Commitment to Issue Letters of Credit. The Letter of Credit Bank agrees, from the date hereof to and including the Revolving Commitment Termination Date, to issue one or more letters of credit for the account of the Co-Borrowers, on the terms and subject to the conditions set forth below: (a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “Letter of Credit.” No Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance. (b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned. (c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers. (d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 2 contracts
Sources: Credit Agreement (FCA Acquisition Corp.), Credit Agreement (FreightCar America, Inc.)
Commitment to Issue Letters of Credit. The Letter of Credit Bank agrees, from the date hereof of this Agreement (or prior to and including the date of this Agreement, in the instance of the Existing Letters of Credit) to the date which is thirty (30) days prior to the Revolving Commitment Termination Date, to issue one or more letters Letters of credit Credit for the account of the Co-BorrowersBorrower, and the Banks agree to participate in the risk of such Letters of Credit issued for the account of the Borrower hereunder, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “The Letter of Credit Bank has issued the Existing Letters of Credit for the for the account of the Borrower. The Existing Letters of Credit will be deemed “Letters of Credit” for all purposes of this Agreement.”
(b) No Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit Credit, (i) the Letter of Credit Amount would Obligations shall exceed the Letter of Credit Sublimit or (ii) the Total Outstanding Revolving Facility Outstanding Amount would shall exceed the Borrowing BaseRevolving Commitment Amount. In addition the Letter of Credit Bank shall not be obligated to issue any Letter of Credit unless the Letter of Credit Bank shall be reasonably satisfied with the form, substance and beneficiary of such Letter of Credit, and there shall have been no statutory or regulatory change or directive adversely affecting the issuance by the Letter of Credit Bank of letters of credit. The expiration date of any Letter of Credit shall not be later than the earlier of (Ax) one year after the date of issuance of such thereof (subject to provisions for annual renewal thereof unless Letter of CreditCredit Bank gives notice of non-renewal), or (By) twenty-five ten (2510) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to promptly after application therefor by the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and Borrower in accordance with the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated thereinBank’s standard procedures. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-BorrowersBorrower, and the Borrower shall enter into any additional agreement respecting issuance of the Letter of Credit as the Letter of Credit Bank shall request from time to time (each such application and additional agreement is called a “Letter of Credit Agreement”). In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the applicable conditions precedent specified in Section 3.2 Article III shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving AdvanceLoan. Promptly after issuance of a Letter of Credit pursuant hereto, the Agent shall so advise each Bank of all relevant information with respect thereto.
(bc) The Co-Borrowers agree Borrower agrees to pay to the BankAgent, for the pro rata account of all Banks, a commission with respect to each Letter of Credit (herein, herein the “Letter of Credit Fee”) at a rate per annum (computed as on the product basis of actual number of days elapsed in a year of three hundred sixty (i360) an annual rate days) equal to the applicable then-Applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) LIBOR Rate Loans applied to the face amount of the applicable such Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be Credit, payable quarterly quarterly, in arrears arrears, on the last day of March, June, September and December of each calendar quarteryear, and on drawing or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance expiry of any such Letter of Credit; provided, however, that upon written notice by the Agent from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the BankRequired Banks, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum Applicable Margin for LIBOR Rate Loans, plus (ii) two percent (2%). Letter of Credit Fees payable by the Borrower to the Banks in accordance with this subsection (1c) shall be shared among the Margin otherwise Banks pro rata in effect accordance with respect their respective Percentages.
(d) The Borrower further agrees to pay to the Letter of Credit Bank a fronting fee, payable upon issuance of any Letter of Credit at a rate of 0.125% per annum (computed on the basis of actual number of days elapsed in a year of three hundred sixty (360) days), applied to the face amount of such Letter of Credit, and (ii) the face amount payable in full, in advance upon issuance of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than or on extension of the amount that actually accrues (as a result of cancellation of expiry thereof. The fee payable by the Borrower to the Letter of Credit prior to the end of its stated term), the Co-Borrowers Bank in accordance with this subsection (d) shall be entitled to a credit for retained by the amount of any such Letter of Credit Fee not earnedBank for its own account.
(ce) Upon issuance of a Letter of Credit hereunder, and without any further notice to the any Bank, the each Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers Borrower in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the sum of the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving FacilityPercentage of such Bank. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Agent, the Agent shall so notify each Bank and shall request immediate reimbursement from the Co-Borrowers Borrower for the amount of the draft. If sufficient funds are not immediately paid to the Bank Agent by the Co-BorrowersBorrower, the Co-Borrowers Borrower shall be deemed to have requested a Borrowing under the Revolving Facility Loans pursuant to Section 2.2 and the Bank Banks shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing Loans as Floating Base Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c2.7(e)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the the, conditions set forth in Section 3.2) the Bank does Banks do not make such Revolving Advances Loans as contemplated above and the Co-Borrowers do Borrower does not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers Borrower shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is is’ repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers Borrower or as proceeds of a BorrowingLoans), upon demand of the Bank, the Agent each Bank shall immediately advance the amount of its participation in such drawing to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-BorrowersBorrower.
(df) The Each Bank and the Co-Borrowers Borrower agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchsuch document. The Letter of Credit Bank shall not be liable to any Bank for: (i) any action taken or omitted in connection herewith at the request or with the approval of the Banks (including the Required Banks, as applicable); (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document executed in connection with a Letter of Credit.
