Common use of Bridge Loan Clause in Contracts

Bridge Loan. Matrix agrees that following the execution of this Agreement, Matrix will make a bridge loan available to Avtel in the maximum principal amount of $500,000 on the following terms: (a) Up to $250,000 may be drawn by Avtel any time after the execution of this Agreement and prior to the earlier to occur of (i) August 31, 1997 or (ii) the termination of this Agreement. (b) Up to an additional $250,000 may be drawn by Avtel at any time on or after July 1, 1997 and prior to the earlier to occur of (i) August 31, 1997 or (ii) the termination of this Agreement. (c) Disbursements shall be made on five days' written notice to Matrix. No disbursements shall be made after the termination of this Agreement. (d) The loan shall be recourse and shall bear interest at the rate of 8% per annum through August 31, 1997, and thereafter at a rate of 12% until maturity and, after maturity at a rate of 15%, in all cases subject to reduction to comply with applicable usury laws. Interest shall be payable monthly in arrears, based on a 360-day year, and all principal and accrued interest shall be due and payable on or before the earlier of (i) 180 days after the termination of this Agreement or (ii) December 1, 1997. (e) Avtel shall pay all expenses of documenting the loan, including any necessary California usury permit, if any.