LOAN AGREEMENT

February 28, 2024

LOAN AGREEMENT BETWEEN XXXX AND YYYY

THIS LOAN AGREEMENT (the “Agreement”) is made and entered into as of [DATE] between XXXX(the “Lender”) whose address is [insert address] and YYYY whose place of business is located at [insert address] (the “Borrower”).

RECITALS:

WHEREAS, the Borrower has requested a loan from the Lender in the amount of [AMOUNT] dollars ($[AMOUNT]) (the “Loan”).

WHEREAS, The Lender has agreed to make the Loan to the Borrower on the terms and conditions set forth in this Agreement.

WHEREAS, The Loan shall be used by the Borrower for working capital, including the following items:

  1. Payroll cost: $19,200
  1. Director and manager: $42,000
  2. Office: $9000
  3. Operation: $7200
  4. Insurance/utilities: $9000

The total estimated cost of these items is $86,400.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

  1. Loan Amount:
    • The Lender agrees to loan the Borrower the sum of [AMOUNT] dollars ($[AMOUNT]) (the “Loan”) on the terms and conditions set forth in this Agreement.
    • The Loan shall be made available to the Borrower on the [insert date], subject to the satisfaction of all conditions precedent set forth in this Agreement.
    • The Borrower agrees to use the Loan solely for the purpose of funding its working capital needs, and not for any other purpose without the Lender’s prior written consent.
  2. Interest:
    • The Borrower shall pay interest to the Lender on the outstanding principal balance of the Loan at a rate of 2% per annum.
    • If the Loan is not paid back in full within 5 years of the date of this Agreement, the interest rate shall increase by 1% per annum for each year thereafter.
  3. Repayment:
    • The Borrower shall not be required to make any payments on the Loan until one year from the date of the initial deposit of any amount into the Borrower’s bank account.
    • After this period, the Borrower shall repay the Loan in [NUMBER] equal annual payments of principal and interest, with the first payment due on the [DATE] and subsequent payments due on the same day of each year thereafter.
  4. Representations and Warranties:
    • The Borrower represents and warrants to the Lender that:
      • The Borrower is duly organized, validly existing, and in good standing under the laws of its state of incorporation;
      • The Borrower has the power and authority to enter into this Agreement and to perform its obligations hereunder;
      • The execution, delivery, and performance of this Agreement by the Borrower have been duly authorized by all necessary corporate action;
      • The execution, delivery, and performance of this Agreement do not violate any law or any agreement to which the Borrower is a party or by which it is bound;
      • The Borrower has all necessary licenses, permits, and approvals to conduct its business as currently conducted;
      • The financial statements provided to the Lender are true and accurate in all material respects; and
      • The Borrower is not in default under any agreement, instrument, or obligation to which it is a party or by which it is bound.
  1. Conditions Precedent:
  • The obligation of the Lender to make the Loan is subject to the satisfaction of the following conditions precedent:
    • The Borrower shall have delivered to the Lender all documents and information reasonably requested by the Lender in connection with the Loan;
    • The Lender shall have received evidence satisfactory to it that the Borrower is duly organized, validly existing, and in good standing under the laws of its state of incorporation;
    • The Lender shall have received evidence satisfactory to it that the Borrower has the power and authority to enter into this Agreement and to perform its obligations hereunder;
    • The Lender shall have received evidence satisfactory to it that the execution, delivery, and performance of this Agreement by the Borrower have been duly authorized by all necessary corporate action;
    • The Lender shall have received evidence satisfactory to it that the execution, delivery, and performance of this Agreement do not violate any law or any agreement to which the Borrower is a party or by which it is bound;
    • The Lender shall have received evidence satisfactory to it that the Borrower has all necessary licenses, permits, and approvals to conduct its business as currently conducted; and
    • The Lender shall have received evidence satisfactory to it that the financial statements provided to the Lender are true and accurate in all material respects.
  1. Representations and Warranties of the Lender:
  • The Lender represents and warrants to the Borrower that:
    • The Lender is duly organized, validly existing, and in good standing under the laws of its state of incorporation;
    • The Lender has the power and authority to enter into this Agreement and to perform its obligations hereunder;
    • The execution, delivery, and performance of this Agreement by the Lender have been duly authorized by all necessary corporate action; and
    • The execution, delivery, and performance of this Agreement do not violate any law or any agreement to which the Lender is a party or by which it is bound.
  1. Default and Remedies:
  • In the event of a default by the Borrower under this Agreement, the Lender shall have the right to take any and all actions permitted by law or equity to enforce its rights hereunder, including, without limitation, the right to accelerate the Loan and demand immediate repayment in full.
  1. Governing Law, Jurisdiction, and Dispute Resolution:
  • This Agreement shall be governed by and construed in accordance with the laws of the state of California, without giving effect to any choice or conflict of law provision or rule (whether of the state of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the state of California.
  • Any legal suit, action or proceeding arising out of or related to this Agreement or the transactions contemplated hereby shall be instituted in the federal courts of the United States or the courts of the state of California, and each party irrevocably submits to the jurisdiction of such courts in any such suit, action or proceeding.
  • In the event of any dispute or claim arising out of or in connection with this Agreement, the parties shall first attempt to resolve the dispute or claim through good faith negotiation. If the dispute or claim cannot be resolved through negotiation within thirty (30) days after a written notice of dispute or claim is given by one party to the other, either party may submit the dispute or claim to binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall take place in the state of California, and the arbitrator(s) shall apply the laws of the state of California. The decision of the arbitrator(s) shall be final and binding on the parties, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The costs of arbitration, including the fees and expenses of the arbitrator(s), shall be borne equally by the parties, unless otherwise determined by the arbitrator(s).
  1. Entire Agreement:
  • This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements between them with respect to the subject matter hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

XXXX

By: __________________________

Name: ________________________

Date: _________________________

 

YYYY

By: __________________________

Name: ________________________

Title: _________________________

 

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