Term Facility Agreement Template for Germany

The Term Facility Agreement is a fundamental document in German corporate lending, used when a borrower requires a fixed-term loan for specific purposes such as acquisitions, capital expenditure, or refinancing existing debt. This agreement type is particularly common in the German market where bank financing remains a primary source of corporate funding. The document must comply with German banking regulations and civil law requirements, including specific provisions of the German Banking Act (KWG) and Civil Code (BGB). It typically contains detailed terms regarding facility utilization, interest calculation (often based on EURIBOR), repayment structures, and security arrangements. The Term Facility Agreement will also address specific German law considerations such as form requirements, transfer restrictions, and regulatory compliance obligations.

1. Parties: Identification of the lender(s), borrower(s), and any guarantors or security providers

2. Background: Context of the facility, purpose of the loan, and basic commercial terms

3. Definitions and Interpretation: Comprehensive list of defined terms and interpretation rules

4. The Facility: Details of the facility amount, purpose, and availability

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

6. Drawdown: Procedures and requirements for utilizing the facility

7. Interest: Interest calculation, periods, and payment provisions

8. Repayment: Terms of repayment including scheduled repayments and final maturity

9. Prepayment and Cancellation: Voluntary and mandatory prepayment provisions

10. Tax Gross Up and Indemnities: Tax-related provisions and indemnification obligations

11. Increased Costs: Provisions dealing with changes in law or regulations affecting the lender's costs

12. Representations: Borrower's representations and warranties

13. Information Undertakings: Obligations to provide financial and other information

14. General Undertakings: Positive and negative covenants of the borrower

15. Events of Default: Circumstances constituting default and consequences

16. Changes to Parties: Transfer and assignment provisions

17. Payment Mechanics: Administrative provisions regarding payments

18. Set-off: Rights of set-off and counterclaim

19. Notices: Communication procedures between parties

20. Calculations and Certificates: Provisions regarding calculations and evidence

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