Post
by icrm » Wed Jan 18, 2017 8:14 pm
Zimba88 and others, Here is my Director Loan Agreement, please help me what points i can stress in Admin Review
Parties:
1. (the “Lender”)
2. (the Borrower”)
Introduction
The lender has agreed to make a loan to the Borrower on the terms set out below (the “Loan”)
Now the parties agree as follows:
1. Loan
The Lender will make available to the Borrower a Loan of £50,000. The first instalment of the Loan amounting to £4,200 will be made in the 1st instalment upon signature of this Agreement by transfer to the Borrower’s bank account, details of which are set out in the Schedule to this Agreement. The reminder if the Loan will be paid to the same account by the Lender by 01 Oct 2014.
2. Repayments of Interest
The Borrower will pay interest on the Loan at the rate of 0.5% above base rates for one year after the final Loan payment has been received by the Borrower. Interest will accrue on a yearly basis on the balance of the Loan. Interest will be payable annually in arrears on 31st January each year. The first interest payment will be made on 31st January 2018. The Lender will give advance notice to the Borrower of the amount of each interest payment which is due but failure to do so will not relieve the Borrower of its obligations under this Clause.
3. Repayments of Principal
The principal sum borrowed under the Loan will be repayable by 20 equal quarterly (every 3 months) instalments, the first repayment being due on 30th June 2017.
4. Prepayment
The Borrower may repay all or any part if the Loan at any time before the dates for repayment set out in Clause 3 above.
5. Payment of Loan and Interest
All payments due from the Borrower to the Lender will be made to the Lender’s bank account, details of which are set out in the Scheduler or to such other account as the Lender may from time to time notify in writing to the Borrower. Every payment, whether of interest or capital, will be made on the due date during normal banking hours on a day when banks are normally open for business (a “Banking Day”), unless the due date is one on which banks are not open for
business, in which case the payment will be made on the immediately preceding Banking Day.
6. Warranties
The Borrower warrants to the Lender that at the date of this Agreement:
6.1. The Borrower is a validly constituted limited company incorporated in England and Wales;
6.2. There is nothing in the Borrower’s Memorandum & Articles of Association which may prevent or restrict the ability of the Borrower to enter into this Agreement;
6.3. The Borrower has provided the Lender with a copy of its unaudited accounts for the last three financial years and the Borrower is aware of no material adverse change in its business or financial affairs since those accounts were prepared;
6.4. No claims have been made against the Borrower, nor is the Borrower a party to any pending litigation or arbitration or other legal proceedings;
6.5. The Borrower is not aware of any circumstances which may result in any of the matters specified in clause 6.4 above arising in the foreseeable future;
6.6. No third party has any interest in or security, rights lien, fixed or floating charge over any property or assets of the Borrower) except as disclosed in writing to the Lender before the date of this Agreement);
6.7. The Borrower has no outstanding loans form any third party (except as disclosed in writing to the Lender before the date of this Agreement); and
7. Information
The Borrower will during this Agreement supply the Lender with:
7.1. A copy of the unaudited accounts of the Borrower when they become available;
7.2. Any other information which the Lender may from time to time request in writing concerning the Borrower’s business and financial condition.
8. Undertakings of the Borrower
The Borrower undertakes with the Lender that so long as this Agreement remains in the place it will not without the prior written consent of the Lender (to be granted or withheld at the unfettered discretion of the Lender):
8.1. Enter into any agreement with any third party for the borrowing of money;
8.2. Sell or dispose of any of its property or assets other than in the normal course of trading;
8.3. Grant any security, lien or charge (whether fixed or floating) to any third party over any of its property or assets;
8.4. Incur any liability to any third party except in the normal course of business.
9. Default
If the Borrower:
9.1. Fails to make any payment (whether of interest or principal) due under this Agreement on the due date; or
9.2. Becomes insolvent, passes a resolution for its winding up or enters into any negotiations with its creditors to avoid insolvency or has a receiver or liquidator or administrative receiver appointed over any of its assets; or
9.3. Fails to pay its debts as they become due; or
9.4. Suffers any change in its financial condition which, in the opinion of the Lender, is material; or
9.5. Commits a breach of any of the terms of this Agreement,
Then in any such case, the Lender shall be entitled to give the Borrower written notice that the Loan and all accrued interest is immediately due and payable and the Borrower shall immediately comply with the terms of the notice.
10. Change of Ownership
The Lender reserves the right to terminate this Agreement with immediate effect by written notice and to call on the Borrower to repay the Loan and all accrued interest if, in the opinion of the Lender, there has been any change in the ownership of the Borrower (including any change in the identity of the shareholders or the proportions of the Borrower’s issued share capital held by existing shareholders) which might prejudice the interests of the Lender.
11. Assignment
The Borrower’s interest in this Agreement will not be assignable to any third party.
12. Waiver
No Waiver by the Lender in respect of any breach of this Agreement shall operate as a waiver in respect of any subsequent breach.
13. Notices
Any notice will be effective if sent by post or email address of the recipient shown in this Agreement. Every notice correctly addressed and sent by post will be treated as having been delivered on the second Banking Day after the date of posting.
14. Governing Law and Disputes
This Agreement is governed by the law of England and the parties agree to submit to the exclusive jurisdiction of the English courts.
15. Counterparts
This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
SIGNED by duly authorised signatories of the parties
SIGNED_________________________________________ (Print name and position)
For and on behalf of the Lender
In the presence of:
_______________________________
Dated: _________________________
SIGNED _______________________________________ (print name and position)
For and on behalf of the Borrower
In the presence of:
_______________________________
Dated: _________________________
