REVOLVING CREDIT AND SECURITY AGREEMENT
REVOLVING CREDIT AND SECURITY AGREEMENT, dated as of September 21, 2001
among CORPORATE RECEIVABLES CORPORATION, CITIBANK, N.A., the other Secondary
Lenders (as hereinafter defined) from time to time parties hereto, CITICORP
NORTH AMERICA, INC., as agent for the Lender (as hereinafter defined) and the
Secondary Lenders (in such capacity, together with its successors and assigns,
the "Agent") and LIBERTY FLOATING RATE ADVANTAGE FUND (together with its
permitted successors and assigns, the "Borrower").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower desires that the Lender and the Secondary Lenders
from time to time make advances to the Borrower on the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, the Lender and the Secondary Lenders are willing to make such
advances to the Borrower for such purposes on the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
Article I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. Definitions.
As used in this Agreement, the following terms shall have the meanings
indicated:
"Adjusted Asset Value" means in respect of any Borrowing Base Eligible
Asset, an amount equal to the product of (i) the Asset Value of such Borrowing
Base Eligible Asset, and (ii) the Applicable Advance Rate for such Borrowing
Base Eligible Asset.
"Advance" means each borrowing by the Borrower pursuant to Article II.
"Advance Note" means each promissory note issued by the Borrower to CRC or
a Secondary Lender evidencing the Advances (or portions of the Advances) made to
the Borrower by CRC or such Secondary Lender, substantially in the form of
Exhibit A hereto.
"Adverse Claim" means any Lien in, of or on any Person's assets or
properties in favor of any other Person, other than any such Lien in favor of
(i) any Secured Party created by or pursuant to this Agreement or the Control
Agreement or (ii) the Custodian securing the Custodian's Overdraft Advances to
the extent such Custodian's Overdraft Advances do not exceed the amount
permitted by Section 5.02(q).
"Advisor" means Xxxxx Xxx & Xxxxxxx Incorporated, or any of its successors
or assigns which is either approved by the Agent in writing or which becomes a
successor or assign in connection with a Permitted Change.
"Affected Person" means the Lender, each Secondary Lender, any other entity
which enters into a commitment to make or purchase any Advance or any interest
therein, and any of their respective Affiliates, including any assignee or
participant of the Lender or any Secondary Lender.
"Affiliate" means, in respect of a referenced Person, another Person
controlling, controlled by or under common control with such referenced Person
(which in the case of CRC and the Agent, shall also include any Person who has a
relationship to the Agent comparable to that of CRC). The terms "control,"
"controlling," "controlled" and the like shall mean the direct or indirect
possession of the power to direct or cause the direction of the management or
policies of a Person or the disposition of its assets or properties, whether
through ownership, by contract, arrangement or understanding, or otherwise.
"Agent" shall have the meaning assigned to such term in the introduction to
this Agreement.
"Agent's Account" means the special account (account number ___, ABA
No. ____) of the Agent maintained at the office of Citibank at its
Principal Office or to such other account in the United States as the Agent
shall designate in writing to the Borrower.
"Aggregate Custodian's Advance Amount" means the sum of (i) the aggregate
unpaid Dollar amount of all Custodian's Overdraft Advances of cash, (ii) the
aggregate Value of all Custodian's Overdraft Advances of assets (other than
cash) to the extent not reimbursed by the Borrower, and (iii) the accrued and
unpaid interest, if any, on the amounts set forth above.
"Agreement" means this Agreement, as the same may from time to time be
amended, supplemented, waived or modified.
"Alternate Base Rate" means a fluctuating interest rate per annum as shall
be in effect from time to time, which rate shall be at all times equal to the
Applicable Margin above the highest of:
(a) the Base Rate; and
(b) one half of one percent per annum above the Federal Funds Rate.
"Applicable Advance Rate" means (i) in respect of Cash, 100%, (ii) in
respect of Eligible Commercial Paper and Eligible Government Securities, 95%,
(iii) in respect of Class A Loan Assets, 75%, (iv) in respect of Class B Loan
Assets, 65%, (v) in respect of Class C Loan Assets, 55%, and (vi) in respect of
Class D Loan Assets, 45%.
"Applicable Law" means any Law of any Authority, including, without
limitation, all Federal and state banking or securities laws, to which the
Person in question is subject or by which it or any of its property is bound.
"Applicable Margin" means, (i) with respect to the Eurodollar Rate, 1.00%
per annum, and (ii) with respect to the Alternate Base Rate, 0% per annum;
provided, however, that during the continuance of any Event of Default under
Section 6.01(a), the "Applicable Margin" shall mean with respect to the
Eurodollar Rate, 2.00% per annum and in respect of the Alternate Base Rate,
1.00% per annum; provided, further, that during any period that Yield in respect
of any Advance is computed by reference to the Post-Default Rate, the
"Applicable Margin" applicable to such Advance during such period shall be
deemed to be zero.
"Asset" means a collective reference to all items which would be classified
as an "asset" on the balance sheet of the Borrower in accordance with GAAP.
"Asset Coverage Test" means the Borrower's "senior securities representing
indebtedness" (as defined in Section 18(g) of the Investment Company Act) have
"asset coverage" (as defined in Section 18(h) of the Investment Company Act) of
at least 300%.
"Asset Purchase Agreement" means the Asset Purchase Agreement entered into
by a Secondary Lender (other than Citibank) concurrently with the Assignment and
Acceptance pursuant to which it became party to this Agreement.
"Asset Value" means, as of any day of determination (a) in respect of Cash,
the amount of such Cash, and (b) in respect of any other Asset, the Value of
such Asset computed in the manner as such Value is required to be computed by
the Borrower in accordance with the Prospectus of the Borrower in effect on the
Closing Date and in accordance with Applicable Law, including without limitation
the rules, regulations and interpretations of the SEC under the Investment
Company Act; provided, that the Asset Value of any Asset shall be net of the
Borrower's liabilities relating thereto, including without limitation all of the
Borrower's obligations to pay any unpaid portion of the purchase price therefor;
provided, further, that for any Asset for which market quotations are not
available (or which is not otherwise valued for the Borrower by an independent
pricing source), the Asset Value of such Asset shall be deemed to be zero for
purposes of this definition.
"Assigned Collateral" shall have the meaning assigned to such term in
Section 7.01.
"Assignee Rate" means in respect of any Advance for any Settlement Period
an interest rate per annum equal to the sum of the Applicable Margin plus the
Eurodollar Rate for such Settlement Period; provided, however, that in case of:
(i) any Settlement Period on or prior to the first day of which a Lender
(other than CRC) or Secondary Lender shall have notified the Agent
that the introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for such Lender or
Secondary Lender to fund such Advance at the Assignee Rate set forth
above (and such Secondary Lender shall not have subsequently notified
the Agent that such circumstances no longer exist),
(ii) any Settlement Period of one to (and including) 27 days,
(iii)any Settlement Period as to which the Agent does not receive notice,
by no later than 12:00 noon (New York City time) on the third Business
Day preceding the first day of such Settlement Period, that such
Advances will not be funded by issuance of commercial paper, or
(iv) any Settlement Period for which the aggregate principal amount of the
outstanding Advances is less than $500,000,
the "Assignee Rate" for such Settlement Period shall be an interest rate per
annum equal to the Alternate Base Rate in effect on the first day of such
Settlement Period.
"Assignment and Acceptance" means the Assignment and Acceptance, in
substantially the form of Exhibit C hereto, entered into by a Secondary Lender,
an Eligible Assignee and the Agent, pursuant to which such Eligible Assignee may
become a party to this Agreement.
"Authority" means any governmental or quasi-governmental authority
(including the National Association of Securities Dealers, the stock exchanges
and the SEC), whether executive, legislative, judicial, administrative or other,
or any combination thereof, including, without limitation, any Federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, board, body, branch, bureau, commission,
corporation, court, department, instrumentality, master, mediator, panel,
referee, system or other political unit or subdivision or other entity of any of
the foregoing, whether domestic or foreign.
"Base Rate" means the rate of interest from time to time announced publicly
by Citibank at its Principal Office as its base rate. The Base Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer of Citibank.
"Benefit Arrangement" means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Borrower" shall have the meaning assigned to such term in the introduction
to this Agreement.
"Borrower Obligations" means all indebtedness, whether absolute, fixed or
contingent, at any time or from time to time owing by the Borrower to any
Secured Party under or in connection with this Agreement, the Advance Notes or
the Control Agreement, the Asset Purchase Agreement or any other Program
Document, including without limitation, all amounts payable by the Borrower in
respect of the Advances, with interest thereon, and the amounts payable under
Sections 2.05, 2.06, 2.07, 2.08, 2.09, , 2.12, 2.13, 7.04(b), 9.03 and 9.04 of
this Agreement.
"Borrower's Account" means Account No. ___ and ABA No. ___
maintained with State Street Bank and Trust Company or such other account as the
Borrower shall designate in writing to the Agent.
"Borrowing Base" means on the date any determination thereof is made, an
amount equal to the Net Adjusted Asset Value reduced by the aggregate Adjusted
Asset Value of all Eligible Collateral in which the Agent does not have a valid
and perfected first priority security interest therein, free and clear of all
Adverse Claims.
"Borrowing Base Eligible Assets" means Cash, Eligible Loan Assets, Eligible
Commercial Paper and Eligible Government Securities which the Borrower is
permitted to purchase in accordance with the Investment Policies and
Restrictions which are free and clear of all Adverse Claims; provided, that such
Asset (i) does not constitute an option, Derivatives Transaction or an Asset
which is the subject of a Derivatives Transaction, reverse repurchase agreement,
dollar roll or securities lending transaction; (ii) is denominated and payable
in Dollars and is not a Non-OECD Loan Asset, (iii) is not committed to a
repurchase of shares pursuant to Rule 23c-3(b)(10) under the Investment Company
Act, and (iv) does not constitute a Foreign Asset held in a Securities System or
a Foreign Holding Company.
"Borrowing Base Excess Amount" means as of any date any determination
thereof is made, an amount equal to the sum (without duplication) of:
(i) the amount by which the aggregate Adjusted Asset Value of all Eligible
Collateral (other than Eligible Government Securities) issued or
Guaranteed by or owing from any Person (together with all Affiliates
of such Person), exceeds five percent (5%) of the aggregate Adjusted
Asset Value of all Eligible Collateral;
(ii) the amount by which the aggregate Adjusted Asset Value of all Eligible
Collateral issued or Guaranteed by or owing from Persons in a single
Industry Class, exceeds twenty percent (20%) of the aggregate Adjusted
Asset Value of all Eligible Collateral;
(iii)the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral which constitutes Foreign OECD Loan Assets exceeds
twenty-five percent (25%) of the aggregate Adjusted Asset Value of all
Eligible Collateral;
(iv) the amount by which the aggregate Adjusted Asset Value of all Eligible
Collateral which constitutes Foreign OECD Loan Assets issued or
guaranteed by or owing from Persons in any single OECD Country (other
than the United States, England or Canada) exceeds ten percent (10%)
of the aggregate Adjusted Asset Value of all Eligible Collateral;
(v) the amount by which the aggregate Adjusted Asset Value of all Eligible
Collateral which constitutes Distressed Loan Assets exceeds ten
percent (10%) of the aggregate Adjusted Asset Value of all Eligible
Collateral;
(vi) the amount by which the aggregate Adjusted Asset Value of all Eligible
Collateral which constitutes Eligible Loan Assets which have a
scheduled final maturity date later than the tenth (10th) anniversary
of the Origination Date, exceeds ten percent (10%) of the aggregate
Adjusted Asset Value of all Eligible Collateral;
(vii)the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral which constitutes Unsecured Loan Assets exceeds
twenty percent (20%) of the aggregate Adjusted Asset Value of all
Eligible Collateral;
(viii) the amount by which the aggregate Adjusted Asset Value of all
Eligible Collateral which constitutes Eligible Loan Assets which
constitute participation interests purchased or otherwise acquired
from any Selling Institution (together with all Affiliates of such
Selling Institution), exceeds ten percent (10%) of the aggregate
Adjusted Asset Value of all Eligible Collateral; and
(ix) the aggregate maximum commitments of the Borrower to fund future
advances or extensions of credit under the Loan Documents relating to
the Assigned Collateral.
"Borrowing Base Test" means as of any date of determination that the
Borrowing Base shall be at least equal to Credits Outstanding.
"Borrowing Date" shall have the meaning assigned to such term in Section
2.02(a).
"Business Day" means any day on which (i) banks are not authorized or
required to close in New York City and the New York Stock Exchange is not
authorized or required to close, and (ii) if this definition of "Business Day"
is utilized in connection with a Eurodollar Rate Advance, dealings are carried
out in the London interbank market.
"Cash" means a demand deposit of United States Dollars immediately
available on the day in question in an account maintained by the Custodian.
"Citibank" means Citibank, N.A.
"Class A Loan Asset" means as of any date of determination, an Eligible
Loan Asset which (i) is not a Distressed Loan Asset, and (ii) has an Asset Value
which is at least ninety percent (90%) of its par value.
"Class B Loan Asset" means as of any date of determination, an Eligible
Loan Asset which (i) is not a Distressed Loan Asset, and (ii) has an Asset Value
which is less than ninety percent (90%) of its par value.
"Class C Loan Asset" means as of any date of determination, an Eligible
Loan Asset which (i) is a Distressed Loan Asset, and (ii) has an Asset Value
which is at least ninety percent (90%) of its par value.
"Class D Loan Asset" means as of any date of determination, an Eligible
Loan Asset which (i) is a Distressed Loan Asset, and (ii) has an Asset Value
which is less than ninety percent (90%) of its par value.
"Closing Date" means the first date on which the conditions precedent
specified in Section 3.01 shall have been fully satisfied.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committed Advance" shall have the meaning assigned to such term in Section
2.02(b).
"Collateral Account" shall have the meaning assigned to such term in the
Control Agreement.
"Control Agreement" means the Control and Collateral Agency Agreement,
dated as of the date hereof among the Borrower, the Agent and the Custodian, as
the same may from time to time be amended, supplemented, waived or modified.
"CP Rate" for each day during a Settlement Period for any Advance funded by
CRC means to the extent CRC funds such Advance (or portion thereof) on such day
by issuing commercial paper notes, the per annum rate equivalent to the weighted
average of the per annum rates paid or payable by CRC from time to time as
interest on or otherwise (by means of interest rate xxxxxx or otherwise) in
respect of those commercial paper notes issued by CRC that are allocated, in
whole or in part, by the Agent (on behalf of CRC) to fund the making or
maintenance of such Advance (or portion thereof) on such day as determined by
the Agent (on behalf of CRC) and reported to the Borrower, which rates shall
reflect and give effect to the commissions of placement agents (which currently
do not exceed 0.05% per annum of the face amount of the commercial paper notes)
and dealers in respect of such commercial paper notes; provided, however, that
if any component of such rate is a discount rate, in calculating the "CP Rate"
for such day the Agent shall for such component use the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum.
"CRC" means Corporate Receivables Corporation, together with its successors
and assigns that constitute special purpose entities that issue commercial paper
notes or other debt securities.
"CRC Maturity Date" shall have the meaning assigned to such term in Section
2.02(b).
"Credits Outstanding" means at any date a determination thereof is made, an
amount equal to the sum of (i) the outstanding principal amount of all Advances,
plus (ii) the Yield that would accrue on the outstanding principal amount of the
Advances for the number of days equal to the sum of (x) thirty (30) days, plus,
(y) the number of days from and including such date of determination through but
excluding the last day of the calendar month in which such determination is
being made, computed by reference to the Eurodollar Rate plus the Applicable
Margin for a thirty (30) day period in effect as of the time of determination,
plus (iii) the Aggregate Custodian's Advance Amount.
"Custodial Agreement" means the Custodial Contract and the Addendum
Custodian Contract, each dated as of January 14, 2000, between the Borrower and
the Custodian, together with the Loan Services Addendum thereto, as the same may
from time to time be amended, supplemented, waiver or modified as permitted
under the Program Documents.
"Custodian" means State Street Bank and Trust Company, as custodian,
securities intermediary and collateral agent under the Custodial Agreement and
the Control Agreement, and its permitted successors and assigns.
"Custodian's Overdraft Advance" means any advance of cash or securities by
the Custodian pursuant to the Custodial Agreement.
"Debt" means with respect to any Person, at any date, without duplication,
(i) all "senior securities representing indebtedness" (as defined in Section
18(g) of the Investment Company Act), (ii) all obligations of such Person for
borrowed money, including without limitation, reimbursement obligations relating
to letters of credit, (iii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iv) all obligations of such
Person to pay the deferred purchase price of property or services, (v) all
obligations of such Person as lessee which are capitalized in accordance with
GAAP, (vi) all Debt of others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person, (vii) payment obligations,
fixed or contingent, under investment, financial derivative or similar contracts
(other than covered short sales); (viii) all liabilities and Debt of others
Guaranteed by such Person; and (ix) to the extent not otherwise included, all
items which in accordance with GAAP would be included in determining total
liabilities as shown on the liabilities side of such Person's balance sheet.
