Common Terms Agreement for Malaysia

Common Terms Agreement Template for Malaysia

A comprehensive agreement governed by Malaysian law that establishes the common terms, conditions, and operational mechanics applicable across multiple facility agreements in a syndicated lending arrangement. The document incorporates relevant provisions from the Malaysian Contracts Act 1950 and Financial Services Act 2013, setting out the framework for the relationship between borrowers, lenders, and other finance parties. It includes detailed provisions for representations, warranties, covenants, events of default, and administrative matters, while ensuring compliance with Malaysian regulatory requirements and market practices.

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What is a Common Terms Agreement?

The Common Terms Agreement serves as the cornerstone document in complex financing arrangements under Malaysian law, typically used in syndicated lending transactions where multiple lenders provide various facilities to a borrower or group of borrowers. It establishes a unified set of terms that apply across all facility agreements, streamlining documentation and ensuring consistency in the treatment of key provisions such as representations, covenants, and events of default. The document is particularly crucial in the Malaysian context as it must comply with local regulatory requirements, including the Financial Services Act 2013 and Bank Negara Malaysia guidelines, while potentially accommodating both conventional and Islamic financing structures. This agreement type is essential for large-scale financing projects where multiple lenders and various types of debt facilities are involved, providing a efficient and standardized approach to managing the relationships between all finance parties.

What sections should be included in a Common Terms Agreement?

1. Parties: Identification of all parties to the agreement, including borrowers, guarantors, lenders, and agents

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

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and interpretation rules

4. The Facilities: Overview of all facilities covered by the common terms

5. Conditions Precedent: Conditions that must be satisfied before the facilities become available

6. Representations and Warranties: Standard representations and warranties given by the borrower and guarantors

7. Covenants: Financial and non-financial undertakings, including information covenants

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

9. Changes to Parties: Provisions regarding transfers, assignments, and changes to the parties

10. Administration: Role and duties of the facility agent and other administrative matters

11. Payments: Payment mechanics, currency provisions, and set-off rights

12. Decision Making: Majority lender decisions and voting mechanisms

13. Notices: Communication methods and contact details

14. General Provisions: Boilerplate clauses including amendments, waivers, severability

15. Governing Law and Jurisdiction: Choice of law and jurisdiction for dispute resolution

What sections are optional to include in a Common Terms Agreement?

1. Accordion Facility: Optional section for provisions allowing the increase of facility amounts

2. Multiple Currencies: Detailed provisions for handling multiple currencies when the facility is multi-currency

3. Islamic Financing Provisions: Special provisions for Shariah-compliant facilities when Islamic financing is involved

4. Security Sharing: Provisions for sharing security among different classes of creditors if applicable

5. Intercreditor Provisions: Provisions governing the relationship between different classes of creditors if not covered in a separate agreement

6. Tax Gross-Up and Indemnities: Detailed tax provisions when cross-border elements exist

7. Increased Costs: Provisions for dealing with regulatory changes affecting lenders' costs

8. Market Disruption: Provisions dealing with market disruption events affecting interest rates

What schedules should be included in a Common Terms Agreement?

1. Lenders and Commitments: List of lenders and their respective commitments under each facility

2. Conditions Precedent Documents: Detailed list of required conditions precedent documents

3. Form of Transfer Certificate: Standard form for transferring commitments between lenders

4. Form of Accession Deed: Standard form for new parties joining the agreement

5. Form of Compliance Certificate: Template for periodic compliance certification

6. Financial Covenants Calculations: Detailed methodology for calculating financial covenants

7. Form of Utilization Request: Standard form for requesting drawdowns

8. Existing Security: List of existing security interests if applicable

9. Group Structure Chart: Corporate structure of the borrower group

10. Forms of Notices: Standard forms for various notices required under the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Infrastructure

Real Estate

Energy

Manufacturing

Telecommunications

Mining

Oil and Gas

Transportation

Healthcare

Agriculture

Construction

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Syndications

Transaction Management

Project Finance

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Compliance Officer

Banking Relationship Manager

Syndication Manager

Credit Risk Manager

Transaction Manager

Finance Manager

Corporate Secretary

Investment Banker

Debt Capital Markets Officer

Project Finance Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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