COMMERCIAL LOAN AGREEMENT

(Business Purpose Loan - TILA Exempt)

Loan Amount: $[PRINCIPAL AMOUNT]
Effective Date: [DATE]
Loan Number: [UNIQUE IDENTIFIER]

TABLE OF CONTENTS

ARTICLE I: DEFINITIONS
ARTICLE II: THE LOAN FACILITY
ARTICLE III: INTEREST AND FEES
ARTICLE IV: SECURITY
ARTICLE V: CONDITIONS PRECEDENT
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
ARTICLE VII: AFFIRMATIVE COVENANTS
ARTICLE VIII: NEGATIVE COVENANTS
ARTICLE IX: FINANCIAL COVENANTS
ARTICLE X: EVENTS OF DEFAULT
ARTICLE XI: REMEDIES
ARTICLE XII: INDEMNIFICATION
ARTICLE XIII: DISPUTE RESOLUTION
ARTICLE XIV: GENERAL PROVISIONS
ARTICLE XV: SIGNATURES

PARTIES

This Commercial Loan Agreement ("Agreement") is entered into as of [EFFECTIVE DATE] by and between:

LENDER:

BORROWER:

GUARANTOR(S) (If Applicable):

ARTICLE I: DEFINITIONS

"Advance" means any disbursement of Loan proceeds by Lender to Borrower.

"Affiliate" means any entity controlling, controlled by, or under common control with Borrower.

"Applicable Law" means all federal, state, and local laws, including UCC Articles 3 and 9 as enacted in the Governing Law State.

"Borrowing Base" means, if this is an asset-based loan, the amount calculated pursuant to Section 2.5.

"Business Day" means any day other than Saturday, Sunday, or bank holiday in [STATE].

"Change of Control" means any transaction resulting in (a) a change in more than [50]% of Borrower's voting equity, or (b) a sale of all or substantially all of Borrower's assets.

"Collateral" means all property securing the Loan as described in Article IV.

"Commitment" means Lender's commitment to make the Loan in the maximum amount of $[AMOUNT].

"Default Rate" means the Interest Rate plus [PERCENTAGE]% per annum.

"EBITDA" means earnings before interest, taxes, depreciation, and amortization, calculated in accordance with GAAP.

"Event of Default" has the meaning set forth in Article X.

"GAAP" means generally accepted accounting principles in the United States.

"Governing Law State" means the State of [STATE].

"Guaranty" means any guaranty executed in connection with this Loan.

"Interest Rate" has the meaning set forth in Article III.

"Loan" means the credit facility established under this Agreement.

"Loan Documents" means this Agreement, the Note, any Security Agreement, Guaranties, and all other documents executed in connection herewith.

"Material Adverse Effect" means any event or condition that materially adversely affects Borrower's business, financial condition, or ability to perform under the Loan Documents.

"Maturity Date" means [DATE], or such earlier date as all amounts become due by acceleration.

"Maximum Lawful Rate" means the maximum rate of interest permitted by Applicable Law.

"Note" means the promissory note evidencing the Loan.

"Obligations" means all present and future debts, liabilities, and obligations of Borrower to Lender under the Loan Documents.

"Permitted Liens" has the meaning set forth in Section 8.2.

"Principal Amount" means $[AMOUNT].

"Security Agreement" means any security agreement granting a lien on Collateral.

"UCC" means the Uniform Commercial Code as enacted in the Governing Law State.

ARTICLE II: THE LOAN FACILITY

2.1 Commitment

Subject to the terms and conditions hereof, Lender agrees to make a loan to Borrower in the principal amount of $[AMOUNT] ("Loan").

2.2 Type of Facility

Select One:

☐ Term Loan: A single Advance on or about the Closing Date, repayable as set forth in Section 2.4.

☐ Revolving Credit Facility: Multiple Advances up to the Commitment amount, with repayments and re-borrowings permitted until the Maturity Date, when all amounts are due.

