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A condition which delays the vesting of a right until the beginning of an event.
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ISDA documentation in a finance transaction—checklist This checklist sets out the key ISDA documentary requirements which need to be considered during the course of a financing transaction. Term sheet stage • if acting for a borrower and specialist hedging advisors are instructed, get their input on the term sheet • if acting for a borrower, ensure that the overall pricing of the transaction is understood (across both the loan and the hedging). A borrower may choose a particular lender based on a low margin offered on the loan, but then find that the credit spread on the swap offered by the same lender means that the overall economics of the transaction are less attractive than those offered by a different lender • is the loan and hedging on an IBOR basis (eg EURIBOR) or on a risk free rate (eg SONIA or SOFR)? • does the lender require a zero floor in its loan? If acting for a borrower, ensure that the borrower understands the implications of a mismatch between...
Intellectual property due diligence in asset purchase transactions—checklist This Checklist has been drafted for use by the buyer and is designed to highlight issues commonly arising, and key questions that should be asked, when undertaking due diligence in the course of an asset purchase transaction, where a buyer is acquiring a business in its entirety or specific business assets. This focuses on IP assets and rights aspects of the transaction and is intended to be used in conjunction with due diligence enquiries in other areas such as IT and as to financial position. For information about the corporate aspects of such transactions, see: Asset purchase agreement—overview. For further information, see Practice Notes: • IP issues to consider in asset purchase contracts • Buying a software business—key considerations • Corporate transactions for technology lawyers • Asset purchase transactions—IP issues—checklist For example agreements, see Precedents: • IP due diligence questionnaire • Assignment of intellectual property rights (asset purchase) (long form) • Assignment of intellectual property rights (asset purchase) (short form) • Intellectual...
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This Practice Note considers the meaning and use of conditions precedent in commercial arrangements. It also considers typical conditions precedent and drafting issues.What are conditions precedent?A condition precedent in a commercial contract details an event which must take place before:•a contract, or•a party’s obligation(s) under a contractcomes into force. The contract, or the relevant obligation, does not become binding until the condition has been satisfied.In Nautica Marine Ltd v Trafigura Trading LLC, the judge distinguished between a ‘pre-condition’ to contract (which has the effect of preventing a contract coming into existence altogether) and a ‘performance condition’ (which does not prevent a binding contract coming into existence, but which if not satisfied means that performance does not have to be rendered). While each case will depend on its own individual facts and commercial context, an important determining factor is whether satisfaction of the condition depends on the decision of a contracting party or a third party. A condition is more likely to be a pre-condition than a performance condition where it...
In financing transactions, conditions precedent are the conditions that need to be fulfilled for funding to occur.This Practice Note explains:•the nature of conditions precedent•the different types of conditions precedent (ie documentary or factual)•what needs to be taken into account when determining whether the conditions precedent have been satisfied, and•what happens if the conditions precedent are not satisfiedThis Practice Note looks at the usual conditions precedent in a finance transaction at the time of:•first drawdown, and•future drawdowns throughout the life of the facilityWhere appropriate, this Practice Note highlights relevant provisions in Precedent: Facility agreement (term loan): single company borrower—bilateral—with or without security or a guarantee and the Loan Market Association (LMA) investment grade multicurrency term facility agreement (the LMA facility agreement) (available to LMA members on the LMA website).The LMA has a series of helpful user guides in the Documents & Guidelines section of its website which provide guidance on its documentation. Additionally, the Association of Corporate Treasurers (ACT) ACT Borrower’s Guide to the LMA’s Investment Grade Agreements contains useful guidance...
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Music publishing agreement—pro-publisher This Agreement is made on [date] Parties 1 [Insert name of Publisher] a company incorporated in [England] with registered number [company number], whose registered office is at [address] (Publisher); and 2 [Insert name of Writer] of [insert address] (Writer). Background (A) The Writer is a composer of musical works and/or an author of lyrics of literary works; (B) The Publisher is engaged in the business of music publishing throughout the Territory and has, inter alia, facilities for the administration and exploitation of musical works; and (C) The Publisher wishes to acquire and the Writer wishes to grant to the Publisher the exclusive right to the Writer’s share of the Compositions, subject to the terms of this Agreement. It is agreed as follows: 1 Definitions and Interpretation 1.1 In this Agreement: Accounting Period • means each six monthly period ending on 30 June and 31 December; Advance • means all monies paid to the Writer by the Publisher other than royalties. Such...