(g) The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as the Borrower may have against the beneficiary or transferee at law or under any other agreement. The Letter of Credit Bank shall not be liable or responsible for any of the matters described in clauses (i) through (vii) of subsection (h) below. In furtherance and not in limitation of the foregoing: (i) the Letter of Credit Bank may accept documents that appear on their face to be in order, without responsibility for further investigation; and (ii) the Letter of Credit Bank shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
(h) The obligation of the Borrower under this Agreement to reimburse the Letter of Credit Bank for a drawing under a Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement, the Master Agreement for Standby Letters of Credit or any letter of credit application;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of any Letter of Credit or any other amendment or waiver of or any consent to departure from the Master Agreement for Standby Letters of Credit or any letter of credit application;
(iii) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Letter of Credit Bank or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit;
(v) any payment by the Letter of Credit Bank under any Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of any Letter of Credit; or any payment made by the Letter of Credit Bank under any Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of any Letter of Credit, including any arising in connection with any insolvency proceeding;
(vi) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the obligations of the Borrower in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower.
(i) Notwithstanding anything in this Section 2.7 to the contrary, including particularly subsections (g) and (h) above, the Borrower may have a claim against the Letter of Credit Bank and the Letter of Credit Bank may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the Letter of Credit Bank’s willful misconduct or gross negligence or the willful failure to pay under any Letter of Credit after the presentation to the Letter of Credit Bank by the beneficiary of a sight draft and certificate strictly complying with the terms and conditions of a Letter of Credit.
(j) The Borrower shall indemnify, protect, defend and hold harmless each Indemnitee from and against all losses, liabilities, claims, damages, judgments, costs and expenses, including but not limited to all reasonable attorneys’ fees and legal expenses, incurred by the Indemnitees or imposed upon the Indemnitees at any time by, reason of the issuance, demand for honor or honor of any Letter of Credit or the enforcement, protection or collection of the Letter of Credit Bank’s claims against the Borrower under this Section 2.7 or by reason of any act or omission of any Indemnitee in connection with any of the foregoing; provided, however, that such indemnification shall not extend to losses, liabilities, claims, damages, judgments, costs and expenses to the extent arising from any act or omission of an Indemnitee which constitutes gross negligence or willful misconduct.
(k) The Borrower hereby agrees to pay to the Letter of Credit Bank, on demand, all administrative fees charged by the Letter of Credit Bank in the ordinary course of business in connection with the issuance of letters of credit, honoring of drafts under letters of credit, amendments thereto, transfers thereof and all other activity with respect to letters of credit, at the then current rates established by the Letter of Credit Bank from time to time for such services rendered on behalf of customers of the Letter of Credit Bank generally.
Appears in 1 contract
Sources: Credit Agreement (Entegris Inc)
Commitment to Issue Letters of Credit. The Letter of Credit Each LC Bank agrees, from subject to the date hereof terms and conditions hereof, following receipt of an Issuance Request delivered pursuant to and including the Revolving Commitment Termination Dateterms hereof, to issue one or more letters Letters of credit Credit upon the request of the Borrower for the account of the Co-BorrowersBorrower or any of its Subsidiaries on a sight basis from time to time on any Business Day during the period from the Effective Date until the Revolving Advance Commitment Termination Date, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “provided that immediately after each such Letter of Credit.” No Credit is issued, the aggregate amount of the Letter of Credit Liabilities shall not exceed the Available LC Amount. Each Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to or greater than $100,000 or such smaller amount as the product relevant LC Bank may agree in a particular instance in its sole discretion. Upon the date of (i) issuance by an LC Bank of a Letter of Credit, the maximum amount available LC Bank shall be deemed, without further action by any party hereto, to have sold to each Revolving Lender, and each Revolving Lender shall be drawn under deemed, without further action by any party hereto, to have purchased from the LC Bank, a participation in such Letter of Credit and the amount related Letter of any drawing thereunder, respectively Credit Liabilities in proportion to its Percentage. The Borrower shall pay to the LC Bank issuance fees and (ii) other customary fees in the Revolving Facilityamounts and at the times as agreed between the Borrower and the LC Bank. Whenever a draft submitted under Unless otherwise expressly agreed by the LC Bank and the Borrower when a Letter of Credit is paid issued, the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Letter of Credit. In the event of any conflict between the terms hereof and the terms of any Letter of Credit Bankor Issuance Request, the terms hereof shall control. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse the LC Bank shall so notify hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the Bank issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and shall request immediate reimbursement that the Borrower’s business derives substantial benefits from the Co-Borrowers for the amount businesses of the draftsuch Subsidiaries. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers All Existing Letters of Credit shall be deemed to have requested a Borrowing under the Revolving Facility been issued pursuant to Section 2.2 hereto, and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid Initial Borrowing Date shall be subject to and governed by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank terms and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowersconditions hereof.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Sources: Credit Agreement (Supervalu Inc)
Commitment to Issue Letters of Credit. The Letter of Credit Bank agrees, from the date hereof to and including the Revolving Commitment Termination Date, to issue one or more letters of credit for the account of the Co-Borrowers, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “Letter of Credit.” No Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant Subject to the terms and conditions of a Master Letter hereof, and so long as no Stop Issuance Notice is in effect, each Issuing Bank agrees to issue Letters of Credit Agreement by and between the Co-Borrowers and from time to time before the Letter of Credit Bank (Termination Date upon the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any request of the terms of such application are inconsistent with the terms and provisions of this AgreementBorrower; provided that, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to immediately after each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of is issued (i) an annual rate equal to the applicable Margin for Letters aggregate amount of Credit in effect on the date payment Revolving Outstandings shall not exceed the aggregate amount of the Revolving Commitments and (ii) the aggregate amount of the Letter of Credit Fee becomes due and payable hereunder, and (ii) Liabilities shall not exceed $150,000,000. Upon the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time date of issuance by an Issuing Bank of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such a Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Issuing Bank shall be deemed todeemed, without further action by any party hereto, to have sold to each Revolving Lender, and hereby irrevocably and unconditionally agrees toeach Revolving Lender shall be deemed, purchase without further action by any party hereto, to have purchased from the Letter of Credit Bank an undivided participating interest Issuing Bank, a participation in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount related Letter of any drawing thereunder, respectively and Credit Liabilities in the proportion its respective Revolving Commitment bears to the aggregate Revolving Commitments.
