Directors Loan Agreement Template for Nigeria

The Director's Loan Agreement is a crucial document used when a company in Nigeria extends a loan to one of its directors, or vice versa. This agreement is essential for compliance with Nigerian corporate law, particularly the Companies and Allied Matters Act (CAMA) 2020, which requires formal documentation and specific approvals for related party transactions. The document outlines the complete terms of the loan, including amount, interest, repayment schedule, and any security arrangements, while ensuring transparency and protection for both parties. It's particularly important for corporate governance, tax compliance, and regulatory reporting purposes, and must be properly executed to avoid potential legal issues or challenges from shareholders or regulatory authorities. The agreement should be tailored to specific circumstances while maintaining compliance with Nigerian banking, financial, and corporate regulations.

1. Parties: Identification of the Company and the Director entering into the loan agreement

2. Background: Context of the loan agreement, including the director's relationship with the company and purpose of the loan

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Amount and Purpose: Specific details of the loan amount and its intended use

5. Interest Rate: Terms of interest payment, calculation method, and rate

6. Repayment Terms: Schedule and method of repayment, including installment details if applicable

7. Drawdown: Conditions and process for accessing the loan funds

8. Representations and Warranties: Statements of fact by both parties regarding their capacity and authority to enter into the agreement

9. Covenants: Ongoing obligations of both parties during the loan term

10. Events of Default: Circumstances that constitute default and consequences thereof

11. Termination: Conditions and process for early termination of the agreement

12. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction for disputes

13. Notices: Process and addresses for formal communications between parties

14. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments