A facility agreement for a term or revolving credit facility will contain conditions
precedent. From the bank's perspective, the agreement should be drafted so that the conditions precedent must be satisfied before_______?
The utilisation of the facility by the borrower.
Note that, once signed, the agreement will bind but there is no automatic right to borrow. However, the bank will be able to monitor the borrower in accordance with the terms of the facility agreement and to enforce any obligations of the borrower to pay fees, costs and expenses, even if the facility is never utilised.