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Training Program: MBA

Subject: Legal Business Environment

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Name and Last name: Mark Espinoza

Email: [email protected]

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Important: Final Project Submission Guidelines

Please take a moment to thoroughly read these guidelines to ensure a smooth

submission process and to avoid potential issues. Your attention to these
details is essential.

Download the Exam Document:

 Download the final project document from Moodle.
 You must only use Microsoft Word or LibreOffice
(https://www.libreoffice.org/download/download-libreoffice) for your
work.
 Do not alter any non-editable fields.

Writing Your Project:

 Ensure your content is original and solely your work.
 Utilize the tutors available to you for any queries.
 Submit the final version only, as no preliminary reviews will be
conducted.
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  In case you fail the first delivery you have a second opportunity. If you
fail twice, you will have to pay the corresponding fees in order to
resubmit your work.
Content Requirements:
 Do not insert images of any kind into your document.
 For diagrams or methodologies like a DAFO or others, use text and/or
tables to describe and illustrate.
Formatting Your Document:
 All editable fields on the cover page must be filled.
 The document should not exceed 18 pages, cover page, bibliography,
and appendix not included.
Naming Your File:
 Follow this format:
ddmmyyyy_Subject_YourLastNameandFirstName.doc
 For example: 11052024_SubjectName_ElsaMoore.doc
Uploading Your Project:
 Once completed, upload your document back to Moodle in either .doc
or .docx format.
Important Notes:
 Plagiarism or submission of work not your own is strictly prohibited.
Repeat violations may result in ineligibility to obtain your degree.
 Your ability to follow these instructions is crucial and reflects on your
overall performance. Please prioritize the accuracy of this process.
Submission Checklist:
 Have you downloaded the final project document from Moodle?
 Have you used only Microsoft Word or LibreOffice?
 Is all content original and individually created?
 Is the final version ready for submission?
 Is the file named correctly as per guidelines?
 Have you uploaded the document to Moodle in the correct format?

Take a moment to double-check your work against this checklist before

submitting. This ensures your project meets all the required standards and is
set for a successful evaluation. Good luck!

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Evaluation Guidelines

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The final work will be evaluated based on the following criteria:

 Acquired Knowledge (3 points): To receive the maximum score, the

work must demonstrate an exceptional and complete understanding of
the theoretical concepts relevant to the subject, applying this knowledge
effectively and accurately to the case analysis. The student is expected
to integrate theories, principles, and models studied during the program
in a way that significantly enriches their analysis and argumentation.

 Development of the Subject (3 points): The maximum score will be

awarded when the student performs a coherent and deeply analytical
analysis of the statement, offering clear, well-founded, and critical
interpretations of the presented case. The development of the statement
is expected to show an exceptional ability to identify and analyze key
issues, using logical reasoning and relevant evidence to construct solid
arguments.

 Final Outcome (3 points): To achieve the maximum score in this area,

the presented solution must be comprehensive, correct, and
exceptionally articulated, meeting all the established parameters for the
presentation. The final outcome is expected not only to effectively solve
the posed problem but also to be presented in a manner that
demonstrates a deep understanding and practical application of the
acquired knowledge.

 Added Value (0.5 points): The maximum score in added value is

achieved when the student contributes significant elements that enrich
the analysis beyond the basic requirements. This may include original
analyses, novel perspectives, innovative practical applications, or the
integration of theories or models not covered in class. Creativity and the
ability to connect the case with broader concepts or contexts are
particularly valued.

 Supplementary Bibliography (0.5 points): To receive the maximum

score in supplementary bibliography, the work must include a selection of
relevant and current sources that are properly cited according to APA
guidelines. These sources must support and significantly expand the
case analysis, demonstrating an effort to go beyond the material
provided in class and find additional information that adds depth and
context to the work.

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 BACKGROUND

Don Manuel García Ferrer is self-employed and is dedicated to installing air

conditioners. His friend, Mr. Antonio López Hernández, has decided to set up a
Business Accounting and Taxation business. For this he needs to make an
initial investment of € 40,000. As his friend Manuel is doing very well, he has
chosen to borrow from him instead of going to a bank. Don Manuel will give Don
Antonio the amount of € 40,000 by bank transfer on September 15, 2016. They
have agreed that Don Antonio will return the amount in four annual payments.
The payment of each annual fee will be made at the end of each year with an
annual interest of 4%. To document the payments, four bills of exchange
corresponding to each annuity will be issued. To make sure of the collection of
the amounts, Don Manuel has requested that the payment of the letters be
guaranteed by the father of his friend, Mr. Luis López Pérez.

