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Structuring Real Estate Mortgage Covenants, Event of Default Provisions, Representations and Warranties

Drafting Provisions That Balance Borrower Protections With Lender Remedies

A live 90-minute premium CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Tuesday, August 6, 2024

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

or call 1-800-926-7926

This CLE course will instruct borrowers' and lenders' counsel on structuring default provisions, representations and warranties, affirmative and negative covenants, and other provisions in commercial real estate loan documents. The panel will discuss the most recent trends and best practices.

Description

Strategically crafted loan documents give flexibility to the borrower and adequate protections and remedies for the lender. Carefully structured loan provisions can minimize disputes between the parties and reduce the risk of suit.

Default clauses should carefully define "default," "event of default," and the borrower's ability to cure defaults. Grace periods and notice and cure provisions may be critically important to the borrower, while the lender may want to maintain its ability to take immediate enforcement action.

Affirmative and negative covenants are often among the most negotiated provisions in a loan transaction due to their integral relationship with individual properties and borrowers. Financial covenants and material adverse change (commonly referred to as MAC) clauses have evolved over time but remain important tools for the lender to monitor property performance and trigger cash management.

Although property representations and warranties will vary among transactions, standard representations are in most loan agreements. There are also limitations (such as best knowledge) that borrowers seek to negotiate regarding the scope of representations and warranties.

Listen as our authoritative panel of real estate finance attorneys offers practical approaches for borrowers' and lenders' counsel for structuring loan covenants, event-of-default provisions, representations and warranties, and other loan provisions.

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Outline

  1. Loan covenants
    1. Affirmative
    2. Negative
    3. Financial
  2. Default provisions
    1. Cross-default
    2. Insolvency-related events
    3. Due on sale; change of control
    4. Material adverse change
  3. Reps and warranties
    1. Relating to the property
    2. Non-physical aspects of the property
    3. Due diligence
    4. Loan documentation
    5. Other

Benefits

The panel will review these and other critical issues:

  • What are borrowers' and lenders' best tactics for mitigating risk when negotiating and drafting financial covenants?
  • What financial covenants are required by lenders?
  • How can the borrower and lender each minimize risk when drafting or relying on default provisions?
  • What are the standard property representations found in most facility agreements and what limitations do borrowers typically seek concerning representations?

Faculty

Dreyfus, Caroline
Caroline W. Dreyfus

Partner
Cox Castle & Nicholson

Ms. Dreyfus is a finance attorney with a practice that involves assets in every state, having represented every type of...  |  Read More

Homburger, Thomas
Thomas C. Homburger

Attorney
University of Arizona James E. Rogers College of Law

Mr. Homburger concentrates his practice in the area of real estate financing, development and investment, and he is...  |  Read More

O’Connell, Christine
Christine O’Connell

Partner
King & Spalding

Ms. O’Connell represents major investment banks, private equity funds, and other institutional lenders in the...  |  Read More

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You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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