May 1, 2006
Mr. Richard Johnson, President
XYZ Company
1234 Main St.
Rockford, IL 61000
Dear Mr. Johnson,
I am pleased to advise you that we have approved in principle a $1,000,000 term loan to your company. The
following general terms and conditions would apply:
Term: 60 months
Interest Rate: Our prime plus 2%
Payments: Interest monthly, 1/60th of principal each month.
Facility Fee
Payable at Closing: 1%
Collateral: First lien on inventory, receivables, and equipment
Guarantors: Personal guaranties of Richard Johnson and Allen Jones.
The loan documents will provide requirements for periodic financial statements, and will contain restrictions on additional encumbrances and additional borrowings, as well as standard covenants regarding mergers, acquisitions, default, etc.
This letter constitutes an expression of our intent only, based upon information you have submitted. Any obligation to lend will arise only upon the satisfactory preparation, execution, and delivery of documentation in form and substance satisfactory to the Bank, including, but not limited to, the terms set forth above.
If you wish to proceed further to finalize the terms of your loan request, please sign and return this letter to
us on or before May 15, 2003. We will then instruct our counsel to begin preparation of the final loan documents. You will be responsible for our costs and expenses, including counsel fees, even if the loan does not close.
We look forward to a pleasant relationship.
Very truly yours,
Steven Sanders, Vice President
XYZ Lending Company
By:__________________________________
Title:_________________________________
Date:________________________________
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