Loan Agreement (International)
Parties
This agreement is dated the date on which it is signed by the last of the parties.
This agreement is made between [Lender legal name and details] (the "Lender") and [Borrower legal name and details] (the "Borrower").
Key Terms
"Business Day" means a day (other than a Saturday, a Sunday or a public holiday) on which banks are open for general business in [Business day financial centre].
"Loan" means the loan of a principal amount of [Loan amount (principal, with currency)] that the Lender agrees to make available under this agreement or, where the context requires, so much of it as is outstanding from time to time.
"Purpose" means the general business purposes of the Borrower.
"Drawdown Date" means the date on which the Loan is to be advanced under the Drawdown clause.
"Availability Period" means the period from the date of this agreement to and including [Last day on which the Borrower may request the Loan].
"Final Repayment Date" means [Final repayment date].
"Interest Rate" means [Fixed interest rate (per annum)] per annum.
"Interest Payment Date" means [Interest payment dates].
"Default Margin" means [Default interest margin (per annum)] per annum.
"Prepayment Notice Period" means five Business Days.
"Prepayment Fee" means [Prepayment fee (percentage of the amount prepaid)] of the amount prepaid.
"Payment Grace Period" means three Business Days.
"Remedy Period" means 15 Business Days.
"Cross Default Threshold" means [Cross default threshold] (or its equivalent in other currencies).
"Secured Assets" means [Assets to be secured].
"Guarantor" means [Guarantor legal name and details].
"Governing Law" means the law of [Governing law (for example, England and Wales)].
"Chosen Courts" means [Courts with jurisdiction (for example, the courts of England and Wales)].
"Arbitration Terms" means arbitration under [Arbitration rules (for example, the ICC Rules of Arbitration)], with its seat in [Seat of arbitration (city and country)], before [Number of arbitrators], conducted in the English language.
"Process Agent" means [Process agent (name and address in the jurisdiction of the Chosen Courts)].
Interpretation
"Security Document" means any document creating or evidencing security for the Borrower's obligations under this agreement.
"Guarantee" means any guarantee of the Borrower's obligations under this agreement.
"Finance Documents" means this agreement, each Security Document and each Guarantee.
"Security Interest" means any mortgage, charge (whether fixed or floating), pledge, lien, assignment by way of security or other security interest securing any obligation of any person, or any other agreement or arrangement having a similar effect.
"Financial Indebtedness" means any indebtedness for or in respect of money borrowed or raised, including under any loan, bond, note, finance or capital lease, deferred purchase price arrangement (other than normal trade credit), or guarantee or indemnity of any of those.
An Event of Default is "continuing" if it has not been remedied or waived in writing by the Lender.
In this agreement: a reference to a party includes its successors in title and permitted assigns; "including" and similar words do not limit the words that precede them; a reference to a law includes that law as amended or re-enacted; a reference to a clause is to the clause of this agreement with that heading; headings do not affect interpretation; and, where a party is an individual, "it" and "its" include him or her and his or her, a reference to a party's officers, board, constitution or constitutional documents, or to its being duly incorporated or established, applies only to a party that is a body corporate or other entity, and a reference to a party's insolvency includes, for an individual, bankruptcy, an individual voluntary arrangement or other composition with creditors, or any equivalent procedure in any jurisdiction.
The Loan
The Lender agrees to make the Loan available to the Borrower on the terms of this agreement.
The Borrower must use the Loan only for the Purpose. The Lender is not obliged to monitor or verify how the Loan is used.
Conditions to Drawdown
The Lender is not obliged to advance the Loan until it has received, in form and substance reasonably satisfactory to it: a copy of this agreement signed by the Borrower; evidence that the Borrower has taken all action needed to authorise its entry into and performance of the Finance Documents to which it is a party, including a copy of any relevant board or members' resolution where the Borrower is not an individual; evidence of the identity and authority of each person signing a Finance Document for the Borrower; each Security Document and Guarantee required by this agreement, signed and, where relevant, registered; and any information the Lender reasonably requires to complete its identification and anti-money-laundering checks.
