The term “advance” refers to a refund that goes beyond the amount of the ME set out in the agreement. Typically, these surpluses are settled with the outstanding principal at the time of payment. The amount of the advance may be only a fraction of the loan amount or the total loan amount. The clause defines the financial impact of these advances that must be made. An ease agreement can be divided into four sections: representations and guarantees are similar in all ease agreements. They focus on the borrower`s legal capacity to enter into financing agreements and the nature of the borrower`s activity. They will often be broad and the borrower may try to limit them to issues that, if not correct, would have a significant negative effect. This qualification may apply to a large number of insurance and guarantees relating to the borrower`s activities (for example. B litigation, environmental and accounting matters), but will probably not be acceptable to the lender in order to limit the borrower`s ability to enter into financing agreements or with respect to important financial information. Any repayment made by the Customer for the loan adjusted in the first place against all other unpaid taxes, such as payment fees, penalties, transaction fees, etc., after the full recovery of these contributions, is the amount adjusted against the payment or repayment of the principal loan. Representations and guarantees: these should be carefully considered in all transactions. It should be noted, however, that the purpose of insurance and guarantees in a facility agreement differs from its purpose in purchase and sale contracts.
The lender will not attempt to sue the borrower for breach of representation and guarantee – instead, it will use an infringement as a mechanism to call a default event and/or ask for repayment of the loan. A disclosure letter is therefore not required with respect to insurance and guarantees in the facility agreements. Mandatory costs: This formula, which deals with the costs incurred by banks to meet their regulatory obligations, is rarely negotiated. It is made available as a timetable for the agreement of the institutions. However, the interest rate should only apply to libor facilities and not to basic interest facilities, since a bank`s basic interest rate already contains an amount corresponding to the mandatory costs. The lender should only have the right to demand repayment of the loan in the event of a delay and lawsuit. If the delay default has been corrected or reversed, the lender`s right to accelerate should cease. Finally, an agreement on union facilities will contain many provisions concerning a bank of agents and its role.
These will often not be of immediate importance to the borrower, but it should consider whether the agent bank can only be replaced by its consent and that the agent bank has sufficient powers to act autonomously to give the borrower the flexibility it needs. A borrower does not wish to obtain the agreement or waiver declarations of a large consortium of lenders.