Liberty CLO - NOTICE OF REVISED PROPOSED SUPPLEMENTAL INDENTURE

Date15-May-2009

The Bank of New York Mellon Trust Company, National Association

 

LIBERTY CLO, LTD.

LIBERTY CLO, CORP.

 

NOTICE OF REVISED PROPOSED SUPPLEMENTAL INDENTURE

 

NOTE: THIS NOTICE CONTAINS IMPORTANT INFORMATION THAT IS OF INTEREST TO THE REGISTERED AND BENEFICIAL OWNERS OF THE SUBJECT SECURITIES. IF APPLICABLE, ALL DEPOSITORIES, CUSTODIANS, AND OTHER INTERMEDIARIES RECEIVING THIS NOTICE ARE REQUESTED TO EXPEDITE RE-TRANSMITTAL TO BENEFICIAL OWNERS OF THE SECURITIES IN A TIMELY MANNER.

May 15, 2009

 

To: The Holders of the Securities as of May 15, 2009 (the “Record Date”) described as:

Security CUSIP*Rule 144A CUSIP*Reg. S. Common*Codes ISIN*Rule 144A ISIN*Reg. S

Class A-1A Notes 530361AA2 (Certificated) -- -- US530361AA23(Certificated) --

Class A-1B Notes 530361AC8(Certificated) -- -- US530361AC88 (Certificated) --

Class A-1C Notes 530361AE4 G27868AC5 023730383 US530361AE45 USG27868AC51

Class A-2 Notes 530361AG9 G27868AD3 023730448 US530361AG92 USG27868AD35

Class A-3 Notes 530361AJ3 G27868AE1 023730499 US530361AJ32 USG27868AE18

Class A-4 Notes 530361AL8 G27868AF8 023730529 US530361AL87 USG27868AF82

Class B Notes 530361AN4 G27868AG6 023730553 US530361AN44 USG27868AG65

Class C Notes 530361AQ7 G27868AH4 023730618 US530361AQ74 USG27868AH49

Class Q-1 Securities 530360AE6(Certificated) G27867AC7 023730839 US530360AE61 (Certificated) USG27867AC78

Class P-1 Securities 530360AA4 (Certificated) G27867AA1 023730740 US530360AA40 (Certificated) USG27867AA13

Class P-2 Securities 530360AC0 (Certificated) G27867AB9 023730774 US530361AC06 (Certificated) USG27867AB95

 

Security CUSIP*Rule 144A CUSIP*Reg. S. CUSIP*Acc’d Investor Common*Codes ISIN*Rule 144A ISIN*Reg. S ISIN*Acc’d Investor

Class E Certificates 530360205(Certificated) G27867202 530360304 (Certificated) 023730707 US5303602057(Certificated) KYG278672020 US5303603048 (Certificated)

To: Those Additional Parties Listed on Schedule I hereto

Re: Proposed Supplemental Indenture

Reference is made to that certain Indenture dated as of December 8, 2005 (as amended, modified or supplemented, the “Indenture”) among LIBERTY CLO, LTD., as as Issuer (the “Issuer”), LIBERTY CLO, CORP., as Co-issuer (the “Co Issuer,” and together with the Issuer, the “Co-Issuers”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION (as successor to JPMorgan Chase Bank, National Association), as trustee (the “Trustee”). Reference is further made to that certain Notice of Proposed Supplemental Indenture dated as of April 30, 2009 from the Trustee where you were notified of a proposed Supplemental Indenture (the “Supplemental Indenture”) under Sections 8.1(a)(22) and 8.1(d) of the Indenture among the Co-Issuers and the Trustee, which will supplement the Indenture according to its terms and which will be executed by the Issuer, the Co-Issuer and the Trustee upon satisfaction of all conditions precedent set forth in the Indenture. Capitalized terms used herein without definition shall have the meaning given to such terms in the Indenture.

 

Pursuant to Sections 8.1(c) and 8.1(e) of the Indenture, the Trustee hereby provides notice of revisions to the proposed Supplemental Indenture (the “Revised Supplemental Indenture”). A copy of the proposed Revised Supplemental Indenture, with changes marked against the Supplemental Indenture is attached hereto as Exhibit A.

The Revised Supplemental Indenture shall not become effective until: (i) the Rating Condition with respect to each Rating Agency is satisfied, (ii) the Co-Issuers and the Trustee shall have executed the Revised Supplemental Indenture and (iii) all other conditions precedent set forth in the Indenture are satisfied or waived. Unless notified by a Majority of any Class of the Securities that the Class of Securities would be materially and adversely affected, the Trustee may rely on a certificate of the Portfolio Manager and an Opinion of Counsel as to whether the interests of any Holder of Securities would be materially and adversely affected by the Revised Supplemental Indenture.

