Definitions Clauses
(Credit Agreement)

Summary

This template is an example of an – Definitions section in a typical syndicated loan transaction or refinancing of debt under an existing credit agreement. Optional language is included for credit facilities being executed in conjunction with an acquisition or other transaction. This template includes practical guidance, drafting notes, and optional clauses. Note that these sample provisions contemplate a financing that includes the following elements: • A senior secured credit facility consisting of a term loan A facility and a term loan B facility, both funded in full at closing, and a revolving credit facility. The borrower has the ability to draw on the revolving credit facility in alternative currencies (foreign currencies other than U.S. dollars). • Agency roles for each of an administrative agent, collateral agent and issuing bank, acting for a syndicate of lenders. • Collateral and guarantee support from the loan parties, generally including a group of the borrower's subsidiaries and the borrower's immediate parent entity. These provisions do not include certain borrower refinancing and add-on options that have become common in credit agreements in the past decade, including options for incremental facilities, refinancing facilities, loan buybacks and amend and extend transactions. For templates covering these provisions, see Incremental Facility Clauses (Credit Agreement), Refinancing Amendments Clauses (Credit Agreement), Borrower and Sponsor Loan Buybacks Clauses (Credit Agreement), Borrower Loan Buybacks Clauses (Discounted Voluntary Prepayments) (Credit Agreement) and Amend and Extend Clause (Credit Agreement). The capitalized terms used in this template should be conformed to the defined terms in the relevant credit agreement. This template should be read in conjunction with the practice note Introduction, Recitals, and Defined Terms in the Credit Agreement. These definitions should be modified to conform to the parties, type of financing and other factors relevant to your specific transaction. These provisions contain standard language with some alternate and optional clauses, sometimes noting whether they are borrower or bank friendly. Because the standard practice is to start with the bank's form, caution should be exercised when starting with this template, as most banks require use of their bank-specific form. Occasionally, with the consent of the administrative agent, the borrower may prefer to start with a form of their existing credit agreement since they are accustomed to the terminology set out in the existing agreement and to complying with its terms. For a full listing of key content covering a credit agreement, see Credit Agreement Resource Kit.