The lender will not attempt to sue the borrower for breach of a guarantee and guarantee – rather, it will use an infringement as a mechanism to declare an event of default and/or request repayment of the loan. A disclosure letter is therefore not required with respect to insurance and guarantees in establishment agreements. There will also be a late payment interest clause that will increase the interest rate for amounts that are not paid by the due date. That default rate should accurately reflect the costs incurred by the lender of the amount that is not paid at maturity. If the rate is too high, it may not be applicable. Some of the most important definitions contained in any agreement on establishments are as follows: – Insurance and guarantees are similar in all agreements relating to establishments. They focus on the borrower`s legal capacity to enter into financing contracts and the nature of the borrower`s business. Any provisions relating to the increase or reduction of the interest margin (known as the “margin slide”) should also correctly reflect the lender`s letter of offer/term-sheet. Borrowers: It is important that the definition of “borrowers” covers all group businesses that may need access to the loan, including revolving loans (flexible credit as opposed to a fixed amount repaid in tranches) or working capital element. . . .