☐ Delayed Draw Term Loan: Multiple Advances up to the Commitment during a draw period ending on [DATE], after which this converts to a term loan repayable as set forth in Section 2.4.

☐ Line of Credit: Available for draws as needed up to the Commitment, on demand or with maturity on [DATE].

2.3 Purpose

The Loan proceeds shall be used solely for the following business purposes:

☐ Working capital
☐ Equipment acquisition: [DESCRIBE]
☐ Real property acquisition: [ADDRESS]
☐ Business acquisition: [TARGET COMPANY]
☐ Refinancing existing debt
☐ Expansion/construction
☐ Other: [DESCRIBE]

BORROWER REPRESENTS THAT THE LOAN IS FOR BUSINESS, COMMERCIAL, INVESTMENT, OR AGRICULTURAL PURPOSES AND NOT PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES. THIS LOAN IS EXEMPT FROM THE TRUTH IN LENDING ACT (15 U.S.C. § 1601) AND REGULATION Z (12 C.F.R. PART 1026) PURSUANT TO 12 C.F.R. § 1026.3(a).

2.4 Repayment

Select applicable repayment terms:

☐ Lump Sum at Maturity: The entire Principal Amount plus accrued interest due on the Maturity Date.

☐ Amortizing Payments: [NUMBER] consecutive [MONTHLY/QUARTERLY] payments of $[AMOUNT] (principal and interest), commencing on [DATE], with the balance due on the Maturity Date.

☐ Interest-Only Then Amortizing: Interest-only payments for [NUMBER] months, then amortizing payments of $[AMOUNT] for [NUMBER] months, with balance due on the Maturity Date.

☐ Custom Schedule: Per the Payment Schedule attached as Exhibit A.

2.5 Borrowing Base (For Asset-Based Loans)

☐ Not Applicable (skip this section)

☐ Applicable: The maximum amount available under this facility shall be the lesser of (a) the Commitment or (b) the Borrowing Base, calculated as:

Borrower shall deliver a Borrowing Base Certificate [WEEKLY/MONTHLY] in the form attached as Exhibit B.

2.6 Advances and Disbursements

(a) Advance Request: Borrower shall submit a written request for each Advance at least [NUMBER] Business Days prior to the requested funding date.

(b) Minimum Advance: Minimum Advance amount: $[AMOUNT].

(c) Disbursement: Advances shall be made by wire transfer to:
Bank: [BANK NAME]
Account: [ACCOUNT NUMBER]
Routing: [ROUTING NUMBER]

ARTICLE III: INTEREST AND FEES

3.1 Interest Rate

Interest shall accrue on the outstanding Principal at the following rate:

Select One:

☐ Fixed Rate: [PERCENTAGE]% per annum.

☐ Variable Rate:
- Index: ☐ Prime Rate ☐ SOFR ☐ Other: [INDEX]
- Margin: [PERCENTAGE]% above Index
- Current Rate: [PERCENTAGE]% (as of [DATE])
- Rate Floor: [PERCENTAGE]%
- Rate Cap: [PERCENTAGE]%
- Adjustment Frequency: ☐ Daily ☐ Monthly ☐ Quarterly

3.2 Interest Computation

Interest shall be computed on the basis of:
☐ 360-day year, actual days elapsed (Actual/360)
☐ 365-day year, actual days elapsed (Actual/365)
☐ 360-day year, 30-day months (30/360)

3.3 Default Interest

Upon an Event of Default, all outstanding amounts shall bear interest at the Default Rate of [PERCENTAGE]% per annum.

3.4 Usury Savings

(a) Notwithstanding any provision hereof, interest shall not exceed the Maximum Lawful Rate.

(b) Any excess interest shall be credited to Principal or refunded.

3.5 Fees

Loan Fees:

3.6 Application of Payments

Payments shall be applied:
1. First, to fees, costs, and expenses;
2. Second, to accrued interest;
3. Third, to Principal;
4. Fourth, to other Obligations.

ARTICLE IV: SECURITY

4.1 Security Status

☐ UNSECURED: This Loan is unsecured.

