Funding Agreement for Nigeria

Funding Agreement Template for Nigeria

A comprehensive legal document governed by Nigerian law that establishes the terms and conditions under which funding is provided from one party to another. The agreement details the funding amount, disbursement conditions, repayment terms, security arrangements, and obligations of all parties involved, while ensuring compliance with Nigerian financial regulations, including the Companies and Allied Matters Act (CAMA) 2020 and relevant Central Bank of Nigeria directives. It incorporates necessary safeguards and enforcement mechanisms suitable for the Nigerian business environment.

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What is a Funding Agreement?

The Funding Agreement is a crucial document used in Nigerian business transactions when one party seeks to obtain funding from another, whether for project financing, business expansion, or general corporate purposes. It is essential for documenting the terms of financial arrangements while ensuring compliance with Nigerian regulatory requirements, including those set by the Central Bank of Nigeria and the Securities and Exchange Commission. The agreement typically includes detailed provisions on funding amounts, disbursement conditions, repayment schedules, security arrangements, events of default, and remedies. It must be structured to account for specific considerations under Nigerian law, including foreign exchange regulations for international funding, anti-money laundering requirements, and corporate authorization requirements under CAMA 2020.

What sections should be included in a Funding Agreement?

1. Parties: Identification of the parties entering into the agreement, including their full legal names, registration details, and addresses

2. Background: Context of the funding arrangement, including the purpose of the funding and any relevant history or context

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules for interpreting the agreement

4. Amount and Purpose of Funding: Specification of the funding amount, currency, and permitted uses of the funds

5. Disbursement Terms: Conditions precedent, disbursement schedule, and mechanics for releasing the funds

6. Repayment Terms: Details of repayment schedule, interest rates (if applicable), and payment mechanisms

7. Representations and Warranties: Statements of fact and assurances given by both parties regarding their capacity and authority

8. Covenants: Ongoing obligations of the parties throughout the term of the agreement

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

10. Remedies: Actions available to parties in case of breach or default

11. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

12. Confidentiality: Obligations regarding the protection of confidential information

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

14. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and choice of courts/dispute resolution

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

What sections are optional to include in a Funding Agreement?

1. Security Arrangements: Details of any security or collateral provided - include when funding is secured against assets

2. Guarantees: Terms of any guarantees provided - include when there are third-party guarantors

3. Conditions Subsequent: Post-disbursement conditions - include for phased funding arrangements

4. Regulatory Compliance: Specific regulatory requirements - include when dealing with regulated entities or sectors

5. Foreign Exchange Provisions: Currency conversion and exchange rate provisions - include for cross-border funding

6. Tax Provisions: Detailed tax treatment and obligations - include when tax implications are significant

7. Monitoring Rights: Lender's rights to monitor use of funds - include for project-specific funding

8. Insurance Requirements: Required insurance coverage - include when specific insurance is needed

9. Change of Control: Provisions dealing with ownership changes - include for corporate borrowers

What schedules should be included in a Funding Agreement?

1. Disbursement Schedule: Detailed timeline and conditions for fund releases

2. Repayment Schedule: Detailed breakdown of repayment dates and amounts

3. Form of Drawdown Notice: Template for requesting disbursements

4. Security Documents: List and copies of security documentation

5. Required Authorizations: List of required permits, licenses, and approvals

6. Project Details: Detailed description of the funded project (if project-specific)

7. Conditions Precedent Documents: List of documents required before disbursement

8. Financial Covenants: Detailed financial ratios and requirements

9. Permitted Security Interests: List of pre-approved security interests or liens

Authors

Alex Denne

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

Jurisdiction

Nigeria

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking & Financial Services

Real Estate & Construction

Technology & Telecommunications

Manufacturing & Industrial

Energy & Natural Resources

Agriculture & Agribusiness

Healthcare & Pharmaceuticals

Infrastructure Development

Education

Retail & Consumer Goods

Transportation & Logistics

Mining

Oil & Gas

Entertainment & Media

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Finance

Credit

Operations

Company Secretariat

Project Finance

Investment Banking

Due Diligence

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Investment Manager

Credit Risk Manager

Compliance Officer

Treasury Manager

Project Finance Manager

Managing Director

Company Secretary

Financial Controller

Risk Manager

Investment Banker

Relationship Manager

Transaction Manager

Due Diligence Officer

Corporate Finance Manager

Industries
Companies and Allied Matters Act (CAMA) 2020: The primary legislation governing company operations in Nigeria, including provisions for corporate structure, shareholding, and business operations that may be relevant to funding arrangements.
Investment and Securities Act 2007: Regulates investment and securities business in Nigeria, particularly relevant if the funding involves any form of securities or investment instruments.
Central Bank of Nigeria Act 2007: Contains regulations regarding financial transactions and monetary policy that may affect funding arrangements, especially if involving banking institutions.
Money Laundering (Prevention and Prohibition) Act 2022: Provides anti-money laundering requirements that must be considered in funding transactions, including due diligence and reporting obligations.
Banks and Other Financial Institutions Act (BOFIA) 2020: Relevant for funding agreements involving licensed financial institutions or banking transactions.
Nigerian Investment Promotion Commission Act: Important for funding agreements involving foreign investment or international parties.
Companies Income Tax Act: Governs the taxation of companies in Nigeria, relevant for understanding tax implications of the funding arrangement.
Foreign Exchange (Monitoring and Miscellaneous Provisions) Act: Crucial for funding agreements involving foreign currency or international transfers.
Investments and Securities Tribunal (IST) Act: Provides the legal framework for resolving investment and securities-related disputes.
Evidence Act 2011: Relevant for enforceability of the agreement and admissibility of electronic documents/signatures.
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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