In today’s global economy, transactional attorneys and paralegals are seeing an increase in the number of multi-jurisdictional, cross-border transactions and in the resulting number of detailed requirements for closing. One of the requirements that is often overlooked until the last minute is the appointment of a process agent. Understanding the role and what is involved in appointing such an agent will help ensure that this important item on the closing checklist does not cause costly delays in international transactions.
Cross-Border Agreements and Closing Requirements
Cross-border agreements serve as the basis for international transactions involving parties from different jurisdictions. Forms of international agreements vary greatly from country to country, but a typical provision included in many international agreements is the appointment of an agent for service of process — commonly known as a “process agent”. The designation of this agent may be included in the section of the agreement entitled “Consent to Jurisdiction”, “Governing Law” or some variation of those titles.
In addition to completing all the pre-closing issues, careful attention needs to be paid to the formal, but necessary, details required for completion of the transaction. These include, but are not limited to:
- execution of agreements and supporting documents across time zones
- obtaining required signatures
- correctly following multi-location closing procedures
- coordinating wire transfers through international banks
- ensuring that the process agent appointed for all required parties delivers its acceptance to serve for the term of the agreement
While coordinating the appointment of the process agent is only one of many closing requirements, its importance requires advance planning and an understanding of the choice of law and venue (sometimes referred to the jurisdiction or court) that the parties agree will govern the transaction.
Types of Transactions that Require a Process Agent
Process agents are typically appointed as part of cross-border financial transactions involving commercial banks, sovereign states, multilateral lending agencies, export credit agencies and corporate entities.
This type of appointment is often required in global transactions, including credit financing, aviation leasing/financing, debt/equity capital market offerings, Rule 144A, Regulation S offerings and private placements. Types of agreements that include the appointment of an agent for service of process include Loan and Credit Agreements, ISDA Master Agreements, import/export financing agreements, Indentures, Stock Purchase Agreements, Intercreditor Agreements and others. In addition, a U.S. process agent is required to be named in certain SEC filings; for example, certain foreign registration statements such as SEC Forms F-1 to F-6 series and SEC Form F-X, which is filed concurrently with several SEC filings, including Form CB in connection with a tender offer, rights offering or business combination.
Choice of Law for International Agreements: New York and the United Kingdom (U.K.)
Parties to an agreement negotiate a choice of law clause that specifies that any dispute arising under the agreement shall be determined in accordance with the law of a particular jurisdiction. While the choice of law can vary depending on the country of origin of the parties to the transaction, New York and the U.K. are commonly …