"Default" means any event which, with the passage of time, the giving of
notice, or both, would constitute an Event of Default.
"Derivatives Transaction" means any financial futures contract, option,
forward contract, warrant, swap, swaption, collar, floor, cap and other
agreement, instrument and derivative and other transactions of a similar nature
(whether currency linked, index linked, insurance risk linked, credit risk
linked or otherwise).
"Determination Date" means (i) each Borrowing Date, (ii) the second
Business Day of each calendar week, and (iii) at the request of the Agent or
during the continuance of a Default or an Event of Default, each Business Day.
"Distressed Loan Asset" means a Loan Asset (i) the Obligor of which is the
subject of a bankruptcy, insolvency, liquidation or other similar proceedings,
(ii) which is in default as to payment of principal or interest or otherwise
under the applicable Loan Documents, (iii) in respect of which there is a
default or a breach of a material provision under the related Loan Documents, or
(iv) which is otherwise classified by the Advisor of the Borrower as
"distressed" or "non-performing" pursuant to GAAP, or (v) in respect of which
the related Obligor which is rated "Caa" or lower by Moody's or "CCC" or lower
by S&P or which, if unrated, are in the reasonable judgment of the Advisor, of
equivalent credit quality.
"Dollars" and "$" mean lawful money of the United States of America.
"Eligible Assignee" means Citicorp North America, Inc., Citibank, any of
their respective Affiliates, any Person managed by Citibank, Citicorp North
America, Inc. or any of their respective Affiliates or, subject to the
Borrower's consent, as set forth in Sections 9.06(a) and 9.06(b), any other
financial or other institution acceptable to the Agent.
"Eligible Commercial Paper" means a promissory note issued in the United
States commercial paper market, having a maturity of not more than 270 days and
which is rated "A-1" or better by S&P or "P-1" by Moody's, and is held in an
account maintained by the Custodian.
"Eligible Government Securities" means all "Government securities" (as
defined in the Investment Company Act and which for the purposes hereof shall
include any securities issued or guaranteed as to principal and interest by an
agency of the government of the United States) held in an account maintained by
the Custodian.
"Eligible Collateral" means at any time the Assigned Collateral which
constitutes Borrowing Base Eligible Assets.
"Eligible Loan Asset" at any time means a Loan Asset:
(i) with respect to which the interest payable on the principal amount
thereof by the related Obligor is payable in cash;
(ii) in respect of which the Borrower's interest is not a subparticipation;
(iii)which has a scheduled final maturity date no later than the twelfth
(12th) anniversary after the related Origination Date;
(iv) with respect to which the interest payable on the principal amount
thereof is calculated by reference to a Floating Rate;
(v) which is part of a syndicated credit facility with an aggregate
outstanding principal amount of all loans under such facility on the
Origination Date of such Loan Asset of at least $50,000,000;
(vi) which relates to Loan Documents in which the Borrower's interest
(direct or participating) in the aggregate outstanding principal
amount of all loans thereunder is no greater than 33.3%;
(vii)which is part of a senior credit facility, with respect to which such
Loan Asset is not by its terms subordinated (pursuant to contractual
provisions or otherwise) to the prior payment of any other liabilities
or any equity interests of the related Obligor;
(viii) in which the Borrower's interest in all collateral security therefor
and principal and interest payments thereunder is no less than pro
rata and pari passu with all other lenders thereunder and participants
therein;
(ix) in respect of which the credit rating of the related Transaction Agent
or its controlling Affiliate is no less than "A-" from S&P and "A3"
from Moody's;
(x) in respect of which, if the Borrower's interest therein is that of a
participant, the credit rating of the related Selling Institution is
no less than "A-" from S&P and "A3" from Moody's; and
(xi) the pledge of which under Article VII of this Agreement, would not
conflict with or constitute a default under or be prohibited by any
anti-assignment or other provisions contained in the related Loan
Documents, except for anti-assignment provisions rendered ineffective
by applicable law.
"Equity Securities" means common and preferred stock and securities that
are convertible into common or preferred stock, including, without limitation,
common stock purchase warrants and rights, equity interests in trusts,
partnerships, joint ventures or similar enterprises and depositary receipts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Group" means the Borrower and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Eurocurrency Liabilities" shall have the meaning assigned to such term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Additional Yield" means additional Yield on the outstanding
principal of each Advance during the Settlement Period in respect of such
Advance in respect of which Yield is computed by reference to the Eurodollar
Rate, for such Settlement Period, at a rate per annum equal at all times during
such Settlement Period to the remainder obtained by subtracting (i) the
Eurodollar Rate for such Settlement Period from (ii) the rate obtained by
dividing such Eurodollar Rate referred to in clause (i) above by that percentage
equal to one hundred percent (100%) minus the Eurodollar Rate Reserve Percentage
of the Lender or a Secondary Lender, as the case may be, for such Settlement
Period.
"Eurodollar Rate" means, for any Advance for any Settlement Period, an
interest rate per annum equal to the rate per annum at which deposits in Dollars
are offered by the principal office of Citibank in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two (2)
Business Days before the first day of such Settlement Period in an amount
substantially equal to the outstanding principal amount of such Advance on such
first day and for a period substantially equal to such Settlement Period.
"Eurodollar Rate Advance" means an Advance the Yield on which is computed
with reference to the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" for any Settlement Period for any
Eurodollar Rate Advance means the reserve percentage applicable during such
Settlement Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) (or if more than one
such percentage shall be applicable, the daily average of such percentages for
those days in such Settlement Period during which any such percentage shall be
so applicable) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for the Lender or any Secondary Lender with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or any other
category of liabilities that includes deposits by reference to which the
interest rate on Eurocurrency Liabilities is determined) having a term
comparable to such Settlement Period.
"Event of Default" means any of the events, acts or occurrences set forth
in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
"Existing Rescission Offer" shall have the meaning assigned to the term
"Rescission Offer" set forth in the Prospectus dated May 4, 2001.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Citibank from three Federal funds brokers of recognized
standing selected by it.
"Fee Letter" means that certain letter agreement dated the date hereof
between the Borrower and the Agent, as the same may from time to time be
amended, supplemented, waived or modified.
"Fleet Transaction" means the acquisition of the stock or other ownership
interests in certain subsidiaries of Liberty Financial Companies, Inc.
(including Liberty Funds Group LLC, the current parent of the Advisor) by Fleet
National Bank pursuant to that certain Stock Purchase Agreement dated as of June
4, 2001 among the Parent, Liberty Financial Companies, Inc. and Liberty
Financial Services, Inc.
"Floating Rate" means an interest rate calculated by reference to the prime
rate, the London interbank offered rate, the certificate of deposit rate, the
Federal Funds Rate or any other per annum rate commonly referred to in the
United States banking industry as a "floating rate".
"Foreign Assets" shall have the meaning assigned to such term in Section
3(a) of the Control Agreement.
"Foreign Holding Company" shall have the meaning assigned to such term in
Section 3(a) of the Control Agreement.
"Foreign OECD Loan Asset" means any Loan Asset the Obligor of which is
organized under the laws of any OECD Country (other than the United States).
"GAAP" means generally accepted accounting principles in the United States,
in effect from time to time, consistently applied.
"Governmental Authorizations" means all franchises, permits, licenses,
approvals, consents and other authorizations of all Authorities.
"Governmental Filings" means all filings, including franchise and similar
tax filings, and the payment of all fees, assessments, interests and penalties
associated with such filing with all Authorities.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
or by agreement to keep-well, to purchase assets, goods, securities or services,
to take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Industry Class" means each industry class as determined by the Manager
based upon the criteria set forth on Schedule III hereto, as amended and
supplemented in accordance with this Agreement.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, and the rules and regulations of the SEC thereunder as modified or
interpreted by orders of the SEC, or other interpretative releases or letters
issued by the SEC or its staff, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
"Investment Policies and Restrictions" means the provisions dealing with
investment policies, distributions, investment restrictions, tender offers,
repurchases, leverage and diversified status as set forth in the Borrower's
Prospectus in effect on the Closing Date as modified as permitted under this
Agreement.
"Investor Report" means the Investor Report of the Borrower substantially
in the form of Schedule I hereto.
"Law" means any action, code, consent decree, constitution, decree,
directive, enactment, finding, guideline, law, injunction, interpretation,
judgment, order, ordinance, policy statement, proclamation, promulgation,
regulation, requirement, rule, rule of law, rule of public policy, settlement
agreement, statute, or writ, of any Authority, or any particular section, part
or provision thereof.
"Lender" means CRC, together with all Persons which acquire any interest in
any Advance under the Asset Purchase Agreement.
"Lender Termination Date" means the date which is the earliest to occur of
(i) the date which is one (1) Business Day prior to the Secondary Lender Stated
Expiration Date, and (ii) the date on which the Total Commitment shall terminate
pursuant to Section 2.10 or Section 6.01.
"Letter Agreement" means the Letter Agreement dated as of the date hereof
from the Advisor to the Agent on behalf of the Secured Parties, as the same may
from time to time be amended, supplemented, waived or modified.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien or security interest (statutory or other), or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the UCC or comparable law of any jurisdiction).
"Liquidation Fee" means, in respect of any Advance for any Settlement
Period during which the principal on such Advance is repaid by the Borrower in
whole or in part, the amount, if any, by which (i) the additional Yield
(calculated without taking into account any Liquidation Fee or any shortened
duration of such Settlement Period) which would have accrued during such
Settlement Period on the reduction of the outstanding principal amount of such
Advance relating to such Settlement Period had such reductions remained as
outstanding principal, exceeds (ii) that income, if any, received by the
Lender's investing the proceeds of such reductions of principal.
"Loan Asset" means a direct or participation or subparticipation interest
in or assignment or novation of a loan or other extension of credit. For the
avoidance of doubt, Loan Assets shall not include any Equity Security.
"Loan Documents" means with respect to any Loan Asset, each
loan agreement, promissory note, participation certificate, security agreement,
guarantee and any other agreement or document evidencing, securing, governing or
executed in connection with such Loan Asset, including without limitation, the
agreements and instruments in respect of which the Borrower acquired such Loan
Asset.
"Management Agreement" means the Management Agreement dated as of January
14, 2000, between the Advisor and the Borrower, as the same may be amended,
supplemented, waived or modified as permitted under the Program Documents,
including any replacement investment management agreement between the Borrower
and any successor Advisor permitted under this Agreement.
"Material Adverse Effect" means (i) a material adverse effect on the
ability of the Borrower or the Advisor to perform its obligations under this
Agreement, any other Program Document or any Loan Document, (ii) an adverse
effect on the validity or enforceability of this Agreement or any other Program
Document or Loan Document, (iii) a material adverse effect on any Secured
Party's right, title and interest in the Assigned Collateral or on the rights
and remedies of any Secured Party under any Program Document, (iv) a material
adverse effect on the business, financial position, operations, Assets or
properties of the Borrower or the Advisor, (v) a material Adverse Claim on any
of the Assets of the Borrower, or (vi) a Default or Event of Default.
"Maturity Date" means (i) with respect to any Advance made by the Lender,
the Lender Termination Date (or if such day is not a Business Day, the Business
Day immediately preceding such date) or such earlier date as provided in Section
6.01, and (ii) with respect to any Advance made by a Secondary Lender, the date
which is two (2) years after the Borrowing Date of such Advance (or if such day
is not a Business Day, the Business Day immediately preceding such date) or such
earlier date as provided in Section 6.01.
"Moody's" means Xxxxx'x Investors Service, Inc., together with its
successors.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five-year period.
"Net Adjusted Eligible Asset Value" means on the date any determination
thereof is made, an amount equal to the aggregate Adjusted Asset Value of all
Eligible Collateral less the Borrowing Base Excess Amount.
"Non-OECD Loan Asset" means a Loan Asset, the Obligor of which is not
organized under the laws of an OECD Country.
"Notice of Borrowing" shall have the meaning assigned to such term in
Section 2.02(a).
"Notice of Exclusive Control" shall have the meaning assigned to such term
in the Control Agreement.
"Obligor" means in respect of any Loan Asset, the Person primarily
obligated under the related Loan Documents to repay the loan or extension of
credit which is the subject of such Loan Asset.
"OECD Country" means any country which is a member of the Organization for
Economic Cooperation and Development which has a sovereign credit rating for
"foreign currency" of at least "AA-" and "Aa3" from S&P and Moody's,
respectively.
"Origination Date" means in respect of any Loan Asset the initial date on
which the proceeds of the loan or other extension of credit which is the subject
of such Loan Asset was advanced to the Obligor under the related Loan Documents.
"Parent" means, prior to the closing of the Fleet Transaction, Liberty
Financial Companies, Inc. and after the closing of the Fleet Transaction, Fleet
Boston Financial Corp., each together with its successors.
"Percentage" of any Secondary Lender means, (a) with respect to Citibank,
the percentage set forth on the signature page to this Agreement, or such amount
as reduced by any Assignment and Acceptance entered into with an Eligible
Assignee, or (b) with respect to a Secondary Lender that has entered into an
Assignment and Acceptance, the amount set forth therein as such Secondary
Lender's Percentage, or such amount as reduced by an Assignment and Acceptance
entered into between such Secondary Lender and an Eligible Assignee.
"Permitted Change" means any change in the then current investment advisor
(the "Immediate Advisor") for the Borrower in connection with any merger,
consolidation, reorganization of such Immediate Advisor or any assignment by
such Immediate Advisor which in either case meets the following criteria:
(i) the investment advisor for the Borrower immediately after such change
(the "Successor Advisor") is an Affiliate of Liberty Funds Group LLC
(or any successor of Liberty Funds Group LLC) or Fleet Boston
Financial Corp. and such Successor Advisor is a wholly-owned direct or
indirect subsidiary of the Parent (or any successor of the Parent);
(ii) the Successor Advisor shall have agreed in writing to be bound by the
terms of the Letter Agreement and shall have affirmed that the
representations and warranties set forth in the Letter Agreement are
true and correct in respect of such Successor Advisor;
(iii)the Successor Advisor shall have assumed the obligations of the
Immediate Advisor under the existing Management Agreement or the
Successor Advisor shall have entered into a Management Agreement which
is substantially identical to the Management Agreement in effect on
the Closing Date, other than with respect to the dates such agreements
became effective, the termination dates of such agreements and certain
other non-material changes as set forth in the Proxy Statement dated
August 6, 2001;
(iv) the Successor Advisor shall have the investment advisory expertise and
capacity and financial resources substantially equal to or better than
the investment advisory expertise and capacity and financial resources
of the Immediate Advisor immediately prior to such change; and
(v) the Agent shall have received such certificates and opinions of
counsel as it shall have reasonably requested in respect of such
Successor Advisor.
For the avoidance of doubt, any assignment (within the meaning Section
2(a)(4) of the Investment Company Act) by the Immediate Advisor in connection
with the Fleet Transaction shall constitute a Permitted Change.
"Permitted Debt" means (i) accrued expenses and current trade accounts
payable incurred in the ordinary course of the Borrower's business which are not
overdue for a period of more than thirty (30) days or which are being contested
in good faith by appropriate proceedings, (ii) Debt in favor of the Custodian
relating to Custodian's Overdraft Advances incurred in the ordinary course of
the Borrower's business, which are not overdue, (iii) fee and expense
obligations to the Custodian and other similar agents which are providing
services in respect of the Borrower's Assets arising in the ordinary course of
the Borrower's business which are not overdue for a period in excess of thirty
(30) days, (iv) Debt (other than Debt for borrowed money) arising in connection
with transactions in the ordinary course of the Borrower's business in
connection with its purchasing of securities, Derivatives Transactions, reverse
repurchase agreements or dollar rolls to the extent such transactions are
permitted under the Investment Company Act and the Borrower's Investment
Policies and Restrictions, (v) obligations of the Borrower to fund future
advances under the Loan Documents which do not exceed twenty percent (20%) of
the Value of the Borrower's Assets and which meet the Borrower's diversification
requirements set forth under the heading "Investment Restrictions" in the
Borrower's Statement of Additional Information as of the Closing Date, which are
not overdue, and (vi) Debt in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as such
judgments or awards do not constitute an Event of Default and so long as
execution is not levied thereunder or in respect of which the Borrower (A) shall
at the time in good faith be diligently prosecuting an appeal or proceeding for
review and in respect of which a stay of execution shall have been obtained
pending such appeal or review, or (B) shall have obtained an unsecured
performance bond in respect of such judgment or award.
"Permitted Liens" means in respect of any Asset of the Borrower (i) Liens
for taxes, assessments or other governmental charges or levies not at the time
delinquent or being diligently contested in good faith by appropriate actions
and for which adequate reserves in accordance with GAAP shall have been set
aside on the Borrower's books, (ii) Liens incidental to the conduct of the
Borrower's business securing the performance of fee and expense obligations to
the Custodian and other similar agents which are providing services in respect
of the Borrower's Assets arising in the ordinary course of the Borrower's
business which are not overdue for a period in excess of thirty (30) days, (iii)
Liens in respect of Debt permitted under clause (iv) of the definition of
Permitted Debt, and (iv) Liens for taxes, assessments and other governmental
charges or levies for amounts not yet due or which are being contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves have been set aside in accordance with GAAP, provided that
enforcement of such Liens is stayed pending such contest.
