An ANP is an agreement between a borrower and a lender that must allow the lender to contact the borrower about a possible credit change, waiver or other housing, without impeding the lender`s ability to enforce the loan documents. The main objective of the agreement is to maintain the status quo during the negotiations and to prevent the borrower from using the negotiations as a basis to reject any ongoing or potential enforcement efforts on the part of the lender; or as the basis for the lender`s exercise of liability rights against the lender, arguing that the lender undertook, during the negotiations, to modify the loan documents, that the correspondence exchanged during the negotiation constitutes a change in credit, that the borrower relied legitimately on the lender`s statements when it has waived the refinancing options and that it has transaction costs, etc. Even if, in the end, a borrower is unable to assert its rights to these claims, it is appropriate that its eventual use be considered when rejecting a lender`s summary assessment application and, therefore, extending a enforcement procedure and increasing the borrower`s leverage to the lender. As a general rule, the lender is required to ask parties who have taken out loan guarantees to join the ANP in order to prevent guarantors from asserting similar rights and to prevent guarantors from arguing that the ANP itself has excluded certain defences, thereby increasing the risk of guarantors and, on that basis, increasing “safe defences”. Another important element of a pre-negotiation agreement is the way in which the information (for example. B documents, reports, correspondences, appointment sheets, declarations of intent, etc.) obtained and/or generated during “free and open” discussions are processed and maintained by the parties. All parties to a preliminary agreement should agree that all this information must remain confidential after the conclusion of the pre-negotiation agreement (i.e., such a confidentiality agreement survives the end of the preliminary agreement and prior discussions). In their pure form, HHPs can be useful for both parties and give some air to both sides to breathe. One of the most common elements of a preliminary agreement is the recognition that there is no agreement until an agreement is reduced to the letter and signature by all parties. Here is an example: a pre-negotiation letter should not, as a general rule, contain an leniency clause, because leniency will be part of the negotiations themselves. As with most aspects of commercial real estate transactions, the content of a pre-negotiation agreement may vary depending on the negotiating positions of the parties and local legal considerations. While not an exhaustive list of all topics, issues and reflections, this article examines some key elements of a pre-negotiation agreement.
While the exact details of an ANP will vary from agreement to agreement, a well-negotiated ANP will at least have to address the following issues: (i) the non-binding nature and confidentiality of potential discussions; (ii) the fact that no party is obliged to carry out a complete definitive restructuring agreement by the parties, (iii) the fact that the talks may be interrupted at any time (for any reason or for no reason) and (iv) the fact that the talks are inadmissible in the context of judicial proceedings. In principle, the ANP allows discussions to be “neutral” and not affect or erode a party`s rights – that is how the ANP maintains the status quo. 1 See z.B. Federal Home Loan Mortg. Corp.