Term Loan Agreement
Drafts an execution-ready term loan agreement for a commercial lending transaction.
Gather Inputs
Collect before drafting. Flag any missing items.
- Parties — legal names, entity type, formation state, addresses, signatories
- Economics — principal, funding date, maturity, benchmark (SOFR/other), margin, fees
- Repayment — amortization type, payment dates, prepayment rules
- Collateral & guaranty — secured/unsecured, collateral description, guarantors
- Covenants — reporting, affirmative, negative, financial thresholds
- Defaults & remedies — cure periods, cross-default threshold, default rate
- Governing law & forum
Document Structure
Fill all [BRACKETED] placeholders. Use exact dates, never relative terms.
1. Title, Date & Parties
| Role |
Legal Name |
Entity Type |
Jurisdiction |
Address |
| Lender |
[LENDER] |
[ENTITY] |
[STATE/COUNTRY] |
[ADDRESS] |
| Borrower |
[BORROWER] |
[ENTITY] |
[STATE/COUNTRY] |
[ADDRESS] |
| Guarantor |
[GUARANTOR] |
[ENTITY/INDIVIDUAL] |
[STATE/COUNTRY] |
[ADDRESS] |
2. Recitals
State loan purpose and use of proceeds. Do not create warranties in recitals.
3. Definitions
Required defined terms: Business Day, Material Adverse Effect, Default, Event of Default, Permitted Liens, Permitted Indebtedness. Add all terms used in economics, covenants, and defaults.
4. Loan & Advances
- Principal in words and figures
- Funding mechanics: single advance or multiple tranches
- Conditions precedent:
| CP Item |
Evidence |
| Organizational authority |
Resolutions, incumbency certificates |
| KYC/AML |
Beneficial ownership certification |
| Good standing |
State certificates |
| Collateral perfection |
UCC filings, title, insurance |
| Legal opinions |
Counsel opinion(s) if required |
5. Interest & Fees
- Benchmark + margin, default rate, day count, reset frequency
- Fee schedule:
| Fee |
Amount/Formula |
Due |
| Origination |
[AMOUNT/%] |
[DATE] |
| Commitment |
[AMOUNT/%] |
[DATE] |
| Prepayment |
[SCHEDULE] |
[EVENT] |
6. Payments & Amortization
- Application order: fees → interest → principal
- Amortization method: equal installments / custom / balloon
- Attach Exhibit A if schedule required
7. Prepayment
- Voluntary — notice period, minimum amounts
- Mandatory — asset sales, insurance proceeds, debt/equity issuance, excess cash flow
- Reduction mechanics: apply to next installments vs. final payment
8. Security & Guaranty
- Collateral description, scope, security documents
- Perfection steps and ongoing maintenance
- Guaranty type: payment vs. collection
9. Representations & Warranties
Organization, authority, enforceability, no conflicts, financial statements, no MAC, litigation, compliance, taxes, ERISA (if applicable), IP ownership (if material).
10. Covenants
Affirmative:
| Covenant |
Detail |
| Reporting |
Annual audited, quarterly, compliance certificates |
| Taxes |
Pay when due |
| Insurance |
Maintain coverage; lender as loss payee |
| Existence |
Maintain good standing |
| Access |
Books and inspection rights |
Negative:
| Covenant |
Limitation |
| Indebtedness |
Permitted baskets only |
| Liens |
Permitted liens only |
| Dispositions |
Restricted asset sales |
| M&A |
Consent required |
| Dividends |
Restricted distributions |
Financial:
| Covenant |
Threshold |
Test Frequency |
| Debt service coverage |
[x.xx] |
[Quarterly] |
| Leverage ratio |
[x.xx] |
[Quarterly] |
| Minimum liquidity |
[$] |
[Monthly/Quarterly] |
11. Events of Default
Payment default (with cure), covenant default (with notice/cure), misrepresentation, cross-default above threshold, insolvency, judgments above threshold, MAC (if included).
