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A Shareholder Loan Agreement is commonly used when a company requires additional funding and a shareholder is willing to provide it through a loan rather than equity investment. This document, governed by English and Welsh law, establishes clear terms for the loan, protecting both parties' interests and ensuring compliance with UK corporate and tax regulations. It's particularly useful for companies seeking to avoid dilution of existing shareholdings while maintaining regulatory compliance and clear documentation of the debt obligation.

1. Parties: Identifies and defines the Lender (Shareholder) and Borrower (Company)

2. Background: Sets out the context of the loan and relationship between parties

3. Definitions: Defines key terms used throughout the agreement including loan amount, business day, interest rate, and other relevant terms

4. Loan Amount and Purpose: Specifies the loan amount, drawdown conditions, and intended use of funds

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

6. Repayment Terms: Specifies repayment schedule, prepayment rights, and mandatory prepayment events

7. Representations and Warranties: Standard company representations regarding capacity, authority, and compliance with laws

8. Events of Default: Lists circumstances constituting default and consequences thereof

9. Covenants: Ongoing obligations of the borrower including information provision and financial covenants

10. Governing Law and Jurisdiction: Specifies English law as governing law and English courts' jurisdiction