"Permitted Senior Securities" means "senior securities" within the meaning
of the Investment Company Act which constitute Advances under this Agreement,
preferred shares, Derivatives Transactions, repurchase transactions, reverse
repurchase transactions or commitments of the Borrower to fund future advances
or other extensions of credit under any Loan Document, to the extent the
issuance of any such senior security by the Borrower is not in contravention of
the Investment Company Act or the Borrower's Investment Policies and Procedures
in effect on the Closing Date.
"Person" means an individual or a corporation (including a business trust),
partnership, trust, incorporated or unincorporated association, joint stock
company, limited liability company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.
"Post-Default Rate" means in respect of all amounts payable to any Secured
Party under any Program Document not paid when due (whether at stated maturity,
by acceleration or otherwise), including, without limitation, the principal and
Yield on any Advance not paid when due, a rate per annum during the period
commencing on the due date until such amount is paid in full equal to the
Alternative Base Rate as in effect from time to time plus two percent (2.00%).
"Principal Office" means the principal office of Citibank located at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx or at such other location as the Agent shall
designate in writing to the Borrower.
"Private Authorizations" means all franchises, permits, licenses,
approvals, consents and other authorizations of all Persons (other than
Authorities) including, without limitation, those with respect to trademarks,
service marks, trade names, copyrights, computer software programs, technical
and other know-how.
"Proceeds" shall have, with reference to any asset or property, the meaning
assigned to it under the UCC and, in any event, shall include, but not be
limited to, any and all amounts from time to time paid or payable under or in
connection with such asset or property.
"Product Information" shall have the meaning assigned to such term in
Section 9.09(a).
"Program Documents" means this Agreement, the Advance Notes, the Letter
Agreement, the Asset Purchase Agreement, the Control Agreement, the Management
Agreement, the Custodial Agreement, the Loan Documents, the Fee Letter and the
other agreements, documents and instruments entered into or delivered in
connection herewith or therewith.
"Program Termination Date" means the later to occur of (i) the Secondary
Lender Termination Date, and (ii) the date that all Borrower Obligations have
been finally paid in full; provided, however, that if any payment in respect of
any Borrower Obligation made to any Secured Party must be rescinded or returned
for any reason whatsoever (including the insolvency or bankruptcy of the
Borrower) such Borrower Obligation shall be deemed to be reinstated as though
such payment had not been made and the Program Termination Date shall be deemed
to have not occurred.
"Prospectus" means with respect to the Borrower, the prospectus filed with
the SEC as a part of the Borrower's registration statement on Form N-2, as
amended (or any successor SEC form), and shall include, without limitation, the
related statement of additional information included in such registration
statement.
"Quarterly Share Repurchase" means a quarterly repurchase of shares of the
Borrower, permitted pursuant to Rule 23c-3 of the Investment Company Act.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Required Ratings" means in respect of the Parent a senior unsecured
long-term debt rating from both S&P and Moody's of at least "BBB-" and "Baa3",
respectively; provided, however, that if the Parent is not rated by S&P or
Moody's, the Parent shall have a rating equivalent of at least such Required
Rating, as determined by the Agent.
"Responsible Officer" means with respect to any Person, such Person's
president or any one of its vice presidents, its treasurer or any one of its
assistant treasurers.
"Restricted Payments" means (a) the declaration of any distribution or
dividends (other than distributions payable solely in shares of beneficial
interest in the Borrower) on, or the payment on account of, or the setting apart
of assets for the purchase, redemption, retirement or other acquisition of any
shares of beneficial interests in the Borrower, including without limitation all
common and preferred shares, whether now or hereafter outstanding, either
directly or indirectly, whether in cash, property or in obligations of the
Borrower, other than Quarterly Share Repurchases, and (b) the payment of fees
and expenses to the Advisor or any Affiliate of the Advisor as compensation for
the provision of managerial, administrative services or otherwise.
"S&P" means Standard & Poor's Ratings Group, together with its successors.
"SEC" means the Securities and Exchange Commission or any other
governmental authority of the United States of America at the time administering
the Securities Act, the Investment Company Act or the Exchange Act.
"Secondary Lender Commitment" means (a) with respect to Citibank, an amount
equal to the Total Commitment, as such amount shall be reduced by any Assignment
and Acceptance entered into between Citibank and an Eligible Assignee, or (b)
with respect to a Secondary Lender that has entered into an Assignment and
Acceptance, the amount set forth therein as such Secondary Lender's "Secondary
Lender Commitment", in each case as such amount may be reduced by an Assignment
and Acceptance entered into between such Secondary Lender and an Eligible
Assignee, and as may be further reduced (or terminated) pursuant to the next
sentence. Any reduction (or termination) of the Total Commitment pursuant to the
terms of this Agreement shall reduce ratably (or terminate) each Secondary
Lender's Secondary Lender Commitment.
"Secondary Lenders" means Citibank and each Eligible Assignee that becomes
a party to this Agreement pursuant to Section 9.06.
"Secondary Lender Stated Expiration Date" means September 19, 2002, unless,
prior to such date (or the date so extended pursuant to this clause), upon the
Borrower's request, made not more than sixty (60) days nor less than thirty (30)
days prior to the then current Secondary Lender Stated Expiration Date, one or
more Secondary Lenders having 100% of the Total Commitment shall in their sole
discretion consent, which consent shall be given not less than twenty (20) days
prior to the then current Secondary Lender Stated Expiration Date (the date any
such consent is given, the "Extension Date"), to the extension of the Secondary
Lender Stated Expiration Date to the date occurring 364 days after such
Extension Date; provided, however, that any failure of any Secondary Lender to
respond to the Borrower's request for such extension shall be deemed a denial of
such request by such Secondary Lender.
"Secondary Lender Termination Date" means the earlier of (i)
the Secondary Lender Stated Expiration Date, and (ii) the date the Total
Commitment shall terminate pursuant to Section 2.10 or Section 6.01.
"Secured Parties" means the Agent, the Lender, the Secondary Lenders and
their respective successors and assigns.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder, all as from time to time in effect,
or any successor law, rules or regulations, and any reference to any statutory
or regulatory provisions shall be deemed to be a reference to any successor
statutory or regulatory provision.
"Securities System" shall have the meaning assigned to such term in Section
3(a) of the Control Agreement.
"Selling Institution" means in respect of any Loan Asset which constitutes
a participation interest, the Person which has granted or sold to the Borrower a
participation interest in the loan or other extension of credit which is the
subject of such Loan Asset.
"Settlement Date" means the date which is two (2) Business Days after the
end of each Settlement Period.
"Settlement Period" means in respect of any Advance:
(a) in the case of any Settlement Period in respect of which Yield is
computed by reference to the CP Rate, the period beginning on the date
such Advance was made and ending on the last day of the calendar month
in which such Advance was made and thereafter each successive period
commencing on the first day of each calendar month during the term of
this Agreement and ending on the last day of such calendar month
during the term of this Agreement; provided, however, that in the case
of any Settlement Period for any Advance which commences before the
Maturity Date for such Advance and would otherwise end on a date
occurring after such Maturity Date, such Settlement Period shall end
on such Maturity Date and the duration of each Settlement Period which
commences on or after the Maturity Date for such Advance may be any
period (including, without limitation, a period of one day) as shall
be selected from time to time by the Agent;
(b) in the case of any Settlement Period in respect of which Yield is
computed by reference to the Assignee Rate, the period beginning on
the date such Advance was made and ending on the last day of the
calendar month in which such Advance was made and thereafter each
successive period commencing on the first day of each calendar month
during the term of this Agreement and ending on the last day of such
calendar month during the term of this Agreement; provided, however,
that any Settlement Period which is other than the monthly Settlement
Period shall be of such duration as shall be selected by the Agent;
and
(c) in the case of any Settlement Period in respect of which Yield is
computed by reference to the Alternate Base Rate, such Settlement
Period shall be of such duration as shall be selected by the Agent.
"Taxes" shall have the meaning assigned to such term in Section 9.03(a).
"Total Commitment" means $150,000,000 as such amount may be reduced
pursuant to Section 2.10. References to the unused portion of the Total
Commitment shall mean, at any time, the Total Commitment then in effect, minus
the outstanding principal amount of the Advances.
"Transaction Agent" means a commercial bank, insurance company, finance
company or other financial institution that is acting as agent or trustee under
the Loan Documents relating to any Loan Asset.
"UCC" means the Uniform Commercial Code, as from time to time in effect in
the applicable jurisdictions.
"Unsecured Loan Assets" means Loan Assets which are not fully secured under
the related Loan Documents by a first priority perfected Lien on assets or
properties of the related Obligor with value as reasonably determined by the
Advisor at the time of the Borrower's purchase of such Loan Asset in reliance
upon appraisals, financial statements or market valuation techniques, in an
amount no less than the outstanding debt of such Obligor under the related Loan
Documents.
"Value" shall have the meaning assigned to such term in Section 2(a)(41) of
the Investment Company Act.
"Weekly Portfolio Report" shall have the meaning assigned to such term in
Section 5.01(d)(viii).
"Yield" means for each Advance for each Settlement Period:
(i) for each day during such Settlement Period to the extent such Advance
will be funded on such day by CRC through the issuance of commercial
paper notes,
CP x P + LF
-------
360
(ii) for each day during such Settlement Period to the extent such Advance
will be funded on such day by the Secondary Lenders or the Lender,
other than CRC,
AR x P + LF
------
360
where:
AR = the Assignee Rate for such Advance for such Settlement Period
P = the outstanding principal amount of such Advance on such day
CP = the CP Rate for such Advance on such day
LF = the Liquidation Fee, if any, for such Advance for such Settlement
Period;
provided, further, that Yield for any Advance shall not be considered paid by
any distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason.
SECTION 1.02. Rules of Construction.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
Singular words shall connote the plural as well as the singular, and vice
versa (except as indicated), as may be appropriate.
The words "herein," "hereof" and "hereunder" and other words of similar
import used in this Agreement refer to this Agreement as a whole and not to any
particular appendix, article, schedule, section, paragraph, clause, exhibit or
other subdivision.
The headings, subheadings and table of contents set forth in this Agreement
are solely for convenience of reference and shall not constitute a part of this
Agreement nor shall they affect the meaning, construction or effect of any
provision hereof.
References in this Agreement to "including" shall mean, including, without
limiting, the generality of any description preceding such term, and for
purposes hereof the rule of ejusdem generis shall not be applicable to limit a
general statement, followed by or referable to an enumeration of specific
matters, to matters similar to those specifically mentioned.
Each of the parties to this Agreement and its counsel have reviewed and
revised, or requested revisions to, this Agreement, and the usual rule of
construction that any ambiguities are to be resolved against the drafting party
shall be inapplicable in the construction and interpretation of this Agreement.
SECTION 1.03. Computation of Time Periods.
Unless otherwise stated in this Agreement, in the computation of a period
of time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" both mean "to but
excluding".
Article II
ADVANCES TO THE BORROWER
SECTION 2.01. Advance Facility.
On the terms and conditions hereinafter set forth, including without
limitation, Sections 3.01 and 3.02, CRC may, in its sole discretion, make
Advances to the Borrower on any Borrowing Date from the date hereof to the
Lender Termination Date. On the terms and conditions hereinafter set forth,
including without limitation, Sections 3.01 and 3.02, and during the period from
the date hereof to the Secondary Lender Termination Date, the Secondary Lenders
shall make Advances to the Borrower, ratably in accordance with their respective
Secondary Lender Commitments, to the extent CRC has determined not to make such
Advance or if the Lender Termination Date has occurred. Under no circumstances
shall CRC or any Secondary Lender be obligated to make any such Advance, to the
extent that after giving effect to the making of such Advance the aggregate
principal amount of all outstanding Advances would exceed the Total Commitment.
SECTION 2.02. Making of Advances.
(a) The Borrower shall give the Agent written notice (which notice shall be
irrevocable and effective only upon receipt by the Agent) of each request for an
Advance (each such request a "Notice of Borrowing") not later than 12:00 noon
(New York City time) on the day which is two (2) Business Days prior to the
proposed borrowing date, which notice shall specify (i) the proposed borrowing
date therefor (each such date, a "Borrowing Date"), and (ii) the principal
amount of the proposed Advance. Any such Notice of Borrowing shall be
substantially in the form of Exhibit B hereto, dated the date such request is
being made, signed by a Responsible Officer of the Borrower and otherwise
appropriately completed. Each Advance shall be in a principal amount of at least
$1,000,000 and in integral multiples of $1,000,000 in excess thereof. During the
period prior to the Lender Termination Date, CRC shall promptly notify the Agent
whether it has determined to make a proposed Advance and the Agent shall
promptly thereafter notify the Borrower whether CRC has determined to make such
Advance. If CRC has determined not to make a proposed Advance, the Agent shall
promptly send notice of the proposed Advance to all of the Secondary Lenders
concurrently specifying the Borrowing Date for such Advance, each Secondary
Lender's Percentage multiplied by the principal amount of such Advance and
whether the Yield for such Advance is calculated based on the Eurodollar Rate or
the Alternate Base Rate. On any Borrowing Date the Lender or the Secondary
Lenders shall, subject to the terms and conditions of this Agreement, make
available to the Borrower at the Borrower's Account the principal amount of the
requested Advance in immediately available funds. To the extent not covered by
Section 2.08, the Borrower shall indemnify CRC, each Secondary Lender and the
Agent against any loss (other than lost profits) or reasonable expense incurred
by them as a result of any failure by the Borrower to accept any Advance
requested in a Notice of Borrowing or as a result of the failure of the Borrower
to receive any Advance requested in a Notice of Borrowing as a result of the
failure of any condition precedent to the making of such Advance to be
satisfied, including, without limitation, any such loss or expense incurred by
reason of the liquidation or reemployment of funds acquired or requested to fund
such Advance.
(b) The parties hereto agree that on the Maturity Date of the Advances made
by CRC (the "CRC Maturity Date"), so long as no Default or Event of Default
shall have occurred and be continuing on such date and subject to the other
terms and conditions of this Agreement (other than the obligation to deliver a
Notice of Borrowing), the Secondary Lenders shall make an Advance (the
"Committed Advance") on such date in a principal amount equal to the outstanding
principal amount of the Advances funded by CRC, unless on or prior to the second
(2nd) Business Day preceding the CRC Maturity Date, the Borrower has delivered a
written notice to the Agent stating that it has elected not to receive such
Committed Advance. Notwithstanding anything in this Agreement to the contrary,
the principal amount of such Committed Advance shall be made ratably by the
Secondary Lenders to the Agent's Account and shall constitute a payment in full
by the Borrower in respect of the outstanding principal amount of the Advances
maturing on the CRC Maturity Date and shall be applied by the Agent on the CRC
Maturity Date to the outstanding principal amount of the Advances made by CRC.
SECTION 2.03. Advance Notes.
(a) All Advances made by CRC and each Secondary Lender to the Borrower
shall be evidenced by separate Advance Notes, with appropriate insertions, which
shall (i) be payable to the order of CRC and each Secondary Lender and provide
for the payment of the unpaid principal amount of the Advances evidenced thereby
on the Maturity Date for such Advances, and (ii) require that the Borrower pay
Yield on the outstanding principal amount as provided in Section 2.06 hereof.
The date and principal amount of each Advance and of each repayment of principal
thereon shall be recorded by CRC or the Secondary Lenders, as the case may be,
or their designee on Schedule I attached to CRC's or such Secondary Lender's
Advance Note and the aggregate unpaid principal amount shown on such schedules
shall be rebuttable presumptive evidence of the principal amount owing and
unpaid on the Advances. The failure to record or any error in recording any such
amount on such schedule shall not, however, limit or otherwise affect the
obligations of the Borrower hereunder or under any Advance Note to repay the
principal amount of the Advances together with all Yield thereon.
(b) The Borrower agrees that upon any Eligible Assignee becoming a
Secondary Lender hereunder in accordance with Section 9.06, it shall, promptly
upon the request of the Agent, execute and deliver an Advance Note payable to
the order of such Secondary Lender and otherwise appropriately completed.
SECTION 2.04. Maturity of the Advances.
It is understood and agreed that the principal amount of and the unpaid
Yield on each outstanding Advance shall be due and payable on the Maturity Date
for such Advance.
SECTION 2.05. Prepayment of the Advances.
(a) It is understood and agreed that the Borrower shall have the right at
any time and from time to time, upon not less than one (1) Business Day's prior
written or telephonic notice (in the case of telephonic notice, promptly
confirmed in writing) to the Agent specifying the date and amount of such
prepayment, to prepay all or a portion of the outstanding Advances, together
with unpaid Yield thereon, on a Business Day; provided, that any such
prepayment, if a partial prepayment, shall be an integral multiple of $1,000,000
with a minimum amount of $1,000,000.
