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The Revolving Line of Credit Agreement is essential for businesses and individuals seeking flexible financing options in Canada. This agreement is used when a borrower requires ongoing access to credit that can be drawn down, repaid, and redrawn as needed, unlike a term loan that provides a one-time lump sum. The document establishes the credit relationship between the lender and borrower, incorporating critical elements such as the credit limit, interest calculation methods, security requirements, and compliance obligations. It must comply with Canadian federal banking regulations, including the Bank Act and Interest Act, as well as provincial legislation regarding security interests and consumer protection. The agreement is particularly valuable for managing working capital, seasonal business fluctuations, or ongoing operational needs, providing businesses with reliable access to funding while protecting the lender's interests through carefully structured terms and conditions.

1. Parties: Identifies the lender and borrower with their full legal names and addresses

2. Background: Explains the context of the agreement and the parties' intention to establish a revolving credit facility

3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out interpretation rules

4. The Facility: Details the nature, amount, and purpose of the revolving credit facility

5. Interest and Fees: Specifies interest rates, calculation methods, fees, and payment terms

6. Drawdown Mechanics: Procedures for requesting and receiving advances under the facility

7. Repayment and Prepayment: Terms for regular payments, prepayment rights, and facility reduction

8. Conditions Precedent: Conditions that must be satisfied before initial and subsequent drawdowns

9. Representations and Warranties: Borrower's statements about its legal and financial status

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

11. Events of Default: Circumstances that constitute default and consequences

12. Security: Overview of security requirements and enforcement rights

13. Administration: Operational aspects including payments, calculations, and notices

14. Assignment and Transfer: Rules regarding transfer of rights under the agreement

15. Governing Law and Jurisdiction: Specifies applicable law and courts having jurisdiction

16. Miscellaneous: Standard boilerplate provisions including amendments, waivers, and severability