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Director Loan Agreement for the United States

Director Loan Agreement Template for United States

A Director Loan Agreement is a legally binding contract under U.S. law that establishes the terms and conditions for a loan between a company and one of its directors. This document outlines the loan amount, interest rate, repayment schedule, and any security arrangements, while ensuring compliance with federal and state corporate governance requirements, SEC regulations (if applicable), and tax laws. It includes necessary protections for both the company and the director while maintaining transparency in related-party transactions.

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Director Loan Agreement

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What is a Director Loan Agreement?

The Director Loan Agreement is commonly used when a company extends financial assistance to a board member, requiring careful documentation to ensure regulatory compliance and corporate governance standards. This agreement type is particularly important in the United States due to strict oversight of related-party transactions and fiduciary duties. The document must address specific requirements under state corporate laws, federal regulations, and potentially SEC requirements for public companies. Director Loan Agreements typically include detailed terms about interest rates, repayment schedules, security arrangements, and default provisions while maintaining transparency and protecting both parties' interests.

What sections should be included in a Director Loan Agreement?

1. Parties: Identification of the company and the director receiving the loan

2. Background: Context of the loan and relationship between parties

3. Definitions: Key terms used throughout the agreement

4. Loan Amount and Purpose: Specific amount being loaned and its intended use

5. Interest Rate and Payments: Interest rate, payment schedule, and calculation method

6. Term and Repayment: Duration of loan and repayment terms

7. Events of Default: Circumstances constituting default and consequences

8. Representations and Warranties: Standard declarations by both parties

9. Governing Law: Applicable jurisdiction and law

What sections are optional to include in a Director Loan Agreement?

1. Security: Details of any collateral securing the loan - include when loan is secured by assets or guarantees

2. Early Repayment: Terms for early loan repayment - include if early repayment is permitted

3. Insurance Requirements: Required insurance coverage - include when loan is secured by physical assets

4. Change in Control: Provisions for change in company ownership - include for public companies or when specifically required

What schedules should be included in a Director Loan Agreement?

1. Repayment Schedule: Detailed payment dates and amounts

2. Security Details: Description of any collateral or security arrangements

3. Board Resolution: Copy of board approval for the loan

4. Disclosure Schedule: Any required disclosures by either party

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Clauses




















Industries

Securities Exchange Act 1934: Federal law requiring disclosure of director loans and related party transactions for public companies

Sarbanes-Oxley Act 2002: Federal legislation governing corporate governance and financial disclosure requirements, including restrictions on personal loans to directors

Dodd-Frank Wall Street Reform Act: Federal law affecting executive compensation and corporate governance matters, including disclosure requirements

Internal Revenue Code: Federal tax regulations affecting loan terms, interest rates, and tax implications of director loans

State Corporate Laws: State-specific legislation governing corporate operations, director duties, and loan agreements

State Usury Laws: State-specific regulations limiting maximum interest rates and loan terms

Blue Sky Laws: State securities laws regulating the offering and sale of securities, including potential implications for director loans

Corporate Bylaws Compliance: Internal company regulations that may restrict or govern director loans

Board Resolution Requirements: Corporate governance requirements for board approval and documentation of director loans

Stock Exchange Requirements: Listing requirements and regulations from stock exchanges regarding director loans and related party transactions

Fiduciary Duties: Legal obligations of directors including duty of care, duty of loyalty, and business judgment rule considerations

IRC Section 7872: Specific Internal Revenue Code section governing below-market loans and their tax treatment

SEC Disclosure Requirements: Securities and Exchange Commission rules regarding disclosure of director loans and related party transactions

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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