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Master Credit Agreement Template for Canada

A comprehensive legal agreement governed by Canadian law that establishes the fundamental terms and conditions for extending credit facilities between a lender and borrower. This master agreement serves as an umbrella document that governs multiple credit facilities and future lending arrangements, incorporating essential provisions for interest calculation, repayment terms, security requirements, representations and warranties, and covenant obligations. It ensures compliance with Canadian federal banking regulations and provincial requirements while providing flexibility for various types of credit facilities and future modifications.

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What is a Master Credit Agreement?

The Master Credit Agreement is designed for use in Canadian lending transactions where parties intend to establish a long-term credit relationship with multiple facilities or ongoing lending arrangements. It provides the overarching framework for current and future credit facilities, incorporating all necessary provisions required by Canadian federal and provincial regulations. This document is particularly valuable when the borrower may require various types of credit products over time, as it streamlines the process by establishing standard terms that apply across all facilities while allowing for specific terms through supplemental documentation. The agreement includes comprehensive provisions for financial covenants, security arrangements, representations and warranties, and regulatory compliance, making it suitable for complex corporate lending relationships while maintaining flexibility for future modifications.

What sections should be included in a Master Credit Agreement?

1. Parties: Identification of the lender and borrower, including full legal names and addresses

2. Background: Context of the agreement and relationship between the parties

3. Definitions: Comprehensive definitions of terms used throughout the agreement

4. Facility Details: Overview of credit facilities, including types, limits, and general terms

5. Conditions Precedent: Conditions that must be satisfied before credit becomes available

6. Representations and Warranties: Borrower's statements of fact and assurances about their business and financial condition

7. Covenants: Positive and negative obligations of the borrower during the term of the agreement

8. Events of Default: Circumstances constituting default and consequences thereof

9. Interest and Fees: Interest rate calculations, fee structures, and payment terms

10. Repayment Terms: Terms for repayment of principal and interest

11. Security: Overview of security requirements and cross-references to security documents

12. Administration: Operational aspects including notices, amendments, and administrative procedures

13. Governing Law: Specification of Canadian law as governing law and jurisdiction

14. Boilerplate Provisions: Standard legal provisions including severability, entire agreement, and assignment

What sections are optional to include in a Master Credit Agreement?

1. Syndication Provisions: Include when multiple lenders are or may be involved in the credit facility

2. Multicurrency Provisions: Include when credit facilities are available in multiple currencies

3. Letter of Credit Facility: Include when the agreement includes letter of credit facilities

4. Increased Costs: Include for floating rate facilities or when regulatory changes might affect costs

5. Market Disruption: Include for facilities with market-based interest rates

6. Tax Provisions: Include detailed tax provisions when cross-border elements exist

7. Anti-Money Laundering Provisions: Include detailed AML provisions for higher-risk borrowers or complex structures

8. Environmental Compliance: Include for borrowers in industries with environmental risks

What schedules should be included in a Master Credit Agreement?

1. Schedule A - Definitions: Detailed definitions and interpretations

2. Schedule B - Drawdown Notice Form: Standard form for requesting advances under the facility

3. Schedule C - Compliance Certificate: Form for periodic certification of financial covenants and conditions

4. Schedule D - Facility Specific Terms: Detailed terms for each type of credit facility offered

5. Schedule E - Financial Covenants: Detailed financial covenants and calculation methodologies

6. Schedule F - Security Documents: List and forms of required security documents

7. Schedule G - Permitted Liens: List of pre-approved liens and encumbrances

8. Schedule H - Subsidiary Information: Details of borrower's subsidiaries and corporate structure

9. Appendix 1 - Pricing Grid: Interest rate and fee calculations based on financial metrics

10. Appendix 2 - Address for Notices: Contact details and notice requirements for all parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Canada

Document Type

Master Agreement

Cost

Free to use

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