Finance Contract

This Finance Contract (the "Contract") is made and entered into as of [Month Day, Year], by and between:

[Your Company Name], a corporation organized and existing under the laws of the State of [State], with its principal office located at [Your Company Address] (hereinafter referred to as "Lender"),

and

[Borrower’s Name], a [type of entity, e.g., corporation, LLC] organized and existing under the laws of the State of [State], with its principal office located at [Borrower’s Address] (hereinafter referred to as "Borrower").

RECITALS

WHEREAS, Lender agrees to extend a financial loan to Borrower, and Borrower agrees to repay such loan under the terms and conditions set forth herein;

WHEREAS, the parties wish to establish a clear agreement governing the provision of the loan, including its terms, covenants, and conditions to ensure compliance and protection for both parties;

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

1. Loan Amount and Disbursement

1.1 Loan Amount. Lender agrees to loan Borrower the principal sum of $[0] (the "Loan"). The Loan amount shall be disbursed in accordance with the terms set forth in this Contract.

1.2 Disbursement. The Loan shall be disbursed to Borrower in one lump sum payment of $[0] on or before [Month Day, Year]. Such disbursement shall be contingent upon Borrower's fulfillment of all conditions precedent as detailed in this Contract, including the execution of all required documentation.

1.3 Conditions Precedent. Prior to disbursement, Borrower shall provide the following documents to Lender:

• Evidence of Borrower’s corporate authority to enter into and perform this Contract.

• An executed promissory note in the amount of the Loan.

• A resolution of Borrower's board of directors or equivalent governing body approving the Loan.

2. Interest Rate and Payment Terms

2.1 Interest Rate. The Loan shall accrue interest at a fixed annual rate of [0]% per annum. Interest shall be calculated on the basis of a 360-day year for the actual number of days elapsed.

2.2 Payment Schedule. Borrower shall repay the Loan in [0] equal monthly installments of $[0] each. Payments shall be due on the [Day] of each month, commencing on [Month Day, Year] and continuing until the Loan is repaid in full.

2.3 Amortization. The Loan will be amortized over [0] years, with payments applied first to accrued interest and then to the principal balance.

2.4 Prepayment. Borrower may prepay the Loan, in whole or in part, without penalty. Any prepayment shall first be applied to accrued interest and then to the principal balance. Lender shall apply any such prepayment to future installments due, or, if the Loan is repaid in full, to the final installment.

3. Use of Loan Proceeds

3.1 Purpose. Borrower agrees to use the Loan proceeds exclusively for the following purposes:

• Acquisition of New Equipment: Purchase of state-of-the-art machinery and equipment for the expansion of Borrower’s manufacturing operations, as detailed in Schedule A.

• Expansion of Facilities: Renovation and expansion of the existing production facility located at [Facility Address], including construction, interior upgrades, and acquisition of additional space.

• Working Capital: Funding to increase working capital to support the growth of operations, including the management of increased inventory and additional staffing requirements.

The specific allocation of the Loan proceeds for each of the above purposes is outlined in detail in the attached Schedule A. Any deviation from these purposes or reallocation of funds must receive prior written consent from Lender. Such consent shall not be unreasonably withheld if Borrower can demonstrate that the proposed deviation will still support the overall objectives of the Loan and does not contravene the terms of this Contract.

3.2 Restrictions. Borrower shall adhere to the following restrictions regarding the use of Loan proceeds:

• Prohibition of Unlawful Activities: Borrower shall not use any portion of the Loan proceeds for activities that are illegal under federal, state, or local laws. This includes, but is not limited to, funding any illegal operations or investments that violate applicable regulations or laws governing Borrower’s business.

• Compliance with Business Regulations: Borrower shall not use the Loan proceeds in any manner that contravenes the regulations or compliance requirements applicable to its business operations. This includes, but is not limited to, adhering to industry standards, safety regulations, and environmental laws.

• No Investment in Speculative Ventures: Loan proceeds must not be invested in speculative ventures or high-risk financial instruments that could jeopardize the financial stability of Borrower. This ensures that the funds are used in a manner that supports the sustainable growth and operational stability of Borrower.

• No Personal Use: The Loan proceeds shall not be used for personal expenses or investments unrelated to Borrower’s business operations. Any such personal use or misallocation will be considered a breach of this Contract and may result in an Event of Default as outlined in Section 6.

Borrower shall provide Lender with documentation and periodic reports on the utilization of the Loan proceeds to ensure compliance with the specified purposes and restrictions.

4. Representations and Warranties

4.1 Borrower's Representations. Borrower represents and warrants to Lender that:

• Borrower is duly organized, validly existing, and in good standing under the laws of the State of [State].

• Borrower has the full power and authority to enter into, execute, and deliver this Contract and to perform its obligations hereunder.