The Lender is also not obliged to advance the Loan if, on the date of any drawdown request or on the Drawdown Date, an Event of Default is continuing or would result from the advance, or any representation in the Representations clause is untrue in any material respect.
Drawdown
Subject to the Conditions to Drawdown clause, the Lender must advance the Loan in one amount on [Drawdown date (fixed-date drawdown)], or any later date the parties agree in writing, by transferring it in immediately available funds to the bank account in the Borrower's name that the Borrower notifies to the Lender in writing at least three Business Days before that date.
The Loan may be drawn only once. Any part of the Loan not advanced on the Drawdown Date or, where an Availability Period applies, by the end of the Availability Period, is cancelled.
Interest
The Loan bears interest at the Interest Rate from and including the Drawdown Date until it is repaid in full. Interest accrues daily, is calculated on the actual number of days elapsed and a year of 365 days, and is payable by the Borrower in arrears on each Interest Payment Date and on the date on which the Loan is repaid or prepaid in full.
Repayment
The Borrower must repay the Loan in full, together with all accrued interest and all other amounts outstanding under this agreement, on the Final Repayment Date.
The Borrower may not re-borrow any part of the Loan that has been repaid or prepaid.
Voluntary Prepayment
The Borrower may prepay all or any part of the Loan by giving the Lender written notice, at least the Prepayment Notice Period before the proposed prepayment date, specifying the amount to be prepaid and the prepayment date. A prepayment notice is irrevocable, and the Borrower must make the prepayment on the date specified.
A prepayment must be made together with accrued interest (if any) on the amount prepaid and is otherwise made without premium or penalty.
A partial prepayment is applied against the remaining repayment instalments in inverse order of maturity.
Default Interest
If the Borrower does not pay any amount payable under this agreement on its due date, interest accrues on the overdue amount from the due date until the date of actual payment, both before and after any judgment, at a rate equal to the Interest Rate (if any) plus the Default Margin. Default interest is calculated on the actual number of days elapsed and a year of 365 days, does not compound, and is payable on demand.
Payments
The Borrower must make every payment under this agreement in the currency in which the Loan is denominated, in immediately available funds, to the account that the Lender notifies to the Borrower in writing for that purpose, by no later than its due date.
A payment that would otherwise fall due on a day that is not a Business Day is due on the next Business Day in the same calendar month (if there is one) or on the preceding Business Day (if there is not), and interest (if any) is adjusted accordingly.
If the Lender receives less than the full amount then due under this agreement, it must apply the payment first to costs and expenses due under this agreement, then to default interest, then to other accrued interest, and then to principal.
A certificate by the Lender of any amount due under this agreement is, in the absence of manifest error, prima facie evidence of the matters to which it relates.
Taxes
All payments under the Finance Documents are to be made without deduction or withholding for tax unless the law requires it. If a deduction is required, the Borrower must make it, pay it to the right authority within the time allowed, send the Lender evidence of payment, and increase the payment so that the Lender receives what it would have received without the deduction. The Lender must give the Borrower any treaty residence certificate or form it reasonably requests to obtain a reduction or exemption, and the Borrower need not increase a payment to the extent that such relief would have been available if the Lender had given it.
The Borrower must pay all stamp, registration, documentary and similar taxes and fees payable in any country on or in relation to the signing, performance or enforcement of the Finance Documents, and must indemnify the Lender against any cost or liability from a failure to pay them on time.
Security
The Borrower's obligations under this agreement are to be secured by security over the Secured Assets, created by a separate Security Document in a form agreed between the parties. This agreement does not itself create any security.
The Borrower must sign and deliver the Security Document to the Lender before the Drawdown Date and must, at its own cost, complete every registration, filing, notice or other step that the law requires to perfect the security and give it the priority intended.
Guarantee
The Borrower must procure that the Guarantor signs and delivers to the Lender, before the Drawdown Date, a guarantee of the Borrower's obligations under this agreement in a separate document in a form agreed between the Lender and the Guarantor.
