LETTER OF COMFORT



Letter of Comfort

|A parent company may be called upon to provide some comfort to a party entering into a contractual relationship with its |

|subsidiary. This comfort may take the form of a guarantee of some undertakings by the subsidiary (see model: Guarantee Agreement) |

|or may be in a weaker form which is generally known as a Letter of Comfort (“patronaatsverklaring/lettre de confort”). In a Letter |

|of Comfort the parent company does not bind itself to pay the debts of its subsidiary in the case that the subsidiary does not pay.|

|The parent company confines itself only to its own specific legal obligations. |

|The title given to such a document is of no legal value. The letter needs to be carefully drafted in order to properly determine |

|whether the parent company is entering into real commitments to the recipient of the letter or rather is making non-binding |

|statements of facts relating to itself or to its subsidiary, or is merely acknowledging the existence of a certain event or policy.|

|The model contains different types of clauses. The qualification of a clause as merely informative, best efforts |

|(“middelenverbintenis/obligation de moyen”) or as a result obligation (“resultaatsverbintenis/obligation de résultat”) is not |

|always straightforward. A court has the power to give interpretation to the wording in cases of doubt. |

|The model is a letter issued within the framework of a financing operation. Typically, the beneficiary will be a financial |

|institution. A non-financial comfort letter that seeks to ensure the proper performance of a contract for delivery of services or |

|goods is not covered in this model. Not all of the provisions are likely to be appropriate to every transaction, and certain other |

|clauses could be inserted, but the model gives a variety of clauses from which one or more can be chosen. |

|Before entering into or accepting a Letter of Comfort, parties should examine the possible impediments that may exist in relation |

|to whether they can actually be granted, especially in the framework of intra-group guarantees. A parent company must, for |

|instance, have a separate corporate benefit in order to grant a guarantee for its subsidiary. It is advisable to have such issues |

|of validity examined by a lawyer (and/or covered by a legal opinion). |

[LETTERHEAD OF THE ISSUER]

[Name and address of the Beneficiary]

Dear Sirs,

Awareness of underlying contract

We are pleased to learn that you will extend to our subsidiary __________ [full name and address] (the “Subsidiary”) of which we own a __________ per cent (__________ %) share, a credit facility amounting to __________ euro [amount in words] (€ __________) [amount in numbers][1].

We are aware that the Subsidiary has requested such a credit facility from you and we confirm that this request is in order.

Acknowledgment of underlying contract

We hereby state that we have read and understood the clauses, terms and conditions governing the credit facility granted by you to the Subsidiary in your letter/contract dated __________, reference __________ [if available][2].

Agreement of underlying contract

We hereby confirm that we know and approve the terms and conditions of this credit facility.

Policy of support

Although it is not our custom to guarantee credits extended to our subsidiaries, it is our long-standing policy to stand behind these companies and to see that no lending institution incurs any loss from doing business with our subsidiary companies. This policy will be followed with respect to the credit facility which you extend to our Subsidiary.

Best efforts to maintain financial position

In our capacity as the majority shareholder, we can confirm that we shall take all appropriate measures to ensure that the financial position of the Subsidiary is such that it is able, at all times, to honour both its present and future commitments towards you in respect of the credit facility.

Result obligation to maintain financial position

We undertake to provide sufficient capital or otherwise fund our Subsidiary, so that it will have sufficient working capital to meet its outstanding obligations to you in respect of the credit facility and according to the terms agreed upon.

Obligation to abstain from specific actions

We undertake not to take any actions that would reduce the financial position of the Subsidiary, such as the reduction of its share capital, the distribution of profits, or the making of intra group loans by the Subsidiary.

Agreement to subordinate debt

All indebtedness of our Subsidiary to us arising from our funding as agreed in this Letter of Comfort, will be subordinate to the obligations of our Subsidiary towards you.

Awareness of ownership

We are aware that this credit facility has been granted by you to our Subsidiary in view of the fact that our company holds a majority stake in the capital of the Subsidiary [optional: that we control directly or indirectly the Subsidiary]

Notification obligation re change of ownership

It is our intention to retain our present interest and equity in the Subsidiary and we hereby undertake to advise you should we decide or be requested to sell any portion of our equity in this company while any direct or contingent debt to you is still outstanding.

Commitment to maintain ownership

We hereby irrevocably undertake not to dispose of our holding in the Subsidiary in full or in part without giving you prior notification in such a manner that you will have due time to reconsider the credit facility[3].

Undertaking to provide guarantee

In the event that we dispose of our holding in the Subsidiary, either in full or in part, we will, at your request, issue an unconditional guarantee covering the principal, interest and other charges owed to you by our Subsidiary under the credit facility.

At your request, such an unconditional guarantee will also be delivered immediately, should our Subsidiary not keep its commitments to you.