(b) If on any Determination Date, the Borrower is not in full compliance
with the Borrowing Base Test, the Borrower shall on such Determination Date
notify the Agent of such failure to comply, (A) prepay Advances (and pay Yield
thereon), and/or (B) pledge to the Agent additional Borrowing Base Eligible
Assets in an amount necessary to cause the Borrower to be in full compliance
with the Borrowing Base Test on such Determination Date; provided, however, that
to the extent the Borrower does not have sufficient available funds and/or
additional Borrowing Base Eligible Assets to pledge to the Agent in order to
fully cure such compliance shortfall on such Determination Date, then the
Borrower shall (i) on such Determination Date prepay outstanding Advances in the
amount of its available funds and pledge all Borrowing Base Eligible Assets to
the Agent; (ii) no later than the close of business on the fifth (5th) Business
Day following such Determination Date either (A) acquire and pledge to the Agent
under this Agreement and the Control Agreement additional Borrowing Base
Eligible Assets having an Adjusted Asset Value at least sufficient to cause the
Borrowing Base to be at least equal to the product of (x) 1.05, and (y) Credits
Outstanding, as determined on the first (1st) Business Day after such
Determination Date, or (B) prepay Advances in a principal amount (and pay the
Yield thereon) at least sufficient to cause the Borrowing Base to be at least
equal to the product of (x) 1.05 and (y) Credits Outstanding, as determined on
the first (1st) Business Day after such Determination Date; and (iii) no later
than the close of business on the second (2nd) Business Day following such
Determination Date, deliver to the Agent a certificate, signed by a Responsible
Officer of the Borrower, that (1) certifies the amount of the compliance
shortfall, (2) specifies whether the Borrower shall either (x) prepay the
Advances in accordance with clause (B) above, or (y) acquire additional
Borrowing Base Eligible Assets in accordance with clause (A) above and specifies
the identity and Adjusted Asset Value of the Borrowing Base Eligible Assets for
which the Borrower has entered into corrective trades in order to satisfy the
requirements of clause (A) of this Section 2.05(b), and (3) certifies that the
requirements of this Section 2.05(b) shall be satisfied on or prior to the fifth
(5th) Business Day following such Determination Date.
(c) The amount of each prepayment under this Section 2.05 shall be applied
to the Advances, in the order in which such Advances were made.
SECTION 2.06. Yield.
The Borrower hereby agrees to pay the Yield computed with reference to the
principal amount of each Advance outstanding from time to time. Yield accruing
in respect of any Advance for any Settlement Period shall be due and payable on
the Settlement Date immediately succeeding such Settlement Period and as
required by Section 2.05. It is the intention of the parties hereto that the
Yield on the Advances shall not exceed the maximum rate permissible under
applicable law. Accordingly, anything herein or in any Advance Note to the
contrary notwithstanding, in the event any Yield is charged to, collected from
or received from or on behalf of the Borrower by the Lender or the Secondary
Lenders pursuant hereto or thereto in excess of such maximum lawful rate, then
the excess of such payment over that maximum shall be applied first to the
payment of amounts owing by the Borrower to the Lender, the Secondary Lenders
and the Agent under the Program Documents (other than in respect of principal
and Yield on Advances) and then to the reduction of the outstanding principal
balance of the Advances.
SECTION 2.07. Increased Costs.
(a) If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements reflected in the
Eurodollar Rate Reserve Percentage) in or in the interpretation of any
Applicable Law or (ii) the compliance with any guideline or request from any
central bank or other Authority (whether or not having the force of law, but, if
not having the force of law, which is generally applicable to and complied with
by banks or financial institutions of the same general type as such Affected
Person), there shall be any increase in the cost to any Affected Person of
agreeing to make or making, funding or maintaining Eurodollar Rate Advances to
the Borrower, then the Borrower shall from time to time, upon demand by the
Lender or such Affected Person pay to the Agent for the account of such Affected
Person additional amounts (without duplication of any other amounts payable
hereunder) sufficient to compensate such Affected Person for such increased
cost. In determining such amount, such Affected Person may use any reasonable
averaging and attribution methods, consistent with the averaging and attribution
methods generally used by such Affected Person in determining amounts of this
type with respect to other borrowers. A certificate as to the amount of such
increased cost, submitted to the Borrower by an Affected Person, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If (i) the introduction of, change in or in the interpretation of any
Applicable Law, or (ii) the compliance with any guideline or request from any
Authority (whether or not having the force of law, but, if not having the force
of law, which is generally applicable to and complied with by banks or financial
institutions of the same general type of such Affected Person) affects or would
affect the amount of capital required or expected to be maintained by such
Affected Person and that the amount of such capital is increased by or based
upon the existence of such Affected Person's commitment under the Program
Documents or upon such Affected Person's making, funding or maintaining
Advances, then, upon demand of such Affected Person (with a copy of such demand
to the Agent), the Borrower shall immediately pay to the Agent for the account
of such Affected Person, from time to time as specified by such Affected Person,
additional amounts sufficient to compensate such Affected Person in light of the
circumstances. A certificate setting forth in reasonable detail such amounts
submitted to the Borrower by such Affected Person shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.08. Compensation.
The Borrower shall compensate each Affected Person, upon its written
request (which request shall set forth the basis for requesting such amounts),
for all reasonable losses (excluding lost profits), expenses and liabilities
(including, without limitation, any interest paid by such Affected Person to
lenders of funds borrowed by it to make or carry its Eurodollar Rate Advances
and any loss (excluding lost profits)sustained by such Affected Person in
connection with the re-employment of such funds), which such Affected Person may
sustain (other than losses and expenses for which the Borrower has compensated
the Lender or the Secondary Lenders through the payment of a Liquidation Fee):
(i) if for any reason (other than a default by such Affected Person) a borrowing
of any Eurodollar Rate Advance by the Borrower does not occur on a date
specified therefor in the Notice of Borrowing (whether or not withdrawn), (ii)
if any prepayment of any of the Borrower's Eurodollar Rate Advances occurs on a
date which is not the last day of a Settlement Period applicable thereto, (iii)
if any prepayment of any of the Borrower's Eurodollar Rate Advances is not made
on any date specified in a notice of prepayment given by the Borrower, or (iv)
as a consequence of any other default by the Borrower to repay its Eurodollar
Rate Advances when required by the terms of this Agreement.
SECTION 2.09. Additional Yield on Eurodollar Rate Advances.
So long as any Affected Person shall be required under regulations of the
Board of Governors of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, the Borrower shall pay (without duplication of any other amounts
payable hereunder) to such Affected Person Eurodollar Additional Yield on the
principal amount of each outstanding Advance on each date on which Yield is
payable on such Advance. Such Eurodollar Additional Yield shall be determined by
such Affected Person and notified to the Borrower through the Agent within
thirty (30) days after any payment is made with respect to which such additional
Yield is requested. A certificate as to such Eurodollar Additional Yield
submitted to the Borrower and the Agent shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 2.10. Termination or Reduction of the Total Commitment.
The Borrower may at any time, upon thirty (30) days' prior written notice
to the Agent terminate in whole or reduce in part the unused portion of the
Total Commitment; provided, that each such partial reduction of the Total
Commitment shall be in an amount equal to at least $5,000,000 or an integral
multiple thereof.
SECTION 2.11. Rescission or Return of Payment.
The Borrower further agrees that, if at any time all or any part of any
payment theretofore made by it to any Secured Party or their designees is or
must be rescinded or returned for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of the Borrower or any
of its Affiliates), the obligation of the Borrower to make such payment to such
Secured Party shall, for the purposes of this Agreement, to the extent that such
payment is or must be rescinded or returned, be deemed to have continued in
existence and this Agreement shall continue to be effective or be reinstated, as
the case may be, as to such obligations, all as though such payment had not been
made.
SECTION 2.12. Fees Payable by Borrower.
The Borrower agrees to pay the Agent such fees as are set forth in the Fee
Letter.
SECTION 2.13. Post Default Interest.
The Borrower hereby promises to pay interest on the unpaid principal amount
of each Advance and any other amount payable by the Borrower hereunder, in each
case, which shall not be paid in full when due, for the period commencing on the
due date thereof until but not including the date the same is paid in full at
the Post-Default Rate. Interest payable at the Post-Default Rate shall be
payable on the Agent's demand.
SECTION 2.14. Payments.
(a) All amounts owing and payable by the Borrower under this Agreement,
including, without limitation, the principal amount of outstanding Advances,
Yield, fees, expenses and indemnitees, shall be paid in Dollars, in immediately
available funds on or prior to 1:00 p.m. (New York City time) on the date due
without counterclaim, setoff, deduction, defense, abatement, suspension or
deferment to the Agent's Account. Any payment paid after 1:00 p.m. (New York
City time) on any day shall be deemed to have been made on the next Business Day
for all purposes of this Agreement.
(b) All computations of interest at the Post-Default Rate and all
computations of Yield, fees and other amounts payable by the Borrower hereunder
shall be made on the basis of a year of 360 days for the actual number of days
elapsed. Whenever any payment or deposit to be made hereunder shall be due on a
day other than a Business Day, such payment or deposit shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of such payment or deposit.
(c) Upon receipt of funds deposited into the Agent's Account, the Agent
shall distribute such funds, first to the Lender and the Secondary Lenders in
payment in full of all accrued and unpaid Yield owing to the Lender and
Secondary Lenders, second to the Lender, the Secondary Lenders or the Agent in
payment of any other fees or other amounts owed by the Borrower to the Lender,
the Secondary Lenders and the Agent under this Agreement and the other Program
Documents (other than in respect of the principal amount of the Advances), and
third to the payment of the principal amount of the Advances.
(d) The Agent shall, on or prior to 3:00 p.m. (New York City time) on the
Business Day immediately preceding each Settlement Date, notify the Borrower of
the Yield, Fees and other amounts due and payable on such Settlement Date.
SECTION 2.15. Borrower's Obligations Absolute.
The Borrower's obligations under this Agreement and under the other Program
Documents shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms hereof and thereof, under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower, the Advisor or any other Person may have or have had against
the Agent, the Lender, any Secondary Lender or any other Person.
Article III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to the Effectiveness of this Agreement.
The effectiveness of this Agreement and the Lender's and any Secondary
Lender's obligations hereunder shall be subject to the conditions precedent that
the Agent shall have received on or before the initial Borrowing Date the
following, each (unless otherwise indicated) in form and substance reasonably
satisfactory to the Agent in sufficient copies for the Lender and the Secondary
Lenders:
(a) each of the Program Documents duly executed and delivered by the
parties thereto, which shall each be in full force and effect;
(b) the Prospectus, as in effect on the Closing Date;
(c) the signed opinions of counsel to the Borrower and the Advisor
addressed to each Secured Party as to such matters as the
Agent shall have reasonably requested;
(d) an Advance Note duly executed and completed by the Borrower to CRC and
each Secondary Lender;
(e) all Governmental Authorizations, Private Authorizations and
Governmental Filings, if any, which may be required in connection with the
transactions contemplated by the Program Documents;
(f) a certificate of the Secretary or Assistant Secretary of each of the
Borrower and the Advisor certifying (i) as to its declaration of trust,
articles, by-laws or other organizational documents, as applicable, (ii) as to
the resolutions of its Board of Directors or Board of Trustees, as applicable,
approving the Program Documents to which it is a party and the transactions
contemplated thereby, (iii) that its representations and warranties set forth in
the Program Documents are true and correct, and (iv) the incumbency and specimen
signature of each of its officers authorized to execute the Program Documents;
(g) duly executed copies of proper financing statements naming the Borrower
as debtor and the Agent as secured party, under the UCC in all jurisdictions
that the Agent may reasonably deem necessary or desirable in order to perfect
the Agent's first priority perfected interest in the Assigned Collateral;
(h) proper termination financing statements, if any, necessary to release
all security interests and other rights of any Person in the Borrowing Base
Eligible Assets of the Borrower previously granted by the Borrower;
(i) completed requests for information, dated on or before the date of such
initial transfer and all other effective financing statements filed in the
jurisdictions referred to in subsection (h) above that name the Borrower (under
its present name or as "Liberty-Xxxxx Xxx Advisor Floating Rate Fund") as
debtor, together with copies of such other financing statements (none of which
shall cover any Assets);
(j) a pro-forma Investor Report, which shall evidence compliance with the
Borrowing Base Test, the Asset Coverage Test and the other terms of the Program
Documents after giving effect to the initial borrowing of Advances under this
Agreement;
(k) the fees to be received by it on or prior to the Closing Date under the
Fee Letter; and
(l) from the Borrower and the Advisor such other instruments, certificates
and documents as the Agent shall have reasonably requested, all in form and
substance reasonably satisfactory to the Agent.
SECTION 3.02. Conditions Precedent to All Advances.
The obligation of the Lender and the Secondary Lenders to make any Advance
(including the initial Advance) on any Borrowing Date shall be subject to the
fulfillment of the following conditions:
(a) each of the representations and warranties of the Borrower, the
Custodian and the Advisor contained in this Agreement, the Control Agreement,
the Letter Agreement and the other Program Documents shall be true and correct
in all material respects;
(b) no Default or Event of Default shall have occurred and be continuing or
shall result from the making of such Advance;
(c) the conditions precedent set forth in Section 3.01 shall have been
fully satisfied;
(d) immediately after giving effect to such Advance the Borrower shall be
in full compliance with each of the Borrowing Base Test and the Asset Coverage
Test;
(e) immediately after the making of any such Advance, the aggregate
outstanding principal amount of all Advances shall not exceed the Total
Commitment; and
(f) the Agent shall have received such other instruments, certificates and
documents as the Agent shall reasonably request.
Article IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants on and as of the Closing Date, each
Borrowing Date, each date that any Asset is included or removed as Assigned
Collateral and each Settlement Date (and in respect of clause (g) below each
date such information is provided), as follows:
(a) Due Organization. The Borrower is a business trust, duly organized and
validly existing under the laws of the Commonwealth of Massachusetts and is duly
qualified to do business in each jurisdiction in which the ownership of its
properties or the conduct of its business requires it to be so qualified, except
where the failure to be so qualified could not reasonably be expected to give
rise to a Material Adverse Effect.
(b) Power and Authority. The Borrower has all necessary power and authority
to execute, deliver and enter into each Program Document to which it is a party,
to enter into the transactions contemplated by each Program Document to which it
is a party and to perform all of its obligations thereunder.
(c) Due Authorization. The execution, delivery and performance by the
Borrower of each Program Document to which it is a party (i) have been duly
authorized by all necessary corporate action, and (ii) do not require that any
Governmental Authorization, Private Authorization or Governmental Filing be made
or obtained.
(d) Noncontravention. Neither the execution and delivery by the Borrower of
this Agreement, the Control Agreement, the Fee Letter or the Advance Notes, or
any instrument or agreement executed or delivered by the Borrower in connection
therewith, nor the consummation of the transactions herein or therein
contemplated, nor compliance with the terms, conditions and provisions hereof or
thereof by it, will (i) conflict with, or result in a breach or violation of, or
constitute a default under its declaration of trust or other organizational
documents, (ii) conflict with or contravene any (A) Applicable Law, except where
such conflict or contravention of Applicable Law could not be reasonably
expected to give rise to a Material Adverse Effect, or (B) any order, writ,
judgment, award, injunction or decree binding on or affecting the Borrower or
any of its Assets, (iii) conflict with, or result in a breach or violation of,
or constitute a default under, or permit the acceleration of any obligation or
liability in, or but for any requirement of the giving of notice or the passage
of time (or both) would constitute such a conflict with, breach or violation of,
or default under, or permit any such acceleration in, any contractual obligation
or any agreement or document to which it is a party or by which it or any of its
properties is bound (or to which any such obligation, agreement or document
relates), including any Loan Document, except for any anti-assignment provisions
contained in any Loan Document rendered ineffective by applicable law, or (iv)
result in any Adverse Claim upon any Asset of the Borrower.
(e) Valid and Binding Agreement. Each Program Document to which the
Borrower is a party has been duly executed by the Borrower and is the legal,
valid and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights and remedies of creditors generally and by equitable
principles.
(f) Pending Litigation or Other Proceeding. There is no pending action,
proceeding or, to the best of the Borrower's knowledge, investigation before any
Authority, against or affecting the Borrower or any of its Assets which if
determined adversely to the Borrower, in the aggregate could reasonably be
expected to give rise to a Material Adverse Effect.
(g) Information and Reports. The Prospectus, each Investor Report, each
Weekly Portfolio Report, each Notice of Borrowing and all other written
information, reports, certificates and statements provided by or on behalf of
the Borrower or the Advisor to any Secured Party for purposes of or in
connection with this Agreement, the other Program Documents or the transactions
contemplated hereby or thereby is, and all such information hereafter provided
by or on behalf of the Borrower to any Secured Party are true, correct and
complete in all material respects on the date such information is stated or
certified and no such information contains, or will contain, any material
misrepresentation or any omission to state therein matters necessary to make the
statements made therein not misleading in any material respect under the
circumstances in which they were made.
