7
PLAYBOOK TEMPLATES

Loan Agreement (Unsecured)

An Unsecured Loan Agreement establishes credit terms without collateral, relying on borrower creditworthiness. This playbook focuses on interest provisions, representations, and remedies for nonpayment.

Conditions Precedent

Why This Matters: Ambiguous or onerous conditions precedent can stall financing and increase execution risk. Clarity on requirements and timing ensures smooth transaction closure.

Negotiation strategy

If you're the Lender:

Ensure conditions are specific, measurable, and achievable. Include realistic timelines and documentation requirements. Allocate responsibilities clearly between parties.

If you're the Borrower:

Confirm that all conditions are realistic and align with the transaction's goals. Ensure that the Borrower has the capacity to fulfill these conditions within the timeline.

Essential elements

1

Documentation Requirements

Necessary documents for compliance.
2

Timeline for Satisfaction

Deadline for meeting conditions.
3

Waiver Provisions

Conditions under which waivers apply.

Action framework

ACCEPT

Propose edits when conditions are unclear or unrealistic.

EDIT

Reject clauses that impose unachievable conditions.

ADD

Add language to clarify responsibilities and timelines.

PRO TIP

Ensure all conditions are documented and agreed upon to prevent future disputes.

Example clauses

FAVORABLE

Preferred Conditions Precedent

"The obligation of the Lender to make the initial advance under the Loan Agreement is subject to the satisfaction or waiver of the following conditions precedent..."
NEUTRAL

Standard Conditions Precedent

"All conditions precedent must be satisfied or waived within thirty (30) days from the date of this Agreement, unless otherwise agreed in writing by the Lender..."
UNFAVORABLE

Unclear Conditions Precedent

"Conditions precedent must be met as soon as possible without specific timelines or responsibilities outlined."

Fallbacks

High-Risk Projects

In high-risk projects, conditions precedent should be more stringent to mitigate potential risks and ensure thorough due diligence.

Cross-Border Transactions

For cross-border transactions, consider additional conditions related to regulatory approvals and currency exchange requirements.

Start-Up Financing

In start-up financing, conditions may be more flexible to accommodate the evolving nature of the business and its needs.
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