(ii) On the Revolving Facility. Whenever a draft submitted under a Restatement Date, without further action by any party hereto, each Issuing Bank that has issued an Existing Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested granted to each Revolving Lender, and each Revolving Lender shall be deemed to have acquired from such Issuing Bank, a Borrowing under participation in each Existing Letter of Credit and the related Letter of Credit Liabilities in the proportion its respective Revolving Facility Commitment bears to the aggregate Revolving Commitments, all on the same terms and conditions as if such Existing Letters of Credit had been issued on the Restatement Date pursuant to Section 2.2 and 2.16(a)(i). Each Lender party to the Bank shall be notified of such request Original Credit Agreement agrees that its participation in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter Existing Letters of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank acquired pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Original Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and Agreement shall be entitled to interest cancelled on such participating interest at the Default Rate until reimbursed in full Restatement Date without further action by the Co-Borrowersany party.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
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Commitment to Issue Letters of Credit. The Letter of Credit Bank agrees, from the date hereof Subject to and including the Revolving Commitment Termination Date, to issue one or more letters of credit for the account of the Co-Borrowers, on the terms and subject conditions hereof, and so long as no Stop Issuance Notice is in effect, each Issuing Lender agrees to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “Letter of Credit.” No Letter issue Letters of Credit shall be issued by from time to time before the Letter of Credit Bank if, Termination Date upon the request of any Borrower; provided that immediately after giving effect to the issuance of such each Letter of Credit is issued (i) the Total Outstanding Amount shall not exceed the aggregate amount of the Commitments, (ii) the Letter of Credit Amount would Liabilities outstanding with respect to such Issuing Lender shall not exceed such Issuing Lender’s Letter of Credit Sublimit and (iii) the aggregate amount of the Letter of Credit Liabilities shall not exceed the Letter of Credit Sublimit or referred to in clause (iia) of the Revolving Facility Outstanding Amount would exceed the Borrowing Basedefinition thereof. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after Upon the date of issuance by an Issuing Lender of such a Letter of Credit, or (B) twenty-five (25) days prior the Issuing Lender shall be deemed, without further action by any party hereto, to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice have sold to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereundereach Lender, and upon no less than five (5) Business Days’ prior written application each Lender shall be deemed, without further action by any party hereto, to have purchased from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the BankIssuing Lender, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit participation in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount related Letter of any drawing thereunderCredit Liabilities in the proportion its respective Commitment bears to the aggregate Commitments. In the event the Commitments shall have been extended pursuant to Section 2.01(b) with respect to some but not all Lenders, respectively and (ii) as a result the Revolving Facility. Whenever Termination Date applicable to a draft submitted under Lender falls prior to the expiry date of a Letter of Credit is paid by the then outstanding, such Lender’s participation in such Letter of Credit Bankshall terminate on its Termination Date, and the Letter participations of the other Lenders therein shall be redetermined pro rata to their respective Percentages after giving effect to the termination of the Commitment of such former Lender. If and to the extent necessary to permit redetermination of the participations in Letters of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second preceding sentence within the limits of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitationthe Commitments which are not terminated, the occurrence of Borrowers shall prepay on such date all or a Default or Event of Default or the failure to satisfy any portion of the conditions set forth outstanding Loans, and such redetermination and termination of participations in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter outstanding Letters of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowersconditioned upon their having done so.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
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Sources: Credit Agreement (Campbell Soup Co)
Commitment to Issue Letters of Credit. The Issuer agrees to issue from time to time before the Letter of Credit Bank agrees, from the date hereof to and including the Revolving Commitment Termination Date, to issue one or more standby letters of credit (herein collectively called the "Letters of Credit" and individually called a "Letter of Credit") for the account and in the name of any Borrower, and for the general corporate purposes of such Borrower. The commitment of the Co-BorrowersIssuer to issue Letters of Credit, on the terms and subject of each Lender to the conditions set forth below:
(a) Each letter of credit issued purchase participations pursuant to this Section 2.62.1.3 in such Letters of Credit, shall be is herein referred to herein as a “its "Letter of Credit.” No Credit Commitment". Each Letter of Credit shall be issued by substantially upon such terms as such Borrower may specify in an application therefor made to the Issuer at least three (3) Business Days before the requested issuance thereof. Each Letter of Credit Bank if, after giving effect must be in form and substance satisfactory to the Issuer in its sole and absolute discretion and shall have a fixed expiration date occurring not later than one (1) year after the date of the issuance of such Letter of Credit thereof (iand in no event later than (a) the Letter of Credit Amount would exceed Commitment Termination Date or (b) if the Borrowers have posted cash collateral in accordance with Section 2.7.4(b), one year after the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date). The Co-Borrowers may renew any Letter It is understood by the parties hereto that for all purposes of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bankthis Agreement, so long as the expiry date thereof complies with the preceding sentence upon such each renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance if applicable, of a Letter of Credit shall be on considered an issuance thereof and such Borrower shall be required to comply with all the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The with respect to any such renewal to the same extent as if a new Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless was being issued on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount renewal date. Upon fulfillment of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly conditions set forth in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect Article V with respect to such Letter of Credit, Credit and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior subject to the end of its stated term)terms hereof, the Co-Borrowers Issuer shall be entitled to a credit for the amount of any issue such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, requested beneficiary no later than the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from close of business on the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount date of such drawing, proposed issuance and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal give to the product of Lenders prompt written notice (iin reasonable detail) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowersissuance.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Commitment to Issue Letters of Credit. (i) The Letter Borrower may from time to time request that the Issuing Bank issue a letter of Credit credit pursuant to which the Issuing Bank shall be obligated to the beneficiary to pay any drawings made thereunder and the Banks shall be obligated to the Issuing Bank to participate ratably in such drawings in proportion to their respective Commitments as hereinafter provided.