(h) Investment Company Act. The Borrower has been and is registered under
the Investment Company Act, as a closed-end investment management company, and
has been (except for the Existing Recission Offer) and is in compliance in all
material respects with all Applicable Laws, including without limitation the
Securities Act and the Investment Company Act and the rules and regulations
promulgated thereunder. The Borrower is in compliance in all material respects
with the Investment Policies and Restrictions.
(i) Borrowing Base Eligible Assets, Adverse Claims, Etc. Each Asset of the
Borrower which constitutes Assigned Collateral is, and at all times shall
constitute, a Borrowing Base Eligible Asset, and the Borrower owns each Asset
which constitutes Assigned Collateral free and clear of Adverse Claims. The
Borrower owns all Assets which do not constitute Assigned Collateral free and
clear of Adverse Claims (other than Permitted Liens). This Agreement and the
Control Agreement and the actions required to be taken pursuant to the terms
hereof and thereof are effective to create and perfect in the Agent, for the
benefit of the Secured Parties, a perfected security interest in the Assigned
Collateral free and clear of all Adverse Claims. As of the initial Borrowing
Date and at all times thereafter, the Agent on behalf of the Secured Parties has
a first priority perfected security interest in the Assigned Collateral free and
clear of all Adverse Claims and, no actions, except as have been taken, are
necessary to perfect or protect such security interest free and clear of Adverse
Claims.
(j) No Default or Event of Default. No Default or Event of Default has
occurred and is continuing.
(k) Taxes. The Borrower has filed all United States Federal income tax
returns and all other material tax returns which are required to be filed by it,
if any, and has paid all taxes due pursuant to such returns, if any, or pursuant
to any assessment received by the Borrower, except for any taxes or assessments
which are being contested in good faith by appropriate proceedings and with
respect thereto adequate reserves have been established in accordance with GAAP
and which could otherwise not give rise to a reasonable possibility of a
Material Adverse Effect; and the charges, accruals and reserves on the books of
the Borrower in respect of taxes or other governmental charges, if any, are, in
the opinion of the Borrower, adequate.
(l) Financial Condition. The statement of assets and liabilities of the
Borrower as of August 31, 2000, certified by PricewaterhouseCoopers LLP
independent auditors, fairly presents in conformity with GAAP the financial
position of the Borrower at such date and since such date there has been no
material adverse change in the business, financial condition or results of
operations of the Borrower.
(m) Principal Office. The principal place of business and chief executive
office of the Borrower is located at the address referred to in Section 5.01(c).
The Borrower has not transacted any business under any name other than
"Liberty-Xxxxx Xxx Advisor Floating Rate Advantage Fund" and "Liberty Floating
Rate Advantage Fund".
(n) Loan Assets. No restriction in any Loan Document for any Loan Assets
which constitutes Assigned Collateral could materially adversely affect the
Borrower's performance of its obligations hereunder or under any other Program
Document.
(o) Internal Revenue Code. The Borrower qualifies as a "regulated
investment company" within the meaning of the Code.
(p) ERISA. The Borrower is not a member of an ERISA Group and has no
Benefit Arrangement, Plan or Multiemployer Plan subject to ERISA.
(q) Borrowing Base Test, Etc. On each Borrowing Date and immediately after
the making of each Advance it is in full compliance with the Borrowing Base Test
and the Asset Coverage Test and the other conditions specified in Article III.
(r) Regulations T, U and X. Neither the making of any Advance nor the use
of the proceeds thereof will violate or be inconsistent with the provisions of
Regulation T, Regulation U or Regulation X.
Article V
COVENANTS
SECTION 5.01. Affirmative Covenants of the Borrower.
From the date hereof until the Program Termination Date, the Borrower will,
unless the Agent shall otherwise consent in writing:
(a) Compliance with Agreements. Comply in all material respects with the
terms and conditions of each Program Document to which it is a party.
(b) Compliance with Laws; Taxes. Comply in all material respects with all
Applicable Laws with respect to it, its business and properties and cause to be
paid and discharged when due all taxes, assessments and other governmental
charges or levies imposed upon it, or upon any of its income or Assets, prior to
the day on which penalties are attached thereto, unless and to the extent that
the same (x) shall be contested in good faith by appropriate actions and with
respect to which adequate reserves have been established on the books of the
Borrower in accordance with GAAP, and (y) could not otherwise reasonably be
expected to give rise to a Material Adverse Effect.
(c) Continued Existence. Maintain its existence and shall at all times
continue to be a Massachusetts business trust having its principal place of
business and chief executive office at the address set forth in Section 9.02 or,
upon thirty (30) days' prior written notice to the Agent, at any other locations
in jurisdictions where all actions to protect and perfect the Agent's first
priority perfected security interest in the Assigned Collateral have been taken
(including the filing of UCC-3 financing statements). Remain duly qualified to
do business in each jurisdiction in which the ownership of its properties or the
conduct of its business requires it to be so qualified, except where the failure
to be so qualified does not give rise to a reasonable possibility of a Material
Adverse Effect.
(d) Financial Statement; Accountants' Reports, Other Information. Keep or
cause to be kept in reasonable detail and in accordance with the requirements of
the SEC proper books and records of account of the Borrower's Assets and
business, including, but not limited to, books and records relating to its
purchase of Assets. The Borrower shall furnish to the Agent (with enough
additional copies for the Lender and each Secondary Lender):
(i) as soon as available, and in any event within ninety (90) days after
the end of each fiscal year of the Borrower, a statement of assets and
liabilities of the Borrower as at the end of such fiscal year, and statements of
operations and of changes in net assets of the Borrower for such fiscal year,
and the portfolio of investments as of the end of such fiscal year, with an
audit report thereon issued by PricewaterhouseCoopers LLP or other independent
certified public accountants of nationally recognized standing, together with
the comparable report for the prior fiscal year;
(ii) as soon as available and in any event within seventy-five (75) days
after the end of each first semi-annual fiscal period of the Borrower, a
statement of assets and liabilities of the Borrower as at the end of such
period, a statement of operations and of changes in net assets of the Borrower
for such period, and the portfolio of investments as of the end of such period,
all certified (subject to normal year-end adjustment) as to fairness of
presentation in all material respects by the treasurer, chief financial officer
or controller of the Borrower;
(iii) as soon as possible, and in any event within one (1) Business Day of
the occurrence of any Default or Event of Default, a certificate of a
Responsible Officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect thereto;
(iv) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed;
(v) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and annual and semi-annual reports which the Borrower shall have
filed with the SEC;
(vi) on or before the first Business Day of each week, weekly portfolio
reports and weekly covenant compliance certificates in substantially the form of
Schedule II attached hereto (each a "Weekly Portfolio Report") with respect to
the immediately preceding calendar week, signed by an authorized officer of the
Borrower;
(vii) on or before the tenth (10th) Business Day of each calendar month or
more frequently as the Agent shall request (which may be daily), an Investor
Report substantially in the form of Schedule I hereto, together with a
certificate of a Responsible Officer of the Borrower in substantially the form
of Annex A to the Investor Report;
(viii) promptly upon its receipt, a copy of any notice from the Custodian
of its termination of the Custodial Agreement or Control Agreement; and
(ix) from time to time such additional information regarding the financial
position or business of the Borrower as the Agent may reasonably request;
(e) Audits. Annually (or more frequently as the Agent may require after the
occurrence of and during the continuance of a Default or an Event of Default)
and at the sole cost and expense of the Borrower (i) cause
PricewaterhouseCoopers LLP, or another independent nationally recognized
accounting firm selected by the Borrower and reasonably satisfactory to the
Agent, to enter the premises of the Borrower and any Person to whom the Borrower
delegates all or any portion of its duties under any Program Document
(including, without limitation, the Advisor and the Custodian) and conduct a
commercial finance examination of the books, records and accounts of the
Borrower relating to its business, financial condition, operations and the
Borrower's performance under the Program Documents, (ii) permit such accounting
firm to discuss the Borrower's affairs and finances with the officers, partners,
employees and accountants of any of them, (iii) cause such accounting firm to
provide to the Agent, for itself and as agent for the Secured Parties, with a
certified report in respect of the foregoing, which shall be in form and scope
reasonably satisfactory to the Agent, and (iv) authorize such accounting firm to
discuss such affairs, finances and performance with representatives of the Agent
and its designees; it being understood that such commercial finance examination
and report of such accountants may be coordinated with the Borrower's regular
annual audit by the Borrower's accountants.
(f) Access to Records. Permit the Agent or any Person designated by the
Agent to, upon reasonable advance notice and during normal hours, visit and
inspect at reasonable intervals its books, records and accounts relating to its
business, financial condition, operations, Assets and its performance under the
Program Documents and to discuss the foregoing with the officers, partners,
employees and accountants of the Borrower, all as often as the Agent may
reasonably request.
(g) Maintenance of Insurance. Maintain insurance with financially sound,
responsible and reputable insurance companies or associations in such amounts
and covering such risks as are usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Borrower operates or as may be required by the Investment Company Act and the
rules and regulations thereunder.
(h) Maintenance of Business. Remain at all times a closed-end investment
management company for purposes of the Investment Company Act and continue to
engage in business of the same type as now conducted by it and take all
reasonable action to maintain all rights, privileges, licenses, permits,
charters and franchises necessary in the normal conduct of its business and the
performance of its obligations under the Program Documents to which it is a
party and will at all times remain registered under the Investment Company Act.
(i) Investment Policies and Restrictions; Borrowing Base Test, Etc. At all
times comply with the Borrowing Base Test, the Asset Coverage Test (regardless
of whether dividends or distributions are being made on such date, or whether
Debt is being incurred on such date) and the Investment Policies and
Restrictions in effect on the date hereof. The Borrower shall maintain necessary
liquidity to meet its obligations to fund future advances or other extensions of
credit under the Loan Documents relating to its Loan Assets.
(j) Waiver of Confidentiality. Upon the occurrence and during the
continuance of an Event of Default, with respect to interests in Loan Assets,
the Borrower will use its best efforts to obtain, on behalf of the Secured
Parties, waivers of any confidentiality provisions or agreements contained in
the related Loan Documents or which are otherwise applicable that would prevent
the Borrower from disclosing confidential information with respect to such Loan
Assets to the Secured Parties.
(k) Use of Proceeds. Agrees that the net proceeds of any Advance made
hereunder shall be used solely for the purposes of (i) purchasing Assets which
do not constitute "margin stock" within the meaning of Regulation U, and (ii)
paying principal and Yield in respect of any outstanding Advances and other
Borrower Obligations.
(l) Further Assurances. Promptly, at the Borrower's expense, execute and
deliver such further instruments and take such further action in order to (i)
establish and protect the rights, interests and remedies created, or intended to
be created, in favor of the Secured Parties including, without limitation, all
such actions which are necessary or advisable to maintain and protect the
Secured Parties' first priority perfected security interest in the Assigned
Collateral free and clear of Adverse Claims (including, without limitation, take
or cause to take any actions required under the laws of the jurisdiction in
which any assets are held by a foreign sub-custodian), (ii) enable the Secured
Parties to enforce their rights and remedies under the Program Documents,
including, without limitation, to do all things necessary at the request of the
Agent during the continuance of an Event of Default to have each Loan Asset
which constitutes Assigned Collateral and the related Loan Documents assigned to
the Agent or its designee, and (iii) effectuate the intent and purpose of, and
to carry out the terms of, the Program Documents.
(m) Defense of Secured Party's Interest. Defend each of the Secured
Parties' right and interest in and to the Assigned Collateral against all
Adverse Claims of all Persons whomsoever.
(n) Custody and Control, Etc. At all times, cause the Custodian to have and
maintain in its custody (A) all Loan Documents relating to the Assigned
Collateral, (B) all of its Borrowing Base Eligible Assets in accordance with the
terms of the Custodial Agreement, and (C) all Assigned Collateral in accordance
with the terms of the Custodial Agreement and the Control Agreement. The
Borrower shall, or shall cause the Custodian to, deliver instruments to all
Selling Institutions, Transaction Agents and Obligors related to such Loan
Assets requiring that any instrument evidencing such Loan Asset be delivered to
the Custodian. The Borrower shall maintain the Loan Documents relating to the
Assigned Collateral with the Custodian at 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxxxxx or such other location in the Commonwealth of Massachusetts as the
Borrower shall designate in writing to the Agent. Subject to Section 7.02(a),
cause all Eligible Commercial Paper, Eligible Government Securities and Eligible
Loan Assets, to constitute Assigned Collateral.
(o) Proceeds of Assigned Collateral. After a Default or Event of Default,
cause all Proceeds of the Assigned Collateral to be remitted to the Collateral
Account.
(p) Investment Advisor. Except as consented to by the Agent (which consent
shall not be unreasonably withheld), at all times maintain the Advisor as the
Borrower's investment advisor.
SECTION 5.02. Negative Covenants of the Borrower.
From the date hereof until the Program Termination Date, the Borrower will
not, unless the Agent shall otherwise consent in writing:
(a) Amendments to Organizational Documents. Amend, terminate, supplement or
otherwise modify in any material respect its declaration of trust, by-laws or
other organizational documents if the same could reasonably be expected to give
rise to a material adverse effect.
(b) Creation of Debt. Create, assume or suffer to exist any Debt or any
Guarantee, except for Permitted Debt.
(c) Subsidiaries. Form, or cause to be formed, any subsidiaries.
(d) Liens. Create, incur, assume or suffer to exist, any Adverse Claims, or
any other type of preferential arrangement, upon or with respect to any of its
Assets, whether now owned or hereafter acquired, except (in the case of all
Assets other than the Assigned Collateral) for Permitted Liens.
(e) Mergers; Sales of Assets. Adopt or carry out any plan of liquidation,
partial liquidation or recapitalization, or merge into or consolidate with, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) any of its Assets other than ordinary course sales
of Assets in the conduct of its business as an investment company and in
accordance with the Investment Policies and Restrictions and other than as
contemplated by this Agreement and the Control Agreement, provided, however,
that in the event such ordinary course sale or transfer of Assets would result
in a decrease in the Net Adjusted Borrowing Base Eligible Asset Value (as set
forth in the most recent Investor Report) equal to or greater than 10%, such
sale shall be permitted only if the Borrower delivers to the Agent a certificate
demonstrating compliance with the Borrowing Base Test and the Asset Coverage
Test after giving effect to such sale.
(f) Conversion to Open-End Status; Etc. Convert from a closed-end
investment company to an open-end investment company or purchase any Asset or
engage in any line of business not contemplated by the Prospectus in effect on
the Closing Date.
(g) Management Agreement; Custodial Agreement. Amend, supplement, waive or
otherwise modify or terminate, in either case without the prior written consent
of the Agent (which consent shall not be unreasonably withheld), the Management
Agreement or the Custodial Agreement, except to the extent the same could not
reasonably be expected to give rise to a Material Adverse Effect.
(h) Restricted Payments. Make any Restricted Payments; provided that (i) so
long as a Default or an Event of Default shall not have occurred and be
continuing and would not occur as a result thereof and after giving effect to
such Restricted Payment the Borrower would be in full compliance with the
Borrowing Base Test and the Asset Coverage Test, the Borrower may make
Restricted Payments described in clause (a) of the definition thereof in
accordance with its policy to allocate investment income and capital gains and
permitted withdrawals as set forth in the Prospectus and make distributions to
the extent necessary to retain its qualification as a regulated investment
company under Subchapter M of the Code, and in order to not be subject to the
federal excise tax imposed on certain undistributed income, and (ii) so long as
an Event of Default shall not have occurred and be continuing and would not
occur as a result thereof, and after giving effect to such Restricted Payment
the Borrower would be in compliance with the Borrowing Base Test and the Asset
Coverage Test, the Borrower may make the Restricted Payments described in clause
(b) of the definition thereof. The Borrower will not utilize or dispose of any
Assigned Collateral (including without limitation Cash in the Collateral
Account) for any purpose other than to repay Borrower Obligations if after
giving effect thereto the Borrower would not be in full compliance with the
Borrowing Base Test.
(i) Impairment of Rights. Enter into any agreement containing any provision
which would be violated or breached by the performance of its obligations under
any Program Document to which it is a party or take any action not required by
law, or fail to take any lawful action, if such action or failure to take such
action will result in a Material Adverse Effect.
(j) ERISA. Be a member of an ERISA Group or have any Benefit Arrangement,
Plan or Multiemployer Plan subject to ERISA.
(k) Investment Policies and Restrictions. Permit any change in the
Investment Policies and Restrictions in effect on the Closing Date or the
criteria used to determine any Industry Class set forth on Schedule III hereto,
without, in each case, the prior written consent of the Agent (which consent
shall not be unreasonably withheld).
(l) Senior Securities. Issue any "senior securities", as such term is
defined and used in the Investment Company Act other than Permitted Senior
Securities.
(m) Margin Requirements. Extend credit to others for the purpose of buying
or carrying any "margin stock" in such a manner as to violate Regulation T,
Regulation U or Regulation X. The Borrower shall not use any proceeds of any
Advance to purchase or carry "margin stock" within the meaning of Regulation U
and, without limiting the foregoing, shall not have more than 25% of its total
assets represented by margin stock.
