Model Closing Opinion Letter (Annotated) - American Bar Association

Basis for Opinion; Qualifications, Limitations, etc.
[(I)(1) A copy of this Opinion Letter is being concurrently
delivered to [NAME OF AGENT’S COUNSEL], counsel to the
Agent, and such counsel shall be entitled to rely hereon in rendering
its Opinion to the Banks as if this Opinion Letter were
expressly addressed and had been delivered to it.]
Note: Paragraphs (I)(1), (I)(2), and (I)(3) are possible exceptions
to the limitation and prohibition stated in paragraph (I)(4).
[(I)(2) A copy of this Opinion Letter may be delivered by you
to a prospective loan participant or purchaser for review in connection
with their purchase of a portion of the credit facility created
under the Credit Agreement, but such persons may not rely
on this Opinion Letter without our prior written consent.]
[(I)(3) At your request, we hereby consent to reliance hereon
by any future assignee of your interest in the loans under the
Credit Agreement pursuant to an assignment that is made and
consented to in accordance with the express provisions of Section
[ ___ ] of the Credit Agreement, on the condition and understanding
that (i) this letter speaks only as of the date hereof,
(ii) we have no responsibility or obligation to update this letter, to
consider its applicability or correctness to other than its
addressee(s), or to take into account changes in law, facts or any
other developments of which we may later become aware, and
(iii) any such reliance by a future assignee must be actual and
reasonable under the circumstances existing at the time of
assignment, including any changes in law, facts or any other
developments known to or reasonably knowable by the assignee
at such time.] 29
Note: Increasingly, Opinion Recipients are requiring that legal
opinions delivered in connection with the closing of a financial
transaction include express permission for future holders of an interest
in the financing documents to be able to rely upon the opinion.
Initially this request was addressed to permitting future
assignees of notes or interests in the loan documents, and in some
circumstances participants, to rely upon the opinion. Opinion givers,
when faced with this request, were often successful in not including
direct reliance by participants, since the participants’
claims were derivative through a holder of the note or a direct
party to the loan agreement. The practice developed that Opinion
29. Lawrence Safran, quoted in ABA Legal Opinion Newsletter, Vol. 4 No. 4
(September 2005).
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