Commercial Loan Agreement Page 12
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14Social Enterprise Associates’ Tip Sheet #7: Commercial Loan Agreement
____(g) Default Under Other Documents. The occurrence
of an event of default under any of the Related Documents;
____(h) Adverse Change in Business. A determination by
Also, in Section 7, if the bank determines that
your business has suffered an “adverse change”,
the Bank, which determination shall be conclusive if made
it can in its own discretion declare you in
in good faith, that a material adverse change has occurred
default.
in the financial or business condition of the Borrower;
In the event of the occurrence of any event of default, then
and in any such case, the Bank may, in addition to other
remedies available to it hereunder, under the Related
Documents, at law, in equity or otherwise, by written notice
to the Borrower immediately terminate any commitment to
make advances to the Borrower and/or declare the principal
and interest due on the Note, together with all other sums
then due and payable by the Borrower hereunder, under the
Note and under the Related Documents, to be forthwith due
and payable whereupon the same shall become forthwith
due and payable; provided, however, that upon the
occurrence of any event of default described in
subparagraph (f) of this Section 7, such commitment shall
be automatically terminated and such obligations shall
automatically become immediately due and payable
without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived by the Borrower.
8. SETOFF. The Borrower hereby grants the Bank a
Section 8 is where you pledge all the assets of
security interest in, and a continuing lien on, all property
your business within the control of the bank to
and deposit accounts at or under the control of the Bank
the bank as collateral to the loan.
("Bank Accounts") in which the Borrower now or hereafter
has an interest, including joint accounts. Borrower and may
A set-off clause authorizes the bank to seize your
deposits as a form of reimbursement in an event
be set-off against all or any part of the Borrower's
of default.
obligations to the Bank at any time. This security interest
and lien is in addition to the Bank's right to set-off at any
time, without notice, against all Bank Accounts in which
Borrower or any guarantor hereof now or hereafter has an
interest, including joint accounts. The Borrower hereby
authorizes the Bank to set-off any of the Borrower's Bank
DO NOT ignore Section 9 (the Miscellaneous
Accounts for the payment of expenses the Bank incurs and
section) of a loan agreement. Even lawyers have
fees payable to the Bank.
a tendency to fall asleep by the time they reach
this part of a loan agreement, but even though
9. MISCELLANEOUS.
the heading of this section seems rather sterile,
(a) Consolidated Subsidiary. The term "Consolidated
the substance of this section is quite potent.
Subsidiary" as used in this Agreement means any
corporation of which at least 50% of the voting stock is
No Amendments or Waivers unless duly
owned by the Borrower directly or indirectly.
authorized by the bank: this is a standard clause,
(b) Amendments and Waivers. No waiver hereunder or
and it means that even if you have a conversation
with someone about changing the terms of the
amendment hereto shall be effective unless in writing
loan, that conversation means nothing unless it is
in writing, with a duly authorized agent of the
bank.
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