Common Terms Agreement Template for Australia

A Common Terms Agreement serves as the foundational document in complex Australian financing arrangements, establishing uniform terms that apply across multiple debt facilities. When you're involved in syndicated lending, project financing, or multi-facility corporate transactions, this master agreement streamlines documentation and ensures consistency between different lenders and facility types.

When do you need this document?

You'll require a Common Terms Agreement when structuring financing arrangements involving multiple facilities from different lenders. This is particularly common in large corporate acquisitions where you need term loans, revolving credit facilities, and bridge financing from a syndicate of banks. Project financing for infrastructure developments typically uses these agreements to coordinate between senior lenders, mezzanine providers, and government funding bodies. Property development projects often employ Common Terms Agreements when combining construction loans, take-out financing, and guarantee facilities. You'll also encounter these in restructuring situations where existing facilities are being refinanced or consolidated under new common terms.

Key legal considerations

The agreement must carefully define the relationship between different facilities and their respective priorities. Security arrangements require particular attention, as you need to establish clear ranking between secured and unsecured facilities, and determine how security will be shared or allocated. Financial covenants must be consistently applied across all facilities, with clear testing periods and cure rights. Cross-default provisions need careful drafting to ensure that defaults under one facility appropriately trigger consequences across other facilities. Representations and warranties should be tailored to cover all parties and their specific roles, while events of default must account for the complexity of multi-party arrangements. You must also consider how amendments and waivers will be managed across multiple facilities and lenders with potentially different commercial interests.

Legal requirements in Australia

Australian Common Terms Agreements must comply with the Corporations Act 2001, particularly regarding financial services licensing requirements and corporate governance obligations. The Competition and Consumer Act 2010 governs fair trading practices and consumer protection provisions that may apply to corporate borrowers. Electronic execution is permitted under the Electronic Transactions Act 1999, allowing digital signatures and electronic delivery of notices. Privacy Act 1988 compliance is essential when personal information is collected or shared between parties. The agreement must incorporate Australian Consumer Law protections where applicable, and ensure compliance with ASIC regulations for corporate lending. Security interests must be registered under the Personal Property Securities Act 2009 where relevant, and the document should address Australian stamp duty implications across different states and territories.