Sec. 306.001. DEFINITIONS. In this chapter:
(1) "Account purchase transaction" means an agreement under which a person engaged in a commercial enterprise sells accounts, instruments, documents, or chattel paper subject to this subtitle at a discount, regardless of whether the person has a repurchase obligation related to the transaction.
(2) "Affiliate of an obligor" means a person who directly or indirectly, or through one or more intermediaries or other entities, owns an interest in, controls, is controlled by, or is under common control with the obligor, or a person in which the obligor directly or indirectly, or through one or more intermediaries or other entities, owns an interest. In this subdivision "control" means the possession, directly or indirectly, or with one or more other persons, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.
(3) "Asset-backed securities" means debt obligations or certificates of beneficial ownership that:
(A) are a part of a single issue or single series of securities in an aggregate of $1 million or more and issuable in one or more classes;
(B) are secured by a pledge of, or represent an undivided ownership interest in:
(i) one or more fixed or revolving financial assets that by their terms convert into cash within a definite period; and
(ii) rights or other assets designed to assure the servicing or timely distribution of proceeds to security holders; and
(C) are issued for a business, commercial, agricultural, investment, or similar purpose by a pass-through entity.
(4) "Business entity" means a partnership, corporation, joint venture, limited liability company, or other business organization or business association, however organized.
(5) "Commercial loan" means a loan that is made primarily for business, commercial, investment, agricultural, or similar purposes. The term does not include a loan made primarily for personal, family, or household use.
(6) "Guaranty" means an agreement under which a person:
(A) assumes, guarantees, or otherwise becomes primarily or contingently liable for the payment or performance of an obligation of another person;
(B) provides security, by creation of a lien or security interest or otherwise, for the payment or performance of an obligation of another person; or
(C) agrees to purchase or to advance consideration to purchase an obligation of another person or property that is security for the payment or performance of the obligation.
(7) "Pass-through entity" means a business entity, association, grantor or common-law trust under state law, or segregated pool of assets under federal tax law that, on the date of original issuance of asset-backed securities, does not have significant assets other than:
(A) assets pledged to or held for the benefit of holders of the asset-backed securities; or
(B) assets pledged to or held for the benefit of holders of other asset-backed securities previously issued.
(8) "Prepayment premium" means compensation paid by or that is or will become due from an obligor to a creditor solely as a result or condition of the payment or maturity of all or a portion of the principal amount of a loan before its stated maturity or a regularly scheduled date of payment, as a result of the obligor's election to pay all or a portion of the principal amount before its stated maturity or a regularly scheduled date of payment.
(9) "Qualified commercial loan":
(A) means:
(i) a commercial loan in which one or more persons as part of the same transaction lends, advances, borrows, or receives, or is obligated to lend or advance or entitled to borrow or receive, money or credit with an aggregate value of:
(a) $3 million or more if the commercial loan is secured by real property; or
(b) $250,000 or more if the commercial loan is not secured by real property and, if the aggregate value of the commercial loan is less than $500,000, the loan documents contain a written certification from the borrower that:
(1) the borrower has been advised by the lender to seek the advice of an attorney and an accountant in connection with the commercial loan; and
(2) the borrower has had the opportunity to seek the advice of an attorney and accountant of the borrower's choice in connection with the commercial loan; and
(ii) a renewal or extension of a commercial loan described by Paragraph (A), regardless of the principal amount of the loan at the time of the renewal or extension; and
(B) does not include a commercial loan made for the purpose of financing a business licensed by the Motor Vehicle Board of the Texas Department of Motor Vehicles under Section 2301.251(a), Occupations Code.
Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.18(a), eff. Sept. 1, 1999. Amended by Acts 1999, 76th Leg., ch. 531, Sec. 2, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 994, Sec. 2, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.772, eff. Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 1018 (H.B. 955), Sec. 2.08, eff. September 1, 2005.
Acts 2009, 81st Leg., R.S., Ch. 933 (H.B. 3097), Sec. 3D.01, eff. September 1, 2009.
Section: 306.001 306.002 306.003 306.004 306.005 306.006 306.007 306.101 306.102 NextLast modified: September 28, 2016