Debt Facility Agreement Template for Pakistan

The Debt Facility Agreement serves as the primary documentation for lending arrangements in Pakistan, establishing the legal relationship between lenders and borrowers while ensuring compliance with local banking and financial regulations. This document is essential for any significant lending transaction, whether it's for corporate financing, project development, or business expansion. The agreement comprehensively covers all aspects of the lending relationship, including facility terms, security arrangements, representations, covenants, and enforcement mechanisms. It must comply with Pakistani law, particularly the Banking Companies Ordinance 1962, Financial Institutions (Recovery of Finances) Ordinance 2001, and State Bank of Pakistan regulations. The document is typically used when a borrower requires substantial financing and the parties need a robust legal framework to govern their lending relationship, protect their interests, and ensure clarity on their respective rights and obligations.

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

2. Background: Context of the facility and brief description of the transaction structure

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

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

5. Conditions Precedent: Conditions that must be satisfied before the facility can be utilized

6. Utilization: Process and requirements for drawing down the facility

7. Repayment: Terms of repayment including scheduled payments and final maturity

8. Prepayment and Cancellation: Provisions for voluntary and mandatory prepayment and facility cancellation

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

10. Fees: All applicable fees including arrangement, commitment, and processing fees

11. Tax Gross Up and Indemnities: Provisions for tax payments and related indemnities

12. Increased Costs: Provisions dealing with changes in costs due to regulatory or legal changes

13. Representations and Warranties: Borrower's representations and warranties

14. Information Undertakings: Requirements for financial and other information to be provided to the lender

15. Financial Covenants: Financial ratios and other financial requirements to be maintained

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

17. Events of Default: Circumstances constituting default and consequences

18. Security: Overview of security structure and enforcement rights

19. Changes to Parties: Provisions for transfer, assignment, and novation

20. Administration: Administrative provisions including payment mechanics and calculations

21. Notices: Communication requirements and contact details

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