Pre Financing Agreement for the Netherlands

Pre Financing Agreement Template for Netherlands

A Pre-Financing Agreement under Dutch law is a comprehensive legal document that establishes the terms and conditions for providing advance funding before a project or transaction is completed. This agreement, governed by Dutch civil and financial regulations, outlines the financing amount, drawdown conditions, repayment terms, security arrangements, and obligations of all parties involved. It includes specific provisions compliant with Dutch financial supervision laws (Wet op het financieel toezicht) and incorporates necessary safeguards for both the financing party and the recipient, while ensuring adherence to Dutch anti-money laundering regulations and financial market rules.

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What is a Pre Financing Agreement?

The Pre-Financing Agreement is a crucial document used when one party requires advance funding for specific business activities or projects before generating revenue or receiving payment from end clients. This agreement, structured under Dutch law, is commonly utilized in various business scenarios such as construction projects, trade financing, or project development where upfront capital is essential. The document addresses key aspects including the financing amount, drawdown mechanisms, security arrangements, repayment terms, and risk mitigation measures. It must comply with Dutch financial regulations, particularly the Financial Supervision Act (Wft) and related financial market rules. The agreement typically includes detailed conditions precedent, representations and warranties, and covenants to protect the interests of both the financing party and the recipient.

What sections should be included in a Pre Financing Agreement?

1. Parties: Identification of the financing party and the recipient, including full legal names, registration details, and addresses

2. Background: Context of the pre-financing arrangement, purpose of the funding, and relevant business relationship between parties

3. Definitions: Definitions of key terms used throughout the agreement

4. Facility Amount and Purpose: Specification of the pre-financing amount and its intended use

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

6. Drawdown Mechanics: Procedures and requirements for requesting and receiving funds

7. Interest and Fees: Details of interest rates, calculation methods, and any additional fees

8. Repayment Terms: Timing and method of repayment, including any early repayment provisions

9. Security: Details of any security or collateral provided for the pre-financing

10. Representations and Warranties: Statements of fact and assurances given by the parties

11. Covenants: Ongoing obligations of the parties during the term of the agreement

12. Events of Default: Circumstances that constitute default and consequences thereof

13. Governing Law and Jurisdiction: Confirmation of Dutch law application and jurisdiction for disputes

14. Miscellaneous: Standard boilerplate provisions including notices, amendments, and severability

What sections are optional to include in a Pre Financing Agreement?

1. Multiple Lenders Provisions: Required when there is more than one financing party, including voting rights and sharing provisions

2. Regulatory Compliance: Specific section for detailed regulatory requirements when dealing with regulated entities

3. Tax Provisions: Detailed tax clauses when cross-border elements or specific tax arrangements are involved

4. Currency Provisions: Required when financing involves multiple currencies

5. Step-In Rights: When lenders require the right to take control in certain circumstances

6. Information Rights: Detailed reporting requirements when enhanced monitoring is needed

7. Insurance Requirements: Specific insurance obligations when financing is linked to insurable assets

8. Subordination Provisions: When the pre-financing needs to be subordinated to other debt

What schedules should be included in a Pre Financing Agreement?

1. Schedule 1 - Facility Details: Detailed terms of the facility including amounts, interest rates, and fee calculations

2. Schedule 2 - Conditions Precedent Documents: List of all required documents and conditions to be satisfied

3. Schedule 3 - Form of Drawdown Request: Template for requesting disbursement of funds

4. Schedule 4 - Security Documents: Details of security arrangements and related documentation

5. Schedule 5 - Repayment Schedule: Detailed schedule of repayment dates and amounts

6. Appendix A - Compliance Certificates: Templates for ongoing compliance certification

7. Appendix B - Financial Covenants Calculations: Formulas and methods for calculating financial covenants

8. Appendix C - Know Your Customer Requirements: List of required KYC documentation and procedures

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

Netherlands

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Construction

Manufacturing

International Trade

Technology Development

Real Estate Development

Infrastructure

Energy Projects

Film Production

Agriculture

Renewable Energy

Export/Import

Retail Development

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit

Commercial

Project Management

Business Development

Corporate Finance

Investment

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Contract Manager

Risk Manager

Credit Manager

Project Finance Manager

Commercial Director

Financial Controller

Compliance Officer

Business Development Manager

Account Manager

Investment Manager

Corporate 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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