LOANS PAYABLE ON DEMAND Clause Samples
A "Loans Payable on Demand" clause establishes that the lender can require repayment of the loan at any time, without needing to provide a specific reason or adhere to a fixed repayment schedule. In practice, this means the borrower must be prepared to repay the outstanding balance in full whenever the lender requests, which could be immediately or at any point during the loan term. The core function of this clause is to give the lender maximum flexibility and control over the timing of repayment, addressing the need for liquidity or risk management.
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LOANS PAYABLE ON DEMAND. Borrower expressly acknowledges and agrees that all loans hereunder are and shall at all times be payable ON DEMAND by Bank. Borrower further acknowledges that it is a necessary inducement to Bank to make any loan hereunder that Borrower grant Bank the unconditional right in Bank’s sole discretion to demand payment in whole or in part of the principal of and accrued interest on loans hereunder or of any other demand obligations, which right Borrower expressly grants whether or not Borrower is then in compliance with the provisions hereof. If any of the events set forth below (each an “Event of Default”) shall occur and be continuing, Bank may, but shall not be obligated to, make such demand; such events are set forth only for purposes of illustrating certain circumstances in which Bank may, but shall not be obligated to, make such demand. Such circumstances are not exclusive and shall not limit Bank’s right of demand in any other circumstances in which Bank may exercise Bank’s right of demand including, without limitation, when Bank deems that Bank is insecure or that the prospects for timely or full payment or performance of any of Borrower’s obligations have been impaired:
a) Borrower’s failure to make any payment when due hereunder or to pay or perform any other obligation to Bank, now existing or hereafter arising, in each case after any applicable cure and grace period;
b) Borrower’s failure to pay any indebtedness to any others when due, following any applicable cure and grace period;
c) if any material representation, warranty, statement or certificate made to Bank by Borrower proves to have been or becomes untrue;
d) Borrower’s ceasing to conduct its business as presently conducted or its dissolution;
e) with respect to the Borrower, the commencement, whether voluntary or involuntary, of a case under the United States Bankruptcy Code or any other proceeding or action seeking reorganization, liquidation, dissolution or other relief under federal or state bankruptcy or insolvency statutes or similar laws, or seeking the appointment of a receiver, trustee or custodian for the Borrower or all or a part of its assets, which in the case of an involuntary filing is not dismissed within 60 days of the filing thereof;
f) if Borrower makes an assignment for the benefit of creditors, or admits in writing that it is unable to pay its debts as they mature; or
g) any such event occurs with respect to any guarantor or endorser of Borrower’s obligations to Bank.