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LIEN & CASH COLLATERAL AGREEMENT

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LIEN & CASH COLLATERAL AGREEMENT

  • In consideration of your granting a credit facility to me, I, (which shall where the context so admits include our heirs, successors-in-title and assigns) hereby instruct you to establish a cash collateral account and lien all moneys due to or relating to me as security for any sums which are now or may at any time become due or owing or may be accruing or becoming due to you by me either alone or partly with any other person or persons on account of or in relation to the aforesaid facility.
    I hereby give the Bank by way of security for the facility, a right of set-off of the sum availed to me in my fixed deposit account or other accounts and/or investments maintained with the Bank together with interest accruing thereon.

    I fully understand and hereby agree that the funds deposited in my account(s) shall not be released to me, until the full liquidation of any sum due from me to the Bank in relation to the said facility and confirmation in writing by the Bank to that effect.
    The Bank is hereby authorized to take from my account(s) all such sums as shall be necessary to fully adjust any sum due and owing from us to the Bank in relation to the facility. Further I agree that you may at any time without further order from or notice to me/us apply such moneys (with the right, if necessary, to convert any currencies held for my/our account at such rate or rates and at such time or times as you shall think fit) in or towards satisfaction of such indebtedness or liabilities and that in so doing you may refuse payment of cheques or other orders upon any account wheresoever kept unless after such application you hold on any account funds sufficient to meet any cheques or orders drawn on such account. This security is to be a continuing one until the expiration of three calendar months after receipt by you from me of notice in writing of my/our desire to discontinue.
    I undertake to maintain at all times a good credit balance in my account with your bank in Nigerian Naira and/or other approved currency or currencies of or equivalent to the loan sum availed in Nigerian Naira at least and authorize you to refuse payment of any cheque or other the payment of which would reduce such balance below that amount and I agree that I shall not be released from this obligation nor shall your rights hereunder be affected by the granting of time in complying with this condition or by any other indulgence on your part.


    TERMS AND CONDITIONS
  • 1. That the Bank reserves the right to use the cash investment / pledged funds to set-off or liquidate the principal amount and accrued interest in the event of default of the availed amount.
  • 2. The Borrower hereby authorizes the Bank to lien the deposit / investment pledge against the facility applied for.
  • 3. Approval of any request for extension of the facility at the expiration of the tenor hereby provided shall be at the discretion of the Bank and shall be subject to management fee of 1%flat and renewal fee of 0.25% for a new tenor as may be approved. A restructuring fee of 0.25 % flat shall also be applied where this becomes the case.
  • 4. In the event of default in the repayment of the facility or interest arising thereon or in compliance with the terms, conditions and covenants contained herein, the Bank reserves the right to call in the facility and demand immediate repayment of all outstanding on the facility. .
  • 5. You hereby indemnify the Bank against any loss that might be incurred by the Bank as a result of any irregularity or incompleteness in the information contained in any documents submitted to the Bank.
  • 6. No failure or delay by the Bank in exercising any remedy, right or power herein shall operate as a waiver or impairment thereof nor shall it affect or impair any such remedies, power or right in respect of any other subsequent default.
  • 7. No change in the business operations and conditions (financial or otherwise) or other prospects shall affect the full repayment of the facility at maturity.
    • 8. The borrower is hereby notified that he/she shall bear SMS charges for monthly payment notifications.
  • 9. If the facility is not liquidated at maturity or on due date, you shall pay a default/penalty fee of 1% flat per month on any outstanding until the facility is repaid in addition to any other charge and interest as may be demanded by the Bank.
  • 10. The charges created in favour of the Bank are all enforceable and you shall not take any steps to restrain, restrict or delay the Bank in taking steps to realize the security in the event of default.
  • 11. This facility shall be utilized strictly for the purpose stated above and on no condition(s) should it be utilized for any other purpose.
  • 12. You shall not default on any of the financial affirmative or negative covenants and assurances it had given the Bank in respect of the facility , its operations and conditions and in the event of default, it shall take steps immediately to rectify the default, whether same is brought to its knowledge by the Bank or not, and in any case not later than three working days from the date the breach is communicated by the bank, failing which the Bank can proceed to realize the security provided for the facility.
  • 13. You hereby agree and accept that the Bank shall be entitled to charge interests in line with the prevailing market rate on this facility at the agreed rate both during and after expiry of the tenure granted until the facility is fully repaid or recovered.
  • 14. Funds received into the account when the principal and/or interest are past due, will be applied first to the overdue interest before the outstanding principal amount.
  • 15. Without prejudice to the foregoing, the Bank reserves the right to vary, alter or amend any of the terms and conditions of the facility as and when the need arises to do so.

    • OBLIGATION TO REPAY FACILITY AND GLOBAL RIGHT OF SET-OFF By signing this offer letter/ loan agreement and by drawing on the loan, I covenant to repay the loan as and when due. In the event that I fail to repay the loan as agreed, and the loan becomes delinquent, the bank shall have the right to report the delinquent loan to the CBN through the Credit Risk Management System (CRMS) or by any other means, and request the CBN exercise its regulatory power to direct all banks and other financial institutions under its regulatory purview to set-off my indebtedness from any money standing to my credit in any bank account and from any other financial assets they may be holding for my benefit.
    I covenant and warrant that the bank shall have power to set-off my indebtedness under this loan agreement from all such monies and funds standing to my credit benefit in any and all such accounts or from any other financial assets belonging to me and in the custody of any such bank. I hereby waive any right of confidentiality whether arising under common law or statute or in any other manner whatsoever and irrevocably agree that I shall not argue to the contrary before any court of law, tribunal, administrative authority or any other body acting in any judicial or quasi- judicial capacity.
    RIGHT OF SET-OFF The Bank may at any time and without notice to the Borrower, combine all or any of the Borrower’s account and liabilities with the Bank in Nigeria (or elsewhere) whether severally or jointly with any person and set off all or any monies standing to the credit of the Borrower in such accounts, including the Borrower’s deposits with the Bank (whether matured or not) towards satisfaction of any of the Borrower’s liabilities to the Bank, whether as principal or surety, actual or contingent, severally or jointly, primary or collateral with any other person and the Bank may effect any necessary currency conversion at the Bank’s own rate of exchange then prevailing. Exchange risks associated with any collateral, cash or otherwise in satisfaction of outstanding debt shall be borne by the Borrower.
    UTILIZATION This facility must be utilized within 30 days from the date of acceptance of offer failing which it shall attract a commitment fee of 1% flat.
    AVAILABILITY CLAUSE Please indicate your acceptance of all the terms and conditions of this facility by signing and returning to us the attached copy of this letter, within 30 (thirty) days from the date of this letter, failing which the offer shall lapse without any liability or commitment on the part of the Bank. A term facility which has been accepted but remains undrawn after 90 (ninety) days shall automatically expire unless otherwise expressly stated. We thank you for your patronage and look forward to a mutually beneficial relationship


    Signed, Sealed and Delivered by me.
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