(ii) Subject to Section 2.07(a)(iv) below, and in accordance with its customary procedures (to the extent such procedures are not inconsistent with the terms of this Agreement), the Issuing Bank agrees, from on the date hereof to terms and including conditions set forth in this Agreement and at the Revolving Commitment Termination Daterequest of the Borrower, to issue one or more letters Letters of credit Credit for the account of the Co-Borrowers, on the terms and subject Borrower or any of its Subsidiaries from time to time prior to the conditions set forth below:
(a) Termination Date. Each letter of credit issued pursuant Bank agrees to this Section 2.6, shall be referred participate ratably in proportion to herein as a “its Commitment in any drawings made under each Letter of Credit.” No
(iii) Notwithstanding any reference in any Existing Letter of Credit to the Existing Credit Agreement, on and as of the Effective Date, each Existing Letter of Credit shall be issued by the deemed to be a Letter of Credit Bank if, after giving effect and to have been issued pursuant to clause (ii) above.
(iv) In addition to the issuance conditions precedent set forth in Article 3, the obligations of the Issuing Bank to issue Letters of Credit pursuant to clause (ii) above are subject to the additional conditions that:
(A) no Letter of Credit shall have an expiry date later than one Domestic Business Day prior to the Termination Date; provided that with respect to a Letter of Credit issued for the purpose of providing credit support for obligations of the Borrower or any of its Subsidiaries in connection with self-insurance provided by or insurance procured on behalf of the Borrower and its Subsidiaries, it shall not be a violation of the condition set forth in this clause (iv) if such Letter of Credit (i1) is certified by an Authorized Officer of the Borrower to be required by applicable insurance law or regulation to provide, and does provide, that if there shall occur with respect to the Issuing Bank one of the events described in Article 17 of the 1993 revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (Publication No. 500), as the same may be revised, amended, supplemented or superseded, the expiry date shall be extended until not later than a specified number of days (the "EXTENSION PERIOD") after the resumption of business of the Issuing Bank following such event and (2) provides for an expiry date prior to the Termination Date by at least 30 days more than the number of days included in the Extension Period; and
(B) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year fact that, immediately after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any no Bank's Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Exposure will exceed such Bank's Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving AdvanceCommitment.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Commitment to Issue Letters of Credit. The (a) Subject to the terms and conditions set forth herein and the execution and delivery by the Borrower of a letter of credit application on the applicable Fronting Bank’s customary form (a “Letter of Credit Application”), (i) each Fronting Bank on behalf of the Revolving Credit Banks and in reliance upon the agreement of the Revolving Credit Banks set forth in §3.1.4 and upon the representations and warranties of the Borrower contained herein, agrees, in its individual capacity (x) from time to time on any Business Day during the period from the date hereof to and including Closing Date until the Revolving Commitment Termination Maturity Date, to issue one or more letters of credit issue, extend and renew for the account of the Co-BorrowersBorrower (or, so long as the Borrower remains fully liable on the terms and subject to applicable Letter of Credit Application, for the conditions set forth below:
(aaccount of a Wholly-owned Subsidiary of the Borrower or a Partially-Owned Entity) Each letter one or more standby letters of credit issued pursuant to this Section 2.6denominated in Dollars or in one or more Alternative Currencies providing for the payment of cash (in Dollars or such Alternative Currency, shall be referred to herein as applicable) upon the honoring of a presentation thereunder (individually, a “Letter of Credit.” No Letter of Credit shall be issued by the Letter of Credit Bank if”), after giving effect to the issuance of in such Letter of Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be requested from time to time by the Borrower and reasonably agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the applicable Fronting Bank, a commission with respect and to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for amend Letters of Credit previously issued by it, in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunderaccordance with §3.1.2, and (iiy) to honor drawings under the face amount of the applicable Letter Letters of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon issued by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Creditit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Credit Banks severally agree to participate in such Letters of Credit and any drawings thereunder; provided that, after giving effect to such Letter of Credit is paid by Application (and upon issuance, amendment, extension, reinstatement or renewal of such Letter of Credit the Borrower shall be deemed to represent and warrant that), (1) the Outstanding Amount of all Revolving Credit Loans and Letter of Credit Obligations shall not at any time exceed the Total Revolving Credit Commitment, (2) the Revolving Credit Exposure of any Bank (exclusive of such Bank’s Bid Rate Loans) shall not at any time exceed such Bank’s Revolving Credit Commitment, and (3) the Outstanding Amount of all Letter of Credit Obligations shall not at any time exceed the Letter of Credit Bank, Sublimit. It is acknowledged that the Letter Existing Letters of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchtreated as
Appears in 1 contract
Sources: Credit Agreement (Boston Properties LTD Partnership)
Commitment to Issue Letters of Credit. The Letter Subject to the terms and conditions of Credit Bank agreesthis Agreement, including, without limitation, Section 3.2, Lenders (acting through any Lender or Lenders designated by Borrower from time to time, as issuer) agree to issue, at such times as Borrower may request from the date hereof Closing Date to and including the Revolving Commitment Termination Loan Maturity Date, to issue one or more commercial and standby letters of credit for the account of the Co-Borrowers, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “Letter of Credit.” No Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of CreditDaisytek Corporation; provided, however, that from and after (a) the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction aggregate amount of the BankLetters of Credit issued by Lenders at any one time outstanding shall not exceed $2,000,000, and (b) the applicable aggregate amount of the Letters of Credit, plus the principal amount of the Loan, at any one time outstanding, shall not exceed the lesser of (x) the Borrowing Base and (y) the Loan Commitment. If a Letter of Credit Fee payable hereunder is issued other than by TCB, then the issuing Lender shall promptly (and in any event within one Business Day) notify Agent thereof and include with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such notice Borrower's application for such Letter of Credit, and (ii) the face amount a photocopy of the applicable issued Letter of Credit outstanding and a statement signed by such issuing Lender acknowledging that such Letter of Credit was issued hereunder. The obligation of Lenders (acting through any Lender or Lenders designated by Borrower from time to time. If any Letter , as issuer) to issue Letters of Credit Fee so paid is greater than hereunder shall expire at Agent's close of business in Dallas, Texas on the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving FacilityLoan Maturity Date. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Each Letter of Credit, as the Letter same may be amended or extended from time to time, shall expire no later than the Loan Maturity Date. All Letters of Credit Bank issued hereunder shall not have any responsibility to obtain any document (be in the issuing Lender's standard form or in such other than any sight draft form as is mutually agreed upon by Borrower and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchLenders.
