Dated: December 05, 2006
Assistant Manager Finance
Dhaka Main Office
1/1-B Sonargaon Road
RE: LEGAL OPINION ON MEMORANDUM OF UNDERSTANDING FOR CREDIT RATINGS.
We refer to your letter dated 29 November 2006 on the above subject.
We have perused the contents of your letter and other papers/documents referred to us in connection with the above Memorandum of Understanding (“MOU”).
Our opinion on the draft MOU is given below.
|Clause 3||According to Clause 5 of Bangladesh Bank BRPD circular no. 6 dated 05 July 2006, BANK 1 has to disclose their credit rating prominently in their published financial statement and as a result BANK 1 needs to finalise their statutory accounts within 12 February 2006. That is why we suggest that Clause 3 of the MOU be deleted and replaced with the following:
“3. That the First Party has agreed to undertake the rating assignment and complete the same within six weeks from the date of the Second Party providing all information required vide CRISL’s primary questionnaire and satisfying subsequent queries. In any event, the First Party agrees that they would complete the rating assignment by ________________ 2006 so that the Second party will have adequate time to complete their Statutory accounts and be able to disclose the credit rating in their published financial statement.”
|Clause 4||The terms contained in Clause 4 are commercial terms, please ensure whether BANK 1 agrees to pay the stated service fee of Tk. 600,000 and also review the fact that 50% of the fees will have to be paid at the signing of the MOU and remaining 50% of the fees will be paid after the submission by CRISL of the draft report but before the declaration of rating.
In line 2 of Clause 4, “600,0000” should be replaced with “600,000”.
|Clause 5||Please delete Clause 5 and replace with the following:
“5. That the entire information and clarification furnished by the Second Party for facilitating rating and the Credit Rating provided by the First Party shall be held on trust by the First Party on behalf of the Second Party and the said information will solely be the property of the Second Party. The said information can only be used by the First Party for the purpose of providing the Second Party’s credit rating and peer analysis.”
|Clause 6||Please delete Clause 6 and replace with the following:
“6. That the First Party has agreed, in principle, to the surveillance of rating on yearly basis at a fee which is two third of the original fees, subject to the acceptance in writing of the same by the Second Party. The surveillance report will be submitted to the management of the Second Party by the First Party with in Four weeks from the date of the receipt of the complete information from the Second Party; in any event, the First Party agrees that they would complete the surveillance report within the _____ day of the month of _________ of the calendar year.”
|Clause 9||Please delete the second sentence of Clause 9 and replace it with the following sentence:
“Once the Credit Rating has been accepted and used by the Second Party, the First Party may only publish the same with the written permission of the Second Party.”
|Clause 10||Please delete clause 10 and replace with the following:
“10. That in the event of failure on the part of the Second Party to furnish, as required by the First Party from time to time, such relevant information, material and clarification which are needed to provide the Credit Rating or in the event of failure on the part of the Second Party to pay the fees as and when due, the First Party shall have the right to suspend/withdraw the rating assigned, subject to giving the Second Party a 7 (seven) days notice to rectify the defect.”
|Clause 11||In this clause the First Party has the right to disclose in public interest. This likely to create confusion because in case of any dispute who will decide what is meant by “public interest”. As such we are of the opinion that the words “in public interest” be deleted and replaced with the words “if required by law”.|
Subject to the above, the MOU referred to us appear to be in order.
If you have any further query, please do not hesitate to contact the undersigned.
Barrister at Law
The Lawyers & Jurists
M.L.Hotel Tower Ltd, 208, Shahid Syed Nazrul Islam Sarani,
Bijoy Nagar, Dhaka-1000.