Common Terms Agreement
The basic conditions of a credit agreement include the following provisions. A template of the agreement can be downloaded below. A delivery contract is concluded between the project company and the supplier of the necessary raw material/fuel. An agreement between the parties to the financing and the project company defining the conditions common to all financial instruments and the relationship between them (including definitions, conditions, order of use, project accounts, voting rights for waivers and amendments). An agreement on common terms greatly clarifies and simplifies the obtaining of multiple financial resources for a project and ensures that the parties have a common understanding of key definitions and critical events. Agreeing on common terms is key to project financing scenarios. CTA protects both parties from future legal issues. The agreement between the financial(s) and the borrower(s) specifies the reciprocal and common conditions. A detailed explanation of the financial instruments and the relationship between the different instruments is necessary for both parties in order to avoid any future divergence or dispute. Common terms and conditions Agreements clarify and simplify the multi-sourcing of project credits and ensure that parties have a common understanding of key definitions and critical events.
For more information on the common terms agreement, see the project financing documents. The most common construction contract for project financing is the EPC (Engineering, Procurement and Construction) contract. An EPC contract generally provides for the obligation for the contractor to increase the project facilities to a fixed turnkey price, i.e.: to build and supply at a fixed price determined in advance, on a given date, in accordance with certain specifications and with certain performance guarantees. The EPC contract is quite complex from a legal point of view, so the project company and the EPC contractor need sufficient experience and knowledge of the nature of the project to avoid their mistakes and minimize risks during the execution of the contract. A credit agreement is concluded between the project company (borrower) and the lenders. The credit agreement regulates the relationship between lenders and borrowers. It defines the basis on which credit can be used and repaid and contains the usual provisions found in a business credit agreement. It also contains additional clauses to meet the specific requirements of the project and project documents. This practice note examines the first category of records, financial records. It explains what they are and some of the keywords in them. Project funding documents almost always contain an agreement with common conditions and should always include it.
An agreement with common terms is an agreement between the project lenders and the project company, which defines the common conditions for all project financing documents as well as the relationship between them with definitions, conditions, order of drawdowns and voting rights for waiver declarations and amendments. . . .