Appears in 1 contract
Sources: Credit Agreement (Daisytek International Corporation /De/)
Commitment to Issue Letters of Credit. The Letter of Credit Bank agrees, from the date hereof of this Agreement (or prior to and including the date of this Agreement, in the instance of the Existing Letters of Credit) to the date which is thirty (30) days prior to the Revolving Commitment Termination Date, to issue one or more letters Letters of credit Credit for the account of the Co-BorrowersBorrower, and the Banks agree to participate in the risk of such Letters of Credit issued for the account of the Borrower hereunder, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “The Letter of Credit Bank has issued the Existing Letters of Credit for the for the account of the Borrower. The Existing Letters of Credit will be deemed “Letters of Credit” for all purposes of this Agreement.”
(b) No Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit Credit, (i) the Letter of Credit Amount would Obligations shall exceed the Letter of Credit Sublimit or (ii) the Total Outstanding Revolving Facility Outstanding Amount would shall exceed the Borrowing BaseRevolving Commitment Amount. In addition the Letter of Credit Bank shall not be obligated to issue any Letter of Credit unless the Letter of Credit Bank shall be reasonably satisfied with the form, substance and beneficiary of such Letter of Credit, and there shall have been no statutory or regulatory change or directive adversely affecting the issuance by the Letter of Credit Bank of letters of credit. The expiration date of any Letter of Credit shall not be later than the earlier of (Ax) one year after the date of issuance of such thereof (subject to provisions for annual renewal thereof unless Letter of CreditCredit Bank gives notice of non-renewal), or (By) twenty-five ten (2510) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to promptly after application therefor by the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and Borrower in accordance with the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated thereinBank’s standard procedures. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-BorrowersBorrower and the Borrower shall enter into any additional agreement respecting issuance of the Letter of Credit as the Letter of Credit Bank shall request from time to time (each such application and additional agreement is called a “Letter of Credit Agreement”). In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the applicable conditions precedent specified in Section 3.2 Article III shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving AdvanceLoan. Promptly after issuance of a Letter of Credit pursuant hereto, the Agent shall so advise each Bank of all relevant information with respect thereto.
(bc) The Co-Borrowers agree Borrower agrees to pay to the BankAgent, for the pro rata account of all Banks, a commission with respect to each Letter of Credit (herein, herein the “Letter of Credit Fee”) at a rate per annum (computed as on the product basis of actual number of days elapsed in a year of three hundred sixty (i360) an annual rate days) equal to the applicable then-Applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) LIBOR Rate Loans applied to the face amount of the applicable such Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be Credit, payable quarterly quarterly, in arrears arrears, on the last day of March, June, September and December of each calendar quarteryear, and on drawing or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance expiry of any such Letter of Credit; provided, however, that upon written notice by the Agent from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the BankRequired Banks, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum Applicable Margin for LIBOR Rate Loans, plus (ii) two percent (2%). Letter of Credit Fees payable by the Borrower to the Banks in accordance with this subsection (1c) shall be shared among the Margin otherwise Banks pro rata in effect accordance with respect their respective Revolving Percentages.
(d) If there are Banks that are party to this Agreement in addition to ▇▇▇▇▇ Fargo, the Borrower further agrees to pay to the Agent a fronting fee, payable upon issuance of any Letter of Credit at a rate of 0.125% per annum (computed on the basis of actual number of days elapsed in a year of three hundred sixty (360) days), applied to the face amount of such Letter of Credit, and (ii) the face amount payable in full, in advance upon issuance of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than or on extension of the amount that actually accrues (as a result of cancellation of expiry thereof. The fee payable by the Borrower to the Letter of Credit prior to the end of its stated term), the Co-Borrowers Bank in accordance with this subsection (d) shall be entitled to a credit for retained by the amount of any such Letter of Credit Fee not earnedBank for its own account.
(ce) Upon issuance of a Letter of Credit hereunder, and without any further notice to the any Bank, the each Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers Borrower in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the sum of the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving FacilityPercentage of such Bank. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Agent, the Agent shall so notify each Bank and shall request immediate reimbursement from the Co-Borrowers Borrower for the amount of the draft. If sufficient funds are not immediately paid to the Bank Agent by the Co-BorrowersBorrower, the Co-Borrowers Borrower shall be deemed to have requested a Borrowing under the Revolving Facility Loans pursuant to Section 2.2 and the Bank Banks shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing Loans as Floating Base Rate Advances (in accordance with their respective Revolving Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c2.7(e)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the the, conditions set forth in Section 3.2) the Bank does Banks do not make such Revolving Advances Loans as contemplated above and the Co-Borrowers do Borrower does not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers Borrower shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is is’ repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers Borrower or as proceeds of a BorrowingLoans), upon demand of the Bank, the Agent each Bank shall immediately advance the amount of its participation in such drawing to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-BorrowersBorrower.