Waiver letter: for a bilateral facility agreement—waiving conditions precedent [ To be printed on the headed paper of the lender ] [insert date] To: [insert name and address of borrower] [and] [insert name and address of guarantor, if applicable] Dear [insert full name of borrower and, if applicable, full name of guarantor] 1 We refer to the facility agreement dated [insert date of facility agreement] between [insert name of borrower] (the Borrower) and [insert name of lender] (the Lender) as amended, novated, supplemented, restated or replaced from time to time in accordance with its terms (the Facility Agreement). 2 [We also refer to the guarantee dated [insert date of guarantee] between [insert name of guarantor] (the Guarantor) and the lender as amended, novated, supplemented, restated or replaced from time to time in accordance with its terms (the Guarantee).] 3 Unless defined otherwise in this letter, or the context requires otherwise, all words or expressions defined in the Facility Agreement have the same...
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Is a contract enforceable if the nominal consideration of £1 is never paid? The placement of clauses providing for nominal consideration is used in some contracts to fulfil the requirements of consideration. Nominal consideration is the payment of a small amount that is still sufficient for legal purposes but 'nominal' in that it would not be adequate in any commercial sense. A sum of one pound sterling is commonly indicated as the nominal consideration, although higher amounts are sometimes seen. We refer you to Precedent: Nominal consideration clause and the related Drafting Notes which state that: ‘The reference to the receipt of the nominal consideration is important, particularly to avoid any risk of
Can you make an application to set aside a judgment if the parties settle a claim prior to the remedy hearing? Where the parties reach an agreement to settle a claim either judgment will be entered by consent or the parties will enter into a Tomlin Order by which the claim is stayed save for the purposes of enforcement of a schedule entered into between the parties. Simple cases in which one party agrees to pay money to the other will often be dealt with by a judgment. Tomlin Orders have the benefit of allowing the parties to agree to provisions which the court does not have the power to order. The court has a wide discretion to vary or revoke orders under CPR 3.1(7), though whilst the rule is broad and unfettered, considerations of finality meant that the discretion ought normally only to be exercised where there has been a material change of circumstances since the order was made, or where the facts on which the original decision were...
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Restructuring & Insolvency analysis: In this case Mr Justice Leech approved a restructuring plan proposed by Thames Water Utilities Holdings Ltd (TWUL) (the ’Plan’). Utilising the cross-class cram down powers under Part 26A of the Companies Act 2006 (CA 2006), he dismissed four objections put forward by a class of dissenting creditors (the ‘Class B AHG Creditors’). Leech J also found it was in the public interest to sanction the Plan. This careful and detailed judgment contains a clear example of how to assess the first condition for a cross-class cram down; how to assess fairness between classes where a class is out-of-the-money; and the importance of public interest issues. The judgment also addresses a novel objection to the Plan based on competition grounds, as well as making several practical remarks on the Court’s expectations regarding evidence, and costs, in restructuring proceedings. Written by Hugh Whelan, barrister at Monckton Chambers, and Charlotte McLean, pupil at Monckton Chambers.
Insurance & Reinsurance analysis: Ten years on from the introduction of the Insurance Act 2015 (IA 2015), the Court of Appeal has handed down a significant judgment, addressing for the first time the proper characterisation of warranties and representations under the ‘new’ law. The decision provides an important and helpful insight into the operation of IA 2015 and a reminder to parties that while the Act went some way to balancing the rights of insurers and policyholders, an insurer will still be able to avoid a policy where the policyholder is in breach of warranty. Written by Chris Neilson, partner, Leah Alpren-Waterman, of counsel and Katie Henderson trainee solicitor at Mischon de Reya LLP.
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