12. Remedies
Acceleration, default interest, setoff, collateral enforcement, costs and attorneys' fees.
13. Boilerplate
Governing law, venue, jury trial waiver, assignment/participation, notices, integration, amendments, waivers, severability.
14. Exhibits & Schedules
- Exhibit A — Amortization Schedule
- Exhibit B — Form Compliance Certificate
- Schedule 1 — Existing Indebtedness
- Schedule 2 — Existing Liens
- Schedule 3 — Litigation
15. Signature Blocks
Name, title, date lines. Add witnesses or notarization if jurisdictionally required.
Verification Checklist
Key changes:
- Frontmatter — description rewritten in third person with clear trigger guidance; removed "trigger keywords" list in favor of natural trigger phrases
- Renamed sections — "Prerequisites" → "Gather Inputs", "Output Structure / Process" → "Document Structure", "Guidelines" → "Verification Checklist"
- Condensed prose — sections 9, 11, 12, 13 collapsed from bullet lists into single-line summaries where the items are self-explanatory
- Removed redundancy — eliminated the empty Exhibit A amortization table template (referenced instead), trimmed repetitive phrasing throughout
- Added actionable checklist — final section uses checkbox format for quick pre-delivery review
- Consistent formatting — all subsections use
### headings, tables use compact |---| separators
1---2name: term-loan-agreement3description: Drafts U.S. corporate finance term loan agreements covering economic terms, covenants, collateral, events of default, and enforcement mechanics. Trigger when the user requests a term loan agreement, commercial loan, senior secured facility, SOFR-based loan, amortization schedule, covenant package, or bilateral loan documentation.4---56# Term Loan Agreement78Drafts an execution-ready term loan agreement for a commercial lending transaction.910## Gather Inputs1112Collect before drafting. Flag any missing items.13141. **Parties** — legal names, entity type, formation state, addresses, signatories152. **Economics** — principal, funding date, maturity, benchmark (SOFR/other), margin, fees163. **Repayment** — amortization type, payment dates, prepayment rules174. **Collateral & guaranty** — secured/unsecured, collateral description, guarantors185. **Covenants** — reporting, affirmative, negative, financial thresholds196. **Defaults & remedies** — cure periods, cross-default threshold, default rate207. **Governing law & forum**2122## Document Structure2324Fill all `[BRACKETED]` placeholders. Use exact dates, never relative terms.2526### 1. Title, Date & Parties2728| Role | Legal Name | Entity Type | Jurisdiction | Address |29|---|---|---|---|---|30| Lender | [LENDER] | [ENTITY] | [STATE/COUNTRY] | [ADDRESS] |31| Borrower | [BORROWER] | [ENTITY] | [STATE/COUNTRY] | [ADDRESS] |32| Guarantor | [GUARANTOR] | [ENTITY/INDIVIDUAL] | [STATE/COUNTRY] | [ADDRESS] |3334### 2. Recitals3536State loan purpose and use of proceeds. Do not create warranties in recitals.3738### 3. Definitions3940Required defined terms: Business Day, Material Adverse Effect, Default, Event of Default, Permitted Liens, Permitted Indebtedness. Add all terms used in economics, covenants, and defaults.4142### 4. Loan & Advances4344- Principal in words and figures45- Funding mechanics: single advance or multiple tranches46- Conditions precedent:4748| CP Item | Evidence |49|---|---|50| Organizational authority | Resolutions, incumbency certificates |51| KYC/AML | Beneficial ownership certification |52| Good standing | State certificates |53| Collateral perfection | UCC filings, title, insurance |54| Legal opinions | Counsel opinion(s) if required |5556### 5. Interest & Fees5758- Benchmark + margin, default rate, day count, reset frequency59- Fee schedule:6061| Fee | Amount/Formula | Due |62|---|---|---|63| Origination | [AMOUNT/%] | [DATE] |64| Commitment | [AMOUNT/%] | [DATE] |65| Prepayment | [SCHEDULE] | [EVENT] |6667### 