(df) The Each Bank and the Co-Borrowers Borrower agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchsuch document. The Letter of Credit Bank shall not be liable to any Bank for: (i) any action taken or omitted in connection herewith at the request or with the approval of the Banks (including the Required Banks, as applicable); (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document executed in connection with a Letter of Credit.
(g) The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as the Borrower may have against the beneficiary or transferee at law or under any other agreement. The Letter of Credit Bank shall not be liable or responsible for any of the matters described in clauses (i) through (vii) of subsection (h) below. In furtherance and not in limitation of the foregoing: (i) the Letter of Credit Bank may accept documents that appear on their face to be in order, without responsibility for further investigation; and (ii) the Letter of Credit Bank shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
(h) The obligation of the Borrower under this Agreement to reimburse the Letter of Credit Bank for a drawing under a Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement, the Master Agreement for Standby Letters of Credit or any letter of credit application;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of any Letter of Credit or any other amendment or waiver of or any consent to departure from the Master Agreement for Standby Letters of Credit or any letter of credit application;
(iii) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Letter of Credit Bank or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit;
(v) any payment by the Letter of Credit Bank under any Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of any Letter of Credit; or any payment made by the Letter of Credit Bank under any Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of any Letter of Credit, including any arising in connection with any insolvency proceeding;
(vi) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the obligations of the Borrower in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower.
(i) Notwithstanding anything in this Section 2.7 to the contrary, including particularly subsections (g) and (h) above, the Borrower may have a claim against the Letter of Credit Bank and the Letter of Credit Bank may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the Letter of Credit Bank’s willful misconduct or gross negligence or the willful failure to pay under any Letter of Credit after the presentation to the Letter of Credit Bank by the beneficiary of a sight draft and certificate strictly complying with the terms and conditions of a Letter of Credit.
(j) The Borrower shall indemnify, protect, defend and hold harmless each Indemnitee from and against all losses, liabilities, claims, damages, judgments, costs and expenses, including but not limited to all reasonable attorneys’ fees and legal expenses, incurred by the Indemnitees or imposed upon the Indemnitees at any time by, reason of the issuance, demand for honor or honor of any Letter of Credit or the enforcement, protection or collection of the Letter of Credit Bank’s claims against the Borrower under this Section 2.7 or by reason of any act or omission of any Indemnitee in connection with any of the foregoing; provided, however, that such indemnification shall not extend to losses, liabilities, claims, damages, judgments, costs and expenses to the extent arising from any act or omission of an Indemnitee which constitutes gross negligence or willful misconduct.
(k) The Borrower hereby agrees to pay to the Letter of Credit Bank, on demand, all administrative fees charged by the Letter of Credit Bank in the ordinary course of business in connection with the issuance of letters of credit, honoring of drafts under letters of credit, amendments thereto, transfers thereof and all other activity with respect to letters of credit, at the then current rates established by the Letter of Credit Bank from time to time for such services rendered on behalf of customers of the Letter of Credit Bank generally.
Appears in 1 contract
Sources: Credit Agreement (Entegris Inc)
Commitment to Issue Letters of Credit. The (i) Subject to the terms and conditions hereof, each Issuing Lender agrees (1) to issue Letters of Credit from time to time on a Business Day not less than 30 days prior to the Termination Date upon the request of each Borrower and to amend Letters of Credit previously issued by it in accordance with subsection (b) of this Section 2.18 and (2) to honor drawings under the Letters of Credit; provided that, immediately after each Letter of Credit Bank agreesis issued, from (i) the date hereof Total Outstanding Amount shall not exceed the aggregate amount of the Commitments, (ii) the aggregate amount of Letter of Credit Liabilities of all Lenders shall not exceed $900,000,000, (iii) the aggregate amount of Letter of Credit Liabilities in respect of Letters of Credit issued by any Issuing Lender shall not exceed $75,000,000 without the consent of such Issuing Lender and (iv) the aggregate outstanding principal amount of Loans to and including any Borrower plus the Revolving Commitment Termination Date, to issue one or more letters aggregate amount of credit Letter of Credit Liabilities for the account of such Borrower shall not exceed the Co-Borrowers, on Maximum Availability of such Borrower; provided further that Barclays Bank PLC shall only be required to issue standby Letters of Credit. Upon the terms and subject to the conditions set forth below:
(a) Each letter date of credit issued pursuant to this Section 2.6, shall be referred to herein as issuance by an Issuing Lender of a “Letter of Credit.” No Letter of Credit , the Issuing Lender shall be issued deemed, without further action by any party hereto, to have sold to each Lender, and each Lender shall be deemed, without further action by any party hereto, to have purchased from the Letter of Credit Bank ifIssuing Lender, after giving effect to the issuance of a participation in such Letter of Credit (i) and the related Letter of Credit Amount would exceed Liabilities in the proportion its respective Commitment bears to the aggregate Commitments. Letters of Credit outstanding under the Existing Revolving Credit Agreement on the Effective Date shall be deemed to be issued on such date under this Agreement.
(ii) The Issuing Lender shall not issue any Letter of Credit, if:
(A) subject to Section 2.18(b), the expiry date of the requested Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later occur more than the earlier of (A) one year twelve months after the date of issuance or last extension of such Letter of Credit, or unless the Required Lenders have approved such expiry date; or
(B) twenty-five (25) days prior to the Revolving Commitment expiry date of the requested Letter of Credit would occur after the Letter of Credit Termination Date. , unless all the Lenders have approved such expiry date.
