Revolving Credit Facility Agreement Template

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Essential Sections

A revolving credit facility agreement template serves as a foundational document for establishing a financial relationship between a lender and a borrower, where the borrower can access funds up to a predetermined limit. This agreement outlines the terms and conditions governing the loan, ensuring transparency and mutual understanding between the parties involved.

Form of Credit Agreement – Revolving Credit Facility (Nov
Form of Credit Agreement – Revolving Credit Facility (Nov

1. Borrower and Lender Identification

Clearly state the names and legal entities of both the borrower and the lender.

  • Provide their respective addresses, contact information, and any relevant registration numbers.

    • 2. Credit Limit

    Specify the maximum amount of credit that the borrower can access under the agreement.

  • Indicate whether there are any limitations or restrictions on the use of the credit line.

    • 3. Interest Rate

    Clearly define the interest rate that will be applied to the outstanding balance of the loan.

  • Indicate whether the interest rate is fixed or variable, and if variable, explain how it will be determined.

    • 4. Repayment Terms

    Outline the repayment schedule, including the frequency of payments (e.g., monthly, quarterly) and the minimum amount due.

  • Specify any grace periods or late payment penalties.

    • 5. Security

    If applicable, describe the collateral or security that the borrower is providing to secure the loan.

  • Specify the terms of the security agreement and any related documentation.

    • 6. Covenants

    Outline the covenants or restrictions that the borrower must adhere to during the term of the loan.

  • These covenants may include financial ratios, operational requirements, or restrictions on certain activities.

    • 7. Events of Default

    Define the events that could trigger a default under the agreement.

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  • These events may include failure to make payments, breach of covenants, or insolvency.

    • 8. Remedies in Case of Default

    Specify the remedies available to the lender in the event of a default.

  • These remedies may include acceleration of the loan, foreclosure on collateral, or legal action.

    • 9. Term and Termination

    Specify the term of the agreement, including the start and end dates.

  • Outline the conditions under which either party can terminate the agreement early.

    • 10. Governing Law and Jurisdiction

    Indicate the governing law that will apply to the agreement.

  • Specify the jurisdiction where any disputes arising from the agreement will be resolved.

    • 11. Notices

    Establish the procedures for giving notices between the borrower and the lender.

  • Specify the address to which notices should be sent.

    • 12. Entire Agreement

  • State that the agreement constitutes the entire understanding between the parties and supersedes any prior or contemporaneous agreements.

    • 13. Amendment and Waiver

  • Specify the procedures for amending or waiving any provisions of the agreement.

    • 14. Counterparts

  • Indicate that the agreement may be executed in multiple counterparts, each of which will be deemed an original.

    • 15. Severability

  • State that if any provision of the agreement is found to be invalid or unenforceable, the remaining provisions will remain in full force and effect.

    • 16. Assignment

  • Specify the restrictions, if any, on the assignment of the agreement by either party.

    • 17. Force Majeure

  • Outline the circumstances that may excuse a party from performing its obligations under the agreement due to events beyond its control.

    • 18. Indemnification

  • Specify the indemnification obligations of the parties, including the types of losses or damages that may be covered.
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    19. Dispute Resolution

  • Indicate the preferred method of dispute resolution, such as negotiation, mediation, or arbitration.

    • 20. Execution

    Provide space for the signatures of authorized representatives of both the borrower and the lender.

  • Include the date of execution.

    • Design Elements for Professionalism and Trust

    To enhance the professionalism and trustworthiness of the revolving credit facility agreement template, consider the following design elements:

    Clear and Concise Language: Use plain and simple language that is easy to understand. Avoid legal jargon or technical terms that may confuse the parties.

  • Consistent Formatting: Maintain consistent formatting throughout the document, using headings, subheadings, and bullet points to improve readability.
  • Professional Layout: Use a professional and clean layout that is visually appealing and easy to navigate.
  • Quality Paper and Printing: Print the agreement on high-quality paper and use a professional printer to ensure a polished appearance.
  • Proper Binding: Bind the agreement securely to protect it and maintain its integrity.

    • By carefully crafting and designing the revolving credit facility agreement template, you can create a document that effectively establishes the financial relationship between the borrower and the lender, while also conveying professionalism and trust.