Jump to Section
What is a Keepwell Agreement?
A keepwell agreement is a contract between a parent company and its subsidiary to maintain solvency and financial backing throughout the term set in the agreement. Keepwell agreements are also known as comfort letters.
When a subsidiary finds itself in a cash crunch and has trouble accessing financing to continue its operations, it can sign a keepwell agreement with its parent company for a specific period. During the active keepwell contract period, the parent company guarantees any interest payments and/or principal repayment obligations of the subsidiary. Keepwell agreements give confidence not just to lenders but also to a subsidiary's shareholders, bondholders, and suppliers.
Common Sections in Keepwell Agreements
Below is a list of common sections included in Keepwell Agreements. These sections are linked to the below sample agreement for you to explore.
Keepwell Agreement Sample
Exhibit (d)(2)
KEEP WELL AGREEMENT
THIS AGREEMENT dated November 10, 2009
AMONG:
SMITH & NEPHEW INC., a corporation incorporated under the laws of Canada (“S&N Canada”), SMITH & NEPHEW (OVERSEAS) LIMITED, a corporation formed and organized under the laws of England and Wales (“S&N Overseas”) (S&N Canada and S&N Overseas are sometimes hereinafter referred to collectively as “S&N”)
- and -
THE WESTAIM CORPORATION, a corporation incorporated under the laws of Alberta (“Westaim”)
WHEREAS:
A. | Westaim holds approximately 75% of the issued and outstanding common shares of Nucryst Pharmaceuticals Corp. (“Nucryst Canada”) and Nucryst Canada holds 100% of the issued and outstanding common shares of Nucryst Pharmaceuticals Inc. (“Nucryst USA” and collectively with Nucryst Canada, “Nucryst”); |
B. | Contemporaneously with the execution of this Keep Well Agreement Nucryst is entering into an asset purchase agreement with S&N (the “Purchase Agreement”); |
C. | It is a condition of the Purchase Agreement that Westaim execute this Keep Well Agreement. |
NOW THEREFORE, to induce S&N to enter into the Purchase Agreement and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged) the parties hereto covenant and agree as follows:
ARTICLE I
INTERPRETATION
1.1 | Definitions |
The capitalized terms used in this Keep Well Agreement which are defined in the Purchase Agreement shall, unless otherwise defined in this Keep Well Agreement, have the meanings set out in the Purchase Agreement.
1.2 | Headings and Table of Contents |
The inclusion of headings in this Keep Well Agreement is for convenience of reference only and shall not affect the construction or interpretation hereof.
1.3 | Gender and Number |
In this Keep Well Agreement, unless the context otherwise requires, words importing the singular include the plural and vice versa, words importing gender include all genders or the neuter, and words importing the neuter include all genders.
1.4 | Currency |
Except where otherwise expressly provided, all amounts in this Keep Well Agreement are stated and shall be paid in United States currency.
1.5 | Invalidity of Provisions |
Each of the provisions contained in this Keep Well Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.
1.6 | Entire Agreement |
This Keep Well Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this agreement, and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties hereto.
1.7 | Waiver, Amendment |
Except as expressly provided in this Keep Well Agreement, no amendment or waiver of this Keep Well Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Keep Well Agreement shall constitute a waiver of any other provision nor shall any waiver of any provision of this Keep Well Agreement constitute a continuing waiver unless otherwise expressly provided.
1.8 | Governing Law |
This Keep Well Agreement shall be governed by and construed and interpreted in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein.
1.9 | Calculation of Time Periods |
Unless otherwise specified in this Keep Well Agreement, time periods within which or following which any payment is to be made or act is to be done will be calculated by excluding the day on which the period begins and including the day on which the period ends. If the last day of a time period is not a Business Day, the time period will end on the next Business Day.
1.10 | Successors and Assigns |
This Keep Well Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing herein, express or implied, is intended to confer upon any person, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Keep Well Agreement.