☐ SECURED: This Loan is secured by the Collateral described below.

4.2 Collateral Description

Select all applicable:

☐ All Assets: All assets of Borrower, including but not limited to accounts, inventory, equipment, general intangibles, and proceeds (subject to a Security Agreement).

☐ Accounts Receivable: All accounts and payment intangibles.

☐ Inventory: All inventory now owned or hereafter acquired.

☐ Equipment: All equipment described in Exhibit C.

☐ Real Property: Property at [ADDRESS], secured by Deed of Trust/Mortgage recorded in [COUNTY].

☐ Deposit Accounts: Account No. [NUMBER] at [BANK].

☐ Investment Property: [DESCRIBE SECURITIES OR OWNERSHIP INTERESTS]

☐ Intellectual Property: [DESCRIBE PATENTS, TRADEMARKS, COPYRIGHTS]

☐ Other: [DESCRIBE]

4.3 Security Documents

Borrower shall execute and deliver:
☐ Security Agreement (UCC Article 9)
☐ UCC-1 Financing Statement
☐ Deed of Trust/Mortgage
☐ Deposit Account Control Agreement
☐ Securities Account Control Agreement
☐ Landlord Waiver
☐ IP Security Agreement
☐ Other: [DESCRIBE]

4.4 Perfection

Lender is authorized to file UCC Financing Statements and take all actions necessary to perfect its security interest, including:
- Filing UCC-1 with [SECRETARY OF STATE]
- Recording real property security documents
- Obtaining control agreements
- Noting liens on certificates of title

ARTICLE V: CONDITIONS PRECEDENT

5.1 Conditions to Closing

Lender's obligation to fund is subject to satisfaction of:

☐ Executed Loan Documents (Agreement, Note, Security Agreement, Guaranties)
☐ Good standing certificates for Borrower (and Guarantors if entities)
☐ Resolutions/authorizations
☐ Organizational documents (Articles, Operating Agreement, Bylaws)
☐ UCC/lien/judgment searches showing no prior liens (or acceptable subordinations)
☐ Evidence of insurance with Lender as loss payee/additional insured
☐ Title insurance/commitment (for real property)
☐ Appraisals of Collateral
☐ Environmental assessment (Phase I)
☐ Financial statements (audited/reviewed/compiled)
☐ Tax returns ([NUMBER] years)
☐ Personal financial statements of Guarantors
☐ Legal opinion of Borrower's counsel
☐ Payment of fees due at closing
☐ Other: [DESCRIBE]

5.2 Conditions to Each Advance

Each Advance is subject to:
(a) No Event of Default exists or would result from the Advance;
(b) Representations and warranties remain true;
(c) Borrowing Base Certificate (if applicable) delivered;
(d) No Material Adverse Effect has occurred.

ARTICLE VI: REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants:

6.1 Organization and Good Standing

Borrower is duly organized, validly existing, and in good standing in its state of formation and qualified to do business in all jurisdictions where required.

6.2 Authority and Enforceability

Borrower has full power to execute and perform the Loan Documents. The Loan Documents are valid and binding obligations.

6.3 No Conflicts

Execution and performance do not violate Borrower's organizational documents, any agreement, or Applicable Law.

6.4 Financial Statements

Financial statements delivered to Lender are true and complete and fairly present Borrower's financial condition. No Material Adverse Effect has occurred since the date of such statements.

6.5 No Litigation

There is no material litigation pending or threatened against Borrower.

6.6 Taxes

Borrower has filed all required tax returns and paid all taxes due.

6.7 Compliance with Laws

Borrower is in compliance with all Applicable Laws.

6.8 Environmental

Borrower is in compliance with environmental laws. There are no known environmental liabilities.

6.9 ERISA

Borrower is in compliance with ERISA. No ERISA event has occurred.

6.10 Title to Collateral

Borrower has good title to the Collateral, free of liens except Permitted Liens.

6.11 Business Purpose

The Loan is for business, commercial, investment, or agricultural purposes.

