Negative Pledge Clauses in Loan Agreements Wednesday, August 23, 2017 - 11:00 AM - 12:30 PM ET
A “negative pledge” clause is a provision in a loan agreement by which the borrower agrees not to grant a security interest in, or to permit a lien to arise on, some or all of the borrower's assets in favor of a third party. Such clauses are common in loan agreements, because they are critical to the lender’s agreement to extend credit to the borrower. Yet there has not been much commentary on the purpose, nature and effect of these clauses.
Participants in this program will obtain a much deeper understanding of these clauses and will be better prepared to negotiate them and use them to the advantage of lender or borrower clients.
Covered Topics:
This session will extensively cover the following key points, among others:
- What Are Negative Pledge Provisions and Where Are They Found?
- Common Examples of Negative Pledge Provisions in Loan and Security Agreements
- Typical Carve Outs From Negative Pledge Provisions
- How Do Negative Pledge Provisions Tie in With Ancillary and Related Provisions in Loan and Security Agreement and Other Agreements
- Hidden Negative Pledge Provisions
- Why Do Lenders Want Negative Pledge Provisions?
- Problems Caused by Second Liens in the Enforcement of Creditors Rights
- Problems Caused by Subordinate Liens in the Bankruptcy Context
- What Are the Consequences for the Borrower and Others If There Is a Breach of a Negative Pledge Provision?
- Defaults and the Borrower's Ability to Cure
- Defaults Under Other Agreements, Such as Guaranties
- Helpful Hints in Drafting and Documenting Negative Pledge Provisions
Who Should Attend?
This informative session is designed for bankers, borrowers, and lawyers who represent bankers or borrowers.
This session is a cost-effective way to learn and be able to explain what negative pledge clauses do and don’t do. You may train as many individuals as you like for one set price. There will be no travel costs, time lost from work and no one will be required to leave the institution.
Negative Pledge Clauses in Loan Agreements Wednesday, August 23, 2017 - 11:00 AM - 12:30 PM ET