Representations
The Borrower makes to the Lender each of the representations in this Representations clause that is expressed to be made by the Borrower.
The Borrower, if it is not an individual, is duly incorporated or established and validly existing under the law of its jurisdiction of incorporation or establishment, and has power to own its assets and to carry on its business as it is now conducted; and, if it is an individual, has full legal capacity.
The Borrower has the power to enter into and perform the Finance Documents to which it is a party and has taken all necessary action to authorise its entry into and performance of them.
The obligations expressed to be assumed by the Borrower in the Finance Documents to which it is a party are legal, valid and binding obligations of the Borrower.
The Borrower's entry into and performance of the Finance Documents do not conflict with any law or regulation applicable to it, its constitutional documents (if any), or any agreement or instrument binding on it or any of its assets.
No Event of Default is continuing or would result from the advance of the Loan.
No litigation, arbitration or administrative proceeding is current or, to the Borrower's knowledge, threatened against the Borrower that, if adversely determined, could reasonably be expected to impair materially its ability to meet its payment obligations under the Finance Documents.
All factual information the Borrower has given the Lender in connection with the Loan was true and accurate in all material respects when given and was not misleading in any material respect because of an omission.
The Lender represents to the Borrower that it has the power to enter into and perform this agreement and has taken all necessary action to authorise its entry into and performance of it.
The Borrower makes each of its representations in this Representations clause on the date of this agreement and repeats it on the Drawdown Date and on each Interest Payment Date (if any), by reference to the facts and circumstances then existing.
Undertakings
The Borrower gives the undertakings in this Undertakings clause, which remain in force for as long as any amount is outstanding under this agreement.
The Borrower must supply to the Lender, promptly on request, such information about its financial condition and business as the Lender reasonably requests for the purpose of monitoring the Loan.
The Borrower must notify the Lender promptly after becoming aware of any Event of Default, giving details of it and of the steps (if any) being taken to remedy it.
The Borrower must obtain, comply with and maintain every authorisation that the law requires to enable it to perform its obligations under the Finance Documents.
The Borrower must comply in all material respects with all laws to which it is subject, where failure to do so would materially impair its ability to perform its obligations under the Finance Documents.
The Borrower must ensure that its payment obligations under this agreement rank at least equally with the claims of its other unsecured and unsubordinated creditors, apart from claims that the law mandatorily prefers.
The Borrower must not create or allow to subsist any Security Interest over any of its assets, other than a Security Interest created under a Security Document, a lien arising by operation of law in the ordinary course of business, or a Security Interest that the Lender has approved in writing (approval not to be unreasonably withheld or delayed).
Regulatory Status
The Borrower confirms that it enters into this agreement for the purposes of its business and not as a consumer or for personal, family or household purposes.
The Lender confirms that it holds every licence, authorisation or registration that applicable law requires for it to make the Loan in every jurisdiction where it is lending, or that none is required because it does not carry on the business of lending or because an exemption applies.
The Borrower represents that neither it, nor any Guarantor, nor any of their owners, directors or agents is the subject of sanctions imposed by the United Nations, the European Union, the United Kingdom, the United States or any other authority whose sanctions apply to a party or to the Loan. It must not use the Loan, or any benefit of it, for a person or in a country subject to such sanctions, and must tell the Lender at once if any of those statements stops being true.
If it becomes unlawful for the Lender, in any country that applies to it, to make, fund or keep the Loan, or to receive any payment, the Lender may by written notice cancel any part of the Loan not yet advanced and require the Borrower to repay the part advanced on the last day the law allows it to be kept, together with accrued interest and other amounts due.
The Borrower must pay the Lender, within ten Business Days after demand, any increased cost or reduction in return that the Lender suffers because a law or regulation, or a change in its interpretation or application, begins to apply after the date of this agreement and affects the Loan, other than a cost the Borrower already bears under the Taxes clause. The Lender must give a certificate showing how the amount is worked out.
Events of Default
Each of the events or circumstances described in this Events of Default clause is an "Event of Default".
