Louisiana Administrative Code › Title 19 - CORPORATION AND BUSINESS › Part VII - Louisiana Economic Development Corporation › Subpart 13 - Collateral Support Program › Chapter 91 - SSBCI Collateral Support Program ARPA 2021 › Section VII-9111 - General Agreement Provisions

Current through Register Vol. 50, No. 6, June 20, 2024
A. Master Lender CSP Participation Agreement
1. The lender shall conduct all of the
				  customer/borrower interaction, and shall be responsible for the proper
				  administration and monitoring of the loan (or line of credit), including
				  monthly invoicing, collections, and loan workouts, and the proper liquidation
				  of the collateral in the event of a default.
2. The lender shall agree to underwrite each
				  loan (including line of credit) using its normal underwriting criteria and will
				  perform a credit analysis of the borrower for each loan, assuming full
				  responsibility for credit and ongoing security of the loan and will follow
				  prudent industry loan underwriting processes and will determine that the
				  collateral support to be provided under the CSP will be instrumental in order
				  for the lender to make the loan. Lender will also determine that the amount
				  required for deposit to the LEDC's collateral deposit account does not exceed
				  the amount necessary to provide sufficient collateral for the loan.
3. The lender shall be responsible for the
				  preparation of all loan (including line of credit) documents to be used in
				  connection with such loans made and accepted under this program.
4. The lender shall rely solely on the funds
				  deposited with the lender by LEDC in the cash collateral deposit account (the
				  principal amount, but not the accrued interest on the deposit which is not
				  included as a portion of the security for the unpaid principal due on the loan)
				  provided as security for the repayment of the agreed percentage of the
				  principal amount of the unpaid principal balance due on the loan made and
				  accepted under this program. The lender shall indemnify and hold harmless the
				  LEDC, the state of Louisiana, including any commissioners, directors,
				  participants, officers, agents, employees and contractors (collectively, the
				  "Indemnified Person(s)") who shall not be liable to the lender for any reason
				  arising out of or related in any way to the loan, the loan documents or the
				  participation agreement, against all claims, costs and expenses. This Section
				  shall survive the payment in full of the loan, any return or draw upon the cash
				  collateral deposit for the loan, or any termination of the applicable deposit
				  agreement or other loan documents.
5. The LEDC accepted loan (including line of
				  credit) enrolled into this program shall not be sold, assigned, participated
				  with other lenders (within lender's 20 percent risk interest, as provided above
				  in §9109.A 4), or otherwise transferred by lender without the prior written
				  consent of the LEDC board.
6. Loan
				  delinquency will be defined according to the lender's normal lending policy.
				  Notification of delinquency will be made to the corporation in writing by
				  lender submitting a completed, signed and dated CSP banker loan status monthly
				  report within five business days after the end of the month/reporting period as
				  stated in the Master lender CSP participation agreement.
7. If default by borrower continues for more
				  than 90 calendar days in making payment, when due, of any installment of
				  principal or interest on any note, the lender may demand in writing to LEDC to
				  fully fund the deposit account by submitting a completed, signed and dated
				  claim form notifying LEDC of the default reasonably describing the
				  circumstances of the default. LEDC will deposit the remaining cash deposit of
				  50 percent of the current principal balance within 30 days after LEDC receives
				  the written demand. Once the full collateral support deposit is requested for
				  the deposit account, the lender may begin their standard collection and
				  liquidation process.
8. All
				  collection efforts, legal and liquidation processes shall be handled by the
				  lender. In all collection efforts, legal and liquidation processes through
				  foreclosure or otherwise, the lender will sell the collateral, handle the legal
				  proceedings and documents, and absorb all expenses associated with these
				  activities. All servicing actions, including collections, shall be the
				  responsibility of the holder who shall follow accepted standards of loan
				  servicing and collection employed by prudent lenders generally.
9. Thereafter, should any funds remain in the
				  deposit account after the withdrawal and application of such funds, the
				  remaining amount on deposit shall be returned by lender to LEDC, plus all
				  interest accrued on the deposit account, which accrued interest on LEDC's
				  deposit account is not included as a portion of the collateral securing the
				  loan.