The Record Date for determining the Holders entitled to receive this Notice of Revised Proposed Supplemental Indenture shall be May 15, 2009.

Should you have any questions regarding the enclosed, please contact Michael Coburn at (713) 483-6371 or at robert.coburn@bnymellon.com.

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee and Class E Certificates Paying Agent

SCHEDULE I

 

Additional Parties

 

Co-Issuers:

Liberty CLO, Limited

c/o Walkers SPV Limited

P.O. Box 908

Walker House, Mary Street

George Town, Grand Cayman, Cayman Islands

Attn: The Directors

Fax: (345) 945-4757

 

Liberty CLO, Corp.

2711 Centerville Road, Suite 400

Wilmington, Delaware 19808

Attn: Donald Puglisi

 

Portfolio Manager:

Highland Capital Management, L.P.

Two Galleria Tower

13455 Noel Road, Suite 800

Dallas, Texas 75240

Fax: (972) 628-4147

Attn: James Dondero

 

Administrator:

Walkers SPV Limited

P.O. Box 908

Walker House, Mary Street

George Town, Grand Cayman, Cayman Islands

Attn: The Directors

Fax: (345) 945-4757

 

Company Announcements Office

Irish Stock Exchange Limited:

Company Announcements Office, Irish Stock Exchange Limited

28 Anglesea Street

Dublin 2, Ireland

Fax: +353 1 677 6045

Email (MS Word format): announcements@ise.ie

 

Cayman Islands Stock Exchange:

Cayman Islands Stock Exchange

4th Floor, Elizabethan Square

P.O Box 2408 G.T.

Grand Cayman, Cayman Islands

Fax: (345) 945-6061

Email: csx@csx.com.ky

Irish Paying and Listing Agent:

NCB Stockbrokers

3 George’s Dock

Dublin 1, Ireland

 

Rating Agencies:

Moody’s Investors Service

CDO Group

7 World Trade Center at 250 Greenwich Street

New York, New York 10007

Email: cdomonitoring@moodys.com

Fax: (212) 553-4170

Attn: CBO/CLO Monitoring

 

Standard & Poor’s

55 Water Street, 41st Floor

New York, New York 10041-0003

Email: cdo_surveillance@standardandpoors.com

Fax: (212) 438-2664

Attn: Asset Backed-CBO/CLO Surveillance

 

AGFP:

AG Financial Products Inc.

1325 Avenue of the Americas

New York, New York 10019

Attn: Risk Management Department

Re: Liberty CLO, Ltd., Reference Nos. D-2005-100, D-2005-105, D-2005-106, D-2005-107

Fax: (212) 581-3266

Email: RiskManagementDept@assuredguaranty.com

 

With a copy to:

AG Financial Products Inc.

1325 Avenue of the Americas

New York, New York 10019

Attn: General Counsel

 

Placement Agent and Initial Purchaser:

Citigroup Global Markets Inc.

390 Greenwich Street, 4th Floor

New York, New York 10013

Fax: (212) 723-8671

Attn: Managing Director, Global Portfolio Solutions

 

LIBERTY CLO, LTD.

Issuer

LIBERTY CLO, CORP.

Co-Issuer

AND

THE BANK OF NEW YORK MELLON TRUST COMPANY,

NATIONAL ASSOCIATION

Trustee

 

AMENDMENT NO. 1

TO

INDENTURE

 

Dated as of May [____], 2009

 

THIS AMENDMENT NO. 1 TO INDENTURE (this “Amendment”), dated as of May [___], 2009, among LIBERTY CLO, LTD., as issuer (the “Issuer”), LIBERTY CLO, CORP., as co-issuer (the “Co Issuer”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION (successor to JPMorgan Chase Bank, National Association), as trustee (the “Trustee”), hereby amends the Indenture, dated as of December 8, 2005, among the Issuer, the Co-Issuer and the Trustee (as amended, modified or supplemented and in effect, the “Indenture”).