• The execution and delivery of this Contract by Borrower has been duly authorized by all necessary corporate or other organizational action.

• Borrower’s financial statements, provided to Lender, are true, complete, and accurate in all material respects and fairly present Borrower’s financial condition and results of operations.

4.2 Lender’s Representations. Lender represents and warrants to Borrower that:

• Lender is a corporation duly organized and in good standing under the laws of the State of [State].

• Lender has the full power and authority to enter into, execute, and deliver this Contract and to perform its obligations hereunder.

• The execution and delivery of this Contract by Lender has been duly authorized by all necessary corporate action.

5. Covenants

5.1 Borrower's Covenants. Borrower covenants and agrees to:

• Provide Lender with annual financial statements audited by a certified public accountant, and quarterly unaudited financial statements within 30 days of the end of each fiscal quarter.

• Maintain its corporate existence and good standing and comply with all applicable laws and regulations.

• Use the Loan proceeds only for the purposes specified in Section 3 of this Contract and not for any other purposes without Lender’s prior written consent.

• Maintain adequate insurance coverage for its assets and operations.

5.2 Lender’s Covenants. Lender covenants and agrees to:

• Disburse the Loan proceeds in accordance with the terms of this Contract and promptly following Borrower’s satisfaction of all conditions precedent.

• Not unreasonably withhold or delay any consent or approval required under this Contract.

6. Events of Default

6.1 Definition of Default. An "Event of Default" occurs if:

• Borrower fails to make any payment of principal or interest when due under this Contract.

• Borrower breaches any representation, warranty, or covenant contained in this Contract or in any other document delivered to Lender in connection with the Loan.

• Borrower becomes insolvent, makes an assignment for the benefit of creditors, files for bankruptcy, or becomes subject to any other insolvency or similar proceedings.

• Borrower ceases to do business or otherwise fails to maintain its corporate existence or good standing.

6.2 Remedies. Upon the occurrence of an Event of Default, Lender may:

• Declare the entire unpaid principal balance of the Loan, together with accrued interest and any other amounts due, immediately due and payable.

• Enforce any and all rights and remedies available to Lender under applicable law or in equity, including the right to commence legal proceedings to collect amounts due and recover costs, including reasonable attorneys’ fees.

7. Indemnification

7.1 Indemnity. Borrower agrees to indemnify, defend, and hold harmless Lender, its affiliates, and their respective officers, directors, employees, and agents from and against any and all claims, liabilities, losses, damages, and expenses (including reasonable attorneys’ fees and costs) arising out of or related to:

• Any breach of this Contract or any other agreement between the parties.

• The use of the Loan proceeds by Borrower.

• Any claim or action brought by a third party against Lender related to Borrower’s business or operations.

7.2 Survival. The indemnity provisions of this Section 7 shall survive the termination or expiration of this Contract.

8. Governing Law and Dispute Resolution

8.1 Governing Law. This Contract shall be governed by, and construed in accordance with, the laws of the State of [State], without regard to its conflict of laws principles.

8.2 Dispute Resolution. Any dispute, controversy, or claim arising out of or in connection with this Contract shall be resolved through binding arbitration conducted in accordance with the rules of the American Arbitration Association. The arbitration shall take place in [City, State], and the decision of the arbitrator(s) shall be final and binding.

9. Miscellaneous

9.1 Amendments. This Contract may only be amended or modified by a written agreement signed by both parties. Any amendment must specifically reference this Contract and state the changes agreed upon.

9.2 Notices. All notices, requests, demands, and other communications required or permitted under this Contract shall be in writing and shall be deemed to have been duly given when:

• Delivered personally to the recipient;

• Sent by certified mail, return receipt requested, to the recipient’s address as set forth in this Contract;

• Sent by electronic mail with confirmation of receipt, to the recipient’s email address as set forth in this Contract.

9.3 Entire Agreement. This Contract, including all attachments and schedules, constitutes the entire agreement between the parties with respect to the subject matter hereof. It supersedes all prior negotiations, understandings, and agreements, whether written or oral, between the parties.

9.4 Severability. If any provision of this Contract is determined to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. The parties shall negotiate in good faith to amend any invalid or unenforceable provision to reflect the original intent of the parties as closely as possible.

9.5 Waivers. No waiver of any term or condition of this Contract shall be deemed a waiver of any other term or condition, nor shall any waiver be deemed a continuing waiver. Any waiver must be in writing and signed by the party against whom it is sought to be enforced.

9.6 Assignment. Neither party may assign its rights or obligations under this Contract without the prior written consent of the other party. Any purported assignment in violation of this Section shall be void.

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

[Your Company Name]

By:

[Your Name]

[Title]

[Month Day, Year]

[Borrower’s Name]

By:

[Full Name]

[Title]

[Month Day, Year]

Finance Templates @ Template.net