Shareholder Loan Agreement

SHAREHOLDER LOAN AGREEMENT

This Shareholder Loan Agreement (the “Agreement”) is effective as of [DATE],

BETWEEN: [SHAREHOLDER NAME] (the "Shareholder"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE] with its head office located at:

[COMPLETE ADDRESS]

AND: [COMPANY NAME] (the "Borrower"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE] with its head office located at:

[COMPLETE ADDRESS]

WHEREAS, the Shareholder desires to loan funds to the Borrower for the Borrower's operations;

WHEREAS, the Parties wish to memorialize the terms and conditions governing the Loan;

WHEREAS, for the purposes of this Agreement, the Shareholder is willing (i) to be deemed to have accepted the Borrower’s assertion that no Existing Default has occurred, (ii) to be deemed to have withdrawn the Default Notice, retroactively, as of [SPECIFY DATE], and (iii) to accept the Borrower’s proposal so to restructure the Loan and other Secured Obligations, all on the terms and conditions provided herein;

WHEREAS, both the Parties affirm to understand all of the provisions contained in this Agreement, and in case either Party requires clarification as to one or more of the provisions contained herein, either Party has requested clarification or otherwise sought guidance.

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

LOAN

AND INTEREST RATE

The Shareholder shall loan a total of

[

SPECIFY

THE AMOUNT]

to the Borrower to finance the operations of the Borrower's business (the "Loan").

The Loan shall bear interest at the

rate of

[SPECIFY

RATE]

per annum, compounded annually. The

arties shall calculate the interest based on a

full

year

(365 days)

consisting of twelve months. Interest will accrue until repayment of the Loan. The amount owed to the Shareholder shall be calculated as the Loan plus accrued interest thereon (the "Loan Amount").

the

Borrower fails

to pay any sum payable under this

Agreement

when due,

the

Borrower shall from time to time on demand pay interest on such sum from and including the due date to the date of actual payment (after as well as before judgment) at a per annum interest rate equal to

[SPECIFY RATE

]

% above the interest rate.

PAYMENT

The Loan Amount shall be due and payable on

[

SPECIFY

DATE]

(the “Maturity Date”), provided that the Borrower has enough cash flow to repay the Loan Amount without adversely affecting its then-current business activities. In the event the repayment of the

oan would adversely affect the then-current business activities of the Borrower, the Maturity Date shall be postponed until the Borrower has enough cash flow to repay the Loan Amount without adversely affecting its then-current business activities.

At any time, the Borrower, with one

week

’s

prior written notice, may repay the entire Loan Amount to the Shareholder without penalty.

OBLIGATIONS

OF THE BORROWER

The Borrower hereby agrees neither to invest in any new business in any other country

nor shall it pay dividends to any

other

shareholders of the Company unless and until the entire Loan

mount

along with the interest

has been repaid by it to the

Shareholder

DEFAULT

If any of the following events of default occur, this Agreement and any other obligations of the Borrower to the

Shareholder

shall become due immediately, without demand or notice.

Failure of the Borrower to pay the principal and any accrued interest when due.

The filing of bankruptcy proceedings involving the Borrower as a debtor.

The application for the appointment of a receiver for the

orrower.

The making of a general assignment for the benefit of the Borrower’s creditors

The insolvency of the Borrower

A misrepresentation by the Borrower to the

Shareholder

for the purpose of obtaining or extending credit

addition,

the Borrower shall be in default if there is a sale, transfer, assignment, or any other disposition of any assets pledged as security for the payment of this Loan Agreement, or if there is a default in any security agreement which secures this

Shareholder

Loan Agreement.

CONDITIONS TO EFFECTIVENESS

The Borrower shall have made the

required o

bligation payment

to the Shareholder

as and when expressly provided in

this Agreement

herein (with time being of the essence).

This Agreement and all other instruments, documents, and agreements contemplated herein shall have been duly executed and delivered by the respective

arties hereto and shall be in full force and effect and shall be in form and substance reasonably satisfactory to the

Shareholder

All action on the part of the Borrower necessary for the valid execution and performance by the Borrower pursuant to this Agreement

and all instruments, documents, and agreements contemplated herein shall have been duly and effectively taken.

MODIFICATION

No modification to, waiver of, or cancellation of any term of this Agreement shall be valid unless it is in writing and signed by both Parties.

NOTICES

Any notices or delivery required here shall be deemed completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the Parties at the addresses contained in this Agreement or as the

arties may later designate in writing at the address provided by the Parties.

LEGAL AND BINDING

This Agreement is legal and binding between the Parties as stated above. This Agreement may be entered into and is legal

and

binding in [COUNTRY]. The Parties each represent that they have the authority to enter into this Agreement.

ALTERNATIVE DISPUTE RESOLUTION

In the event a dispute arises out of or in connection with this Agreement, the Parties shall attempt to resolve the dispute through friendly consultation.

If the dispute is not resolved within a period of [

NUMBER OF

DAYS] days then any or all outstanding issues may be submitted to mediation in accordance with any statutory rules of mediation. If mediation is not successful in resolving the entire dispute or is unavailable, any outstanding issues shall be submitted to final and binding arbitration in accordance with the laws of [STATE/PROVINCE]

The arbitrator's award shall be final, and judgment may be entered upon it by any court having jurisdiction within [STATE/PROVINCE].

SEVERABILITY

In the event that any provision of this Agreement is deemed invalid or unenforceable, in whole or in part, that part shall be severed from the remainder of the Agreement and all other provisions should continue in full force and effect as valid and enforceable.

ENTIRE

AGREEMENT

This

greement, and any documents referred to in it, constitute the whole

greement between the

arties and supersede any previous arrangement, understanding or agreement between them relating to the subject matter they cover.

Each of the

arties acknowledges and agrees that in entering into this

greement

it does not rely on any undertaking, promise, assurance, statement, representation, warranty or understanding (whether in writing or not) of any person (whether party to this

greement or not) relating to the subject matter of this

greement, other than as expressly set out in this

greement.

LANGUAGE AND GOVERNING LAW

This Agreement shall be governed by and construed and enforced in accordance with the laws of the [STATE/PROVINCE]

of [COUNTRY]

, which law shall prevail in the event of any conflict of the

arties.

The

arties hereto acknowledge that they requested that this Agreement and all related documents be drafted in English, that any notice to be given hereunder be given in English, and that any proceedings between the

arties relating to this Agreement be drafted in English

IN WITNESS WHEREOF, the Parties have executed this Agreement on [DATE].

SHAREHOLDER BORROWER

Authorized Signature Authorized Signature

Print Name and Title Print Name and Title

Shareholder Loan Agreement - Download Free Template Shareholder Loan Agreement