LLM Law Outlines > Corporate Bonds and Credit Agreement Outlines
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III. Representations and Warranties, Conditions to Lending
03. Representations and Warranties, Conditions to Lending
• Reps and Warranties
• MACs and Materiality
• Structure of Covenants
• Information Rights and Default Notices
• Merger and Asset Sale Covenant
Representation and warranties: claim of something as it is existing now
- When do reps have to be true as of?
- What is function of reps?-
Conditions to closing the contract: all reps have to be true on the closing date, like a closing checklist
True in future points of time
FMC 4.02 Conditions Precedent to Each Revolving Loan Borrowing, Swing
Loan Borrowing and Letter of Credit Issuance.
o "The obligation of each Lender to make a Loan… on the occasion of each Borrowing (including the initial Borrowing), and the right of the
Borrowers to request a Swing Loan Borrowing or the issuance of a
Letter of Credit, shall be subject to the further conditions precedent that:
o (b)(i) The representations and warranties contained in Article V
(Representations and Warranties) (except the Excluded
Representations) are correct in all material respects on and as of the date of such Borrowing or issuance, before and after giving effect to such Borrowing or issuance and to the application of the proceeds therefrom, as though made on and as of such date, other than any such representations or warranties that, by their terms,
refer to a date other than the date of such Borrowing or issuance,
which are true and correct as of such earlier date"
Borrower can no longer borrow
Material Adverse Change versus Material Adverse Effect
- Definition of "Material Adverse Effect" means an effect that results in or causes, or could reasonably be expected to cause, a Material Adverse
Doesn't have to actually result, only need to be a reasonably expected cause that there would be a change"Material Adverse Change"
1) events that, in the aggregate, have had a Material Adverse Effect
5.04 "Since December 31,2010, there has been no Material
Adverse Change and there have been no events or 1
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