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September 20, 2021

Finance Direct Agreement

Filed under: Uncategorized — Mark Baker @ 9:03 am

As a general rule, there is no debate as to whether direct agreement on the principle should be reached. However, it is still customary for certain provisions to be the subject of intense negotiations and it often seems that a disproportionate amount of time is spent concentrating on such a short agreement. To my knowledge, no one has intervened in a direct agreement and there would be practical difficulties in doing so, such as for example. B the novices of all project contracts. However, direct agreements are a common practice and a standard part of a lender`s security package. Construction Contract: Projectco enters into the construction contract with the contractor under which Projectco`s construction obligations in the project contract will be transferred to the contractor. Lenders also need a security package and guarantees to protect the loaned funds. The credit agreement is discussed in more detail in our separate OUT-LAW guide on key issues for lenders in project finance agreements. In addition to the agreement that the counterparty agrees not to terminate the contract if it has the right to do so in accordance with the project document, it will also accept that the step-by-step process may be triggered by the notification by lenders of notification of a project company`s default under the Facility Agreement, by implementing the guarantee or accelerating the loan.

Subcontracting: Projectco has entered into various subcontracts to pass on the risks incurred by project agreement. .

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