An LSTA Assignment and Assumption Agreement (AAA) is a legal agreement that transfers rights and obligations from one party to another. It is often used in the context of loans or other financial agreements, where one party wishes to sell or transfer its interest to another party.
The LSTA AAA is commonly used in the United States, especially in the corporate finance industry. The agreement is governed by the Loan Syndications and Trading Association (LSTA), which is the primary trade organization for the loan market in the US.
The agreement contains several important clauses, including the assignment clause, which specifies the rights and obligations that are being transferred from the assignor to the assignee. This clause also includes any warranties or representations that the assignor makes to the assignee, such as the validity and enforceability of the assigned rights and obligations.
Another important clause in the LSTA AAA is the assumption clause, which outlines the obligations that the assignee will assume upon taking over the assignment. This clause also specifies any limitations on the assignee`s liability, such as caps on damages or exclusions of certain types of liability.
The agreement also includes provisions for notice and consent, which ensure that all parties involved are aware of the assignment and agree to its terms. This is important because some loans or financial agreements may require the consent of other parties before an assignment can take place.
In addition, the LSTA AAA often includes provisions for governing law and jurisdiction, which specify which state`s laws will govern the agreement and which courts will have jurisdiction to resolve any disputes that may arise.
Overall, the LSTA AAA is a useful tool for transferring rights and obligations in the corporate finance industry. It provides a clear framework for the assignment and assumption process and helps to ensure that all parties involved are aware of their rights and obligations.