(iii) The Co-Borrowers may renew Issuing Lender shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any governmental authority shall by its terms purport to enjoin or restrain the Issuing Lender from issuing the Letter of Credit, or any law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any governmental authority with a one year tenor for additional one year periods jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon five (5) days prior written notice the Issuing Lender with respect to the Letter of Credit Bankany restriction, so long as reserve or capital requirement (for which the expiry date thereof complies with Issuing Lender is not otherwise compensated hereunder) not in effect on the preceding sentence upon such renewal. Each Letter Effective Date;
(B) the issuance of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank would violate one or more policies of the Issuing Lender applicable to letters of credit generally;
(the “Master Letter of Credit Agreement”C) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance is to be denominated in a currency other than U.S. dollars; or
(D) any Lender is at that time a Defaulting Lender, unless the Issuing Lender has entered into arrangements, including the delivery of a Letter of Credit shall be on Cash Collateral, satisfactory to the Issuing Lender (in its sole discretion) with the Borrower or such Lender to eliminate the Issuing Lender’s actual or potential Fronting Exposure (after giving effect to Section 2.20(c)(i)) with respect to the Defaulting Lender arising from either the Letter of Credit Bank’s standard form then proposed to be issued or that Letter of Credit and all other Letter of Credit Liabilities as to which the Issuing Lender has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The Issuing Lender shall not amend any Letter of Credit if the Issuing Lender would not be permitted at such other form as may be agreed time to by issue the Letter of Credit Bank in its amended form under the terms hereof.
(v) The Issuing Lender shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the Co-Borrowers. In documents associated therewith, and the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement Issuing Lender shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance have all of the conditions precedent specified benefits and immunities (A) provided to the Administrative Agent in Section 3.2 shall have been satisfied Sections 7.03, 7.04, 7.05 and 7.07 with respect to any acts taken or omissions suffered by the Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the issuance of term “Administrative Agent” as used in such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to Sections included the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect Issuing Lender with respect to such Letter of Creditacts or omissions, and (iiB) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior additionally provided herein with respect to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earnedIssuing Lender.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Sources: Credit Agreement (Consolidated Edison Co of New York Inc)
Commitment to Issue Letters of Credit. The Letter of Credit Each LC Bank agrees, from subject to the date hereof terms and conditions hereof, following receipt of an Issuance Request delivered pursuant to and including the Revolving Commitment Termination Dateterms hereof, to issue one or more letters Letters of credit Credit upon the request of the Borrower for the account of the Co-BorrowersBorrower or any of its Subsidiaries on a sight basis from time to time on any Business Day during the period from the Effective Date until (i) in the case of an LC Bank that is not an Extending Lender, on the terms Revolving-1 Advance Commitment Termination Date, or (ii) in the case of an LC Bank that is an Extending Lender, the Revolving-2 Advance Commitment Termination Date, provided that immediately after each such Letter of Credit is issued, (A) the amount of the Letter of Credit Liabilities shall not exceed the Available LC Amount, (B) the sum of (x) the aggregate principal amount of all Revolving Advances at such time plus (y) the aggregate principal amount of all Swingline Loans at such time plus (z) the aggregate amount of all Letter of Credit Liabilities at such time shall not exceed the aggregate amount of all Revolving Lenders’ Revolving Advance Commitments at such time, and subject (C) unless otherwise agreed to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6by such LC Bank in its sole and absolute discretion, no LC Bank shall be referred required to herein as a “issue Letters of Credit if total Letter of Credit.” No Credit Liabilities issued by such LC Bank and then outstanding exceeds $150,000,000. Each Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to or greater than $100,000 or such smaller amount as the product relevant LC Bank may agree in a particular instance in its sole discretion. Upon the date of (i) issuance by an LC Bank of a Letter of Credit, the maximum amount available LC Bank shall be deemed, without further action by any party hereto, to have sold to each Revolving Lender, and each Revolving Lender shall be drawn under deemed, without further action by any party hereto, to have purchased from the LC Bank, a participation in such Letter of Credit and the amount related Letter of any drawing thereunder, respectively Credit Liabilities in proportion to its Revolving Percentage. The Borrower shall pay to the LC Bank issuance fees and (ii) other customary fees in the Revolving Facilityamounts and at the times as agreed between the Borrower and the LC Bank. Whenever a draft submitted under Unless otherwise expressly agreed by the LC Bank and the Borrower when a Letter of Credit is paid issued, the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Letter of Credit. In the event of any conflict between the terms hereof and the terms of any Letter of Credit Bankor Issuance Request, the terms hereof shall control. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse the LC Bank shall so notify hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the Bank issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and shall request immediate reimbursement that the Borrower’s business derives substantial benefits from the Co-Borrowers for the amount businesses of the draftsuch Subsidiaries. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers All Existing Letters of Credit shall be deemed to have requested a Borrowing under the Revolving Facility been issued pursuant to Section 2.2 hereto, and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid Initial Borrowing Date shall be subject to and governed by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank terms and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowersconditions hereof.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Sources: Credit Agreement (Supervalu Inc)
Commitment to Issue Letters of Credit. The Letter of Credit Bank agrees, from the date hereof of this Agreement (or prior to and including the date of this Agreement, in the instance of the Existing Letters of Credit) to the date which is thirty (30) days prior to the Revolving Commitment Termination Date, to issue one or more letters Letters of credit Credit for the account of the Co-Borrowers, and the Banks agree to participate in the risk of such Letters of Credit issued for the account of the Borrowers hereunder, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “The Letter of Credit Bank has issued the Existing Letters of Credit for the account of the Company. The Existing Letters of Credit will be deemed “Letters of Credit” for all purposes of this Agreement.”
