§207.  Priority arising from security for continuing credit loan

The real estate mortgage, and the security agreement as affecting the successive crops for the period of the loan, as well as affecting all the livestock, work animals, and agricultural implements of the borrower, as well as the pledge of the capital stock of the corporation and of other collateral security, and the giving and taking of other and additional security, all for the purpose of securing the continuing credit loan for its stated amount, with interest, attorney fees, and costs, and to extend over the term of the continuing credit loan, are lawful; and each

(1)  Shall have preference and priority over all other liens and encumbrances which are created, recorded, filed, claimed, or which arise in any manner whatsoever, subsequent to the recording of the mortgage and the filing of a financing statement evidencing the corporation's security interest securing the continuing credit loan in accordance with applicable law, with the exception of subsequently perfected purchase money security interests as affecting livestock and work animals, agricultural implements, and other property purchased, to the extent that such a subsequently perfected purchase money security interest may be entitled to super priority rights under R.S. 10:9-324, and

(2)  With the exception of a subsequently perfected purchase money security interest as noted in Paragraph (1) of this Section, the continuing credit loan and the notes, issued in order to facilitate the lender to make the advances, shall first be paid and satisfied, in full with attorney fees and costs, from the proceeds of any and all sales of the mortgaged property and the crops, livestock, and other collateral security on which a security interest was granted, before any payment shall be made from any of the proceeds in satisfaction of any other lien and encumbrance created, arising, perfected, or recorded thereafter or as affecting successive crops.

Acts 1989, No. 137, §2, eff. Sept. 1, 1989; Acts 1991, No. 539, §1, eff. Jan. 1, 1992; Acts 2001, No. 128, §2, eff. July 1, 2001.