Model Closing Opinion Letter (Annotated) - American Bar Association

2 Model Closing Opinion Letter (Annotated)
above. Note (e) to Opinion paragraph 6, p. 85, above, as to coverage
of future discretionary action, is also applicable to Opinion paragraph
7.
(b) Usury Laws. See the discussion of usury laws in relation to
the Remedies Opinion in note 3(e) to Opinion paragraph 4, p. 72,
above. As stated in item 3 of the note to paragraph (B)(4), p. 97, below,
it is proper and customary practice in Pennsylvania to rely in
an Opinion Letter on an unstated assumption to the effect that
each party other than the client has complied with all legal requirements
pertaining to its status as such status relates to its
rights to enforce the Transaction Documents against the client. A
question arises as to whether Opinion paragraph 7, which purports
to cover “a violation of any applicable statute,” can be given without
qualification if the prescribed interest rate violates a usury
statute that by its terms is applicable to the lender (but not the
client-borrower). The No Violation of Law Opinion does not, as a
matter of customary practice, address laws that are applicable only
to the lender. Nevertheless, if the terms of a Transaction Document
were to violate a usury law (civil or criminal) applicable to the
lender, the Legal Opinion Committee believes that most Pennsylvania
Opinion Givers, when representing the borrower, choose to
make reference to the existence of such a law in a No Violation of
Law Opinion, particularly when they recognize that the Opinion
Recipient is not aware of it. See, e.g., paragraph (E)(1), p. 102, below;
and see Pa.Op.Report Part IV.
(c) Limitation. The Opinion should be limited to execution, delivery,
and performance of the Credit Agreement, and should not
cover “related transactions” or transactions “contemplated by” the
Agreement. See TriBar Report § 6.6 n.162.
(d) Antitrust, Securities, Tax, Insolvency Laws. There formerly
were differing views as to whether a No Violation of Law Opinion
should be read to confirm that a merger complies with the antitrust
laws, or a bank credit agreement with the securities laws. An example
of an express exclusion of antitrust and securities laws is in
paragraph (E)(4), page 103, below. The TriBar Report states that
as a matter of customary usage, the No Violation of Law Opinion is
understood not to cover antitrust, securities, tax, and insolvency
86