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The Consortium Loan Agreement is a sophisticated financing instrument used when the size or complexity of a loan facility requires participation from multiple lenders. This document, governed by German law, establishes the legal framework for syndicated lending operations, detailing everything from facility terms to lender relationships. It's particularly relevant for large-scale financing where risk sharing is desired, such as project finance, acquisition finance, or major corporate facilities. The agreement must comply with German banking regulations (KWG), civil law requirements (BGB), and financial sector practices. It includes comprehensive provisions for loan administration, security arrangements, voting mechanisms among lenders, and the appointment and duties of facility agents. The document is structured to accommodate both initial lenders and future participants through transfer mechanisms.

1. Parties: Identification of the Borrower, Agent Bank, and all participating lenders in the consortium

2. Background: Context of the loan, purpose, and basic structure of the consortium arrangement

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and interpretation rules

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

5. Conditions Precedent: Conditions that must be satisfied before drawdown

6. Drawdown: Procedures and requirements for utilizing the loan facility

7. Interest and Fees: Interest calculation, payment terms, and all applicable fees

8. Repayment and Prepayment: Terms for scheduled repayments and voluntary/mandatory prepayments

9. Consortium Arrangements: Rights and obligations of consortium members, voting rights, and decision-making processes

10. Role of the Agent: Duties, powers, and limitations of the Agent Bank

11. Representations and Warranties: Borrower's confirmations regarding its status and capacity

12. Covenants: Positive and negative obligations of the Borrower

13. Events of Default: Circumstances constituting default and consequences

14. Changes to Parties: Provisions for transfers, assignments, and substitutions of lenders

15. Administration: Payment mechanics, calculations, and notices

16. Governing Law and Jurisdiction: Choice of German law and jurisdiction provisions

17. Boilerplate Provisions: Standard contractual provisions including severability, amendments, and notices