Don Manuel has decided to buy a new second-hand vehicle. To pay for this
acquisition, he endorses the first letter to Doña Alicia Martínez Castro on
October 01, 2016.

DEVELOP

1. Draft the Commercial Loan Agreement detailing the form of payment and
including all data that is not provided and it is necessary.

2. Determine the total amount to be paid at the expiration of each installment

with the detail of interest calculation, as well as the total amount that Mr.
Antonio will end up paying for the loan received.

3. Fill in the official models the four bills of exchange with all its clauses. By
being present all parties are accepted at the time of signing the contract.

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YOUR ANSWERS

Commercial Loan Agreement

This Commercial Loan Agreement ("Agreement") is made and entered into as

of the 15th day of September 2016 ("Effective Date") by and between Don
Manuel Garcia Ferrer ("Lender"), having a principal place of business at
_________ and its registered office at _________ [address], duly registered
with the __________ in _________ under registration number _________, and
Mr. Antonio López Hernández ("Borrower"), a company incorporated and
existing under the laws of Europe, with its registered office at _________
[address]. The Lender and the Borrower are collectively referred to herein as
the "Parties".

Recitals
 WHEREAS, the Lender agrees to provide a loan to the Borrower under
the terms and conditions set forth in this Agreement;
 WHEREAS, the Borrower seeks to obtain a loan from the Lender in the
principal amount of forty thousand euros (€40,000);
 WHEREAS, the Parties desire to delineate their mutual understandings,
covenants, and agreements in writing;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the Parties agree as follows:

Article 1 - Loan
1.1 Disbursement of Loan: The Lender agrees to disburse to the Borrower, and
the Borrower agrees to receive, a loan in the principal amount of forty thousand
euros (€40,000) on the Effective Date.

1.2 Use of Loan Proceeds: The Borrower shall use the Loan exclusively for its
normal business activities and operations.
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1.3 Advances and Prepayment: The Borrower may make prepayments on the
Loan without penalty. Interest shall be calculated on the outstanding principal
balance.
1.4 Representation and Security: To ensure the payment of the amounts due
under this Agreement, the Borrower hereby guarantees payment of the
amounts through its personal guarantee.

Article 2 - Interest
2.1 Interest Rate: The Loan shall bear interest at the annual rate of four percent
(4%) per annum, compounded annually, on the outstanding principal balance.
2.2 Payment of Interest: Interest shall be payable annually on the anniversary of
the Effective Date. The Borrower shall make the interest payment within eight
days following each anniversary date.
2.3 Penalty for Late Payment: If interest is not paid within fifteen (15) days after
the due date, the Borrower shall be assessed a penalty interest rate of two
percent (2%) per annum on the overdue amount.
2.4 No Deductions: All interest payments shall be made in full without any
deductions or withholdings.
2.5 Payment Instructions: All payments made by the Borrower to the Lender
under this Agreement shall be deposited into a bank account designated by the
Lender. Payments shall be made in euros.

Article 3 - Security
3.1 Unsecured Loan: The Loan shall be unsecured. However, the Borrower and
its heirs shall have full recourse against the Lender.

Article 4 – Expenses

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4.1 Borrower's Responsibility: The Borrower shall be responsible for any and all
legal and out-of-pocket expenses incurred by the Lender in connection with the
granting of this Loan and any subsequent expenses incurred by the Lender.

Article 5 - Duration
5.1 Repayment Term: The Borrower shall repay the Loan within four (4) years
from the Effective Date.
5.2 Automatic Renewal: This Agreement shall automatically renew for
successive two-year terms unless either Party provides written notice of its
intent to terminate the Agreement at least three (3) months prior to the end of
the current term.

Article 6 - Termination
6.1 Default: The Lender may, without prior notice, terminate this Agreement
upon the occurrence of any of the following events of default by the Borrower:
(a) Failure to pay any interest owed under this Agreement;
(b) Breach of any term or provision of this Agreement, which remains
uncured for thirty (30) days following written notice by the Lender;
(c) The initiation of any bankruptcy, insolvency, or similar proceedings by
or against the Borrower, or the appointment of a receiver over any
significant portion of the Borrower's assets;
(d) Any other event which, in the reasonable opinion of the Lender, would
significantly impair the Borrower's ability to fulfill its obligations under this
Agreement.
6.2 Repayment Upon Termination: Upon termination of this Agreement, the
Borrower shall immediately repay the outstanding principal amount and any
accrued interest to the Lender.

Article 7 - Repayment
7.1 Obligation to Repay: The Borrower agrees to repay the outstanding principal
amount and accrued interest to the Lender upon the expiration or termination of
this Agreement, as set forth in Article 6.