The Borrower does not pay on its due date any amount payable by it under a Finance Document, unless the failure is caused by an administrative or technical error or a disruption to payment systems and payment is made within the Payment Grace Period after its due date.
The Borrower does not comply with any other obligation under a Finance Document and, if the failure is capable of remedy, it is not remedied within the Remedy Period after the earlier of the Lender giving the Borrower written notice of it and the Borrower becoming aware of it.
Any representation or statement made or treated as repeated by the Borrower in a Finance Document is incorrect or misleading in any material respect when made or treated as repeated and, if the circumstances giving rise to it are capable of remedy, they are not remedied within the Remedy Period after the Lender gives the Borrower written notice of them.
Any Financial Indebtedness of the Borrower is not paid when due (after any applicable grace period), or is declared due and payable before its specified maturity because of an event of default (however described), unless the aggregate amount of Financial Indebtedness concerned is less than the Cross Default Threshold.
The Borrower is unable, or admits inability, to pay its debts as they fall due, is deemed to be or is declared unable to pay its debts under applicable law, suspends making payments on any of its debts, or, because of actual or anticipated financial difficulties, begins negotiations with one or more of its creditors (other than the Lender) with a view to rescheduling any of its indebtedness.
Any corporate action, legal proceeding or other formal step is taken, in any jurisdiction, in relation to a moratorium, winding-up, dissolution, administration, bankruptcy, liquidation, judicial management or reorganisation (by way of voluntary arrangement, scheme of arrangement, restructuring plan or otherwise) of the Borrower, or the appointment of a liquidator, administrator, receiver, trustee or similar officer over the Borrower or any of its assets. This does not apply to a petition or application that is frivolous or vexatious and is discharged, stayed or dismissed within 21 days of being presented.
Any attachment, sequestration, distress, execution or similar process affects any material part of the assets of the Borrower and is not discharged within 21 days.
It is or becomes unlawful for the Borrower to perform any of its payment obligations under a Finance Document, or the Borrower repudiates or rescinds, or shows an intention to repudiate or rescind, a Finance Document.
The Borrower suspends or ceases, or threatens to suspend or cease, to carry on all or substantially all of its business.
The Borrower dies or loses the legal capacity to manage his or her own affairs, or the Borrower proposes or enters into an individual voluntary arrangement or any other composition or arrangement with his or her creditors generally, or any procedure for the settlement, rescheduling or relief of the Borrower's debts as an individual is started in any jurisdiction.
Any Security Document or Guarantee is not, or ceases to be, in full force and effect, or any person who has given a Guarantee does not pay any amount due under it when due (after any applicable grace period) or repudiates it.
Acceleration
At any time while an Event of Default is continuing, the Lender may, by written notice to the Borrower, do any one or more of the following: cancel any part of the Loan that has not been advanced; declare that all or part of the Loan, together with accrued interest and every other amount accrued or outstanding under the Finance Documents, is immediately due and payable, whereupon it is immediately due and payable; and exercise any of its rights under the Finance Documents.
Costs and Expenses
Each party bears its own costs and expenses (including legal fees) incurred in negotiating, preparing and entering into the Finance Documents.
The Borrower must pay the Lender, within ten Business Days of demand, the reasonable costs and expenses (including legal fees) that the Lender properly incurs in enforcing or preserving its rights under the Finance Documents.
Set-off
The Borrower must make every payment under this agreement without set-off or counterclaim, except for an amount that the Lender has agreed in writing, or a court has finally determined, is owed by the Lender to the Borrower. While an Event of Default is continuing, the Lender may set off any matured amount the Borrower owes under the Finance Documents against any matured obligation the Lender owes the Borrower, regardless of the place of payment or currency of either obligation, converting either obligation at a market rate of exchange for that purpose.
Assignment and Transfer
The Borrower may not assign or transfer any of its rights or obligations under this agreement without the Lender's prior written consent.
The Lender may assign or transfer any of its rights and obligations under this agreement with the Borrower's prior written consent, which may not be unreasonably withheld or delayed. No consent is needed for an assignment or transfer to an affiliate of the Lender or at any time while an Event of Default is continuing. The Lender must notify the Borrower of any assignment or transfer.
