Assigning government receivables
Payments due from the US government can only be assigned to a lender in the way the Assignment of Claims Act allows: one assignment to a financing institution, with written notice to the contracting officer and the disbursing officer. Lenders decide whether to require that paperwork at closing for the larger contracts, or only after a default.
4 filed extracts and the negotiating points for each side are for subscribers.
Representations about assigned contracts
A lender relying on government receivables wants comfort that each assigned contract is in force, can be assigned and has not been assigned to anyone else, and that the government cannot reduce payments by set-off.
1 filed extract and the negotiating points for each side are for subscribers.
Classified information and lender access
Lenders normally receive wide information rights. A borrower doing classified work cannot share classified information with anyone who lacks a clearance, so defence credit agreements say so expressly, and warn lenders that the government may remove classified material before any enforcement.
3 filed extracts and the negotiating points for each side are for subscribers.
FOCI and the exercise of remedies
A cleared US contractor must not come under foreign ownership, control or influence (FOCI) without measures approved by the Defense Counterintelligence and Security Agency (DCSA). A lender enforcing a share pledge, or a foreign bank in the syndicate, can trigger those rules, so defence credit agreements make remedies subject to them.
3 filed extracts and the negotiating points for each side are for subscribers.
Proxy agreements that limit debt
A foreign-owned defence company operating under a DCSA proxy agreement is run by US proxy holders. The foreign owner's approval rights are limited and listed, and may include a ceiling on borrowing, which then sits alongside any credit agreement covenants.
2 filed extracts and the negotiating points for each side are for subscribers.
Debarment and suspension
A contractor that is suspended or debarred cannot win new federal contracts, which can end a defence company's business. Lenders ask for a representation that no such event has happened or is likely, and usually make debarment an event of default.
1 filed extract and the negotiating points for each side are for subscribers.
Export controls and sanctions
Defence technology is controlled under ITAR and the EAR. Buyers and lenders want representations that the business has complied, and need to know that a transfer of the business, including on enforcement, may need State and Commerce Department consents.
2 filed extracts and the negotiating points for each side are for subscribers.
The rest of this tool covers the filed wording for every clause with a link to the document, and the negotiating points for lenders and for borrowers. It is free with a work email, along with the full guides and the register downloads.
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General information on public documents and law as at 28 Oct 2026, not legal advice on any transaction. Filed wording is quoted from the public document linked to it.