A lot of what the TPMC has been discussing over the last few weeks was addressed in the ACIC CLE presentation on April 16, 2020 entitled,“The Practical Impacts of COVID-19 on Private Placement Transactions”, by Colin Pennycooke (Principal Insurance), Stacey Pike (Chapman and Cutler LLP), Christopher A. Lawrence (Akin Gump Strauss Hauer & Feld LLP), and Edwin Smith (Morgan, Lewis Bockius LLP). The presentation covered topics such as (1) Original vs PDF of Notes, (2)electronic contracting, including Docusign, Adobe Sign etc., (3) Wiring process, (4) delayed draw force majeure/MAE, (5) breaking circle force majeure/MAE, and (6) what to do with Notes when custodians no longer accepting delivery of Notes. An in-depth powerpoint slide deck used for the presentation is available via CLE Events Archives of the ACIC Website.
The following underlined language that has been generally proposed, although not formally adopted by the TPMC, with respect to electronic contracting to include in the Model Form NPA:
“Section 23.[__] Counterparts; Electronic Contracting
This Agreement and the Notes may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies, each signed by less than all, but together signed by all, of the parties to it.
The parties agree to electronic contracting and signatures with respect to this Agreement and the Notes and any other documents required to be delivered hereunder (collectively, the “Note Documents”). Delivery of an electronic signature to, or a signed copy of, this Agreement and such other Note Documents by facsimile, email or other electronic transmission shall be fully binding on the parties to the same extent as the delivery of the manually signed originals and shall be admissible into evidence for all purposes. Notwithstanding the foregoing, if any Purchaser shall request manually signed counterpart signatures to any Note Document or a manually signed Note, the Company hereby agrees to provide such manually signed signature page as soon as practicable, and in any event within 30 days of such request or such longer period as the requesting Purchaser and the Company may agree.”
In addition, the current projects that the TPMC are undertaking include (a) addressing ongoing market comments to the Model Forms, (b) providing for a standard LIBOR sunset provision for floating rate Notes in the PP market (in conjunction with the other market groups also addressing this, including the Alternative Reference Rates Committee (ARRC) and the Loan Syndications and Trading Association)), (c) institute procedures in an effort to mitigate fraud in the funding process, (d)considering “global” Model Form NPAs taking into account the growing global investor base beyond just US insurance companies, which would affect (among others) the economic sanctions and tax withholding provisions, and (e) considering whether to go “Noteless”.
Courtesy of Brendan Kelly, New York Life