Term Facility Agreement Template for South Africa

The Term Facility Agreement is a crucial financing document used in South Africa when a borrower requires fixed-term funding for specific purposes such as capital expenditure, acquisitions, or general corporate purposes. This agreement type is extensively used in the South African market and must comply with local banking regulations, including the Banks Act 94 of 1990 and, where applicable, the National Credit Act 34 of 2005. The document comprehensively covers facility terms, security arrangements, repayment schedules, and borrower obligations. A Term Facility Agreement is particularly important in structured finance transactions and corporate lending, providing certainty to both lender and borrower through clearly defined terms and conditions. The agreement must incorporate specific South African law requirements, particularly regarding security, exchange control regulations, and local banking practices.

1. Parties: Identifies and defines the Lender, Borrower, and any other parties to the agreement

2. Background: Sets out the context of the facility and basic transaction structure

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles

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

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

6. Drawdown: Procedures and requirements for utilising the facility

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

8. Repayment: Terms for repayment of the facility, including scheduled payments

9. Prepayment: Voluntary and mandatory prepayment provisions

10. Representations and Warranties: Borrower's confirmations about its status and capacity

11. Information Undertakings: Requirements for financial and other information provision

12. Financial Covenants: Financial ratios and tests the borrower must maintain

13. General Undertakings: Positive and negative obligations of the borrower

14. Events of Default: Circumstances that trigger default and enforcement rights

15. Changes to Parties: Rules for assignments and transfers

16. Payment Mechanics: Administrative provisions for payments

17. Notices: Communication procedures between parties

18. General Provisions: Boilerplate clauses including amendments, waivers, severability

19. Governing Law and Jurisdiction: Choice of South African law and jurisdiction provisions