(n) Name Change. Change its name (i) without giving the Agent at least
thirty (30) days' prior written notice, and (ii) unless all actions necessary
and appropriate to protect and perfect the Secured Parties' first priority
perfected security interest in the Assigned Collateral have been taken and
completed.
(o) Notice of Exclusive Control. After the Agent has delivered a Notice of
Exclusive Control, unless such Notice of Exclusive Control is revoked in writing
by the Agent, give any instruction to the Custodian in respect of any Assigned
Collateral or any amounts deposited in or to the credit of the Collateral
Account without the prior written consent of the Agent.
(p) Tender Offers. Repurchase its shares pursuant to any tender offer. For
the avoidance of doubt, the Borrower shall be permitted to repurchase shares
pursuant to a Quarterly Share Repurchase.
(q) Custodian's Overdraft Advances. Permit the Aggregate Custodian's
Advance Amount to at any time exceed fifteen percent (15%) of the net asset
value of the Borrower.
Article VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.
If any of the following events (each an "Event of Default") shall occur:
(a) the Borrower shall fail to make or cause to be made in the manner and
when due any payment or deposit to be made or to be caused to be made by it
under this Agreement or any of the other Program Documents and such failure
shall continue for three (3) Business Days; or
(b) the Borrower shall (i) fail to be in compliance with the Asset Coverage
Test and provided that a Responsible Officer of the Borrower has certified that
the Borrower is taking all steps necessary to cause the Borrower to be in full
compliance with the Asset Coverage Test within five (5) Business Days after the
first date of such noncompliance, such failure shall continue for five (5)
Business Days, or (ii) fail to comply with clauses (h), (m) or (p) of Section
5.01 or clauses (b), (c), (d), (e), (f), (h), or (l) of Section 5.02 or the
Advisor shall fail to comply with clauses (b), (c), (d) or (e) of the Letter
Agreement; or
(c) (i) the Borrower shall fail to perform or observe any other term,
covenant or agreement on its part to be performed or observed under this
Agreement or any other Program Document, or (ii) the Advisor shall fail to
perform any of its obligations under the Letter Agreement, or (iii) the
Custodian shall fail to perform or observe any term, covenant or agreement on
its part to be performed or observed under the Control Agreement, or (iv) the
Custodian shall fail to perform or observe any term, covenant or agreement on
its part to be performed under the Custodial Agreement and such failure gives
rise to a Material Adverse Effect and such failure described in the cases of
clause (i) through (iv) shall continue for thirty (30) days; or
(d) any representation or warranty made or deemed made by the Borrower, the
Advisor or the Custodian under or in connection with this Agreement, the Control
Agreement, the Letter Agreement or any certificate or report delivered by or on
behalf of the Borrower, the Advisor or the Custodian in connection therewith
shall be false or incorrect in any material respect when made or deemed made or
delivered or any material representation or warranty made or deemed made by the
Borrower, the Advisor or the Custodian in any other Program Document or any
certificate or report delivered by or on behalf of the Borrower, the Advisor or
the Custodian in connection therewith shall be false or incorrect in any
material respect when made or deemed made or delivered; provided, however, that
(A) with respect to any breach of a representation or warranty made by the
Custodian, such breach shall not constitute an Event of Default if (i) such
breach could not result in a Material Adverse Effect, and (ii) the event giving
rise to such breach are cured within fifteen (15) days after its occurrence, and
(B) with respect to any certificate or report provided by the Custodian which is
false or incorrect in any material respect, such event shall not constitute an
Event of Default under this clause (d) if (i) such event could not result in a
Material Adverse Effect, (ii) the incorrect or incomplete certificate or report
giving rise to such event was promptly corrected, (iii) the Advisor shall have
certified that all actions reasonably expected to be necessary to prevent future
reoccurrences of such events or reports of the same general nature as the
failure giving rise to such breach (the "Specified Reporting Breach") have been
taken, and (iv) no breach of the same general type as such Specified Reporting
Breach shall have previously occurred; or
(e) the Agent shall for any reason cease to have a valid and perfected
first priority security interest in the Assigned Collateral free and clear of
all Adverse Claims or the Custodian, as Collateral Agent under the Control
Agreement, shall not have custody and control of the Assigned Collateral, as
contemplated by the Control Agreement; or
(f) the Borrower or the Custodian shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower or the Custodian
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of sixty (60)
days, or any of the actions sought in such proceeding (including an order for
relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property) shall
occur; or the Borrower or the Custodian shall take any corporate action to
authorize any of the actions set forth above in this subsection; or
(g) any material provision of any Program Document shall cease to be a
legal, valid and binding obligation of any of the parties purported to be bound
thereby, enforceable in accordance with its respective terms or the Borrower,
the Advisor or the Custodian shall so assert in writing; or
(h) any judgment or order, or any series of judgments or orders, shall have
been entered against the Borrower, provided that (i) such judgments or orders
shall aggregate to $3,000,000 or more, and (ii) enforcement actions have been
commenced with respect thereto and have not been dismissed or stayed pending
appeal within thirty (30) days of such entry; or
(i) either (1) State Street Bank and Trust Company shall at any time cease
to serve as Custodian under the Custodial Agreement or the Control Agreement,
unless a successor thereto reasonably satisfactory to the Agent shall have
assumed the duties of Custodian thereunder and in accordance with the terms of
the Program Documents, or (2) the Custodian or the Borrower shall have given
notice of the termination of the Custodial Agreement or the Control Agreement;
provided, however, that events specified in clause (2) above shall not
constitute an Event of Default if prior to the fifth (5th) Business Day
immediately preceding the effective date of such termination a successor
custodian reasonably satisfactory to the Agent shall have been appointed as
custodian under the Custodial Agreement and shall have assumed the obligations
of the Custodian under the Custodial Agreement and the Control Agreement and the
Agent shall have received such certificates and opinions as it shall have
reasonably requested; or
(j) any event or condition shall occur which results in the acceleration of
the maturity of any Debt of the Borrower which Debt in the aggregate is at least
$3,000,000 or enables (or, with the giving of notice or lapse of time or both
would enable) the holder of such Debt or any Person acting on such holder's
behalf to accelerate the maturity thereof; or
(k) any change in Law shall be enacted, promulgated or proposed which would
limit the ability of the Agent, or any Secured Party to foreclose upon its
interest in, or in the event of such foreclosure to dispose of, the Assigned
Collateral or to be granted the security interest in Assigned Collateral as
contemplated by the Program Documents; or
(l) except in connection with a Permitted Change, the Advisor shall (i)
sell or otherwise dispose of all or substantially all of its assets, or (ii)
consolidate with or merge into any other Person or acquire all or substantially
all of the assets of another Person, unless in each case it is the survivor or
the Agent has consented to the same in writing and such action does not give
rise to a reasonable possibility of a Material Adverse Effect; or
(m) the Management Agreement in effect on the Closing Date or any
replacement investment management agreement approved of in writing by the Agent
or entered into in connection with a Permitted Change shall be (i) amended,
waived or otherwise modified in any material respect, or (ii) shall be
terminated in either case without the prior written consent of the Agent (which
consent shall not be unreasonably withheld); or
(n) the Borrower shall fail to comply with Section 2.05(b); or
(o) there shall not be in full force and effect a letter agreement
substantially identical to the Letter Agreement between the Agent and the
Advisor or the Advisor shall not be the Investment Advisor for the Borrower; or
(p) the Advisor shall not be a direct or indirect wholly-owned subsidiary
of the Parent or the Parent shall not have the Required Ratings;
then, and in any such event, in addition to all rights and remedies specified in
this Agreement, including without limitation, Article VII, and the rights and
remedies of a secured party under Applicable Law including, without limitation
the UCC, the Agent may, by notice to the Borrower, declare the Lender
Termination Date and the Secondary Lender Termination Date to have occurred and
declare the outstanding Advances to be due and payable (in which case the Lender
Termination Date, the Secondary Lender Termination Date and the Maturity Date
shall be deemed to have occurred); provided, that, upon the occurrence of any
event (without any requirement for the passage of time or the giving of notice,
or both) described in subsection (f) of this Section 6.01, the Lender
Termination Date, the Secondary Lender Termination Date and the Maturity Date
shall be deemed to have automatically occurred.
Article VII
PLEDGE OF ASSIGNED COLLATERAL; RIGHTS OF THE AGENT
SECTION 7.01. Security Interests.
In consideration of the Lender and the Secondary Lenders making and
maintaining the Advances, and as collateral security for the prompt, complete
and unconditional payment and performance of all of the Borrower Obligations,
the Borrower hereby pledges (and in the case of all Assigned Collateral other
than the Loan Assets), hypothecates, assigns, transfers, sets over and delivers
to the Agent for the benefit of the Secured Parties and grants to the Agent for
the benefit of the Secured Parties a continuing Lien upon and security interest
in, all of the Borrower's right, title and interest in, to and under the
following assets and properties whether now owned or existing or hereafter
arising or acquired and wheresoever located (collectively, the "Assigned
Collateral"):
(i) all of the assets, investments and property from time to time credited
to the Collateral Account and all security entitlements with respect to the
Collateral Account and all Loan Assets held by the Custodian for the benefit of
the Agent pursuant to the Control Agreement;
(ii) all interest, dividends, stock dividends, stock splits, distributions
and other money or property of any kind distributed in respect of the assets,
investments, Loan Assets, property and security entitlements described in clause
(i) above;
(iii) the Collateral Account, together with all other accounts in which the
distributions referred to in clause (ii) above are remitted;
(iv) all rights and remedies of the Borrower under the Loan Documents and
the Custodial Agreement in respect of the assets, investments, Loan Assets,
property and security entitlements described in clause (i) above;
(v) all security interests, collateral, liens, property, guaranties,
insurance and agreements or arrangements of whatever character from time to time
supporting or securing payment of the assets, investments, Loan Assets, property
and security entitlements described in clause (i) above;
(vi) all accounts, contract rights, documents, instruments, securities,
investment property, chattel paper, general intangibles (including payment
intangibles), inventory, goods, equipment and all other property of every kind
and nature, now owned or hereafter acquired in respect of the assets,
investments, Loan Assets, property and security entitlements described above;
(vii) all books, records and other information (including, without
limitation, computer programs, tapes, discs, punch cards, data processing
software and related property and rights) relating to the Assets, investments,
Loan Assets, property and security entitlements described in clause (i) above;
and
(viii) all Proceeds of any and all of the foregoing.
Notwithstanding the foregoing provisions of this Section 7.01, the Assigned
Collateral shall not include any "margin" stock within the meaning of Regulation
U. The Agent and the Secured Parties are hereby authorized to file financing
statements describing the Assigned Collateral as "all Assets" or using similar
all-inclusive language.
SECTION 7.02. Substitution of Collateral and Release of Security Interest.
(a) So long as no Event of Default shall have occurred and be continuing
and no Default or Event of Default would occur as a consequence of such sale or
disposition, the Borrower may sell or dispose of or substitute Assigned
Collateral in accordance with the terms of this Agreement and the Control
Agreement.
(b) After the Program Termination Date the Agent at the request of the
Borrower shall execute, deliver and file such instruments as the Borrower shall
reasonably request in order to reassign, release or terminate its security
interest in the Assigned Collateral. Any and all actions under this Section 7.02
shall be without any recourse to, or representation or warranty by, the Agent or
any Secured Party and shall be at the sole cost and expense of the Borrower.
SECTION 7.03. Application of Proceeds.
(a) After the occurrence of an Event of Default, all amounts received in
respect of the Borrower Obligations, including without limitation all Proceeds
resulting from the sale or other disposition of the Assigned Collateral shall be
applied by the Agent in the following order and priority:
First, to the payment of all amounts advanced or expended by the Agent and
all costs and expenses incurred by the Agent in connection with the enforcement
of the Secured Parties' rights and remedies under the Program Documents;
Second, to the extent funds are remaining after the above application, to
the Lender and the Secondary Lenders to the payment of all accrued and unpaid
Yield on all outstanding Advances on a pro-rata basis according to the amount of
accrued Yield owing to the Lender and Secondary Lender;
Third, to the extent funds are remaining after the above applications, to
the Secured Parties to the payment of all fees payable under the Fee Letter on a
pro rata basis according to the amount of such fees owing to each such Secured
Party;
Fourth, to the extent funds are remaining after the above applications, to
the Lender and the Secondary Lenders to the payment of the principal amount of
each outstanding Advance on a pro-rata basis according to the amount of
principal owing to the Lender and each Secondary Lender; and
Fifth, to the extent funds are remaining after the above applications, to
the Secured Parties to the payment of all other amounts payable to the Secured
Parties pursuant to this Agreement and the other Program Documents on a pro rata
basis according to the amounts owed to each such Secured Party.
The Agent shall, after the Program Termination Date, remit the remaining
excess Proceeds which it had received from the sale or disposition of the
Assigned Collateral to the Borrower's Account.
(b) For purposes of determining the application to be made of such monies
and other cash proceeds by the Agent to the Lender and the Secondary Lenders
pursuant to this Section 7.03, the Agent may rely exclusively upon a certificate
or other statement of the Lender or such Secondary Lender, as the case may be,
setting forth in reasonable detail the amount then owing to the Lender or such
Secondary Lender, as the case may be. The Agent shall not be liable for any
application of funds in accordance with any certificate or direction delivered
pursuant to this Section 7.03; provided, however, that no application of funds
in accordance with any certificate delivered pursuant to this Section 7.03 shall
be deemed to restrict or limit the right of any party to contest with the
purported obligee its respective liability in respect of the amount set forth in
such certificate.
SECTION 7.04. Rights and Remedies upon Event of Default.
(a) The Agent (for itself and on behalf of the other Secured Parties) shall
have all of the rights and remedies of a secured party under the UCC and other
Applicable Law. Upon the occurrence and during the continuance of an Event of
Default, the Agent or its designees may (i) deliver a Notice of Exclusive
Control to the Custodian; (ii) instruct the Custodian to deliver any or all of
the Assigned Collateral and any Loan Documents relating to the Assigned
Collateral to the Agent or its designees and otherwise give all instructions to
the Custodian regarding the Assigned Collateral; (iii) sell or otherwise dispose
of the Assigned Collateral, all without judicial process or proceedings; (iv)
take control of the Proceeds of any such Assigned Collateral; (v) exercise any
consensual or voting rights in respect of the Assigned Collateral, including
without limitation the voting and consent rights under the Loan Documents
relating to any Assigned Collateral; (vi) release, make extensions, discharges,
exchanges or substitutions for, or surrender all or any part of the Assigned
Collateral; (vii) to the extent not enforced by the Borrower under Section 7.06,
enforce the Borrower's rights and remedies under the Custodial Agreement with
respect to the Assigned Collateral; (viii) institute and prosecute legal and
equitable proceedings to enforce collection of, or realize upon, any of the
Assigned Collateral; (ix) notify all Selling Institutions, Transaction Agents
and Obligors related to the Loan Assets which constitute Assigned Collateral to
make payment in respect thereof directly to the Agent; (x) at the request of the
Agent execute all documents and agreements which are necessary or appropriate to
have the Assigned Collateral which constitutes Loan Assets to be assigned to the
Agent or its designee; and (xi) endorse the name of the Borrower upon any items
of payment relating to the Assigned Collateral or upon any proof of claim in
bankruptcy against an account debtor. For purposes of taking the actions
described in Subsections (i) through (xi) of this Section 7.04(a), the Borrower
hereby irrevocably appoints the Agent as its attorney-in-fact (which appointment
being coupled with an interest is irrevocable while any of the Borrower
Obligations remain unpaid), with power of substitution, in the name of the Agent
or in the name of the Borrower or otherwise, for the use and benefit of the
Agent, but at the cost and expense of the Borrower and without notice to the
Borrower.
(b) All sums paid or advanced by the Agent in connection with the foregoing
and all costs and expenses (including, without limitation, reasonable attorneys'
fees and expenses) incurred in connection therewith, together with interest
thereon at the Post-Default Rate from the date of payment until repaid in full,
shall be paid by the Borrower to the Agent on demand and shall constitute and
become a part of the Borrower Obligations secured hereby.
SECTION 7.05. Remedies Cumulative.
Each right, power, and remedy of the Agent and the other Secured Parties,
or any of them, as provided for in this Agreement or in the other Program
Documents or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every
other right, power, or remedy provided for in this Agreement or in the other
Program Documents or now or hereafter existing at law or in equity or by statute
or otherwise, and the exercise or beginning of the exercise by the Agent or any
other Secured Party of any one or more of such rights, powers, or remedies shall
not preclude the simultaneous or later exercise by such Persons of any or all
such other rights, powers, or remedies.
SECTION 7.06. Enforcement of Rights and Remedies by the Borrower.
The Borrower agrees that it shall (i) upon the request of the Agent (and at
the Borrower's own expense) diligently enforce the rights and remedies under the
Custodial Agreement and at law or equity against the Custodian for the breach by
the Custodian of any term, covenant or agreement thereunder relating to or
affecting any Assigned Collateral, and (ii) diligently enforce its rights and
remedies under the Loan Documents relating to each Loan Asset and at law or
equity. In enforcing such rights and remedies the Borrower shall exercise the
same degree of care that it would exercise if this Agreement had not been
entered into; provided, that the Borrower shall not, in enforcing such rights
and remedies, settle any claim without the prior written consent of the Agent
(which consent shall not be unreasonably withheld).
