Loan Agreement (Sample)

LOAN AGREEMENT

THIS AGREEMENT IS MADE the ______________ day of ________________ 20________ 

BETWEEN:

(1)          ____________________________________________ (the “Borrower”); and

(2)          ____________________________________________ (the “Lender”).

NOW IT IS HEREBY AGREED as follows:

1.  Loan:

Subject to and in accordance with this agreement, its terms, conditions and covenants the Lender agrees to lend to the Borrower on ____________ 19____ (the “Loan Date”) the principal sum of ________________________ Tanzanian (Tshs. ________ ) ( the “Loan”).

2. Note:

The Loan shall be evidenced by a Note in form attached hereto as Exhibit A (the “Note”) executed by the Borrower and delivered to the Lender on the Loan Date.

3. Interest:

 The Loan shall bear interest on the unpaid principal at an annual rate of________________ percent (___________ %). In the event of a default in payment the aforesaid interest rate shall apply to the total of principal and interest due at the time of default.

4. Payment:

 Payment shall be in accordance with the terms contained in the Note. The Note may, at any time and from time to time, be paid or prepaid in whole or in part without premium or penalty, except that any partial prepayment shall be (a) in multiples of TShs.____________, (b) a minimum of Sh. ___________, applied to any instalments due under the Note in the reverse order of their maturity. Upon payment of the outstanding principal in full or all of the installments, if any, the interest on the Loan shall be computed and a final adjustment and payment of interest shall be made within five (5) days of the receipt of notice. Interest shall be calculated on the basis of a year of ________ days and the actual number of days elapsed.

5. Security:

The Borrower agrees to secure the repayment of the Loan by executing those security documents attached hereto as Exhibit B (the “Security Document”) and shall deliver the Security Document on the Loan Date. From time to time the Lender may demand, and the Borrower shall execute, additional loan documents which are reasonably necessary to perfect the lender’s security interests.

6. Representations and Warranties:

 The Borrower represents and warrants: (i) that the execution, delivery and performance of this agreement, and the Note and Security Documents have been duly authorised and are proper; (ii) that the financial statement submitted to the Lender fairly presents the financial condition of the Borrower as of the date of this agreement knowing that the Lender has relied thereon in granting the Loan; (iii) that the Borrower has no contingent obligations not disclosed or reserved against in said financial statement, and at the present time there are no material, unrealised or anticipated losses from any present commitment of the Borrower; (iv) that there will be no material adverse changes in the financial condition of the Borrower at the time of the Loan Date; (v) that the Borrower will advise the Lender of the material adverse changes which occur at any time prior to the Loan date and thereafter to the date of final payment; and (vi) that the Borrower has good and valid title to all of the property given as security hereunder. The Borrower represents and warrants that such representations and warranties shall be deemed to be continuing representations and warranties during the entire life of this agreement.

7. Default:

The Borrower shall be in default: (i) if any payment due hereunder is not made within__________ (___) days of the date due; (ii) in the event of assignment by the Borrower for the benefit of creditors; (iii) upon the filing of any voluntary or involuntary petition for bankruptcy by or against the Borrower; or (iv) if the Borrower has breached any representation or warranty specified in this agreement.

8. Governing Law:

This agreement, the Note(s) and the Security Document shall be governed by, construed and enforced in accordance with the law of Tanzania to the jurisdiction of which the parties hereto submit.

IN WITNESS OF WHICH the parties have signed this agreement the day and year first above written

_____________________________                     _______________________________

Signed by or on behalf of the Borrower                          Signed by or on behalf of the Lender

______________________________                _______________________________

In the presence of (witness)                                       In the presence of (witness)

Name:__________________________             Nam: ___________________________

Address:________________________              Address: __________________________

Occupation:______________________             Occupation:________________________

EXHIBIT: A

Attach a copy of the Note

EXHIBIT: B

Attach copies of the Security Documents