Syndicated Facility Agreement Template for Canada

The Syndicated Facility Agreement is a fundamental document used in large-scale financing transactions where multiple lenders combine to provide significant loan facilities to a borrower. This agreement, governed by Canadian law, is typically employed when the size of the required financing exceeds what a single lender is willing or able to provide, or when the lender seeks to distribute its risk. The document comprehensively sets out the commercial and legal terms of the facility, including detailed provisions for facility administration, lender rights and obligations, borrower covenants, and security arrangements. It incorporates specific Canadian legal requirements and market practices, ensuring compliance with federal legislation such as the Bank Act and Interest Act, as well as provincial security and property laws. The agreement is designed to facilitate ongoing management of the syndicate and includes mechanisms for handling various scenarios such as lender transfers, voting on amendments, and dealing with defaulting lenders.

1. Parties: Identifies all parties to the agreement including borrower(s), arrangers, facility agent, security trustee, and original lenders

2. Background: Provides context for the facility and basic transaction structure

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and interpretation rules

4. The Facilities: Details of the loan facilities including types, amounts, purpose, and availability

5. Conditions Precedent: Conditions that must be satisfied before drawdown

6. Utilisation: Procedures and requirements for drawing down the facilities

7. Repayment: Terms for repayment of the facilities including scheduled amortization

8. Prepayment and Cancellation: Voluntary and mandatory prepayment events and cancellation rights

9. Interest: Interest calculation, periods, payment, and default interest provisions

10. Fees: All fees payable under the facility including arrangement, commitment, and agency fees

11. Tax Gross Up and Indemnities: Tax provisions including gross-up obligations and tax indemnities

12. Increased Costs: Provisions dealing with changes in law or regulations affecting lenders' costs

13. Representations: Borrower's representations and warranties

14. Information Undertakings: Borrower's obligations to provide financial and other information

15. Financial Covenants: Financial ratios and other financial compliance requirements

16. General Undertakings: Positive and negative covenants governing borrower's activities

17. Events of Default: Circumstances constituting default and consequences

18. Changes to Parties: Provisions for transfers, assignments, and substitution of parties

19. The Administrative Parties: Roles, rights, and duties of facility agent and arrangers

20. Payment Mechanics: Procedures for making payments and calculating amounts

21. Set-off: Rights of set-off and application of proceeds

22. Notices: Methods and requirements for giving notices

23. Calculations and Certificates: Basis for calculations and evidential value of certificates

24. Miscellaneous: Various standard provisions including partial invalidity and remedies

25. Governing Law and Enforcement: Choice of law and jurisdiction provisions