Contents of Loan Agreement
Forms of loan agreements vary tremendously from country to country, but characteristically a professionally drafted commercial loan agreement will incorporate the following terms:
- Parties to contracts with their addresses
- Definitions or interpretation provisions
- Facility and purpose
- Conditions precedent to utilisation
- Repayment provisions
- Prepayment and cancellation provisions
- Interest and interest periods
- Provisions dealing with gross-up in relation to any withholding imposed
- Increased cost formulae
- Payments provisions
- Representations of the borrower
- Covenants of the borrower
- Events of default
- Remedies in the event of default
- Provisions for penalties and liquidated damages
- For syndicated loans, provisions relating to the facility agent and security agent and voting of the lenders
- Formulae for calculations
- Provisions for fees of the lenders
- Provisions for expenses
- Securitization provisions
- Amendments and waivers provisions
- Covenants relating to changes in parties
- Set-off clause
- Severability clause
- Counterparts clause
- Addresses for notices
- Language provisions
- Choice of law clause
- Forum selection clause
- Appointment of a process agent
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