Undertaking Loan Agreement for Nigeria

Undertaking Loan Agreement Template for Nigeria

A comprehensive legal document governed by Nigerian law that establishes the terms and conditions of a loan facility between a lender and borrower. This agreement incorporates specific undertakings and commitments from the borrower, ensuring compliance with Nigerian banking regulations and financial laws. It details loan amount, interest rates, repayment terms, security arrangements, and enforcement mechanisms while adhering to the requirements of the Banks and Other Financial Institutions Act (BOFIA) 2020 and other relevant Nigerian legislation. The document includes provisions for default, remedies, and dispute resolution within the Nigerian legal framework.

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What is a Undertaking Loan Agreement?

The Undertaking Loan Agreement is a fundamental financial instrument used in Nigerian banking and commercial transactions when a lender provides financial facilities to a borrower under specific terms and conditions. This document is essential when establishing a formal lending relationship that requires detailed undertakings and commitments from the borrower, particularly under Nigerian banking regulations. It is commonly used by financial institutions, banks, and other lenders operating in Nigeria who need to ensure their lending arrangements are properly documented and enforceable under Nigerian law. The agreement must comply with the Banks and Other Financial Institutions Act (BOFIA) 2020, Central Bank of Nigeria regulations, and other relevant Nigerian financial legislation. The document typically includes comprehensive provisions covering loan terms, security arrangements, representations and warranties, covenants, events of default, and enforcement mechanisms.

What sections should be included in a Undertaking Loan Agreement?

1. Parties: Identifies and defines the Lender and Borrower with full legal names and addresses

2. Background: Explains the context of the loan and the parties' intention to enter into the agreement

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

4. The Loan: Specifies the loan amount, purpose, and disbursement conditions

5. Interest: Details the interest rate, calculation method, and payment terms

6. Repayment: Specifies repayment schedule, methods, and prepayment terms

7. Conditions Precedent: Lists conditions that must be satisfied before loan disbursement

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

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

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

11. Remedies: Lender's rights and remedies upon occurrence of an Event of Default

12. Notices: Communication procedures between parties

13. Assignment and Transfer: Rules regarding transfer of rights under the agreement

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

15. Execution: Signature blocks and execution formalities

What sections are optional to include in a Undertaking Loan Agreement?

1. Security: Include when loan is secured by specific assets or guarantees

2. Insurance: Include when specific insurance requirements are imposed on the Borrower

3. Special Conditions: Include for industry-specific or unusual loan terms

4. Counter-Indemnity: Include when there are guarantors involved

5. Additional Parties: Include when guarantors or security providers are party to the agreement

6. Set-off Rights: Include when Lender has right to set off against Borrower's other accounts

7. Tax Provisions: Include detailed tax provisions when cross-border elements exist

8. Change of Circumstances: Include provisions for material adverse change or force majeure

What schedules should be included in a Undertaking Loan Agreement?

1. Loan Details: Detailed breakdown of loan amount, interest rates, and payment schedule

2. Conditions Precedent Documents: List of required documents and conditions to be satisfied

3. Security Details: Description of any security or collateral (if applicable)

4. Repayment Schedule: Detailed amortization schedule with payment dates and amounts

5. Form of Drawdown Notice: Template for Borrower to request loan disbursement

6. Forms of Compliance Certificate: Template for periodic compliance certification

7. Permitted Security: List of security interests permitted under the agreement

8. Required Insurance: Details of required insurance coverage and terms

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

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking & Financial Services

Real Estate & Construction

Manufacturing & Industrial

Oil & Gas

Agriculture & Agribusiness

Telecommunications

Retail & Commerce

Healthcare

Technology & Software

Transportation & Logistics

Mining & Natural Resources

Education

Hospitality & Tourism

Relevant Teams

Legal

Finance

Compliance

Risk Management

Treasury

Credit Administration

Corporate Banking

Operations

Company Secretariat

Due Diligence

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Banking Relationship Manager

Credit Risk Manager

Loan Officer

Compliance Officer

Treasury Manager

Financial Controller

Company Secretary

Risk Assessment Officer

Banking Operations Manager

Contract Administrator

Due Diligence 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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