Why use a facility agreement?

A facility agreement is an arrangement under which a lender agrees to provide one or more loans to a borrower for a period of time and up to specified maximum amount. A facility agreement may be unsecured or secured. The facility (if “committed, which means that the lender is committed to provide future loan advances to the borrower under the facility) will enable the borrower to borrow money (and start to pay interest on the amount advanced) when needed. In exchange for the commitment to lend money when requested, the lender is often paid a commitment fee equal to a percentage of the undrawn facility.

Facility Agreement: unsecured

Facility agreement for an unsecured loan facility to a corporate borrower which is incorporated in England and Wales, to be available to be drawn during an availability period and repayable on a fixed repayment date.

for an unsecured loan facility to be available for drawing during an availability period
for a borrower which is a company incorporated in England and Wales

What are the key features?

23 clauses and two schedules over 14 pages
mechanism for the borrower to request advances, subject to satisfaction of conditions precedent
regular interest payments at either fixed or floating interest rate by reference to specified bank’s base rate of interest
repayment of all loans on a fixed repayment date, with borrower able to prepay in whole or in part
provision for an arrangement fee and facility commitment fee
undertakings from the borrower, including to provide information to the lender and prohibition on granting security and additional borrowings
events of default, leading to the lender having the right to stop further advances and demand immediate repayment

What other documents are available?

For a form of secured facility agreement, see

Facility Agreement: secured

For forms of unsecured and secured loan agreements, see

Description

When do I use this document?

if a shareholder has lost its original share certificate or it has been destroyed
if applicable, alongside a transfer of the shares covered by the lost or destroyed original certificate

What are the key features?

different forms of indemnity, depending on whether the shareholder is also transferring shares
alternative forms of indemnity, depending on whether the shareholder is an individual or a company

What else do I need to know?

What is a share certificate?

A share certificate is a document evidencing ownership of shares in a company. By law, shareholders are entitled to receive this certificate when they acquire shares, either through allotment or transfer.

What happens if a share certificate is lost or destroyed?

If a shareholder loses or destroys their certificate, they can ask the company for a replacement. To safeguard itself, the company will usually require a lost share certificate indemnity. This is a legal undertaking under which the shareholder agrees to cover any losses the company might face by issuing the replacement.

What risks does the indemnity protect against?

The indemnity protects the company from risks such as:

Duplicate Claims: If the original certificate reappears, someone else might claim ownership, causing disputes or financial loss.
Fraudulent Claims: A person could falsely claim to have lost the certificate and misuse the replacement, for example, by attempting to sell the shares unlawfully.
Administrative Errors: Mistakes in issuing a replacement or registering a transfer without the original certificate could lead to legal administrative errors.
Legal Liability: If a replacement certificate or transfer is improperly handled, the company might be held responsible for resulting losses.

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

£50.00 exc VAT

Updated by a lawyer on 04/09/2024

Updated By a lawyer on 01/05/2023

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Facility Agreement: unsecured