Limitation of liability

Our maximum liability under this Letter of Comfort will never exceed __________ euro [amount in words] (€ __________) [amount in numbers] [optional: __________ per cent (__________ %)] of our net assets based upon our latest audited financial statements with an absolute maximum of __________ euro [amount in words] (€ __________) [amount in numbers]. You may call upon this letter until this limit is reached provided that all calls are made within __________ days of the end of the credit facility.

Duration

This Letter of Comfort remains valid and enforceable against us until __________ days after the end of the credit facility [optional: for a definite duration until __________], unless terminated by written notice to you prior to that date.

Assignment

Neither party shall assign or transfer any of its rights or obligations under this letter, in whole or in part, to any third party without the prior written consent of the other party. Any such assignment or transfer without the prior written consent of the other party, shall be deemed null and void. The Beneficiary can, however, assign any of its rights under this letter with our prior written consent provided the Beneficiary assigns at the same time and to the same party the rights and obligations under the credit facility. We can assign or transfer this letter, in whole or in part, to any other company in connection with the sale, transfer, merger, consolidation or any other disposition of all or substantially all of our assets or business, upon the provision of formal written notice to this effect to the Beneficiary and provided such transfer or assignment does not adversely affect the Beneficiary’s rights.

Miscellaneous Provisions

This letter contains the entire understanding between the parties with respect to the subject matter hereof and supersedes and replaces all prior letters, agreements or understandings, written or oral, with respect to the same subject matter that are still in force between the parties.

Any amendment to this letter, as well as any additions or omissions, can only take place when agreed in writing with the mutual consent of both of the parties.

Whenever possible, the provisions of this letter shall be interpreted in such a manner as to be valid and enforceable under the applicable law. However, if one or more provisions of this letter is found to be invalid, illegal or unenforceable, in whole or in part, the remainder of any such provision and of this letter shall not be affected and shall continue in full force and effect as if such invalid, illegal or unenforceable provision had never been contained herein. Moreover, if the parties decide to amend the invalid, illegal or unenforceable provision(s) or any part thereof and/or agree on a new provision, they should take care that the new or amended provision embodies as closely as possible the purpose of the invalid, illegal or unenforceable provision(s).

Any failure or delay by either party in exercising any right under this letter, the exercise, in whole or in part, of any right under this letter, or any reaction or absence of reaction by either party in the event of a violation by the other party of one or more provisions of this letter shall not operate or be interpreted as a waiver (whether express or implied, in whole or in part) of any of its rights under this letter or under the said provision(s), nor shall it preclude the further exercise of any such rights. Any waiver of a right must be express and in writing.

If one party has expressly waived a right in writing following a specific failure by the other party, this waiver cannot be invoked by the latter party in favour of a new failure, similar to the previous one, or in favour of any other failure.

All notices and other forms of communication required under this letter must be in writing and delivered or transmitted to the recipient in person through a reputable courier service, by fax with a confirmation sheet or by registered mail (with acknowledgement of receipt) to the address indicated below:

To the Beneficiary: __________

To us: __________

A notice shall be considered delivered to the recipient’s address on the date of delivery if delivered in person, the next working day if sent by fax and 3 working days following the date of mailing if sent by registered mail.

Either party may change the address to which notices are to be delivered or transmitted by giving the other party written notice to this effect in the manner set forth herein.

Applicable law

All issues, questions and disputes concerning the validity, interpretation, enforcement, performance or termination of this letter shall be governed by and construed in accordance with the Belgian law.

Jurisdiction

Any dispute concerning the validity, interpretation, enforcement, performance or termination of this letter shall be submitted to the exclusive jurisdiction of the __________ [judicial district] courts.

Executed in __________ [place], on __________ [date], in one original copy, of which the Beneficiary acknowledges receipt.

Very truly yours,

FOR AND ON BEHALF OF THE ISSUER

______________________________ [name]

______________________________ [title]

______________________________ [date]

______________________________ [signature]

FOR AND ON BEHALF OF THE BENEFICIARY

______________________________ [name]

______________________________ [title]

______________________________ [date]

______________________________ [signature]

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[1]It is possible to attach the documentation relating to the credit facility in annex.

[2]It is possible to attach theZ € cä

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èéꔘÖØðñöþh-i-2!6!x!ˆ!Ü"à"«$³$b7ïÞïËïÞïÞ½Þï°Ÿï‘ïzïzïfïzï‘ïfï‘ïfï&h-"h¸&Ë0J5?OJ[3]QJ[4]RHd\?^J[5],jh-"h¸&Ë0JH*[pic]OJ[6]QJ[7]RHdU[pic]^J[8]hÜ[pic]§0JOJ[9]QJ[10]RHd^J[11]!h-"h¸&Ë5?;?OJ[12]QJ[13]\?^J[14]h-"h¸&ËOJ[15]QJ[16]^J[17]hÜ[pic]§0JOJ[18]QJ[19] documentation relating to the credit facility in annex.

[20]The commitment should not conflict with the free transferability of shares in a company, and it is advisable to foresee that the issuer gives alternative sureties to be released from this commitment such as an undertaking to provide a guarantee.

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