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The Credit Agreement Letter is a fundamental document in Canadian lending practices, used when a financial institution extends credit to individuals or businesses. It serves as both an offer letter and, upon acceptance, the governing agreement for the credit facility. This document is particularly important in the Canadian context as it must comply with federal legislation such as the Interest Act and Bank Act, as well as provincial consumer protection laws and regulations. The Credit Agreement Letter typically includes detailed terms about the credit facility, interest rates, repayment schedules, security requirements, conditions precedent, and events of default. It's commonly used for both new credit facilities and renewals or amendments of existing facilities, and can be adapted for various types of credit including term loans, revolving facilities, and letter of credit facilities. The document must be carefully structured to ensure all regulatory requirements for disclosure and consumer protection are met while maintaining clarity and enforceability.

1. Letterhead and Date: Lender's official letterhead and current date

2. Recipient Address: Borrower's full name and address

3. Salutation: Formal greeting to the borrower

4. Purpose Statement: Clear statement that this letter constitutes a credit agreement and reference to any prior applications or discussions

5. Credit Facility Details: Specific details of the credit being offered, including type, amount, and purpose

6. Interest Rate and Fees: Clear specification of interest rate(s), calculation method, and all applicable fees

7. Repayment Terms: Details of repayment schedule, payment amounts, and payment methods

8. Security and Collateral: Description of any security or collateral required

9. Key Conditions: Essential conditions that must be met before credit is provided

10. Events of Default: Circumstances that would constitute default and consequences

11. Representations and Warranties: Standard declarations about the borrower's legal capacity and financial condition

12. Governing Law: Statement that the agreement is governed by Canadian law and specific provincial jurisdiction

13. Acceptance Instructions: Clear instructions on how to accept the offer and deadline for acceptance

14. Signature Blocks: Space for both lender and borrower signatures