Accommodation loan

Accommodation loan

A legal agreement signed by two parties whereby one of the co-signers guarantees credit liability for the other co-signer.  Accommodation loans, often called accommodation endorsements or bills, allows the guarantor to add strength to the creditworthiness of the other party.  If the receiving party defaults on its debt, the guarantor is then responsible for the debt of the other party. See: Covenant
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It is not clear if Pannu took up the accommodation loan, but it is understood he did claim reimbursements.
Additionally, those Series D investors who invested an amount equal to or greater than 25% of the amounts invested in prior transactions involving stock or certain Accommodation Loans and Term Loans had the exercise price of any Company warrants held by such Series D investor reduced to (i) $0.
Also, effective July 1, 2008, the Company curtailed dealer accommodation loans due to higher risks normally associated with such loans.