Term Loan Agreement Template for Pakistan

The Term Loan Agreement is a fundamental financing document used in Pakistan when a lender provides medium to long-term financing to a borrower for specific purposes such as capital expenditure, business expansion, or project financing. This agreement must comply with Pakistani legal requirements, including the Contract Act 1872, Banking Companies Ordinance 1962, and relevant State Bank of Pakistan regulations. It typically includes detailed provisions on facility terms, conditions precedent, representations and warranties, covenants, and events of default. The document is crucial for establishing a clear legal framework for the lending relationship, protecting both lender and borrower interests, and ensuring enforceability under Pakistani law. Term Loan Agreements are particularly important in the Pakistani market where formal documentation of financing arrangements is essential for regulatory compliance and risk management.

1. Parties: Identifies and defines the Lender and Borrower with their full legal names and addresses

2. Background: Explains the context of the loan facility and purpose of the agreement

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

4. The Facility: Details the loan amount, purpose, and availability period

5. Conditions Precedent: Lists conditions that must be satisfied before the loan can be drawn

6. Drawdown: Specifies the drawdown mechanics, notice requirements, and procedures

7. Interest: Sets out interest rate, calculation method, payment dates, and default interest

8. Repayment: Details repayment schedule, amounts, and prepayment provisions

9. Fees and Expenses: Lists all applicable fees, costs, and expenses

10. Tax Provisions: Addresses tax-related matters including withholding tax and tax gross-up

11. Representations and Warranties: Contains borrower's representations and warranties

12. Information Undertakings: Specifies ongoing information and reporting requirements

13. General Undertakings: Sets out positive and negative covenants of the borrower

14. Events of Default: Lists circumstances constituting default and consequences

15. Changes to Parties: Addresses assignment and transfer provisions

16. Administration: Covers notices, calculations, and other administrative matters

17. Governing Law and Jurisdiction: Specifies Pakistani law as governing law and jurisdiction for disputes

18. Execution: Signature blocks and execution formalities