CREDIT LINE ARRANGEMENT. VARIABLE RATE OF INTEREST. REPAYABLE ON DEMAND
Re: Establishment of Revolving Credit Facility
[NAME OF LENDER] (the “Lender”) is pleased to offer to establish a revolving credit facility in the amount and on the terms set out below:
BORROWER: [Name of Borrower (the “Borrower”).
CREDIT FACILITY: Revolving Line of Credit in the maximum amount of $[MAXIMUM AMOUNT OF LOAN] (the “Credit”).
PURPOSE: [DESCRIBE PURPOSE FOR WHICH LOAN PROCEEDS ARE TO BE USED]
INTEREST: Interest on the outstanding principal amount and interest on overdue interest compounded monthly will be payable monthly, on the first day of each and every month during the term of the Credit, as well after as before demand for payment or judgment or both at a rate per annum equal to the prime rate of interest announced from time to time by the [NAME OF BANK] as a reference rate then in effect for determining interest rates on commercial loans plus [INSERT WHAT % ABOVE PRIME BORROWER WILL PAY, ex. 1.5)%].
TERM AND MATURITY: The Credit shall be repayable on demand.
AVERMENT: [INSERT DATE ON WHICH LOAN PROCEEDS ARE AVAILABLE TO BE ADVANCED, ex. July 1, 1998]
SECURITY: [DESCRIBE ANY SECURITY WHICH BORROWER WILL GIVE, ex. Guarantees by others, General Security Agreements, Mortgages, etc..]
AFFIRMATIVE COVENANTS: Until all amounts payable in connection with the Credit have been paid in full, the Borrower agrees to do the following:
[DESCRIBE AFFIRMATIVE COVENANTS OF BORROWER, ex. Borrower will give Lender monthly financial statements]
NEGATIVE COVENANTS: Until all amounts payable in connection with the Credit have been paid in full, the Borrower shall not, without the prior written consent of the Lender, do any of the following:
[LIST AND DESCRIBE HERE ANY NEGATIVE COVENANTS OF BORROWER, ex. Borrower will not borrow any other amounts from anyone]