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Loan Note Agreement Generator for the USA

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Key Requirements PROMPT example:

Loan Note Agreement

"I need a Loan Note Agreement for a £5 million secured loan to my technology company, with quarterly interest payments and the option to convert to equity after 18 months, planned to complete by March 2025."

Document background
A Loan Note Agreement is commonly used when companies seek to raise debt financing through the issuance of loan notes, particularly in situations where traditional bank financing may not be suitable or available. The agreement, governed by English and Welsh law, provides a comprehensive framework for documenting the debt arrangement, including crucial elements such as interest calculations, repayment schedules, security provisions, and investor protections. This type of financing instrument is particularly popular in private equity transactions, growth company funding, and corporate restructuring scenarios.
Suggested Sections

1. Parties: Details of the lender and borrower

2. Background: Context of the loan note issuance

3. Definitions: Key terms used throughout the agreement

4. Issue of Notes: Terms of issuance including amount and date

5. Interest: Interest rate, calculation method and payment dates

6. Repayment: Terms for repayment of principal

7. Events of Default: Circumstances constituting default and consequences

8. Representations and Warranties: Standard assurances from the issuer

Optional Sections

1. Security: Details of any security provided (used when loan notes are secured)

2. Conversion Rights: Terms for converting notes to shares (used for convertible loan notes)

3. Transferability: Conditions for transferring the notes (used if notes can be transferred)

4. Subordination: Priority ranking of the notes (used when notes are subordinated to other debt)

Suggested Schedules

1. Form of Note: Template of the actual loan note certificate

2. Conditions: Detailed terms and conditions of the notes

3. Transfer Provisions: Detailed procedures for transferring notes

4. Security Documents: Details of any security arrangements (for secured notes only)

Authors

Alex Denne

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

Relevant legal definitions




























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Industries

Companies Act 2006: Primary legislation governing company borrowing, securities, registration of charges, and directors' duties and authorities in relation to loan agreements

Financial Services and Markets Act 2000: Regulatory framework covering financial instruments, financial promotion restrictions, and requirements for regulated activities in financial services

Consumer Credit Act 1974: Legislation governing consumer credit arrangements, relevant if loan notes might be offered to individuals rather than corporations

Law of Property Act 1925: Legislation governing property rights and security, applicable if the loan notes are secured against property

FCA Regulations: Regulatory requirements from the Financial Conduct Authority, particularly relevant for regulated investment products and prospectus requirements for public offerings

UK Listing Rules: Regulations governing the listing of securities on regulated markets in the UK

Insolvency Act 1986: Legislation governing creditor rights and priority of claims in insolvency situations

Common Law Contract Principles: Fundamental principles of contract law including contract formation, interpretation, and remedies for breach

UK Money Laundering Regulations 2017: Regulations covering due diligence requirements and reporting obligations for financial transactions

UK Tax Legislation: Tax laws affecting loan notes, including withholding tax requirements and stamp duty considerations

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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