Loan Agreement - Template Form to Create Word & PDF Pro · UK-law

LOAN AGREEMENT

DATED:

________

1. THE PARTIES

1.1 The Lender

The Lender is ________, a company incorporated in England and Wales with company registration number ________ and whose registered office is at:

________

(the Lender)

1.2 The Borrower

The Borrower is ________, a company incorporated in England and Wales with company registration number ________ and whose registered office is at:

________

(the Borrower)

The Lender and the Borrower are together referred to as the Parties and each a Party.

IN CONSIDERATION of the Lender advancing the Loan Amount to the Borrower as a loan, and the Borrower having agreed to repay the same and to perform its obligations in accordance with this Agreement, it is agreed as follows:

2. INTERPRETATION

2.1. This Agreement and any documents referred to in it constitute the entire agreement between the Parties in relation to the Loan and supersede all previous offers, agreements and understandings, whether written or oral, relating to its subject matter.

2.2. Each of the Parties acknowledges and agrees that in entering into this Agreement it does not rely on, and shall have no remedy in respect of, any statement, representation, warranty, understanding, promise or assurance (whether negligently or innocently made) of any person (whether party to this Agreement or not) other than as expressly set out in this Agreement.

2.3. Nothing in this Agreement shall operate to limit or exclude any liability for fraud or fraudulent misrepresentation.

2.4. In this Agreement:

a. the words "include", "includes" and "including" are deemed to be followed by the words "without limitation";

b. the word "liability" includes all costs, loss, damage, expenses and claims incurred or suffered by the relevant Party;

c. words introduced by the word "other" do not have a restrictive meaning even where preceded by words indicating or referring to a particular class of acts, things or matters.

2.5. In this Agreement, unless otherwise specified:

a. a reference to one gender shall include a reference to the other genders;

b. a reference to the plural is a reference to the singular and vice versa;

c. headings are inserted for convenience only and shall not be considered in the interpretation of this Agreement;

d. a reference to clauses is a reference to a clause of this Agreement;

e. a reference to legislation is a reference to all legislation having effect in England and Wales at any time during the Loan Term, including Acts of Parliament, orders, regulations, consents, licences, notices and bye-laws made or granted under any Act of Parliament or by a local authority or by a court of competent jurisdiction, and any approved codes of practice issued by a statutory body; and

f. a reference to particular legislation is a reference to that legislation as amended, consolidated or re-enacted from time to time and all subordinate legislation made under it from time to time, as in force for the time being.

3. DEFINITIONS

The following definitions apply throughout this Agreement:

3.1. Commencement Date means ________.

3.2. Business Day means a day (other than a Saturday, Sunday or public holiday in England and Wales) on which banks are open for normal banking business.

3.3. The Loan means the loan arrangement created under this Agreement.

3.4. The Loan Amount means the principal sum advanced by the Lender to the Borrower, being £________ (________).

3.5. The Loan Date means ________, being the date on which the Loan Amount is to be advanced.

3.6. Indebtedness means all outstanding sums payable, including the Outstanding Loan, any unpaid Interest and any outstanding charges incurred by the Borrower and owed to the Lender under this Agreement.

3.7. The Outstanding Loan means the amount of the Loan Amount that remains unpaid and owing to the Lender after any sums paid by the Borrower and applied towards the Loan Amount have been taken into account.

3.8. The Interest Rate means the rate of ________% per annum.

3.9. The Loan Term means the term of the Loan, being ________ calendar months from the Commencement Date.

3.10. The Repayment Date means the date falling exactly ________ calendar months from the Commencement Date.

3.11. The Instalment means the monthly equal instalment of £________ (plus Interest, calculated in accordance with this Agreement).

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3.13. Final Payment Day means the day which falls exactly ________ calendar months from the Commencement Date.

3.14. Event of Default means any event set out in clause 7 below.

4. AGREEMENT TO LEND

4.1. The Lender agrees to lend the Loan Amount to the Borrower in accordance with the terms of this Agreement.

4.2. The Lender will advance the Loan Amount to the Borrower no later than the end of the day on ________.

4.3. The Loan Amount shall be paid to the following account:

________

5. REPAYMENT

5.1. The Borrower shall promptly pay each Instalment (plus Interest, calculated in accordance with this Agreement) on each Payment Day throughout the Loan Term.

5.2. On the Final Payment Day any Outstanding Loan and all Indebtedness shall be repaid in full by the Borrower.

5.3. Should any Event of Default occur, any Outstanding Loan and Indebtedness shall become payable by the Borrower within ten (10) Business Days of the Lender's written demand following the Event of Default.

5.4. The Outstanding Loan and Indebtedness shall be paid without deduction or set-off in pounds sterling to such account or accounts as may be specified by the Lender.

