Model Closing Opinion Letter (Annotated) - American Bar Association

2 Model Closing Opinion Letter (Annotated)
(b) breach or result in a default under any Other Agreement listed
in the Company’s Certificate, or (c) result in a violation of any
Court Order listed in the Company’s Certificate.
Note: (a) See TriBar Report § 6.5. “Company’s Certificate” is defined
in paragraph (B)(3), p. 95, below. Other commonly used approaches
to identify which contracts and court orders the Opinion
Preparers will be expected to review are to limit the Opinion to the
items listed in a filing by the Company with the Securities and Exchange
Commission or in an attachment to the Opinion Letter. See
TriBar Report § 6.5.5. If the Opinion does not refer specifically to a
list of contracts and court orders prepared by the client, the Opinion
should be limited by the phrase “to our knowledge”; this term
should be defined as in paragraph (G), p. 104, below. See TriBar
Report § 6.5.5; note (b) to section B, p. 92, below. The Legal Opinion
Committee believes it is preferable to specifically identify the Other
Agreements and Court Orders covered by this Opinion.
(b) A “breach” or “default” under an Other Agreement or Court
Order means an act or failure that, by itself, or with the giving of
notice or passage of time, or both, would constitute an event of default
or other event having similar remedial consequences under
such Other Agreement or Court Order.
The Opinion is designed to tell whether the client’s entering into the
transaction or performance of its obligations thereunder will result
in a breach of or default under the Company’s other legally binding
obligations. When the Other Agreements contain financial covenants,
counsel should not be requested to give an Opinion as to
breach or satisfaction thereof or as to violation of financial restrictions
requiring interpretation of financial covenants. See ABA
Guidelines 1.4. The Opinion Giver is not responsible for the resolution
of any factual issue that is not readily apparent from the terms
of the document being reviewed or cannot be established through
certificate reliance.
(c) “Conflict”; Lien Triggering, Acceleration of Debt. Adverse
economic consequences not constituting a breach or default need
not be considered in a “No Breach or Default” Opinion. TriBar Report
§ 6.5.3. To avoid such an interpretation, the Opinion Letter
should not use language confirming that the transaction does not
“conflict with” or “contravene” a Company’s Other Agreements. See
TriBar Report § 6.5.2.
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