- 2 -
ARTICLE II
KEEP WELL
2.1 | Keep Well |
Westaim hereby covenants with S&N as follows:
(a) | Westaim shall not take any action if such action would result in Nucryst breaching its covenant set forth in section 8.13 of the Purchase Agreement (the “Net Worth Covenant”). In the foregoing sentence, “action” includes, without limitation, the act of voting securities of Nucryst in support of resolutions to declare dividends, return capital, transfer property or assume liabilities. |
(b) | In the event that: |
(i) | Nucryst is in breach of the Net Worth Covenant; |
(ii) | S&N has provided to Nucryst, within the Net Worth Period, written notice of an Indemnity Claim in accordance with section 9.3 of the Purchase Agreement; |
(iii) | it has been finally determined in accordance with sections 9.4, 9.5 or 11.2 of the Purchase Agreement that S&N is entitled to payment of such Indemnity Claim; and |
(iv) | Nucryst fails to satisfy such Indemnity Claim within thirty days after such final determination, |
Westaim shall satisfy such Indemnity Claim; provided that the aggregate liability of Westaim under this Keep Well Agreement shall not exceed $4,000,000 less the amount of any Indemnity Claims paid by Nucryst.
ARTICLE III
GENERAL PROVISIONS
3.1 | Notices |
Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given by facsimile or other means of electronic communication or by hand-delivery as hereinafter provided. Any such notice or other communication, if sent by facsimile or other means of electronic communication, shall be deemed to have been received on the Business Day following the sending, or if delivered by hand shall be deemed to have been received at the time it is delivered to the applicable address noted below either to the individual designated below or to an individual at such address having apparent authority to accept deliveries on behalf of the addressee. Notice of change of address shall also be governed by this section. Notices and other communications shall be addressed as follows:
(a) | if to Westaim |
The Westaim Corporation
212 King Street West, Suite 201
Toronto, Ontario M5H 1K5
Attention: Chief Financial Officer
Facsimile: (416) 203-0734
- 3 -
(b) | if to S&N: |
c/o Smith & Nephew, Inc.
1450 Brooks Road
Memphis, Tennessee 38116
Attention: General Counsel
Facsimile: (901) 396-7824
3.2 | Assignment |
No party may assign any of it rights or obligations hereunder without the prior written consent of the other parties.
3.3 | Counterparts |
This Keep Well Agreement may be executed in counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one and the same agreement.
- 4 -
IN WITNESS WHEREOF the Parties hereto have duly executed this Keep Well Agreement on the day and year first written above and made effective as of the Closing Date.
SMITH & NEPHEW INC. | SMITH & NEPHEW, INC. | |||||||
Per: | Per: | |||||||
Name: Title: |
Name: Title: | |||||||
Per: | Per: | |||||||
T.J. SMITH & NEPHEW LIMITED | THE WESTAIM CORPORATION | |||||||
Per: | Per: | |||||||
Name: Title: |
Name: Title: | |||||||
Per: | Per: | |||||||
Name: Title: |
- 5 -
Reference:
Security Exchange Commission - Edgar Database, EX-99.D.2 7 dex99d2.htm KEEP WELL AGREEMENT, Viewed October 24, 2021, View Source on SEC.
Who Helps With Keepwell Agreements?
Lawyers with backgrounds working on keepwell agreements work with clients to help. Do you need help with a keepwell agreement?
Post a project in ContractsCounsel's marketplace to get free bids from lawyers to draft, review, or negotiate keepwell agreements. All lawyers are vetted by our team and peer reviewed by our customers for you to explore before hiring.
Meet some of our Keepwell Agreement Lawyers
September 6, 2023
Michael C.
40+ years handling litigation matters for employers and employees, defense and prosecution of personal injury matters, CalOsha defense, prepare employment contracts, non-compete clauses, established drug policies and franchise agreements. represented banks in commercial litigation , asset retrieval matters. conducted audits of insurance company claims on behalf of employers, defended contractors in toxic tort cases, handled appeals to the insurance commissioner on workers compensation rate classification matters
September 6, 2023
Christian D.
Christian Davila received his Juris Doctorate from St. Mary’s University and becoming a member of the State Bar of Texas in 2013. Before law school, he studied at Texas A&M International University (TAMIU), and participated in multiple programs across various fields of study, including the University of Texas Medical Branch-School of Medicine’s “Early Medical School Acceptance Program,” and the Hispanic Association of Colleges & Universities’ “National Internship Program” at the Library of Congress in Washington, D.C. Christian’s legal experience includes criminal law (both prosecution and defense), family law, transactional law, business litigation, real estate litigation, and general civil litigation. Christian was previously in-house counsel for a multi-million dollar apartment construction and management company, handling all property acquisition, document drafting, negotiations, and litigation. Christian is a former member of the American Association for Justice (formerly the Association of Trial Lawyers of America), and he has been distinguished by the National Trial Lawyers as one of their TOP 40 Civil Plaintiff attorneys in Texas UNDER 40 years old. He likes weightlifting, reading comicbooks, and being silly with his kids in his spare time.
