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Loan And Security Agreement Template for Nigeria

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Key Requirements PROMPT example:

Loan And Security Agreement

"I need a Loan and Security Agreement for a ���500 million facility to be provided by First Bank Nigeria to a medium-sized manufacturing company, secured by manufacturing equipment and inventory, with quarterly repayments over 3 years starting March 2025."

Document background
The Loan and Security Agreement is a fundamental document in Nigerian banking and finance practice, used when a lender provides financial facilities to a borrower against specific security. This agreement is particularly relevant in the Nigerian market where secured lending is preferred due to risk mitigation requirements and regulatory compliance. The document combines what might otherwise be separate loan and security agreements into a single, comprehensive instrument, streamlining documentation while ensuring compliance with Nigerian banking regulations, including BOFIA 2020 and Central Bank of Nigeria directives. It's commonly used for corporate financing, asset acquisition, working capital facilities, and project finance, providing clear terms for both the lending arrangement and the security package that supports it.
Suggested Sections

1. Parties: Identifies and defines the Lender, Borrower, and any Guarantors or Security Providers

2. Background: Sets out the context of the loan arrangement and security provision

3. Definitions and Interpretation: Defines key terms used throughout the agreement and interpretation rules

4. The Facility: Details of the loan amount, purpose, and drawdown conditions

5. Interest and Fees: Specifies interest rate, calculation method, fees, and payment terms

6. Repayment Terms: Outlines repayment schedule, prepayment provisions, and payment mechanics

7. Security: Describes the assets provided as security and the nature of the security interest

8. Representations and Warranties: Statements of fact and assurances given by the Borrower

9. Covenants: Positive and negative obligations of the Borrower during the loan term

10. Events of Default: Circumstances constituting default and consequences thereof

11. Enforcement: Rights and remedies of the Lender upon default

12. Assignments and Transfers: Rules regarding transfer of rights and obligations under the agreement

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: Confirms Nigerian law as governing law and jurisdiction for disputes

15. Miscellaneous: Standard boilerplate provisions including severability, amendments, and counterparts

Optional Sections

1. Guarantees: Required when third-party guarantees are part of the security package

2. Insurance: Detailed insurance requirements for secured assets, if applicable

3. Security Trustee Provisions: Required in syndicated loans or when security is held by a trustee

4. Tax Provisions: Detailed tax provisions when complex tax implications exist

5. Currency Provisions: Required when loan or payments involve foreign currency

6. Additional Borrower Provisions: Required when multiple borrowers are involved

7. Intercreditor Provisions: Required when multiple lenders are involved

8. Registration Requirements: Specific provisions for registration of security interests when required by Nigerian law

Suggested Schedules

1. Schedule 1 - Conditions Precedent: List of documents and conditions required before drawdown

2. Schedule 2 - Drawdown Request Form: Template form for requesting loan disbursements

3. Schedule 3 - Secured Assets: Detailed description of all assets provided as security

4. Schedule 4 - Repayment Schedule: Detailed payment dates and amounts

5. Schedule 5 - Security Documents: List and copies of all security documents

6. Schedule 6 - Existing Encumbrances: List of any pre-existing charges or encumbrances on security

7. Schedule 7 - Financial Covenants: Detailed financial ratios and requirements

8. Appendix A - Compliance Certificate: Template for periodic compliance certification

9. Appendix B - Security Perfection Requirements: Checklist of requirements for perfecting security under Nigerian law

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
































































Clauses












































Relevant Industries

Banking & Financial Services

Real Estate & Construction

Manufacturing & Industrial

Oil & Gas

Agriculture & Agribusiness

Telecommunications

Healthcare

Technology & Software

Retail & Consumer Goods

Transportation & Logistics

Mining & Natural Resources

Education

Hospitality & Tourism

Relevant Teams

Legal

Finance

Risk Management

Compliance

Credit

Treasury

Corporate Secretariat

Operations

Business Development

Corporate Banking

Documentation

Security Administration

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Risk Manager

Credit Manager

Loan Officer

Compliance Officer

Treasury Manager

Corporate Secretary

Security Trustee

Financial Controller

Branch Manager

Relationship Manager

Credit Analyst

Legal Director

Managing Director

Chief Executive Officer

Chief Risk Officer

Chief Legal Officer

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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