Promissory Note And Security Agreement Template for Nigeria

The Promissory Note and Security Agreement is a sophisticated financial instrument used in Nigerian business transactions when a party needs to document a debt obligation while simultaneously providing security for its repayment. This dual-purpose document is particularly valuable in commercial lending, asset financing, and business expansion scenarios where lenders require both a clear promise of payment and tangible security. The document must comply with Nigerian financial regulations, including the Bills of Exchange Act and Secured Transactions in Movable Assets Act, and typically requires registration with the National Collateral Registry. It's commonly used in both corporate and individual lending arrangements, providing a comprehensive framework for secured debt obligations while offering protection for both lender and borrower interests.

1. Parties: Identification of the Maker (borrower/debtor) and Payee (lender/creditor) with full legal names and addresses

2. Background: Context of the loan arrangement and purpose of the security agreement

3. Definitions: Key terms used throughout the agreement including 'Collateral', 'Event of Default', 'Secured Obligations', etc.

4. Promise to Pay: Unconditional promise to pay a specific sum, with interest rate, payment schedule, and maturity date

5. Interest and Charges: Details of interest calculation, default interest, and any additional charges

6. Security Interest: Grant of security interest in the collateral, description of collateral, and representations regarding ownership

7. Perfection of Security: Requirements for registration and filing of security interests with relevant authorities

8. Representations and Warranties: Maker's declarations regarding authority, ownership of collateral, and absence of other liens

9. Covenants: Ongoing obligations regarding maintenance of collateral, insurance, and prohibited actions

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

11. Enforcement Rights: Payee's rights and remedies upon default, including right to seize and dispose of collateral

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