6.12 Solvency

Borrower is solvent and will not be rendered insolvent by the Loan.

ARTICLE VII: AFFIRMATIVE COVENANTS

Until the Obligations are paid in full, Borrower shall:

7.1 Financial Reporting

Deliver to Lender:
- Annual audited/reviewed financial statements within [90] days after fiscal year end
- Quarterly financial statements within [45] days after quarter end
- Annual projections/budgets within [30] days after fiscal year start
- Tax returns when filed
- Compliance certificates quarterly

7.2 Insurance

Maintain insurance covering:
- Property damage to Collateral (replacement cost)
- General liability ($[AMOUNT] minimum)
- Business interruption
- Workers' compensation as required

Lender shall be named as loss payee and additional insured.

7.3 Taxes

Pay all taxes when due.

7.4 Compliance

Comply with all Applicable Laws, including environmental laws.

7.5 Corporate Existence

Maintain corporate existence and good standing.

7.6 Books and Records

Maintain accurate books and records.

7.7 Inspection

Permit Lender to inspect Borrower's premises, books, records, and Collateral upon reasonable notice.

7.8 Notice

Promptly notify Lender of:
- Any Event of Default or potential Event of Default
- Material litigation
- Material adverse change
- Change in management or ownership
- Change in name, structure, or location

ARTICLE VIII: NEGATIVE COVENANTS

Without Lender's prior written consent, Borrower shall not:

8.1 Indebtedness

Incur additional indebtedness exceeding $[AMOUNT] in aggregate.

8.2 Liens

Create or permit any liens on assets except:
- Lender's liens
- Purchase money security interests up to $[AMOUNT]
- Statutory liens for taxes not yet due
- Other: [SPECIFY]

("Permitted Liens")

8.3 Dispositions

Sell, transfer, or dispose of assets outside the ordinary course of business exceeding $[AMOUNT] in aggregate.

8.4 Investments

Make investments in other entities or loans exceeding $[AMOUNT].

8.5 Distributions

Pay dividends or make distributions to owners exceeding [PERCENTAGE]% of net income (or $[AMOUNT]).

8.6 Change of Control

Effect any Change of Control.

8.7 Affiliate Transactions

Enter into transactions with Affiliates except on arm's length terms.

8.8 Nature of Business

Materially change the nature of its business.

8.9 Organizational Changes

Change its name, structure, or jurisdiction of organization without [30] days' prior notice.

ARTICLE IX: FINANCIAL COVENANTS

Borrower shall maintain:

9.1 Debt Service Coverage Ratio

A Debt Service Coverage Ratio of not less than [1.25]:1.0, tested [QUARTERLY/ANNUALLY].

Calculation: (Net Income + Depreciation + Amortization + Interest Expense) / (Current Portion of Long-Term Debt + Interest Expense)

9.2 Leverage Ratio

A Leverage Ratio (Total Debt / EBITDA) of not greater than [3.0]:1.0, tested [QUARTERLY].

9.3 Minimum Working Capital

Working Capital (Current Assets - Current Liabilities) of not less than $[AMOUNT], tested [MONTHLY/QUARTERLY].

9.4 Minimum Tangible Net Worth

Tangible Net Worth (Total Assets - Intangible Assets - Total Liabilities) of not less than $[AMOUNT], tested [QUARTERLY].

ARTICLE X: EVENTS OF DEFAULT

Each of the following constitutes an "Event of Default":

(a) Payment Default: Failure to pay principal when due; failure to pay interest or fees within [5] Business Days after due date;

(b) Financial Covenant Default: Failure to comply with Article IX;

(c) Other Covenant Default: Failure to perform any other covenant, continuing for [30] days after notice;

(d) Representation Default: Any representation proves materially false;

(e) Cross-Default: Default under any other indebtedness exceeding $[AMOUNT];

(f) Judgment: Unsatisfied judgment exceeding $[AMOUNT] for [60] days;

(g) Bankruptcy: Borrower or any Guarantor files bankruptcy or has involuntary petition not dismissed within [60] days;

(h) Guaranty Default: Any Guarantor dies, becomes incapacitated, or Guaranty becomes unenforceable;

(i) Collateral Impairment: Material loss or impairment of Collateral;

(j) Change of Control: Unapproved Change of Control;

(k) Material Adverse Effect: Occurrence of a Material Adverse Effect;

(l) Regulatory Action: Material regulatory action against Borrower.