 

W I T N E S S E T H

WHEREAS, the Issuer and the Co-Issuer desire to amend certain provisions contained in the Indenture;

WHEREAS, Highland Capital Management, L.P. acts as portfolio manager (the “Portfolio Manager”) with respect to the Collateral;

WHEREAS, Sections 8.1(a)(22) and 8.1(d) of the Indenture provide that the Indenture may be supplemented by the Issuer, Co-Issuer and the Trustee with the consent of the Portfolio Manager and without the consent of the Holders of any Indenture Securities or the Holders of any Class E Certificates (i) if such supplement is authorized by Board Resolutions, (ii) if such supplement would not materially and adversely affect the rights or interest of the Holders of any Class of Securities, as evidenced by an Opinion of Counsel, and (iii) if each Rating Agency confirms that the Rating Condition will be satisfied with respect to such supplement;

WHEREAS, this Amendment has been authorized by the Board Resolutions attached hereto as Exhibit A;

WHEREAS, an Opinion of Counsel in the form of Exhibit B hereto will be delivered in connection with this Amendment; and

WHEREAS, the Issuer has received confirmation from each Rating Agency that this Amendment satisfies the Rating Condition.

NOW, THEREFORE, the parties hereto agree as follows:

SECTION 1. Defined Terms.

For purposes of this Amendment, all capitalized terms which are used but not otherwise defined herein shall have the respective meanings assigned to such terms in the Indenture.

SECTION 2. Amendments.

(a) Amendment to Section 1.1.

Section 1.1 is hereby amended to add the following new defined term:

“Subsidiary”: The meaning set forth in Section 7.4(c).

(b) Amendment to Section 7.4.

Section 7.4 of the Indenture is hereby amended to add the following new subsections (c), (d), (e), (f), (g) and (h):

(c) Notwithstanding Section 7.4(b)(i), the Issuer may have as a subsidiary, directly or indirectly, in addition to the Co-Issuer, any entity (a "Subsidiary") that (x) meets the then-current criteria of the Rating Agencies for bankruptcy remote entities, (y) is formed for the sole purpose of holding Tax Affected Securities or the stock of one or more other Subsidiaries and (z) is a corporation for United States federal income tax purposes; provided that any Subsidiary (i) will be wholly-owned by the Issuer or another Subsidiary, (ii) will not sell, transfer, exchange or otherwise dispose of, or pledge, mortgage, hypothecate or otherwise encumber (or permit such to occur), any part of its assets, except in compliance with the Issuer’s rights and obligations under this Indenture and with such Subsidiary’s constituent documents, (iii) will not have any subsidiaries other than another Subsidiary, (iv) will not have any employees (other than directors to the extent they are employees) and will not conduct business under any name other than its own, (v) will not incur or guarantee any indebtedness, (vi) will include in its constituent documents a limitation on its business such that it may only engage in the acquisition or ownership of assets permitted under this Indenture (including stock of another Subsidiary) and the disposition of such assets and the distribution of the proceeds thereof to the Issuer or another Subsidiary (and activities ancillary thereto) and (vii) will distribute 100% of the proceeds of the assets acquired by it (net of applicable taxes and expenses payable by such subsidiary) to the Issuer or another Subsidiary. The Issuer shall notify the Rating Agencies of (i) any Subsidiary that it may have pursuant to this subsection 7.4(c) and (ii) any Collateral Obligation that is transferred to a Subsidiary by the Issuer. For the avoidance of doubt, a Subsidiary shall not purchase real property in a manner unrelated to the purposes set forth in this subection 7.4(c). In addition, (i) with respect to a Subsidiary formed under the laws of the State of Delaware, any director of such Subsidiary shall be “independent” as defined by the Delaware law in relation to the Portfolio Manager and (ii) with respect to a Subsidiary formed under the laws of any jurisdiction other than the Cayman Islands, the Rating Condition shall be satisfied prior to the formation of such Subsidiary. Notwithstanding the foregoing, no such Subsidiaries in the aggregate, shall enter into any transactions to hold additional assets once a pre-restructured par amount of $73,037,771, on a lifetime cumulative basis, has been converted into assets held by the Subsidiaries.

(d) The Portfolio Manager (by consenting to Amendment No. 1 to the Indenture) has agreed to cause the Subsidiaries (on behalf of the Issuer) to acquire any Tax Affected Securities in exchange for an interest in such Subsidiary. Such acquisition and exchange may take the form of either (i) a single exchange between the Issuer and a directly-owned Subsidiary acquiring the Tax Affected Securities or (ii) a series of exchanges resulting in the Issuer's indirect ownership of the Subsidiary acquiring Tax Affected Securities through one or more intermediate Subsidiaries. The Portfolio Manager on behalf of the Issuer shall cause each Subsidiary to dispose of all Tax Affected Securities as soon as is commercially reasonable.

