Legal Term Side Letter Agreement
As a general rule, the constitutional documents of closed funds contain a mechanism to excuse an investor from participating in certain types of investments (usually due to regulatory or other constraints). It is common for an investor to notify the fund of possible restrictions before investing and/or seek the advice of external legal counsel to confirm that it is thus limited. When a fund is willing to negotiate excusal rights, it should try to limit investors` discretion as to what an excused investment is, as the focus should be on using the investor`s total commitment rather than allowing it to pick deals. If the volume of prohibited investments is indicated in the letter itself, it is generally useful to explain why they are prohibited in order to increase the likelihood that the provision will be made outside the scope of a relevant MFN right. If you need a secondary letter for business reasons, contact me, or maybe we can help you with other business advice or other contracts? Above is a summary of general requests for an auxiliary letter. Such requests should be considered on a case-by-case basis. Newsletters remain valuable tools for keeping it secret or circumventing contractual provisions. If they do not deserve their sinister reputation, they certainly deserve special attention. To the extent that a fund has a credit facility and one of the provisions described above is also covered by an MFN right, these issues may be strengthened, as several investors may be able to obtain problematic provisions. Managers can therefore include an abgunika clause in their standard MFN clause with respect to the subsidiary letter provisions affecting the Fund`s credit facility. An MFN fee allows an investor to obtain the provisions of the subsidiary letter negotiated by other investors.3 However, the provisions of the MFN can be drafted in different ways, meaning that what the investor may actually have the right to choose may be very different. The drafting may be z.B.
(i) with respect to: (i) with respect to the question of whether the MFN applies to all provisions relating to the subsidiary letter or, for example, the fee provisions, (ii) the MFN applies only to provisions negotiated by other investors with equal or smaller investments in the funds (usually, related investors are aggregated) and (iii) if the investor can see all the provisions of the subsidiary letter negotiated (whether he is allowed to decide on receipt).