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The Term Loan Agreement is a fundamental financing document used in Nigeria when a borrower requires fixed-term funding for specific purposes such as business expansion, asset acquisition, or project financing. It provides a structured framework for lending transactions, ensuring compliance with Nigerian banking regulations, including BOFIA 2020 and Central Bank of Nigeria directives. The agreement typically includes detailed provisions on loan utilization, repayment structures, security arrangements, borrower obligations, and lender rights. This document is essential for both secured and unsecured lending transactions in Nigeria, incorporating necessary protections for lenders while ensuring fairness and clarity for borrowers. The Term Loan Agreement must be properly stamped and executed to ensure enforceability under Nigerian law.

1. Parties: Identifies and defines the Lender and Borrower, including their registered addresses and company details

2. Background: Sets out the context of the loan and summarizes the parties' intentions

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

4. The Facility: Details the loan amount, purpose, and availability period

5. Conditions Precedent: Lists conditions that must be satisfied before the loan can be drawn

6. Drawdown: Specifies the drawdown mechanics, notice requirements, and procedures

7. Interest: Details interest rate, calculation method, payment dates, and default interest

8. Repayment: Sets out the repayment schedule, amounts, and mechanisms

9. Prepayment: Governs voluntary and mandatory prepayment situations and consequences

10. Representations and Warranties: Contains standard representations and warranties by the Borrower

11. Information Undertakings: Specifies ongoing information and reporting requirements

12. General Undertakings: Sets out positive and negative covenants applicable to the Borrower

13. Events of Default: Lists circumstances constituting default and their consequences

14. Changes to Parties: Governs assignments and transfers by the Lender and Borrower

15. Payment Mechanics: Details payment procedures, currency, and business day conventions

16. Set-off: Establishes the Lender's set-off rights

17. Notices: Specifies how formal communications between parties should be made

18. Calculations and Certificates: Establishes basis for calculations and evidential value of certificates

19. Partial Invalidity: Ensures agreement remains valid if parts are found unenforceable

20. Remedies and Waivers: Preserves parties' rights and addresses waiver mechanics

21. Governing Law and Enforcement: Specifies Nigerian law as governing law and enforcement provisions