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Article 8 - Assignments
8.1 Prohibition on Assignment: Neither Party shall assign or transfer its rights or
obligations under this Agreement to any third party without the prior written
consent of the other Party.

Article 9 - Covenants
9.1 Negative Covenant: The Borrower shall not create or maintain any charge,
pledge, or lien on its assets in favor of any other lender without the prior written
consent of the Lender.
9.2 Business Operations: The Borrower shall ensure that it has all necessary
licenses, permits, and franchises required for the operation of its business and
that its equipment is maintained in good working order.

Article 10 - Inspection of Accounts

10.1 Right to Audit: The Lender may, at its own expense, appoint a third-party
auditor approved by both Parties to inspect the Borrower's financial and
administrative records to ensure compliance with this Agreement.

Article 11 - Applicable Law and Jurisdiction

11.1 Governing Law: This Agreement shall be governed by and construed in
accordance with the laws of Belgium.
11.2 Jurisdiction: The courts of the _________ [judicial district] shall have
exclusive jurisdiction over any disputes arising out of or in connection with this
Agreement.

Executed in _________ [place] on _________ [date] in two original copies,

each Party acknowledging receipt of one.

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FOR AND ON BEHALF OF THE LENDER

Don Manuel García Ferrer

[Title]
[Date] / [Signature]

FOR AND ON BEHALF OF THE BORROWER

Antonio López Hernández
[Title]
[Date] / [Signature]

Definitions

Lender: Don Manuel Garcia Ferrer, having a principal place of business at

_________ and its registered office at _________ [address], duly registered
with the __________ in _________ under registration number _________.

Borrower: Mr. Antonio López Hernández, a company incorporated and existing

under the laws of Europe, with its registered office at _________ [address].

Loan: The principal amount of forty thousand euros (€40,000) provided by the
Lender to the Borrower under the terms and conditions of this Agreement.
Interest Rate: An annual interest rate of four percent (4%) per annum,
compounded annually.
Penalty Interest Rate: An additional interest rate of two percent (2%) per
annum, applicable to overdue interest payments.
Effective Date: The 15th day of September 2016.

Recitals: The introductory statements outlining the intentions and background of

the Parties entering into this Agreement.

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Obligations of the Borrower

The Borrower shall:

1. Repay the principal amount of the Loan and any accrued interest as
stipulated in this Agreement.
2. Utilize the Loan proceeds solely for its normal business activities.
3. Maintain its business operations, ensuring all necessary licenses,
permits, and equipment are in place and in good working order.
4. Make all interest payments in full and on time, without any deductions or
withholdings.
5. Deposit all payments into the designated bank account specified by the
Lender.
6. Not create or maintain any charge, pledge, or lien on its assets in favor of
any other lender without the prior written consent of the Lender.
7. Allow for the inspection of its financial and administrative records by an
approved third-party auditor at the expense of the Lender.

Obligations of the Lender

The Lender shall:

1. Disburse the Loan amount to the Borrower on the Effective Date.
2. Provide a designated bank account for the Borrower to make all required
payments under this Agreement.
3. Notify the Borrower of any default events and provide an opportunity to
cure such defaults, if applicable.
4. Appoint a third-party auditor to inspect the Borrower's records, if deemed
necessary, at the Lender's expense.

Default and Remedies

The Borrower shall be in default under this Agreement upon the occurrence of
any of the following events:

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  Failure to pay any interest or principal amount when due.
 Breach of any covenant or provision of this Agreement, which remains
uncured for thirty (30) days following written notice by the Lender.
 Initiation of any bankruptcy, insolvency, or similar proceedings by or
against the Borrower.
 Any event which, in the reasonable opinion of the Lender, significantly
impairs the Borrower's ability to fulfill its obligations under this
Agreement.

Upon the occurrence of a default, the Lender may:

 Terminate this Agreement and demand immediate repayment of the
outstanding principal amount and any accrued interest.
 Assess penalty interest on any overdue amounts.
 Take any other action permitted under applicable law to enforce the
Borrower's obligations under this Agreement.

Miscellaneous Provisions

Entire Agreement: This Agreement constitutes the entire understanding

between the Parties with respect to the subject matter hereof and supersedes
all prior agreements and understandings, whether written or oral, relating to
such subject matter.

Amendments: Any amendment or modification of this Agreement must be in

writing and signed by both Parties.

Notices: Any notice required or permitted to be given under this Agreement

shall be in writing and shall be deemed to have been duly given when delivered
personally, sent by registered mail, or transmitted by electronic mail to the
respective addresses of the Parties as set forth in this Agreement.

