Interest Free Loan Agreement - Free Download
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Interest Free Loan Agreement
Interest Free Loan Agreement
1
79208.000002 EMF_US 39736866v1
INTEREST FREE LOAN AGREEMENT
This Loan Agreement, dated as of April __, 2012 (this Agreement) is made by and
between Citizens of the World Charter Schools, a California nonprofit public benefit corporation
(the Lender”), and Citizens of the World Charter Schools - Los Angeles, a California nonprofit
public benefit corporation (the “Borrower”).
The Lender has agreed to make a loan of $450,000 to Borrower (theLoan”) subject to
the terms, covenants and conditions set forth in this Agreement. Accordingly, for valuable
consideration, the receipt and sufficiency of which are acknowledged, the Lender and the
Borrower agree as follows:
1.
Definitions
2.
. Certain capitalized terms used in this Agreement are defined on the attached
Schedule of Definitions.
The Loan
(a)
.
Purpose
(b)
. The proceeds of the Loan shall be used in furtherance of the Borrower’s
tax-exempt educational and charitable purposes, and shall not inure to the benefit of any private
shareholder or individual within the meaning of section 501(c)(3) of the Code. Specifically, the
proceeds of the Loan shall be used for the development of, and start-up costs related to, the new
Citizens of the World school expected to open in the Silver Lake neighborhood of Los Angeles.
Interest
(c)
. The outstanding principal balance of the Loan shall bear no interest.
Accrued interest, if any, shall be payable in arrears on the last day of each Interest Period, and on
the Termination Date.
Principal Payments
(d)
. The unpaid principal balance of the Loan shall be due and
payable in full on the Termination Date.
Prepayment
(e)
. The Loan may be prepaid in whole or in part at any time without a
premium or penalty. Loan repayments and prepayments may not be reborrowed.
Default
(f)
. If an Event of Default occurs under the applicable Loan Documents, and
while such Event of Default is continuing, the interest rate on the outstanding Loan amount may
be increased by 2.00% above the rate otherwise in effect.
Late Charge
3.
. The Lender may assess a late charge for any payment due under the
Loan Documents that is fifteen days or more past due in the amount of 5% of such past due
payment.
Conditions to Funding of the Loan
(a)
. The Loan shall be fully funded within 5 Business
Days of the date of this Agreement, subject to the following conditions precedent:
No Defaults
(b)
. No Default shall be continuing.
Representations. All representations and warranties of the Borrower contained in
this Agreement or any Loan Document shall be true and correct in all material respects.
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