Article VIII
THE AGENT
SECTION 8.01. Authorization and Action.
The Lender and the Secondary Lenders hereby irrevocably appoint and
authorize the Agent to take such action as agent on their behalf and to exercise
such powers under this Agreement and the other Program Documents as are
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. As to any matters not expressly
provided for by this Agreement or the other Program Documents, the Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Lender or the
Secondary Lenders; provided, however, that the Agent shall not be required to
take any action which exposes the Agent to personal liability or which is
contrary to this Agreement, the other Program Documents or Applicable Law.
SECTION 8.02. Agent's Reliance, Etc.
Neither the Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or any of the other Program Documents,
except for its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, the Agent: (i) may consult with legal
counsel (including counsel for the Borrower or the Advisor) and independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to the Lender, any Secondary Lender, or any Person and shall not
be responsible to the Lender, any Secondary Lender or any Person for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement or the other Program Documents; (iii) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement, the other
Program Documents or any Loan Documents on the part of the Borrower, the
Advisor, the Custodian or any other Person or to inspect the property (including
the books and records) of the Borrower or the Advisor; (iv) shall not be
responsible to the Lender, any Secondary Lender or any Person for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement, the other Program Documents, any Loan Document or any other
instrument or document furnished pursuant hereto or thereto; and (v) shall incur
no liability under or in respect of this Agreement or any other Program Document
by acting upon any notice, consent, certificate or other instrument or writing
(which may be delivered by telecopier, telegram, cable or telex) believed by it
to be genuine and signed or sent by the proper party or parties.
Article IX
MISCELLANEOUS
SECTION 9.01. No Waiver; Modifications in Writing.
No failure or delay on the part of any Secured Party exercising any right,
power or remedy hereunder or with respect to the Advances shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to any
Secured Party, at law or in equity. No amendment, modification, supplement,
termination or waiver of this Agreement shall be effective unless the same shall
be in writing and signed by each of the Agent and the Borrower. Any waiver of
any provision of this Agreement, and any consent to any departure by the
Borrower from the terms of any provision of this Agreement, shall be effective
only in the specific instance and for the specific purpose for which given. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.
SECTION 9.02. Notices, Etc.
Except where telephonic instructions are authorized herein to be given, all
notices, demands, instructions and other communications required or permitted to
be given to or made upon any party hereto shall be in writing and shall be
personally delivered or sent by registered, certified or express mail, postage
prepaid, or by prepaid telegram (with messenger delivery specified in the case
of a telegram), or by facsimile transmission, or by prepaid courier service, and
shall be deemed to be given for purposes of this Agreement on the day that such
writing is received by the intended recipient thereof in accordance with the
provisions of this Section 9.02. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 9.02,
notices, demands, instructions and other communications in writing shall be
given to or made upon the respective parties hereto at their respective
addresses (or to their respective facsimile numbers) indicated below, and, in
the case of telephonic instructions or notices, by calling the telephone number
or numbers indicated for such party below:
If to CRC: Corporate Receivables Corporation
x/x Xxxxxxxx Xxxxx Xxxxxxx, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: U.S. Securitization
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
If to the Agent: Citicorp North America, Inc.
U.S. Securitization
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: U.S. Securitization
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
If to Citibank: Citibank, N.A.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Portfolio Management Unit
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Borrower: Liberty Floating Rate Advantage Fund
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Liberty Floating Rate Advantage Fund
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Secretary
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
SECTION 9.03. Taxes.
(a) Any and all payments by the Borrower under this Agreement, the Advance
Notes or any other Program Document shall be made, in accordance with this
Agreement, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of the Secured Parties,
(i) United States federal withholding taxes and (ii) income and franchise taxes
imposed on it by any taxing Authority in any jurisdiction which asserts
jurisdiction to impose such taxes on the basis of contacts which the Secured
Party in question maintains with such jurisdiction other than contacts arising
out of the execution, delivery or performance of the Program Documents or the
transactions contemplated thereby (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder, under any Advance Note or under any
other Program Document to any Secured Party, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
9.03) such Secured Party receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with Applicable
Law.
(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made by the Borrower hereunder, under the
Advance Notes or under any other Program Document or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Advance Note or under any other Program Document (hereinafter referred to as
"Other Taxes").
(c) The Borrower will indemnify the Secured Party for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 9.03) paid by
any Secured Party in respect of the Borrower and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within thirty (30) days from the date the
Secured Party makes written demand therefor to the Borrower.
(d) Within thirty (30) days after the date of any payment of Taxes or Other
Taxes, the Borrower will furnish to the Agent the original or a certified copy
of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreement and obligations of the Borrower contained in
this Section 9.03 shall survive the termination of this Agreement and the
payment in full of principal and Yield on the Advance Notes.
SECTION 9.04. Costs and Expenses; Indemnification.
(a) The Borrower agrees to promptly pay on demand all reasonable costs and
expenses of each the Agent, CRC and Citibank in connection with the preparation,
review, negotiation, reproduction, execution and delivery of this Agreement, the
Advance Notes and the other Program Documents, including without limitation, the
reasonable fees and disbursements of counsel to the Agent, CRC and Citibank. The
Borrower also agrees to promptly pay on demand all reasonable costs and expenses
of each Secured Party in connection with the administration, modification and
amendment of this Agreement, the Advance Notes and the other Program Documents
including, without limitation, the reasonable fees and disbursements of counsel
for each Secured Party with respect thereto and with respect to advising each
Secured Party as to their respective rights, remedies and responsibilities under
this Agreement and the other Program Documents, all actuarial fees, UCC filing
fees and periodic auditing expenses. The Borrower further agrees to pay on
demand all reasonable costs and expenses of the Secured Parties (including,
without limitation, the reasonable fees and disbursements of counsel), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, the Advance Notes, the Loan Documents and the
other Program Documents.
(b) In addition, the Borrower shall pay on demand (i) any and all
commissions of placement agents and commercial paper dealers in respect of
commercial paper notes issued to fund the Advances, (ii) any and all costs and
expenses of any issuing and paying agent or other Person responsible for the
administration of the Lender's commercial paper program in connection with the
preparation, completion, issuance, delivery or payment of commercial paper notes
issued to fund the Advances, and (iii) in connection with the transaction
contemplated by the Program Documents, the applicable pro-rata costs and
expenses of the rating agencies' rating the Lender's commercial paper notes.
(c) The Borrower agrees to indemnify and hold harmless each Secured Party
and each of their Affiliates and the respective officers, directors, employees,
agents, managers of, and any Person controlling any of, the foregoing (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities, obligations, expenses, penalties, actions, suits, judgments and
disbursements of any kind or nature whatsoever, (including, without limitation,
the reasonable fees and disbursements of counsel) (collectively the
"Liabilities") that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of the execution, delivery, enforcement, performance, administration of
or otherwise arising out of or incurred in connection with this Agreement, any
Loan Document or any other Program Document to which the Borrower is a party or
any transaction contemplated hereby or thereby (and regardless of whether or not
any such transactions are consummated), including, without limitation any such
Liability that is incurred or arises out of or in connection with, or by reason
of any one or more of the following: (i) preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with this Agreement or any other Program Document or any of the
transactions contemplated hereby or thereby; (ii) any breach or alleged breach
of any covenant by the Borrower or the Custodian contained in any Program
Document; (iii) any representation or warranty made by the Borrower or the
Custodian, contained in any Program Document or in any certificate, statement or
report delivered in connection therewith is, or is alleged to be, false or
misleading; (iv) any failure by the Borrower or the Custodian to comply with any
Applicable Law or contractual obligation binding upon it; (v) any failure to
vest, or delay in vesting, in the Secured Parties a first priority perfected
security interest in all of the Assigned Collateral; (vi) any action or
omission, not expressly authorized by the Program Documents, by the Borrower or
the Custodian, which has the effect of reducing or impairing the Assigned
Collateral or the rights of the Agent or the Secured Parties with respect
thereto; (vii) any Default or Event of Default; and (viii) any transactions
related to the funding, carrying or repayment of the outstanding principal
amount of the Advances in connection with the Program Documents; except to the
extent any such Liability payable to an Indemnified Party is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 9.04 shall survive the termination of this Agreement and the
payment in full of principal and Yield on the Advances.
SECTION 9.05. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
Agreement.
SECTION 9.06. Assignability.
(a) This Agreement and the Lender's rights and obligations herein
(including the outstanding Advances) shall be assignable by the Lender and its
successors and assigns; provided, that without the prior written consent of the
Borrower (which consent shall not be unreasonably withheld), the Lender shall
not assign its rights and obligations to any Person other than to a United
States Affiliate of the Agent or to a Secondary Lender. Each such assignor shall
notify the Agent and the Borrower of any such assignment. Each such assignor
may, in connection with the assignment or participation, disclose to the
assignee or participant any information relating to the Borrower, including the
Assigned Collateral, furnished to such assignor by or on behalf of the Borrower
or by the Agent; provided, further, that, prior to any such disclosure, the
assignee or participant agrees to preserve the confidentiality of any
confidential information relating to the Borrower received by it from any of the
foregoing entities.
(b) Each Secondary Lender may, with the consent of the Borrower (which
shall not be unreasonably withheld or delayed), assign to any Eligible Assignee
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Secondary Lender Commitment and the
outstanding Advances or interests therein owned by it); provided, that, the
Borrower's consent to any such assignment shall not be required if the assignee
is an existing Secondary Lender or an Affiliate of Citibank or Citicorp North
America, Inc. The parties to each such assignment shall execute and deliver to
the Agent an Assignment and Acceptance. Notwithstanding the foregoing, Citibank
or any of its Affiliates may assign any of its rights (including, without
limitation, rights to payment of principal and Yield on the Advances) under this
Agreement to any Federal Reserve Bank without notice to or consent of the
Borrower or the Agent.
(c) This Agreement and the rights and obligations of the Agent herein shall
be assignable by the Agent and its successors and assigns; provided, that
without the prior written consent of the Borrower (which consent shall not be
unreasonably withheld or delayed), the Agent shall not assign its obligations to
any Person other than a U.S. Affiliate of the Agent.
(d) The Borrower may not assign its rights or obligations hereunder or any
interest herein without the prior written consent of the Agent (which consent
shall not be unreasonably withheld or delayed).
(e) The Secondary Lenders may, without the consent of the Borrower, sell
participation interests in their respective Secondary Lender Commitments. The
Borrower agrees that references in Sections 2.06, 2.07, 2.08, 9.03 and 9.04 and
the other terms and provisions of this Agreement and the other Program Documents
to rates, determinations, reserve and capital adequacy requirements, expenses,
increased costs, reduced receipts and the like as they pertain to the Secondary
Lenders shall be deemed also to include those of each of its participants;
provided, that, the Borrower shall not be required to reimburse a participant of
a Secondary Lender pursuant to Sections 2.06, 2.07, 2.08, 9.03 or 9.04 in an
amount in excess of the amount that would have been payable to such Secondary
Lender had such participation not been made.
SECTION 9.07. Governing Law.
THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SAID STATE.
SECTION 9.08. Severability of Provisions.
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 9.09. Confidentiality.
(a) The Borrower agrees that it shall and shall cause each of its
Affiliates (i) to keep this Agreement, the Control Agreement, the Letter
Agreement, the proposal relating to the structure of the facility contemplated
by this Agreement (the "Facility"), any analyses, computer models, information
or document prepared by the Agent, Citibank or any of their respective
Affiliates in connection with the Facility, the Agent's or its Affiliate's
written reports to the Borrower, the Advisor or any of their respective
Affiliates and any related written information (collectively, the "Product
Information") confidential and to disclose Product Information only to those of
its officers, employees, agents, accountants, legal counsel and other
representatives (collectively, the "Borrower Representatives") who have a need
to know such Product Information for the purpose of assisting in the
negotiation, completion and administration of the Facility; (ii) to use the
Product Information only in connection with the Facility and not for any other
purpose; and (iii) to cause the Borrower Representatives to comply with the
provisions of this Section 9.09 and to be responsible for any failure of any
Borrower Representative to so comply.
The provisions of this Section 9.09(a) shall not apply to any Product
Information that is a matter of general public knowledge or that has heretofore
been made available to the public by any Person other than the Borrower, the
Advisor, any of their respective Affiliates or any Borrower Representative or
that is required to be disclosed by applicable law or is requested by any
Authority with jurisdiction over the Borrower, the Advisor or any of their
respective Affiliates.
(b) Each of the Secured Parties agrees (i) to keep all non-public
information with respect to the Borrower and the Advisor and their respective
Affiliates which such Secured Party receives pursuant to the Program Documents
(collectively, the "Borrower Information") confidential and to disclose Borrower
Information only to those of its officers, employees, agents, accountants, legal
counsel and other representatives of the Secured Parties (collectively, the
"Secured Party Representatives") and to S&P and Xxxxx'x which, in each case, may
have a need to know or review such Borrower Information for the purpose of
assisting in the negotiation, completion, administration and evaluation of the
Facility; (ii) to use the Borrower Information only in connection with the
Facility and not for any other purpose; and (iii) to cause its related Secured
Party Representatives to comply with the provisions of this Section 9.09(b).
The provisions of this Section 9.09(b) shall not apply to any Borrower
Information that is a matter of general public knowledge or that has heretofore
been made available to the public by any Person other than such Secured Party
Representative or that is required to be disclosed by Applicable Law or is
requested by any Authority with jurisdiction over any Secured Party or Secured
Party Representative or any of their respective Affiliates or as may be
necessary to enforce the Program Documents.
Notwithstanding the foregoing, the Borrower Information may be disclosed by
any Secured Party Entity to permitted assignees and participants and potential
assignees and participants in the Facility to the extent such disclosure is made
pursuant to a written agreement of confidentiality substantially similar to this
Section 9.09(b).
SECTION 9.10. Merger.
The Program Documents taken as a whole incorporate the entire agreement
between the parties thereto concerning the subject matter thereof. The Program
Documents supersede any prior agreements among the parties relating to the
subject matter thereof.
SECTION 9.11. No Proceedings.
Each of the Borrower, the Agent, each Secondary Lender, each assignee of an
Advance or any interest therein and each entity which enters into a commitment
to make Advances to the Borrower hereunder hereby agrees that it will not
institute against CRC any proceeding of the type referred to in Section 6.01(f)
so long as any commercial paper or other senior indebtedness issued by CRC shall
be outstanding or there shall not have elapsed one year plus one day since the
last day on which any such commercial paper or other senior indebtedness shall
have been outstanding.
SECTION 9.12. Loan Documents.
No obligation or liability is intended to be assumed by the Agent or any
other Secured Party under or as a result of this Agreement or the other Program
Documents and the transactions contemplated hereby and thereby and, to the
maximum extent permitted under provisions of Law, the Agent and the other
Secured Parties expressly disclaim any such assumption. The Borrower shall
indemnify, defend and hold harmless the Agent and the other Secured Parties from
any loss, liability or expense incurred as a result of any claim that any such
obligation or liability has been so assumed.
If an Event of Default under Section 6.01(f) in respect of the Borrower
shall have occurred and is continuing or the Agent shall have delivered a Notice
of Exclusive Control to the Custodian, and such notice has not been revoked by
the Agent, the Borrower will use its best efforts to obtain and give all
necessary consents under all Loan Documents relating to any Assigned Collateral
and execute and deliver all agreements and documents which are necessary or
appropriate in order to enable the Secured Parties to enforce their rights and
remedies hereunder and under the other Program Documents, including without
limitation, to permit the Assigned Collateral which constitutes Loan Assets to
be assigned to the Agent or its designees. In addition, the Borrower shall pay
all assignment fees which are required to be paid pursuant to the Loan Documents
relating to the Assigned Collateral in connection with the foregoing. The Agent
and the Secured Parties acknowledge that in order to enforce certain of their
remedies in respect of the Assigned Collateral which constitutes Loan Assets
after the occurrence of an Event of Default, certain provisions of the related
Loan Documents may need to be complied with, including provisions requiring the
consent of the related Transaction Agent and/or Obligor.
SECTION 9.13. Submission to Jurisdiction; Waivers.
The Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement or the other Program Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New
York, and the appellate courts of any of them;
(b) consents that any such action or proceeding may be brought in any of
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 9.02 or at such other address as may be permitted
thereunder;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction or court; and
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
SECTION 9.14. E-Mail Reports.
Subject to the following terms and conditions the Borrower may, unless
otherwise notified to the contrary by the Agent, transmit Investor Reports and
Weekly Portfolio Reports to the Agent by electronic mail (each an "E-Mail
Report"):
(i) The Borrower shall make arrangements with VeriSign, Inc. (or another
authenticating organization acceptable to the Agent) to enable the
Borrower to generate digital signatures. The Borrower shall safeguard
the keys, access codes or other means of generating its digital
signature.