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Waiver: No waiver of any provision of this Agreement shall be deemed to be or
shall constitute a waiver of any other provision hereof, nor shall any waiver
constitute a continuing waiver unless otherwise expressly provided.

Severability: If any provision of this Agreement is held to be invalid or

unenforceable, such provision shall be struck, and the remaining provisions
shall be enforced.

Counterparts: This Agreement may be executed in counterparts, each of which

shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement has been carefully read and fully understood by the Parties,
and each Party acknowledges that it has had the opportunity to seek
independent legal advice regarding its terms and conditions.

Confidentiality

The Parties agree to keep the terms of this Agreement and any information
disclosed pursuant to this Agreement confidential and not to disclose such
information to any third party without the prior written consent of the other Party,
except as required by law or as necessary to enforce the terms of this
Agreement.

Dispute Resolution

Any disputes arising out of or in connection with this Agreement shall be

resolved through negotiation in good faith between the Parties. If the Parties are
unable to resolve the dispute within thirty (30) days, the dispute shall be
submitted to mediation before a mutually agreed-upon mediator. If mediation is
unsuccessful, the dispute shall be resolved by binding arbitration in accordance
with the rules of the International Chamber of Commerce, with the arbitration to
be held in _________ [location].

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Force Majeure

Neither Party shall be liable for any failure or delay in performance under this
Agreement (other than for delay in the payment of money due and payable
hereunder) to the extent such failures or delays are caused by conditions
beyond its reasonable control, including but not limited to acts of God,
government restrictions, wars, insurrections, natural disasters, or any other
cause beyond the reasonable control of the Party whose performance is
affected.

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Equated Annual Installment Calculation

Given:
Amount of Loan = €40,000 | Annual Interest Rate = 4% | Duration = 4 years

To calculate the Equated Annual Installment (EAI), we use the formula:

EAI = Loan Amount / PVAF, where PVAF (Present Value Annuity Factor) for 4%
over 4 years = 3.6299

EAI = 40,000 / 3.6299 = 11,019.60

Table of Installments and Payments

PRINCIPAL LOAN
DATE INSTALLMENT INTEREST
PAYMENT BALANCE
9/15/16 40,000.00
9/15/17 11,019.60 1,600.00 9,419.60 30,580.40
9/15/18 11,019.60 1,223.22 9,796.38 20,784.02
9/15/19 11,019.60 831.36 10,188.24 10,595.78
9/15/20 11,019.60 423.83 10,595.78 0.00
TOTAL 44,078.40 4,078.41 40,000.00

Summary
Total Amount Mr. Antonio Will End Up Paying for the €40,000 Loan: €44,078.40
Total Interest Paid Over 4 Years: €4,078.41

This table clearly shows the breakdown of each annual installment, the interest
portion of each installment, the principal portion of each installment, and the
remaining loan balance after each payment.

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3. Complete the four bills of exchange with all their clauses in the official
models. By being present, all parties are accepted at the time of signing the
contract.

Payment Date: September 15 2017

Drawer: Manuel Garcia
GUARANTEE ENDORSEMENT
Endorsement and Signature Data Pay to: Antonio Lopez

Name: Luis Lopez Perez ID: 4239-888

ID: 9999999R
Country: Spain Address: Calle Del Gral Oraa 28006
Tel: (93) 7496-1436 Madrid

------------------------------------------------ -------------------------------------------------
Luis Lopez Perez Endorsing Signature:
Manuel Garcia Ferrer

Payment Date: September 15 2018

Drawer: Antonio Lopez
GUARANTEE ENDORSEMENT
Endorsement and Signature Data

Name: Luis Lopez Perez Pay to: _______________________

ID: 9999999R ID: __________________________
Country: Spain Address: _____________________
Address: Apartado de Correos 83
Spain

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------------------------------------------------ -------------------------------------------------
Luis Lopez Perez Signature

Payment Date: September 15 2019

Drawer: Antonio Lopez
GUARANTEE ENDORSEMENT
Endorsement and Signature Data

Name: Luis Lopez Perez Pay to: _______________________

ID: 9999999R ID: __________________________
Country: Spain Address: _____________________
Address: Apartado de Correos 83
Spain

------------------------------------------------ -------------------------------------------------
Luis Lopez Perez Signature

Payment Date: September 15 2020

Drawer: Antonio Lopez
GUARANTEE ENDORSEMENT
Endorsement and Signature Data

Name: Luis Lopez Perez Pay to: _______________________

ID: 9999999R ID: __________________________
Country: Spain Address: _____________________
Address: Apartado de Correos 83
Spain

------------------------------------------------ -------------------------------------------------
Luis Lopez Perez Signature

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