Louisiana Credit Agreement between Southwest Royalties, Inc. and Bank One Texas: A Comprehensive Overview Introduction to Louisiana Credit Agreement: A Louisiana Credit Agreement refers to a legally binding contract between Southwest Royalties, Inc. (hereinafter referred to as the "Company") and Bank One Texas (hereinafter referred to as the "Bank"). This agreement outlines the terms and conditions under which the Bank provides credit facilities to the Company. It serves as a crucial document, ensuring transparency and understanding between both parties. Types of Louisiana Credit Agreement: 1. Revolving Line of Credit Agreement: In this type of credit agreement, the Bank authorizes the Company to borrow funds up to a specified credit limit. The Company can draw and repay funds as needed within that limit during a pre-defined period, commonly known as the drawdown period. This facility offers the Company flexibility to manage short-term working capital requirements efficiently. 2. Term Loan Agreement: A term loan agreement is a structured credit facility that provides the Company with a lump-sum amount of money. The Company repays this loan over a predetermined period, typically in regular installments, comprising both principal and interest. This type of credit is commonly used for long-term capital investments or substantial acquisitions. 3. Standby Letter of Credit Agreement: A standby letter of credit (SBLC) acts as a financial guarantee provided by the Bank to the Company. This agreement serves as a contractual obligation for the Bank to pay a specified amount if the Company fails to fulfill its obligations, such as non-payment or non-performance as outlined in other agreements or contracts. Key Elements of a Louisiana Credit Agreement: 1. Parties Involved: The agreement clearly identifies the Company, Southwest Royalties, Inc., and the Bank, Bank One Texas, along with their legal addresses and contact details. 2. Purpose and Usage: The agreement explains the purpose of the credit facility, whether it is for working capital, capital expenditure, acquisitions, or any other specific purpose outlined in the agreement. 3. Loan Amount and Drawdown Period: In a revolving line of credit or term loan agreement, the maximum loan amount is defined, along with the drawdown period for the Company to access funds. 4. Interest Rate and Repayment Terms: The agreement specifies the interest rate applied to the outstanding loan amount and outlines the repayment terms, including the installment size, frequency, and duration. 5. Security and Collateral: If applicable, the agreement may outline any collateral or security required by the Bank to secure the credit facility. This may include assets, shares, or personal guarantees. 6. Conditions Precedent: The agreement may list specific conditions that need to be met by the Company before the credit facility becomes effective, such as submitting audited financial statements or obtaining necessary government approvals. 7. Event of Default and Remedies: The agreement delineates events that would constitute a default on the Company's part and provides the Bank with various remedies, such as acceleration of the loan, foreclosure on collateral, or legal action. Conclusion: A Louisiana Credit Agreement between Southwest Royalties, Inc. and Bank One Texas serves as a vital document in establishing a framework for credit facilities. Whether in the form of revolving lines of credit, term loans, or standby letter of credit agreements, this agreement ensures transparency, clarity, and enforceability in the borrowing relationship between the Company and the Bank. It outlines crucial elements such as loan amount, repayment terms, interest rates, and conditions precedent, providing a solid foundation for both parties involved.
Louisiana Credit Agreement between Southwest Royalties, Inc. and Bank One Texas
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Multi-State
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US-EG-9032
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This is a multi-state form covering the subject matter of the title.
Louisiana Credit Agreement between Southwest Royalties, Inc. and Bank One Texas: A Comprehensive Overview Introduction to Louisiana Credit Agreement: A Louisiana Credit Agreement refers to a legally binding contract between Southwest Royalties, Inc. (hereinafter referred to as the "Company") and Bank One Texas (hereinafter referred to as the "Bank"). This agreement outlines the terms and conditions under which the Bank provides credit facilities to the Company. It serves as a crucial document, ensuring transparency and understanding between both parties. Types of Louisiana Credit Agreement: 1. Revolving Line of Credit Agreement: In this type of credit agreement, the Bank authorizes the Company to borrow funds up to a specified credit limit. The Company can draw and repay funds as needed within that limit during a pre-defined period, commonly known as the drawdown period. This facility offers the Company flexibility to manage short-term working capital requirements efficiently. 2. Term Loan Agreement: A term loan agreement is a structured credit facility that provides the Company with a lump-sum amount of money. The Company repays this loan over a predetermined period, typically in regular installments, comprising both principal and interest. This type of credit is commonly used for long-term capital investments or substantial acquisitions. 3. Standby Letter of Credit Agreement: A standby letter of credit (SBLC) acts as a financial guarantee provided by the Bank to the Company. This agreement serves as a contractual obligation for the Bank to pay a specified amount if the Company fails to fulfill its obligations, such as non-payment or non-performance as outlined in other agreements or contracts. Key Elements of a Louisiana Credit Agreement: 1. Parties Involved: The agreement clearly identifies the Company, Southwest Royalties, Inc., and the Bank, Bank One Texas, along with their legal addresses and contact details. 2. Purpose and Usage: The agreement explains the purpose of the credit facility, whether it is for working capital, capital expenditure, acquisitions, or any other specific purpose outlined in the agreement. 3. Loan Amount and Drawdown Period: In a revolving line of credit or term loan agreement, the maximum loan amount is defined, along with the drawdown period for the Company to access funds. 4. Interest Rate and Repayment Terms: The agreement specifies the interest rate applied to the outstanding loan amount and outlines the repayment terms, including the installment size, frequency, and duration. 5. Security and Collateral: If applicable, the agreement may outline any collateral or security required by the Bank to secure the credit facility. This may include assets, shares, or personal guarantees. 6. Conditions Precedent: The agreement may list specific conditions that need to be met by the Company before the credit facility becomes effective, such as submitting audited financial statements or obtaining necessary government approvals. 7. Event of Default and Remedies: The agreement delineates events that would constitute a default on the Company's part and provides the Bank with various remedies, such as acceleration of the loan, foreclosure on collateral, or legal action. Conclusion: A Louisiana Credit Agreement between Southwest Royalties, Inc. and Bank One Texas serves as a vital document in establishing a framework for credit facilities. Whether in the form of revolving lines of credit, term loans, or standby letter of credit agreements, this agreement ensures transparency, clarity, and enforceability in the borrowing relationship between the Company and the Bank. It outlines crucial elements such as loan amount, repayment terms, interest rates, and conditions precedent, providing a solid foundation for both parties involved.
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