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Facilities Agreement

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FACILITIES AGREEMENT

This Facilities Agreement (the "Agreement") is entered into as of by and between:

Facility Owner:   Address:

Facility User:   Address:

WHEREAS

1. Facility Owner owns, operates, or controls the facility commonly described as: (the "Facility"), and is willing to permit limited use of the Facility under the terms set forth herein.

2. Facility User desires to use the Facility for the purposes described in this Agreement and represents that Facility User has the authority, personnel, and resources to use the Facility in accordance with this Agreement.

3. The parties desire to set forth the terms and conditions under which Facility User will have access to and use of the Facility.

SCOPE OF WORK

Facility User's use of the Facility shall be limited to the activities reasonably necessary to perform the Scope of Work and shall not include any activity that would materially alter the Facility without prior written consent from Facility Owner.

PAYMENT TERMS

Late payments shall accrue interest at the rate of % per month (or the maximum rate permitted by law, if less). Facility Owner may suspend access to the Facility for nonpayment after delivering written notice and a ten (10) day opportunity to cure.

TERM AND TERMINATION

Term Commencement Date:   Term Expiration Date:

Either party may terminate this Agreement for convenience upon providing written notice to the other party. Either party may immediately terminate for material breach if such breach remains uncured thirty (30) days after receipt of written notice specifying the breach.

CONFIDENTIALITY

Each party shall keep confidential and shall not disclose to any third party any non-public information disclosed by the other party that is designated in writing as confidential or that a reasonable person would understand to be confidential given the nature of the information ("Confidential Information"). Confidential Information shall not include information that: (a) is or becomes generally available to the public through no fault of the receiving party; (b) is rightfully received from a third party without restriction; or (c) is independently developed by the receiving party without use of the disclosing party's Confidential Information.

The receiving party shall use Confidential Information solely for the purposes of performing its obligations under this Agreement and shall limit access to Confidential Information to those employees, agents, or contractors who have a need to know and are bound by confidentiality obligations no less protective than those set forth herein. These confidentiality obligations shall survive termination of this Agreement for a period of three (3) years.

INSURANCE AND INDEMNITY

Facility User shall procure and maintain, at its expense, insurance coverage sufficient for the activities contemplated by this Agreement, including commercial general liability, automobile liability (if applicable), and workers' compensation as required by law. Minimum limits shall be:

Each party shall indemnify, defend and hold harmless the other party and its officers, directors, employees and agents from and against any third-party claims, liabilities, losses, damages, or expenses (including reasonable attorneys' fees) arising out of or resulting from the indemnifying party's negligent acts or willful misconduct in connection with this Agreement.

COMPLIANCE AND ACCESS

Facility User shall comply with all applicable laws, regulations and Facility Owner rules while on the Facility. Facility Owner shall provide reasonable access and utilities as required to perform the Scope of Work. Facility Owner may impose reasonable security and safety procedures for access.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of without regard to conflict of laws principles.

ENTIRE AGREEMENT

This Agreement, including any exhibits and attachments hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, understandings, and agreements, whether written or oral. Any amendment or modification to this Agreement must be in writing and signed by both parties.

MISCELLANEOUS

If any provision of this Agreement is held to be invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect. Neither party may assign this Agreement without the prior written consent of the other party, provided that Facility Owner may assign to an affiliate or successor in interest without consent so long as such assignee assumes Facility Owner's obligations hereunder.

Facility Owner:

By:

Date:

Facility User:

By:

Date:

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What a Facilities Agreement Is and when it's used

A Facilities Agreement is a legally binding contract that establishes the terms of a credit facility between lenders and a borrower or group of borrowers. It sets the committed facility amount, pricing, drawdown mechanics, covenants, events of default, representations, conditions precedent, security arrangements, and intercreditor provisions where multiple creditors participate. The document governs ongoing borrowing and repayment mechanics and usually incorporates exhibits such as the schedule of collateral, borrowing base calculations, and form notices for drawdowns and defaults. Facilities Agreements are commonly used in corporate finance, real estate development, and project lending.

Why a clear Facilities Agreement matters

A clear Facilities Agreement reduces execution risk by documenting how credit availability, interest, fees, and remedies work. It protects both lender and borrower expectations, speeds funding when conditions precedent are met, and limits disputes about collateral and repayment priority.

Why a clear Facilities Agreement matters

Who typically prepares, reviews, and signs a Facilities Agreement

Primary participants include lending institutions, borrower management, outside counsel, and administrative agents managing drawdowns and covenant monitoring.

  • Lenders and administrative agents who manage commitments, collateral perfection, and payment priority across lenders.
  • Borrowers and corporate finance teams responsible for compliance, draw requests, and reporting under the facility.
  • Outside counsel and trustees who draft intercreditor provisions, security documents, and coordinate filings or recordation.

Effective coordination among these parties during negotiation, execution, and post-closing administration reduces operational friction and legal exposure.

Roles that sign the agreement

Lender — General Counsel

The lender's counsel reviews covenants, security descriptions, and intercreditor language, ensures enforceability in relevant jurisdictions, and confirms conditions precedent are satisfied before funding.