Upon receipt by the Trustee of an Issuer Order certifying that the transfer of Tax Affected Security is being made in accordance with this Section 7.4 and that all applicable requirements of this Section 7.4 and Section 12.1 have been or will be satisfied, the Trustee shall release such Tax Affected Security and shall deliver such Tax Affected Security as specified in such Issuer Order.

(e) The Portfolio Manager shall be entitled to be reimbursed from the Issuer for all reasonable expenses that it incurs in connection with any Subsidiary, which shall be payable in accordance with the Priority of Payments as an Administrative Expense pursuant to subsection (v) of the definition of Administrative Expenses.

(f) With respect to any Subsidiary, the parties hereto agree that any reports prepared by the Trustee with respect to the Collateral Obligations shall refer to related Tax Affected Security instead of the stock of such Subsidiary.

(g) The Co-Issuers and the Trustee, each hereby covenant and agree (and the Portfolio Manager by consenting to Amendment No. 1 to the Indenture covenanted and agreed) that it will not at any time institute against any Subsidiary, or voluntarily join in any institution against any Subsidiary of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any Cayman Islands, United States federal or state bankruptcy or similar law of any jurisdiction within or without the United States in connection with any obligations relating to any Subsidiary for a period of one-year and one-day (or, if longer, the applicable preference period then in effect plus one day) following the date upon which the preferred shares issued by any Subsidiary are redeemed.

(h) This Section 7.4 shall be subject to the provisions set forth in Article 8 of the Indenture regarding supplemental indentures, including, without limitation, a requirement, if applicable, that the Rating Condition be satisfied in connection with a supplemental indenture. In addition, so long as this Indenture remains in effect and any Outstanding Notes are rated by a Rating Agency, the Rating Condition shall be satisfied prior to any amendment to the memorandum and articles of association of a Subsidiary.

SECTION 3. Effect of Amendment.

Upon execution of this Amendment, the Indenture shall be, and be deemed to be, modified and amended in accordance herewith and the respective rights, limitations, obligations, duties, liabilities and immunities of the Issuer, Co-Issuer and the Trustee shall hereafter be determined, exercised and enforced subject in all respects to such modifications and amendments, and all the terms and conditions of this Amendment shall be deemed to be part of the terms and conditions of the Indenture for any and all purposes. Except as modified and expressly amended by this Amendment, the Indenture is in all respects ratified and confirmed, and all the terms, provisions and conditions thereof shall be and remain in full force and effect.

SECTION 4. Binding Effect.

The provisions of this Amendment shall be binding upon and inure to the benefit of the Issuer, the Co-Issuer and the Trustee and each of their respective successors and assigns.

SECTION 5. Acceptance by Trustee

The Trustee accepts the amendment to the Indenture as set forth in this Amendment and agrees to perform the duties of the Trustee upon the terms and conditions set forth herein and in the Indenture set forth therein. Without limiting the generality of the foregoing, the Trustee assumes no responsibility for the correctness of the recitals contained herein, which shall be taken as the statements of the Issuers and, except as provided in the Indenture, the Trustee shall not be responsible or accountable in any way whatsoever for or with respect to the validity, execution or sufficiency of this Amendment and makes no representation with respect thereto.

SECTION 6. Execution, Delivery and Validity

The Issuer represents and warrants to the Trustee that this Amendment has been duly and validly executed and delivered by the Issuer and constitutes its legal, valid and binding obligation, enforceable against the Issuer in accordance with its terms.

SECTION 7. GOVERNING LAW.

THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

SECTION 8. Separability.

Except to the extent prohibited by applicable law, in case any provision in this Amendment shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 9. Effect of Headings.

The section headings herein are for convenience only and shall not affect the construction of this Amendment.

SECTION 10. Counterparts.

This Amendment may be executed in any number of copies, and by the different parties on the same or separate counterparts, each of which shall be considered to be an original instrument.

 

[Signature page follow]

IN WITNESS WHEREOF, the Issuer, Co-Issuer and the Trustee have caused their names to be signed to this Amendment by their respective officers thereunto duly authorized, all as of the day and year first above written.

 

LIBERTY CLO, LTD., as Issuer

 

By:

Name:

Title:

 

LIBERTY CLO, CORP., as Co-Issuer

 

By:

Name:

Title:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee

 

By:

Name:

Title:

 

ACKNOWLEDGED AND AGREED:

 

HIGHLAND CAPITAL MANAGEMENT, L.P.,

as Portfolio Manager

By:

Name:

Title:

 

EXHIBIT A

 

BOARD RESOLUTIONS

 

[SEE ATTACHMENT]

 

EXHIBIT B

 

OPINION OF COUNSEL

 

[SEE ATTACHMENT]