Legal Templates
Equity Commitment Letter

Equity Commitment Letter Template for Denmark

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Key Requirements PROMPT example:

Equity Commitment Letter

I need an Equity Commitment Letter under Danish law for a EUR 50 million private equity investment into a renewable energy project, with the commitment available for drawdown until March 2025.

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What is a Equity Commitment Letter?

The Equity Commitment Letter is a fundamental document in Danish investment and M&A transactions, typically used when one party needs to provide formal assurance of their ability and intention to contribute equity capital. This document becomes particularly important in leveraged buyouts, project financing, or large-scale investments where other stakeholders (such as lenders or sellers) require certainty about the availability of equity funding. The letter, governed by Danish law, typically includes specific details about the commitment amount, funding conditions, and timing of the investment. It serves as a legally binding commitment that can be enforced under Danish jurisdiction, providing security to transaction participants and often serving as a prerequisite for debt financing or transaction closing. The document needs to comply with Danish corporate and contract law requirements while following established market practices in the Danish financial sector.

What sections should be included in a Equity Commitment Letter?

1. Parties: Identification of the commitment provider and the recipient/beneficiary of the commitment

2. Background: Brief context of the underlying transaction requiring the equity commitment

3. Commitment Amount: Clear statement of the equity commitment amount and currency

4. Purpose: Specific purpose for which the equity commitment is being provided

5. Funding Conditions: Key conditions that must be satisfied before the commitment provider is obligated to fund

6. Termination: Circumstances under which the commitment expires or may be terminated

7. Governing Law: Confirmation of Danish law as governing law and jurisdiction provisions

What sections are optional to include in a Equity Commitment Letter?

1. No Third-Party Beneficiaries: Section explicitly limiting the beneficiaries of the commitment, used when there's risk of third-party claims

2. Assignment: Restrictions on transfer or assignment of rights, included when transfer restrictions are necessary

3. Representations and Warranties: Basic representations about capacity and authority, included for more complex transactions

4. Regulatory Approvals: Section addressing required regulatory approvals, included when regulatory oversight is relevant

5. Confidentiality: Confidentiality provisions, included when the commitment terms are sensitive

What schedules should be included in a Equity Commitment Letter?

1. Form of Drawdown Notice: Template for requesting funds under the commitment

2. Corporate Authorization Evidence: List of required corporate approvals and evidence

3. Conditions Precedent: Detailed list of conditions that must be satisfied before funding

4. Payment Instructions: Banking and wire transfer details for funding the commitment

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Private Equity

Investment Banking

Real Estate

Infrastructure

Energy

Technology

Manufacturing

Healthcare

Financial Services

Venture Capital

Renewable Energy

Telecommunications

Relevant Teams

Legal

Finance

Corporate Development

Treasury

Investment

Mergers & Acquisitions

Corporate Finance

Risk Management

Compliance

Transaction Advisory

Relevant Roles

Chief Financial Officer

Investment Director

Legal Counsel

Corporate Finance Manager

M&A Director

Investment Manager

Treasury Manager

Financial Controller

General Counsel

Transaction Manager

Private Equity Partner

Fund Manager

Corporate Development Director

Investment Banker

Finance Director

Industries
Danish Companies Act (Selskabsloven): Primary legislation governing company formation, capital requirements, and shareholder rights in Denmark. Particularly relevant for equity commitments and share capital increases.
Danish Contracts Act (Aftaleloven): Governs the formation and enforceability of contracts in Denmark, including equity commitment letters. Provides framework for offer, acceptance, and binding agreements.
Danish Capital Markets Act (Kapitalmarkedsloven): Regulates securities trading and investment commitments, particularly relevant if the equity commitment involves publicly traded companies or requires regulatory approval.
Danish Financial Business Act (Lov om finansiel virksomhed): Relevant if the equity commitment involves regulated financial institutions or requires financial regulatory approval.
Danish Registration Act (Tinglysningsloven): Contains provisions relevant to the registration of company changes, including changes in share capital and ownership.
Danish Act on Measures to Prevent Money Laundering (Hvidvaskloven): May be relevant for due diligence requirements and verification of funding sources in equity commitments.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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