ARTICLE XI: REMEDIES

11.1 Acceleration

Upon an Event of Default, Lender may declare all Obligations immediately due and payable.

11.2 Remedies

Upon an Event of Default, Lender may:
(a) Cease making Advances;
(b) Apply Default Rate;
(c) Exercise all rights under the Security Agreement and UCC Article 9;
(d) Take possession of Collateral;
(e) Sell Collateral at public or private sale;
(f) Apply proceeds to Obligations;
(g) Commence collection actions;
(h) Exercise Guaranty rights;
(i) Exercise all other available remedies.

11.3 Set-Off

Lender may set off any deposits or credits of Borrower held by Lender against Obligations.

11.4 Remedies Cumulative

All remedies are cumulative and not exclusive.

ARTICLE XII: INDEMNIFICATION

Borrower shall indemnify, defend, and hold harmless Lender and its affiliates, officers, directors, employees, and agents from any claims, losses, damages, liabilities, and expenses arising from:
(a) Breach of any representation, warranty, or covenant;
(b) Use of Loan proceeds;
(c) Environmental matters related to Borrower's business;
(d) Third-party claims related to Collateral;
(e) Enforcement of the Loan Documents.

ARTICLE XIII: DISPUTE RESOLUTION

13.1 Governing Law

This Agreement shall be governed by the laws of the State of [GOVERNING LAW STATE], without regard to conflicts of laws.

13.2 Forum Selection

Any action shall be brought in the state or federal courts located in [COUNTY], [STATE].

13.3 Waiver of Jury Trial

JURY TRIAL WAIVER: EACH PARTY WAIVES ANY RIGHT TO TRIAL BY JURY.

13.4 Arbitration (Optional)

☐ Disputes shall be resolved by binding arbitration under [AAA/JAMS] rules in [CITY, STATE].

ARTICLE XIV: GENERAL PROVISIONS

14.1 Notices

All notices shall be in writing and delivered to the addresses above.

14.2 Amendments

This Agreement may be amended only by written instrument signed by both parties.

14.3 Assignments

Borrower may not assign. Lender may assign or participate the Loan.

14.4 Severability

Invalid provisions modified; remainder continues.

14.5 Entire Agreement

This Agreement and the Loan Documents constitute the entire agreement.

14.6 Survival

Representations, indemnities, and obligations survive repayment.

14.7 Counterparts; Electronic Signatures

May be executed in counterparts. Electronic signatures valid under E-SIGN Act.

14.8 No Third-Party Beneficiaries

No third parties have rights under this Agreement.

ARTICLE XV: SIGNATURES

IN WITNESS WHEREOF, the parties have executed this Commercial Loan Agreement as of the Effective Date.

LENDER:

[LENDER NAME]

By: _________________________________
Name: [NAME]
Title: [TITLE]
Date: ___________

BORROWER:

[BORROWER NAME]

By: _________________________________
Name: [NAME]
Title: [TITLE]
Date: ___________

EXHIBITS

• Exhibit A: Payment Schedule
• Exhibit B: Borrowing Base Certificate Form
• Exhibit C: Equipment Schedule
• Exhibit D: Compliance Certificate Form

COMPLIANCE CHECKLIST

☐ Interest rate complies with commercial usury limits
☐ Business purpose representation included (TILA exempt)
☐ Security documents executed and filed
☐ Guaranties executed
☐ Insurance verified
☐ Conditions precedent satisfied
☐ Legal counsel review completed

Prepared for professional use. Verify all terms against current law before execution.