6. PAYMENT METHOD

All payments shall be made by the Borrower to the Lender by direct debit using the following details:

________

7. EVENTS OF DEFAULT

7.1. An Event of Default occurs if:

7.1.a. the Borrower suffers a change of control without the prior written consent of the Lender, or is the subject of any trade sale, flotation or refinancing; and "change of control" means any event in which either:

7.1.b. more than fifty-one per cent (51%) of the voting power of the Borrower vests with a company other than a subsidiary of the Borrower by equity purchase, contract or otherwise;

7.1.c. a company other than a subsidiary of the Borrower acquires the right to direct more than fifty-one per cent (51%) of the voting rights in the Borrower;

7.1.d. the Borrower issues, allots, buys back or redeems any shares in its capital, makes any changes to its articles of association or alters any rights attaching to the issued shares without the prior written notification or approval of the Lender;

7.1.e. any event occurs which, with the giving of notice and/or the lapse of time and/or the making of a determination, would constitute an Event of Default;

7.1.f. a petition is presented or a resolution is passed for the winding up of the Borrower;

7.1.g. the Borrower fails to perform or observe any of its undertakings or obligations under this Agreement;

7.1.h. the Borrower fails to make any payment due under this Agreement on the due date;

7.1.i. a material adverse change occurs, in the reasonable opinion of the Lender, in the assets, financial condition, results of operations, prospects, business or affairs of the Borrower;

7.1.j. any representation or warranty made by the Borrower under this Agreement, or any statement delivered or made pursuant to it, is or proves to be incorrect or misleading in any material respect;

7.1.k. in the reasonable opinion of the Lender, the business or operations of the Borrower are not being responsibly or efficiently conducted, or the financial or other information provided to the Lender concerning the business or affairs of the Borrower is unsatisfactory;

7.1.l. any encumbrancer takes possession of, or a receiver, administrative receiver or administrator is appointed in respect of, all or a substantial part of the undertaking, property and assets of the Borrower, or circumstances arise which entitle any person to make such appointment, or a petition is presented for an administration order or a winding-up order in respect of the Borrower;

7.1.m. the Borrower is unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986 (or any statutory re-enactment thereof);

7.1.n. a proposal for a voluntary arrangement is made to the Borrower and its creditors pursuant to section 1 of the Insolvency Act 1986 (or any statutory modification or re-enactment thereof);

7.1.o. documents are filed with the court for the appointment of an administrator of the Borrower, or notice of intention to appoint an administrator is given by the Borrower or its directors or by a qualifying floating charge holder (as defined by paragraph 14 of Schedule B1 to the Insolvency Act 1986).

8. CONSEQUENCES OF DEFAULT

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9. INTEREST

9.1. Simple Interest is payable on the Loan.

9.2. Interest is calculated at the Interest Rate on the Outstanding Loan and accrues daily.

9.3. Interest is due and payable on each Payment Day.

9.4. Where payments are late, Interest will accrue daily on the total amount of Indebtedness at the Interest Rate until all Indebtedness is paid in full (or until the date of any court order).

10. PREPAYMENT

The Borrower may prepay the whole or any part of the Loan at any time without penalty, together with all Interest accrued on the amount prepaid up to the date of prepayment.

11. REPRESENTATIONS AND WARRANTIES

11.1. The Borrower acknowledges, represents and warrants to the Lender as follows:

11.1.a. it is a company duly incorporated and validly existing under the laws of England and Wales;

11.1.b. it has the power to own its assets and conduct its business as it is now being conducted, together with the power to sign and deliver this Agreement and to exercise its rights and perform its obligations under it;

11.1.c. the signature and delivery of this Agreement on its behalf and its exercise of rights and performance of obligations under it are not prohibited by law, regulation or order or by its constitutional documents; do not require any approval, filing, registration or exemption; and do not constitute an event of default under, or result in an obligation to create security under, any document or arrangement to which it is a party;

11.1.d. the execution of this Agreement on behalf of the Borrower has been validly authorised, and the obligations expressed as being assumed by the Borrower under this Agreement constitute valid, legal, binding and enforceable obligations of the Borrower in accordance with their terms;

11.1.e. neither the execution and delivery of this Agreement by the Borrower nor the performance or observance of any of its obligations under it will:

i). conflict with, or result in any breach of, any law, statute, regulation, indenture, mortgage, trust deed, agreement, constitutional documents or other instrument, arrangement, obligation or duty by which the Borrower is bound; or

ii). cause any limitation on any of the powers of the Borrower, howsoever imposed, or on the right or ability of the directors of the Borrower to exercise such powers, to be exceeded;

11.1.f. the Borrower is not aware of any default under any law, statute, regulation, indenture, mortgage, trust deed, agreement or other instrument, arrangement, obligation or duty by which it is bound;

11.1.g. no litigation, administrative or arbitration proceeding before any court, governmental authority or arbitrator is presently taking place, pending or (to the best of the knowledge, information and belief of the Borrower) threatened against the Borrower or any of its assets which might have a material adverse effect on its business, assets, condition or operations or its ability to perform its obligations under this Agreement;

11.1.h. the Borrower is validly existing and in good standing, has obtained all licences, permissions and consents required for the carrying on of its business in all relevant jurisdictions, and has complied with all conditions attaching to such licences, permissions and consents;

11.1.i. its obligations under this Agreement rank at least pari passu with all its other present and future unsecured and unsubordinated obligations, save for those obligations preferred by mandatory provisions of law applicable to companies generally;

11.1.j. the borrowing of the full amount available under this Agreement will not cause any limitation on the borrowing powers of the Borrower or its directors to be exceeded;

11.1.k. all information supplied by it to the Lender in connection with this Agreement is true, accurate and complete in all material respects, and it is not aware of any material facts or circumstances which have not been disclosed to the Lender which might, if disclosed, adversely affect the decision of a person considering whether or not to lend to the Borrower;

11.1.l. no Event of Default or potential Event of Default has occurred and remains unremedied or unwaived;

11.1.m. it is not aware of any breach of any law, regulation, agreement or arrangement applicable to it or any of its assets; and

11.1.n. it will comply, and ensure that any of its subsidiaries comply, with all applicable laws and regulations and the terms of all permits, authorisations and licences (including those relating to intellectual property matters).