Borrower — CFO

The borrower's CFO ensures the facility terms align with cash flow forecasts, verifies representations are accurate, coordinates required board approvals, and authorizes draw requests post-closing.

Step-by-step: preparing and executing the Facilities Agreement

Follow this sequence to assemble documents, verify conditions, and reach enforceable signatures.

  • 01
    Assemble documents: Collect financials, corporate authorizations, and collateral schedules.
  • 02
    Draft and review: Circulate negotiated terms among counsel and revise tracked changes.
  • 03
    Confirm conditions: Verify representations, insurance, and title searches before closing.
  • 04
    Execute and perfect: Obtain signatures, notarizations if required, and record financing statements.

Typical digital workflow settings for a Facilities Agreement

Configure your e-signing workflow to reflect signing order, authentication, and required attachments for closing.

Field Configuration
Authentication method Email link plus optional SMS code for higher assurance
Signing order Sequential signing with administrative agent signature before lenders
Template versioning Use versioned templates to lock exhibits and track redlines
Attachments required Exhibits, UCC forms, and board resolutions attached as PDFs

How electronic completion and delivery typically proceed

The online signing flow standardizes document routing, signer authentication, and evidence capture for enforceability.

  • Upload document: Import final PDF with exhibits and schedules.
  • Place fields: Add signature, initial, and date fields at required locations.
  • Add signers: Enter signer emails and assign roles and order.
  • Send for signature: Platform delivers links, captures audit trail, and returns executed copies.

Essential sections that a professional Facilities Agreement must include

A complete Facilities Agreement organizes contractual risk, payment mechanics, and enforcement in logically titled sections.

Parties & Recitals

Identify all borrowers, guarantors, lenders, and the administrative agent. Recitals explain purpose and provide context for representations and covenants used throughout the agreement.

Facility Amounts

State the overall committed facility amount, per-lender commitments, and any sub-limits, together with availability periods and conditions to draw.

Interest & Fees

Define interest calculation, payment dates, default interest, facility fees, commitment fees, and mechanics for rate adjustments or margins linked to benchmarks.

Security & Perfection

Describe collateral, pledges, mortgages, and required steps for perfection including UCC filings, recordation, and local jurisdiction requirements.

Representations & Warranties

List borrower and guarantor representations about authority, solvency, ownership, and compliance; these are conditions precedent to funding.

Events of Default

Define triggering events, grace periods, lender remedies, acceleration, and intercreditor standstill provisions to clarify enforcement paths.

Security, compliance, and format considerations

Encryption: TLS 1.2/1.3, AES-256 at rest
Certifications: SOC 2 Type II, ISO 27001
Access control: Role-based permissions and SSO
Audit trail: Timestamped events and IP logging
BAA available: HIPAA BAA available on request
Supported formats: PDF, DOCX, HTML, Excel

Common mistakes when preparing a Facilities Agreement

  • Using inconsistent party names between the agreement and security documents, which can invalidate perfection steps or filings.
  • Vague collateral descriptions that fail to identify assets precisely, complicating UCC filings and enforcement.
  • Omitting required corporate approvals or resolutions, which can render a signature voidable by third parties.
  • Failing to include drawdown conditions and mechanics, resulting in funding delays or disputes at closing.

Key legal and operational risks from errors

Delayed funding: Funding may be withheld until defects cured
Perfection failure: Security interest may be unenforceable
Contract invalidity: Missing approvals can void commitments
Regulatory fines: Noncompliance can trigger agency penalties
Tax consequences: Incorrect reporting may invoke IRC penalties
Data breach: Unauthorized disclosure may cause costly remediation

eSignature vendor pricing comparison for Facilities Agreement workflows

Common vendor pricing and feature differences that affect cost and compliance for facilities workflows; signNow is listed first for comparison.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial Yes, 7-day trial Varies by region Varies by region Varies by region Varies by region
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Technical requirements for secure e-signing and e-submission

Ensure the signing platform supports the data protection, authentication, and file types you need before executing agreements.

  • Integrations: Salesforce, NetSuite, Google Workspace
  • File formats: PDF, DOCX, Excel supported
  • Authentication: Email, SMS, KBA, SSO

Real-world examples of online execution for similar agreements

These brief case cards illustrate how organizations moved to digital signing to streamline execution and compliance.

Martin Properties (Founder)

Martin Properties moved complex loan documents online to avoid in-person closings and speed deals.

  • The founder reported fully compliant execution across mobile and desktop.
  • Post-implementation the team processed agreements remotely, accelerated closings, and maintained required records for audits and lender reporting without paper dependency.

BIS (CEO)

BIS selected a compliant e-sign platform to centralize contract execution and audit trails.

  • Leadership emphasized SOC 2 certification as decisive.
  • The company reduced turnaround time for multi-party facility signings while preserving security, audit logs, and integration with back-office systems for recordkeeping.

Frequently asked questions about preparing and signing a Facilities Agreement

Answers to common legal, execution, and retention questions encountered during negotiation and closing of Facilities Agreements.


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