229 Recourse agreements

(1) „recourse agreement“ is a written agreement between a protected cell
company and a third party which provides that, pursuant to an
arrangement (within the meaning of section 239(2)) effected by the
protected cell company, protected assets may, notwithstanding the
provisions of this Part, be subject to a liability owed to that third party.

(2) Before entering into a recourse agreement, each director of the protected
cell company who authorises it must make a declaration that he believes,
on reasonable grounds, —

(a) that no creditor of the company will be unfairly prejudiced by the
recourse agreement; and


(b) that, unless the memorandum or articles provide to the contrary,
—

(i) where the protected assets are assets attributable to a
cell, the members of that cell; or

(ii) where the protected assets are core assets, the members
of the core,

have passed a resolution approving the recourse agreement.

(3) A director who without reasonable excuse makes a declaration under
subsection (2) which is false, deceptive or misleading in a material
particular commits an offence and is liable on conviction to a fine not
exceeding US$7,500.

(4) Any member or creditor of the protected cell company may, subject to
such reasonable restrictions as the protected cell company may impose,
inspect or request a copy of the directors‘ declaration.

(5) If a company fails to allow an inspection or refuses a request for a copy
under subsection (4) it commits an offence and is liable on conviction to
a fine not exceeding US$2,500.