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Loan Conversion Agreement Template for Nigeria

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Key Requirements PROMPT example:

Loan Conversion Agreement

"I need a Loan Conversion Agreement under Nigerian law for converting a $5 million technology company loan into 25% equity shares, with the conversion to be completed by March 2025 and including anti-dilution provisions for the lender."

Document background
The Loan Conversion Agreement is a crucial document used in Nigerian corporate restructuring and debt refinancing scenarios, where parties agree to convert outstanding debt obligations into equity ownership. This agreement becomes particularly relevant in situations of corporate financial restructuring, debt consolidation, or strategic investment arrangements. The document must comply with Nigerian legislation, particularly CAMA 2020, the Investment and Securities Act, and relevant Central Bank of Nigeria regulations. It typically includes detailed provisions for valuation methodology, conversion mechanics, regulatory approvals, and post-conversion shareholding arrangements. The agreement is commonly used in both private and public company contexts, requiring careful consideration of securities laws and corporate governance requirements.
Suggested Sections

1. Parties: Identification of the lender, borrower, and any guarantors or other relevant parties

2. Background: Recitals describing the existing loan arrangement and the intention to convert

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Acknowledgment of Existing Loan: Confirmation of the outstanding loan amount and terms

5. Conversion Mechanism: Details of how the loan will be converted, including conversion price/ratio and timing

6. Conditions Precedent: Conditions that must be satisfied before conversion can occur

7. Implementation of Conversion: Process and procedures for executing the conversion

8. Representations and Warranties: Standard and specific representations by both parties

9. Regulatory Compliance: Compliance with Nigerian laws and regulations

10. Tax Matters: Treatment of tax implications and responsibilities

11. Costs and Expenses: Allocation of costs related to the conversion

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Confirmation of Nigerian law governance and jurisdiction

14. General Provisions: Standard boilerplate clauses including severability, entire agreement, etc.

Optional Sections

1. Security Arrangements: Required if any existing security needs to be released or new security created

2. Shareholder Rights: Include if conversion results in special shareholder rights or restrictions

3. Foreign Exchange Provisions: Required if the loan involves foreign currency or foreign parties

4. Corporate Guarantees: Include if there are corporate guarantors involved

5. Anti-dilution Provisions: Include if protection against share dilution is required

6. Tag-Along Rights: Include if minority shareholder protection is needed post-conversion

Suggested Schedules

1. Schedule 1 - Existing Loan Details: Details of the original loan agreement and current outstanding amount

2. Schedule 2 - Conversion Calculations: Detailed methodology and calculations for the conversion

3. Schedule 3 - Form of Conversion Notice: Template for formal conversion notice

4. Schedule 4 - Corporate Authorizations: List of required corporate approvals and resolutions

5. Schedule 5 - New Shareholding Structure: Post-conversion shareholding details

6. Appendix A - Regulatory Approvals: Copies or list of required regulatory approvals

7. Appendix B - Share Certificate Template: Template for new share certificates to be issued

Authors

Alex Denne

Head of Growth (Open Source Law) @ ºÚÁÏÊÓÆµ | 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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Relevant Industries

Banking & Financial Services

Manufacturing

Oil & Gas

Technology

Real Estate

Infrastructure

Telecommunications

Agriculture

Mining

Retail & Consumer Goods

Healthcare

Energy

Relevant Teams

Legal

Finance

Corporate Finance

Treasury

Compliance

Risk Management

Corporate Secretariat

Tax

Investment

Board of Directors

Relevant Roles

Chief Financial Officer

Legal Counsel

Corporate Finance Manager

Investment Manager

Restructuring Officer

Company Secretary

Finance Director

Compliance Officer

Treasury Manager

Risk Manager

Corporate Development Director

Investment Banker

Financial Controller

Board Director

Industries








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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