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PLAYBOOK TEMPLATES

Guarantee & Security Agreement

A Guarantee & Security Agreement provides collateral and personal guarantees securing performance or payment obligations. This playbook details drafting considerations for enforcement rights, perfection, and priority of security interests.

Assignment and Transfers

Why This Matters: Unduly restrictive assignment terms hinder market liquidity and syndication options. Clear transfer protocols facilitate funding flexibility and secondary trading.

Negotiation strategy

If you're the Lender:

Negotiate for the ability to assign rights to affiliates or institutional investors with minimal consent requirements. Ensure that any consent required is not unreasonably withheld.

If you're the Borrower:

Seek to maintain control over assignments by requiring prior written consent, especially for strategic counterparties. Ensure that notice provisions are included for transparency.

Essential elements

1

Consent Requirements

Conditions for assignment approval.
2

Notice Provisions

Notification requirements for assignments.
3

Strategic Counterparties

Control over key party assignments.

Action framework

ACCEPT

Propose edits when consent requirements are too restrictive or lack clarity.

EDIT

Reject clauses that completely prohibit assignments without valid reasons.

ADD

Add language to allow assignments to affiliates with notice and objection rights.

PRO TIP

Always include a timeframe for objections to ensure timely processing of assignment requests.

Example clauses

FAVORABLE

Preferred Assignment Clause

"The rights and obligations under this agreement may be assigned to any affiliate or institutional investor upon providing notice to the other party, who may object for valid reasons within [X] days."
NEUTRAL

Standard Assignment Clause

"Assignments require prior written consent, which shall not be unreasonably withheld."
UNFAVORABLE

Restrictive Assignment Clause

"No assignments are permitted without the express written consent of the other party."

Fallbacks

High-Risk Projects

In high-risk projects, ensure that assignments are subject to stricter consent requirements to mitigate potential risks.

Joint Ventures

For joint ventures, allow more flexibility in assignments to facilitate collaboration and resource sharing.

Public Sector Contracts

In public sector contracts, ensure compliance with regulatory requirements for assignments, including necessary approvals.
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