September 6, 2023
Kahlee S.
I opened Hestia Legal when I was 6 months pregnant with the focus on educating and assisting families in my community. While the majority of my practice revolves around Estate Planning, I have a history of experience with contract and general business agreement drafting, discovery drafting, and general litigation document drafting.
September 6, 2023
Nadir C.
I am a licensed attorney in Illinois, I am currently a Regulatory Compliance Analyst.
September 11, 2023
Torrey L.
Torrey Livenick, Esq. is a fourth generation Colorado lawyer. Although she was born in California and raised in Nevada, she spent every summer in Colorado and knew she planned to make Denver her home. After graduating from Bryn Mawr College with a degree in Classical Culture and Society, she returned to Las Vegas to work as a paralegal. Once she spent five years building her skills and confirming her interest, she attended Emory University School of Law. Torrey’s interests include trivia (she even was a contestant on Jeopardy! during her law school days), video games, playing with her cats, and the arts. She is active in pro bono organizations including Metro Volunteer Lawyers.
September 6, 2023
Peter H.
Haber Law Firm, APC, is a transactional business law firm with a focus on small/mid-market business purchases and sales, outside general counsel, and start-up assistance for businesses in their early stages. Peter Haber started Haber Law Firm, APC after several years as a legal executive at Popcornopolis, a gourmet popcorn brand sold at groceries and stadiums nationwide. In this role, Peter served as the company’s sole in-house legal advisor as it related to all functions of the company’s operations, including dispute resolution, compliance, and employment law, to name a few. With his help and guidance, the company relocated its entire corporate and manufacturing operation, developed a new factory and warehouse, and was successfully acquired by private equity. Prior to this, Peter was a litigator and business attorney with distinguished Los Angeles litigation boutiques. Such matters included the representation of numerous businesses in litigation and in the resolution of pre-litigation disputes as well as the representation of professionals in liability defense matters, including hospitals, physicians, and brokers.
September 7, 2023
Kyle T.
Obtained J.D. in December 2021, admitted to the Indiana Bar in November 2022. Began working as a clerk for civil defense firm in March 2022 and have been the same firm to the present, currently working as an Associate Attorney.
Find the best lawyer for your project
Browse Lawyers NowHow It Works
Business lawyers by top cities
- Austin Business Lawyers
- Boston Business Lawyers
- Chicago Business Lawyers
- Dallas Business Lawyers
- Denver Business Lawyers
- Houston Business Lawyers
- Los Angeles Business Lawyers
- New York Business Lawyers
- Phoenix Business Lawyers
- San Diego Business Lawyers
- Tampa Business Lawyers
Keepwell Agreement lawyers by city
- Austin Keepwell Agreement Lawyers
- Boston Keepwell Agreement Lawyers
- Chicago Keepwell Agreement Lawyers
- Dallas Keepwell Agreement Lawyers
- Denver Keepwell Agreement Lawyers
- Houston Keepwell Agreement Lawyers
- Los Angeles Keepwell Agreement Lawyers
- New York Keepwell Agreement Lawyers
- Phoenix Keepwell Agreement Lawyers
- San Diego Keepwell Agreement Lawyers
- Tampa Keepwell Agreement Lawyers
related contracts
- 93a Demand Letter
- A1 Visa
- A2 Visa
- Accounting Services Agreement
- Accounts Receivable Purchase Agreement
- Ad Agency Contract
- Adhesion Contract
- Advertising Services Agreement
- Agency Agreement
- Agency Contract
other helpful articles
- How much does it cost to draft a contract?
- Do Contract Lawyers Use Templates?
- How do Contract Lawyers charge?
- Business Contract Lawyers: How Can They Help?
- What to look for when hiring a lawyer
Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.
View Trustpilot ReviewContracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.
View Trustpilot ReviewI never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.
View Trustpilot ReviewI got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.
View Trustpilot Review