(ii) Each E-Mail Report shall be formatted as the Agent may designate from
time to time and shall be digitally signed. Each E-Mail Report shall
be sent to the Agent at an electronic mail address designated by the
Agent.
(iii)Each E-Mail Report shall be deemed given when receipt of such
transmission thereof is acknowledged by the Agent.
SECTION 9.15. Waiver Of Jury Trial.
To the extent permitted by law, each of the Parties hereto hereby
irrevocably and unconditionally waives trial by jury in any legal action or
proceeding relating to this Agreement or any other program document or for any
counterclaim therein or relating thereto.
SECTION 9.16. Business Trust Notice.
A copy of the Borrower's Agreement and Declaration of Trust has been filed
with the Secretary of The Commonwealth of Massachusetts. This Agreement is
executed by officers of the Borrower not as individuals and is not binding upon
any of the trustees, officers or shareholders of the Borrower individually but
only upon the assets of the Borrower.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CORPORATE RECEIVABLES CORPORATION,
as Lender
By: Citicorp North America, Inc.,
its Managing Agent
By:____________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
as Agent
By:____________________________
Name:
Title:
CITIBANK, N.A.,
as Secondary Lender
By:____________________________
Name:
Title:
Percentage: 100%
LIBERTY FLOATING RATE ADVANTAGE
FUND,
as Borrower
By:_____________________________
Name:
Title:
REVOLVING CREDIT AND SECURITY AGREEMENT
among
LIBERTY FLOATING RATE ADVANTAGE FUND,
as Borrower
CORPORATE RECEIVABLES CORPORATION,
as Lender
CITIBANK, N.A.,
as Secondary Lender
and
CITICORP NORTH AMERICA, INC.,
as Agent
Dated as of September 21, 2001
[Type VII-C]
iv
i
TABLE OF CONTENTS
Page
REVOLVING CREDIT AND SECURITY AGREEMENT.....1
Article I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Rules of Construction..........................................21
SECTION 1.03. Computation of Time Periods....................................22
Article II
ADVANCES TO THE BORROWER
SECTION 2.01. Advance Facility...............................................22
SECTION 2.02. Making of Advances.............................................22
SECTION 2.03. Advance Notes..................................................23
SECTION 2.04. Maturity of the Advances.......................................24
SECTION 2.05. Prepayment of the Advances.....................................24
SECTION 2.06. Yield..........................................................25
SECTION 2.07. Increased Costs................................................25
SECTION 2.08. Compensation...................................................26
SECTION 2.09. Additional Yield on Eurodollar Rate Advances...................26
SECTION 2.10. Termination or Reduction of the Total Commitment...............26
SECTION 2.11. Rescission or Return of Payment................................26
SECTION 2.12. Fees Payable by Borrower.......................................27
SECTION 2.13. Post Default Interest..........................................27
SECTION 2.14. Payments.......................................................27
SECTION 2.15. Borrower's Obligations Absolute................................28
Article III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to the Effectiveness of this Agreement....28
SECTION 3.02. Conditions Precedent to All Advances...........................29
Article IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.................30
Article V
COVENANTS
SECTION 5.01. Affirmative Covenants of the Borrower..........................32
SECTION 5.02. Negative Covenants of the Borrower.............................36
Article VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default..............................................38
Article VII
PLEDGE OF ASSIGNED COLLATERAL; RIGHTS OF THE AGENT
SECTION 7.01. Security Interests.............................................41
SECTION 7.02. Substitution of Collateral and Release of Security Interest....42
SECTION 7.03. Application of Proceeds........................................42
SECTION 7.04. Rights and Remedies upon Event of Default......................43
SECTION 7.05. Remedies Cumulative............................................44
SECTION 7.06. Enforcement of Rights and Remedies by the Borrower.............44
Article VIII
THE AGENT
SECTION 8.01. Authorization and Action........................................45
SECTION 8.02. Agent's Reliance, Etc...........................................45
Article IX
MISCELLANEOUS
SECTION 9.01. No Waiver; Modifications in Writing.............................46
SECTION 9.02. Notices, Etc....................................................46
SECTION 9.03. Taxes...........................................................47
SECTION 9.04. Costs and Expenses; Indemnification.............................48
SECTION 9.05. Execution in Counterparts.......................................49
SECTION 9.06. Assignability...................................................50
SECTION 9.07. Governing Law...................................................51
SECTION 9.08. Severability of Provisions......................................51
SECTION 9.09. Confidentiality.................................................51
SECTION 9.10. Merger..........................................................52
SECTION 9.11. No Proceedings..................................................52
SECTION 9.12. Loan Documents..................................................52
SECTION 9.13. Submission to Jurisdiction; Waivers.............................53
SECTION 9.14. E-Mail Reports..................................................51
SECTION 9.15. Waiver Of Jury Trial............................................54
SECTION 9.16. Business Trust Notice...........................................54
SCHEDULES
Schedule I Form of Investor Report
Schedule II Form of Weekly Portfolio Report
Schedule III Industry Classifications
EXHIBITS
EXHIBIT A Form of Advance Note
EXHIBIT B Form of Notice of Borrowing
EXHIBIT C Form of Assignment and Acceptance
SCHEDULE I
FORM OF INVESTOR REPORT
Annex A
to
Schedule I
Investor Report Officer's Certificate
The undersigned, ______________, the [INSERT TITLE OF
RESPONSIBLE OFFICER] of Liberty Floating Rate Advantage Fund (the "Borrower")
pursuant to that certain Revolving Credit and Security Agreement, dated as of
September 21, 2001 (the "Credit Agreement") among the Borrower, Corporate
Receivables Corporation, Citibank, N.A., the other banks and financial
institutions parties thereto and Citicorp North America, Inc., as agent (the
"Agent"), as the same may be amended, modified or supplemented from time to
time, hereby certifies that:
1. Capitalized terms used herein and not otherwise defined shall have the
meaning ascribed to such terms in the Credit Agreement.
2. The Investor Report furnished herewith to the Agent pursuant to
Section 5.01(d) of the Credit Agreement is true, accurate and complete
as of the day hereof.
3. No event has occurred and is continuing which would constitute a
Default or an Event of Default.
4. As of the date hereof, the Borrower is in compliance with the
Borrowing Base Test and the Asset Coverage Test.
IN WITNESS WHEREOF, the undersigned has duly signed on behalf of the
Borrower as of the date set forth below.
DATED: ___________________________
---------------------------
Name:
Title:
13620.160 #242298
SCHEDULE II
[FORM OF WEEKLY PORTFOLIO REPORT]
[FORM TO BE PROVIDED BY BORROWER]1
1 Weekly report produced by Borrower.
Annex A
to
Schedule II
Weekly Portfolio Report and Officer's Certificate
The undersigned, ______________, the [INSERT TITLE OF RESPONSIBLE OFFICER]
of Liberty Floating Rate Advantage Fund (the "Borrower") pursuant to that
certain Revolving Credit and Security Agreement, dated as of September 21, 2001
(the "Credit Agreement") among the Borrower, Corporate Receivables Corporation,
Citibank, N.A., the other banks and financial institutions parties thereto and
Citicorp North America, Inc., as agent (the "Agent"), as the same may be
amended, modified or supplemented from time to time, hereby certifies that:
1. Capitalized terms used herein and not otherwise defined shall have the
meaning ascribed to such terms in the Credit Agreement.
2. The Borrowing Base as of the date hereof is $___________________.
3. The aggregate outstanding principal balance of Advances as of the date
hereof is $____________.
4. No event has occurred and is continuing which would constitute a
Default or an Event of Default.
5. The weekly net asset value report to which this certificate is
attached is true, accurate and complete.
6. As of the date hereof the Borrower is in compliance with the Borrowing
Base Test and the Asset Coverage Test.
IN WITNESS WHEREOF, the undersigned has duly signed on behalf of the
Borrower as of the date set forth below.
DATED: ___________________________
---------------------------
Name:
Title:
13620.160 #242298
SCHEDULE III
[INDUSTRY CLASSIFICATIONS]
EXHIBIT A
[FORM OF ADVANCE NOTE]
$---------- ---------, ----
FOR VALUE RECEIVED, on the Maturity Date (as defined in the Credit
Agreement hereinafter referred to) of each Advance made by the [INSERT NAME OF
LENDER OR SECONDARY LENDER] (together with its successors and assigns the
["Lender"] ["Secondary Lender"]) to the undersigned (the "Borrower") pursuant to
the Credit Agreement (defined below), the Borrower hereby promises to pay to the
order of the ["Lender"] ["Secondary Lender"] the unpaid principal amount of each
such Advance, in immediately available funds and in lawful money of the United
States of America, and to pay Yield on the unpaid principal balance of said
Advance from the Borrowing Date thereof, until the principal amount thereof
shall have been paid in full, in like funds and money as provided in said Credit
Agreement for Advances made by the [Lender] [Secondary Lender] and at the
maturity thereof. Capitalized terms used in this promissory note unless
otherwise defined herein shall have the meaning assigned to such terms in the
Credit Agreement.
This promissory note is an Advance Note referred to in the Revolving Credit
and Security Agreement dated as of September 21, 2001 (as from time to time
amended, the "Credit Agreement") among the Borrower, the [Lender], [Secondary
Lender], the other banks and financial institutions parties thereto and Citicorp
North America, Inc., as agent. The date and principal amount of each Advance
made to the Borrower and of each repayment of principal thereon shall be
recorded by the [Lender] [Secondary Lender] or its designee on Schedule I
attached to this Advance Note, and the aggregate unpaid principal amount shown
on such schedule shall be rebuttable presumptive evidence of the principal
amount owing and unpaid on the Advances made by the [Lender] [Secondary Lender].
The failure to record or any error in recording any such amount on such schedule
shall not, however, limit or otherwise affect the obligations of the Borrower
hereunder or under the Credit Agreement to repay the principal amount of the
Advances together with all Yield accrued thereon.
A copy of the Trust's Agreement and Declaration of Trust has been filed
with the Secretary of The Commonwealth of Massachusetts. This promissory note is
executed by officers of the Trust not as individuals and is not binding upon any
of the Trustees, officers or shareholders of the Trust individually but only
upon the assets of the Trust.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
LIBERTY FLOATING RATE ADVANTAGE FUND
By:_____________________________
Name:
Title:
SCHEDULE I
TO EXHIBIT A
This Advance Note evidences Advances made by [INSERT NAME OF LENDER OR SECONDARY
LENDER], (the ["Lender"] ["Secondary Lender"]) under the Revolving Credit and
Security Agreement dated as of September 21, 2001 among Liberty Floating Rate
Advantage Fund, the [Lender] [Secondary Lender], the other banks and financial
institutions parties thereto and Citicorp North America, Inc., as agent in the
principal amounts and on the dates set forth below, subject to the payments and
prepayments of principal set forth below:
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT AMOUNT PAID BALANCE NOTATION
DATE ADVANCED OR PREPAID OUTSTANDING BY
---- ---------- ----------- ----------- --
EXHIBIT B
LIBERTY FLOATING RATE ADVANTAGE FUND
[Address]
Citicorp North America, Inc.,
as Agent
[ADDRESS]
NOTICE OF BORROWING
This Notice of Borrowing is made pursuant to Section 2.02 of that certain
Revolving Credit and Security Agreement dated as of September 21, 2001, among
CORPORATE RECEIVABLES CORPORATION, as lender (the "Lender"), CITIBANK, N.A. the
other banks parties thereto, CITICORP NORTH AMERICA, INC., as agent and LIBERTY
FLOATING RATE ADVANTAGE FUND, as borrower (the "Borrower") (as the same may from
time to time be amended, supplemented, waived or modified, the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used herein have
the meanings assigned to those terms in the Credit Agreement.
1. The Borrower hereby requests that on ______________, ____ (the
"Borrowing Date") it receive an advance under the Credit Agreement in the
principal amount of _____________ Dollars ($_______).
2. The Borrower hereby gives notice of its request for such Advance to the
Agent pursuant to Section 2.02 of the Credit Agreement and requests the Lender
or the Secondary Lenders to remit, or cause to be remitted, the proceeds thereof
to [the Borrower's Account] [SPECIFY OTHER ACCOUNT, IF APPLICABLE].
3. The Borrower certifies that (i) the representations and warranties of
the Borrower contained or reaffirmed in Section 4.01 of the Credit Agreement are
true and correct in all material respects on and as of the date hereof to the
same extent as though made on and as of the date hereof (except to the extent
such representations and warranties expressly relate to any earlier date); (ii)
no Default or Event of Default has occurred and is continuing under the Credit
Agreement or will result from the proposed borrowing; (iii) the Borrower has
performed in all material respects all agreements and satisfied all conditions
under the Credit Agreement to be performed by it on or before the date hereof,
(iv) the conditions precedent to the making of the proposed Advance set forth in
Article III of the Credit Agreement have been fully satisfied, (v) immediately
after giving effect to such Advance, not more than 25% of its assets is
represented by "margin stock"; and (v) immediately after giving effect to such
advance the Borrowing Base Test and the Total Borrowing Base Eligible Asset Test
will be complied with.
WITNESS my hand on this ____ day of _________, ____.
LIBERTY FLOATING RATE ADVANTAGE FUND
By:_____________________________
Name:
Title:
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Revolving Credit and Security Agreement dated as
of September 21, 2001 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement") among CORPORATE RECEIVABLES CORPORATION
(together with its successors and assigns, the "Lender"), CITIBANK, N.A.
(Citibank, N.A., together with the other banks and financial institutions from
time to time parties to the Credit Agreement, the "Secondary Lenders"), CITICORP
NORTH AMERICA, INC., as agent for the Lender and the Secondary Lenders (in such
capacity, together with its successors and assigns, the "Agent") and LIBERTY
FLOATING RATE ADVANTAGE FUND (together with its permitted successors and
assigns, the "Borrower"). Terms defined in the Credit Agreement are used herein
with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto agree as
follows:
1. As of the Effective Date (as defined below), the Assignor hereby
absolutely and unconditionally sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse to or
representation of any kind (except as set forth below) from Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and under the other Program Documents equal to the percentage interest
specified on Schedule I hereto, including the Assignor's Secondary Lender
Commitment and Percentage and the Assignor's portion of the outstanding
principal amount of the Advances (such rights and obligations assigned hereby
being the "Assigned Interests"). After giving effect to such sale, assignment
and assumption, the Assignee's "Secondary Lender Commitment" and the Assignee's
"Percentage" will be as set forth on Schedule I hereto.
2. The Assignor (i) represents and warrants that immediately prior to the
Effective Date it is the legal and beneficial owner of the Assigned Interest
free and clear of any Adverse Claim created by the Assignor; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Program Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security or ownership interest created or purported to be created under or in
connection with, the Program Documents or any other instrument or document
furnished pursuant thereto or the condition or value of the Assigned Interest,
Assigned Collateral, or any interest therein; and (iii) makes no representation
or warranty and assumes no responsibility with respect to the condition
(financial or otherwise) of any of the Borrower, the Agent, the Custodian, the
Advisor or any other person, or the performance or observance by any Person of
any of its obligations under any Program Document or any instrument or document
furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Program Documents, together with copies of any financial
statements delivered pursuant to Section 5.01 of the Credit Agreement and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (ii)
agrees that it will, independently and without reliance upon the Agent, the
Assignor, the Lender or any other Secondary Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under or in connection with
any of the Program Documents; (iii) confirms that it is an Eligible Assignee;
(iv) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Program Documents as
are delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the obligations that by the terms of the
Program Documents are required to be performed by it as a Secondary Lender; (vi)
confirms that the assignment hereunder complies with any applicable legal
requirements including the Securities Act of 1933, as amended; (vii) confirms
that such Assignee is a United States Person (as defined in Section 7701 (a)(30)
of the Code) or that such Assignee shall have provided the Agent with two
Internal Revenue Service forms 4224 (or a successor form) certifying that the
income from the Assigned Interest is effectively connected with the conduct of
such Person's trade or business in the United States; and (viii) confirms that
such Assignee is not a partnership, grantor trust or S corporation (as such
terms are defined in the Code).
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of acceptance hereof by the Agent, unless a later effective date is specified on
Schedule I hereto.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to and bound by the provisions of the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Secondary Lender thereunder and under any
other Program Document and (ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement and under any other Program Document.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement in
respect of the Assigned Interest to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and the Assigned Interests for periods prior to the Effective Date directly
between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule I to this Assignment and Acceptance by telecopier shall
be effective as a delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.
Schedule I
Percentage interest
transferred by Assignor: ___%
Assignee's "Secondary Lender Commitment": $___
Assignee's "Percentage" ___%
Assignor: [INSERT NAME OF ASSIGNOR],
as Assignor,
By:____________________________
Authorized Signatory,
Assignee: [INSERT NAME OF ASSIGNEE]
as Assignee
By:____________________________
Authorized Signatory
Accepted, Consented to and
Acknowledged this ___ day of
---------------, ----
CITICORP NORTH AMERICA, INC.,
as Agent
By:________________________________
Authorized Signatory
[LIBERTY FLOATING RATE
ADVANTAGE FUND
By:________________________________
Authorized Signatory]*
* If required by Section 9.06.
