§208. Notes to be negotiable; payment of single note not to discharge debt; other claimants subordinated

The notes of each indeterminate series furnished from time to time by the borrower to the corporation, as provided for in R.S. 3:206, shall be negotiable, and their payment in full, with interest, attorney's fees, and costs in accordance with the tenor of each, shall be secured by the mortgage, the security agreement, and the corporation's security interests, all as executed between corporation and borrower securing the continuing credit loan. The payment, satisfaction, retirement, or cancellation of any note shall not operate as a payment, cancellation, or novation of the debt due by the borrower to the corporation, for the maximum amount of the continuing credit loan, interest, attorney's fees, and costs, which shall exist as a contractual obligation between the borrower and corporation during the entire period of the continuing credit loan. No holder or owner of any encumbrance previously subordinated to or which is created, claimed, recorded, or which arises subsequent to the recordation of the mortgage or the perfection of the corporation's security interest, excepting only those subsequently perfected purchase money security interests as specified in R.S. 3:207(1) and legal charges shall receive by preference and priority any proceeds from any sale, judicial or otherwise, of any of the property so mortgaged and secured until the corporation, and the holder or holders of all issued notes shall have been paid in full, interest, attorney's fees, and costs, all amounts due to the corporation and holder or holders of the notes.

Acts 1989, No. 137, §2, eff. Sept. 1, 1989; Acts 1991, No. 539, §1, eff. Jan. 1, 1992.