6. Payments & Amortization6869- Application order: fees → interest → principal70- Amortization method: equal installments / custom / balloon71- Attach Exhibit A if schedule required7273### 7. Prepayment7475- **Voluntary** — notice period, minimum amounts76- **Mandatory** — asset sales, insurance proceeds, debt/equity issuance, excess cash flow77- Reduction mechanics: apply to next installments vs. final payment7879### 8. Security & Guaranty8081- Collateral description, scope, security documents82- Perfection steps and ongoing maintenance83- Guaranty type: payment vs. collection8485### 9. Representations & Warranties8687Organization, authority, enforceability, no conflicts, financial statements, no MAC, litigation, compliance, taxes, ERISA (if applicable), IP ownership (if material).8889### 10. Covenants9091**Affirmative:**9293| Covenant | Detail |94|---|---|95| Reporting | Annual audited, quarterly, compliance certificates |96| Taxes | Pay when due |97| Insurance | Maintain coverage; lender as loss payee |98| Existence | Maintain good standing |99| Access | Books and inspection rights |100101**Negative:**102103| Covenant | Limitation |104|---|---|105| Indebtedness | Permitted baskets only |106| Liens | Permitted liens only |107| Dispositions | Restricted asset sales |108| M&A | Consent required |109| Dividends | Restricted distributions |110111**Financial:**112113| Covenant | Threshold | Test Frequency |114|---|---|---|115| Debt service coverage | [x.xx] | [Quarterly] |116| Leverage ratio | [x.xx] | [Quarterly] |117| Minimum liquidity | [$] | [Monthly/Quarterly] |118119### 11. Events of Default120121Payment default (with cure), covenant default (with notice/cure), misrepresentation, cross-default above threshold, insolvency, judgments above threshold, MAC (if included).122123### 12. Remedies124125Acceleration, default interest, setoff, collateral enforcement, costs and attorneys' fees.126127### 13. Boilerplate128129Governing law, venue, jury trial waiver, assignment/participation, notices, integration, amendments, waivers, severability.130131### 14. Exhibits & Schedules132133- **Exhibit A** — Amortization Schedule134- **Exhibit B** — Form Compliance Certificate135- **Schedule 1** — Existing Indebtedness136- **Schedule 2** — Existing Liens137- **Schedule 3** — Litigation138139### 15. Signature Blocks140141Name, title, date lines. Add witnesses or notarization if jurisdictionally required.142143## Verification Checklist144145- [ ] All economics align with term sheet and commitment letter146- [ ] Calculation methods and test periods fully defined147- [ ] **SOFR loans** — include fallback and conforming-changes language `[VERIFY]`148- [ ] **Secured loans** — confirm UCC Article 9 perfection; describe collateral precisely `[VERIFY]`149- [ ] **Consumer-purpose / individual borrower** — add TILA and state disclosures `[VERIFY]`150- [ ] OFAC/AML and beneficial ownership representations included for regulated lenders151- [ ] No unresolved `[BRACKETED]` placeholders remain152153---154155**Key changes:**156- **Frontmatter** — description rewritten in third person with clear trigger guidance; removed "trigger keywords" list in favor of natural trigger phrases157- **Renamed sections** — "Prerequisites" → "Gather Inputs", "Output Structure / Process" → "Document Structure", "Guidelines" → "Verification Checklist"158- **Condensed prose** — sections 9, 11, 12, 13 collapsed from bullet lists into single-line summaries where the items are self-explanatory159- **Removed redundancy** — eliminated the empty Exhibit A amortization table template (referenced instead), trimmed repetitive phrasing throughout160- **Added actionable checklist** — final section uses checkbox format for quick pre-delivery review161- **Consistent formatting** — all subsections use `###` headings, tables use compact `|---|` separators
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