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Negative Pledge Agreement
"Need a Swiss law Negative Pledge Agreement between ABC Bank AG as lender and XYZ Manufacturing GmbH as borrower, with specific carve-outs for existing equipment financing and a CHF 2 million permitted security basket."
1. Parties: Identification of the parties entering into the agreement, including their full legal names, addresses, and registration details
2. Background: Context of the agreement, including reference to any related financing arrangements or reasons for the negative pledge
3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation
4. Negative Pledge Undertaking: Core provision containing the borrower's undertaking not to create or permit security interests over its assets
5. Permitted Security: List and description of security interests that are expressly permitted as exceptions to the negative pledge
6. Representations and Warranties: Statements of fact and assurances given by the pledgor regarding their ability to enter into the agreement and status of assets
7. Duration: Term of the agreement and conditions for termination
8. Events of Default: Circumstances that constitute a breach of the agreement and trigger remedies
9. Remedies: Rights and actions available to the beneficiary in case of breach
10. Notices: Process and requirements for formal communications between parties
11. Governing Law and Jurisdiction: Specification of Swiss law as governing law and jurisdiction for disputes
12. Miscellaneous: Standard boilerplate provisions including severability, amendments, and entire agreement
1. Further Assurance: Obligation to take additional actions to give effect to the agreement, included in complex transactions
2. Information Undertakings: Obligations to provide information about assets and potential security interests, used in larger financing arrangements
3. Costs and Expenses: Allocation of costs related to the agreement, included when significant expenses are anticipated
4. Assignment and Transfer: Provisions regarding the ability to transfer rights under the agreement, included when transferability is important
5. Third Party Rights: Provisions addressing whether third parties have rights under the agreement, included when relevant under the transaction structure
6. Parallel Debt: Creates parallel payment obligations, included when required for enforceability in certain jurisdictions or structures
1. Schedule 1 - Existing Security: List of security interests existing at the time of the agreement that are permitted to continue
2. Schedule 2 - Form of Compliance Certificate: Template for periodic confirmation of compliance with negative pledge obligations
3. Schedule 3 - Assets: List of specific assets subject to the negative pledge, if not all assets are covered
4. Appendix A - Signing Authorities: Documentation proving authority of signatories to enter into the agreement
5. Appendix B - Corporate Approvals: Copies of relevant corporate approvals authorizing the agreement
Authors
Banking and Financial Services
Corporate Lending
Investment Banking
Real Estate
Infrastructure
Manufacturing
Energy
Telecommunications
Healthcare
Mining and Natural Resources
Transportation and Logistics
Legal
Finance
Treasury
Compliance
Risk Management
Corporate Secretariat
Credit Administration
Banking Operations
Transaction Management
Chief Financial Officer
Finance Director
Treasury Manager
Legal Counsel
Corporate Lawyer
Banking Lawyer
Compliance Officer
Risk Manager
Credit Manager
Transaction Manager
Finance Manager
Corporate Secretary
Banking Relationship Manager
Loan Officer
Security Trustee
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