12. UNDERTAKINGS

The Borrower agrees to be bound by the following undertakings and shall:

12.1. give the Lender notice in writing immediately upon becoming aware of the occurrence of any Event of Default or other event which, with the giving of notice and/or lapse of time and/or the Lender making the relevant determination, would constitute an Event of Default;

12.2. for so long as the Loan and Indebtedness remain owing, keep the Lender fully and promptly informed, to such extent and in such form as the Lender may from time to time reasonably require, of any matter relevant to this Agreement or the Borrower's adherence to it;

12.3. not, without the prior written consent of the Lender and whether by a single transaction or a series of transactions (related or not), sell, transfer, lend or otherwise dispose of (otherwise than in the ordinary course of trading) the whole or any substantial part of its business or assets, or make any change in the nature of its business;

12.4. settle the debts incurred by it in the ordinary course of business, including (without limitation) those owed to trade creditors; and

12.5. conduct and carry on its business in a proper, efficient and businesslike manner, not make any substantial alteration in the nature or mode of conduct of that business, and keep or cause to be kept proper books of account relating to such business.

13. NOTICES

13.1. Any notice or other communication to the Lender or the Borrower under this Agreement shall be addressed and delivered to the relevant Party at the address stated above or, in the case of email, to the email address notified by that Party for this purpose: Lender email ________; Borrower email ________.

13.2. Any notice or communication under this Agreement shall be given by hand, by first class prepaid post, or by email addressed to the relevant Party.

13.3. Any notice or communication shall be deemed to have been given:

i). if delivered by hand, on the day it was so delivered;

ii). if sent by first class prepaid post, two (2) Business Days after posting (and in proving delivery it shall be sufficient to prove that the same was properly addressed and posted); and

iii). if sent by email, at the time of transmission, provided that no notice of delivery failure is received;

except that, if deemed receipt is not on a Business Day or is after 5.00 pm on a Business Day, the notice shall be deemed received on the next following Business Day.

14. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original of this Agreement, but all the counterparts shall together constitute one and the same agreement. No counterpart shall be effective until each Party has executed and delivered at least one counterpart.

15. ASSIGNMENT

15.1. The Borrower may not assign, charge, mortgage, transfer or otherwise encumber or deal in any manner with any of its rights or obligations under this Agreement without the prior written consent of the Lender (such consent not to be unreasonably withheld or delayed).

15.2. The Lender may assign or transfer any of its rights or obligations (in whole or in part) under this Agreement with the prior written consent of the Borrower (such consent not to be unreasonably withheld or delayed).

16. JOINT AND SEVERAL LIABILITY

Where any Party comprises more than one person, the obligations and liabilities of that Party under this Agreement shall be the joint and several obligations of those persons.

17. SEVERABILITY

Each of the provisions of this Agreement is severable and distinct from the others, and if at any time one or more provisions is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired in any way.

18. WAIVER

No failure or delay by the Lender in exercising any right, power or privilege under this Agreement shall impair the same or operate as a waiver of it, nor shall any single or partial exercise of any right, power or privilege preclude any further exercise of the same or the exercise of any other right, power or privilege. No waiver, compromise or other dealing with one person jointly and severally liable shall affect or reduce the liability of any other such person.

19. CUMULATIVE REMEDIES

The rights and remedies provided by this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

20. THIRD PARTY RIGHTS

A person who is not a party to this Agreement shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

21. BENEFIT

This Agreement shall be binding upon and enure to the benefit of each Party to it, together with their respective successors and permitted transferees and assigns.

22. VARIATION

This Agreement may only be amended or modified, in part or in whole, by a further agreement in writing signed by or on behalf of all Parties to this Agreement.

23. GOVERNING LAW AND JURISDICTION

This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the laws of England and Wales. The Parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales.

24. SIGNATURES

24.1. The Borrower

Executed by ________, acting by:
(a director and its secretary) OR (two directors)

First Signatory

Signature: .....................
Name: ________
Director / Secretary
Date: ________
Address: ________

Second Signatory

Signature: .....................
Name: ________
Director / Secretary
Date: ________
Address: ________

24.2. The Lender

Executed by ________, acting by:
(a director and its secretary) OR (two directors)

First Signatory

Signature: .....................
Name: ________
Director / Secretary
Date: ________
Address: ________

Second Signatory

Signature: .....................
Name: ________
Director / Secretary
Date: ________
Address: ________