Hi gan-ga :)
Please find below a very basic loan agreement (and related loan note)
which is suitable for two individuals contracting in the UK. Items to
be filled in by you are in [square brackets]. You should also ensure
that BOTH documents (the loan note should be attached to the loan
agreement) are witnessed correctly (i.e. for the loan agreement:
someone to witness your signature and someone different to witness the
Borrower's signature; for the attached Note: it's just the Borrower
that needs to sign this and have it witnessed).
Given the amount of money involved and that fact that I am assuming
that you know the other party quite well, I have not included
something called a security note which is a separate document granting
you security over the borrower's assets (probably a bit heavy-handed
for a transaction between friends!) :) I have, however, left the
option open for you to obtain security at a later date if you wish
(see clause 5).
Should you require any clarification, please do not hesitate to ask.
jem-ga :)
p.s. am apologising in advance if formatting comes out a bit wonky -
sometimes when we cut and paste into our browser windows, the
formatting doesn't always end up how it started!
p.p.s. just picked up your last clarification - yes, although you're
friends, always best to get things sorted out formally so that both
parties respect each others position :)
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LOAN AGREEMENT
THIS AGREEMENT IS MADE the __ day of ___2003 BETWEEN:
(1) GAN-Ga :)(the “Lender”); and
(2) [ ](the “Borrower”).
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 the Borrower on __
day of ___ (the “Loan Date”) the sum of fourteen hundred pounds
(£1400.00) (the “Loan”).
2. Note. The Loan shall be evidenced by a Note in the form attached
as Exhibit A of this agreement (the “Note”) executed by the Borrower
and delivered to the Lender on the Loan Date.
3. Interest. Both parties have agreed that the Loan shall not bear
interest. However, in the event of a default in payment, interest
shall be applied from the date of default at an annual rate of [ ]%
per annum unless otherwise agreed in writing between the parties.
4. Payment. Payment shall be in accordance with the terms of 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 payment shall be a minimum of £[ ].
5. Security. 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 have been duly authorised and are proper; (ii)
that there will be no material adverse changes in the financial
condition of the Borrower at the time of the Loan Date; (iii) there
are no material, unrealised or anticipated losses from any present
commitment of the Borrower; (iv) that the Borrower will advise the
Lender of material adverse changes which may occur at any time prior
to the Loan Date and thereafter to the date of final payment. 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 [10] 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 of
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 and the Note shall be governed by,
construed and enforced in accordance with the laws of England and
Wales and both parties agree to submit to the exclusive jurisdiction
of the English Courts.
IN WITNESS OF WHICH the parties have signed this agreement the day and
year first above written.
Signed by the Borrower: ____________________
in the presence of (witness signature): ______________
Name:
Address:
Occupation:
Signed by the Lender: ____________________
in the presence of (witness signature): ______________
Name:
Address:
Occupation:
EXHIBIT A – LOAN NOTE
THIS DEED is made the __day of ___2003
BY:[Name of Borrower] of [full physical address of Borrower](the
“Borrower”).
WHEREAS: The Borrower is indebted to [GAN-Ga] (“the Lender”) in the
sum of £1400.00.
NOW THIS DEED WITNESSES as follows:
1. The Borrower promises to pay to the order of the Lender the sum of
fourteen hundred pounds (£1400.00).
2. This note shall be paid as follows: [you need to put the payment
schedule in this section]
(i) On [insert date], 2003, the sum of [£ ]
(ii)On [insert date], 2003, the sum of [£ ], etc.
[OR you can simply use the following wording for this clause 2: "This
note shall be paid as follows: starting from the date of the Loan and
for a period of not more than 6 months thereafter, the Borrower hereby
agrees to make bi-weekly payments to the Lender in the amount of [£ ]
per week."
The first option gives certainty of dates and receipt of payment, the
second option is much more general and vague and does not stipulate
any actual dates, only that payments are made bi-weekly over the
course of 6 months]
3. This note may be prepaid without penalty subject to the minimum
payment requirement stipulated in clause 4 of the loan agreement.
4. This note shall be due and payable upon demand by any holder hereof
should the Borrower default in any payment beyond 10 days of its due
date.
IN WITNESS OF WHICH the Borrower has executed this deed the day and
year first above written.
[Signature of Borrower]:________________________
in the presence of (witness)
Name:
Address:
Occupation:
Signature of Witness:____________________________ |
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