Notices
Any notice or other communication under this agreement must be in writing and delivered by hand, sent by pre-paid international post or courier, or sent by email, to the Lender at [Lender notice address and email] and to the Borrower at [Borrower notice address and email], or to any other address or email address that a party notifies to the other for this purpose on at least five Business Days' notice.
A notice is treated as received: if delivered by hand, when it is left at the relevant address; if sent by pre-paid post or courier, on the second Business Day after posting or dispatch (or the fifth Business Day if sent to another country); and if sent by email, when sent, unless the sender receives a message that it was not delivered. A notice received after 5.00 pm, or on a day that is not a Business Day, in the place of receipt is treated as received at 9.00 am on the next Business Day there.
General
The Finance Documents are the entire agreement between the parties about the Loan and supersede all earlier agreements, arrangements and understandings between them about it.
No amendment of this agreement is effective unless it is in writing and signed by or on behalf of each party.
No failure or delay by a party in exercising any right or remedy under this agreement operates as a waiver of it, and no single or partial exercise of a right or remedy prevents its further exercise. The rights and remedies under this agreement are in addition to those provided by law.
If any provision of this agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that does not affect the legality, validity or enforceability of the remaining provisions, or of that provision under the law of any other jurisdiction.
A person who is not a party to this agreement has no right to enforce any of its terms, whether under statute or otherwise.
This agreement may be signed in any number of counterparts and by electronic signature. Each counterpart is an original, and together the counterparts have the same effect as if each party had signed the same document.
Currency Indemnity
If any amount due from the Borrower under the Finance Documents must be converted from the currency in which it is payable into another currency for the purpose of making or filing a claim or proof, or obtaining or enforcing a judgment or award, the Borrower must indemnify the Lender against any cost, loss or liability arising from the conversion, including any difference between the rate of exchange used and the rate at which the Lender is able to buy the original currency with the amount it receives.
Interest
The Lender and the Borrower each confirm that, so far as they know, the Interest Rate (if any) and the fees under the Finance Documents do not exceed any limit that the Governing Law or the law of the Borrower's place of incorporation puts on interest or charges on a loan of this kind. If a limit applies and is exceeded, the interest and charges are reduced to the permitted maximum and any excess already paid is applied against the Loan or repaid.
Waiver of Immunity
The Borrower irrevocably waives, to the extent permitted by law, any immunity from jurisdiction, suit, attachment (before or after judgment or award) or execution to which it or any of its assets is or becomes entitled in any jurisdiction, and consents to the giving of any relief and the issue of any process in connection with any proceedings arising out of or in connection with this agreement.
Governing Law and Jurisdiction
The Governing Law governs this agreement and any non-contractual obligation arising out of or in connection with it.
The Chosen Courts have exclusive jurisdiction over any dispute arising out of or in connection with this agreement, including a dispute about its existence, validity or termination or about any non-contractual obligation arising out of or in connection with it.
If a dispute is referred to arbitration, the parties intend the award to be final and binding and enforceable in any country that is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), and judgment on it may be entered or enforced in any court that has jurisdiction over the Borrower or its assets.
The choice of the Governing Law does not remove the protection of any rule of the place where the Borrower is established or where any asset subject to a Security Document is located that cannot lawfully be excluded by agreement, and the Borrower must tell the Lender promptly of any such rule that affects the Finance Documents or their enforcement.
Without affecting any other method of service allowed by law, the Borrower irrevocably appoints the Process Agent as its agent to receive on its behalf service of process in any proceedings before the Chosen Courts. If the Process Agent ceases to be able to act, the Borrower must promptly appoint another agent in the same jurisdiction on the same terms and notify the Lender.
Repayment Schedule
The Borrower must repay the Loan in the following instalments, each on the date shown: [Repayment instalments (amount and due date of each)]. If less than the full amount of the Loan is advanced, each instalment is reduced proportionately.