(b) No Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit Credit, (i) the Letter of Credit Amount would Obligations shall exceed the Letter of Credit Sublimit or (ii) the Total Outstanding Revolving Facility Outstanding Amount would shall exceed the lesser of (A) the Revolving Commitment Amount minus the Line Block and (B) the Borrowing BaseBase at such time. In addition the Letter of Credit Bank shall not be obligated to issue any Letter of Credit unless the Letter of Credit Bank shall be reasonably satisfied with the form, substance and beneficiary of such Letter of Credit, and there shall have been no statutory or regulatory change or directive adversely affecting the issuance by the Letter of Credit Bank of letters of credit. The expiration date of any Letter of Credit shall not be later than the earlier of (Ax) one year after the date of issuance of such thereof (subject to provisions for annual renewal thereof unless Letter of CreditCredit Bank gives notice of non-renewal), or (By) twenty-five ten (2510) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to promptly after application therefor by the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on in accordance with the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchstandard
Appears in 1 contract
Sources: Credit Agreement (Entegris Inc)
Commitment to Issue Letters of Credit. The Letter of Credit Bank Issuer agrees, from the date hereof Closing Date to and including the sixtieth (60th) day prior to the Revolving Credit Facility Termination Date, the Revolving Term Loan T06 Commitment Termination Date or the Revolving Letter of Credit Commitment Termination Date, as applicable, to issue one or more letters of credit for the account of the Co-BorrowersBorrower. Each Letter of Credit Lender under a Letter of Credit Facility agrees to participate in the risk of such letters of credit issued for the account of the Borrower under such Letter of Credit Facility, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.62.9, shall be referred to herein as a “Letter of Credit.” No Letter of Credit shall be issued by the Letter of Credit Bank Issuer if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount Exposure in respect of any Letter of Credit Facility would exceed the Letter of Credit Sublimit for such Facility; or (ii) with respect to a Letter of Credit issued under the Revolving Facility Outstanding Credit Facility, the Aggregate Short-Term Loan Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or ; and (B) twenty-five (25) 30 days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Maturity Date for the applicable Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewalFacility. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master such Letter of Credit Agreement by and between the Co-Borrowers and Documents as the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated thereinIssuer may reasonably require. The application requesting issuance of Borrower shall request a Letter of Credit shall be upon not less than 1 Business Day prior written application on the Letter of Credit BankIssuer’s standard form or such other form as may be agreed to upon by the Letter of Credit Bank Issuer and the Co-BorrowersBorrower. In Any request for a Letter of Credit shall specify the event that Letter of Credit Facility under which such Letter of Credit is to be issued. If any of the terms of such application any Letter of Credit Document are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank Issuer shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were an Advance. Promptly after issuance of a Revolving AdvanceLetter of Credit pursuant hereto, the Administrative Agent shall so advise each Lender under the applicable Letter of Credit Facility of all relevant information with respect thereto.
(b) The Co-Borrowers agree to Borrower will pay to the BankAdministrative Agent, for the sole and exclusive account of the Letter of Credit Issuer, an issuing fee with respect to each Letter of Credit in an amount equal to the greater of (i) 0.10% of the amount of such Letter of Credit or (ii) $2,500 (the “Issuing Fee”). The Borrower also will pay to the Administrative Agent, for the pro rata account of the applicable Letter of Credit Lenders, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) at an annual rate equal to the sum of (i) the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee thereof becomes due and payable hereunder, hereunder with respect to Letters of Credit constituting standby letters of credit; and (ii) such fee as shall be determined by the face amount of Required Lenders under the applicable Letter of Credit outstanding from time Facility with respect to timeLetters of Credit constituting commercial letters of credit. The Letter of Credit Fee shall be payable quarterly in arrears on the last tenth calendar day following the end of each calendar quarterFiscal Quarter, and on the Maturity Date, or upon such other terms as may be agreed upon by the Co-Borrowers Borrower and the Bank Required Lenders at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the BankRequired Lenders, upon written notice from the Administrative Agent the applicable Letter of Credit Fee Margin payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, ; and (ii) 2.00%. Letter of Credit Fees payable by the face amount of Borrower to the Lenders in accordance with this subsection (b) shall be shared among the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as Lenders on a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earnedpro rata basis in accordance with their respective Percentages.
(c) Upon issuance of a Letter of Credit under a Letter of Credit Facility hereunder, and without any further notice to the Bankany Lender, the Bank each Letter of Credit Lender under such Letter of Credit Facility shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank Issuer an undivided participating interest in the Letter of Credit BankIssuer’s risk and obligation under the Letter of Credit issued under such Letter of Credit Facility, and in the obligation of the Letter of Credit Bank Issuer to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank Issuer to obtain reimbursement from the Co-Borrowers Borrower in the amount of such drawing, and all other rights of the Letter of Credit Bank Issuer with respect thereto, in an amount equal to the product such Letter of (i) Credit Lender’s Percentage of the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit BankIssuer, the Letter of Credit Bank Issuer shall so notify the Bank Administrative Agent, the Administrative Agent shall so notify each Letter of Credit Lender under the applicable Letter of Credit Facility and shall request immediate reimbursement from the Co-Borrowers Borrower for the amount of the draft. If sufficient funds are not immediately paid to the Bank Administrative Agent by the Co-BorrowersBorrower, the Co-Borrowers Borrower shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank applicable Letter of Credit Lenders shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Base Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank Issuer for the amount of such draft so paid by the Letter of Credit Bank Issuer (less any amounts realized by the Letter of Credit Bank Issuer pursuant to the second sentence of this Section 2.6(c2.9(c)). If for any reason or under any circumstance (including, without limitation, including but not limited to the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does applicable Letter of Credit Lenders do not make such Revolving the Advances as contemplated above and the Co-Borrowers do Borrower does not otherwise reimburse the Letter of Credit Bank Issuer for the amount of the draft so paid by the Letter of Credit BankIssuer, the Co-Borrowers Borrower shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit BankIssuer, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank Issuer until the amount thereof is repaid to the Letter of Credit Bank Issuer in full. If the Letter of Credit Bank Issuer shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers Borrower or as proceeds of a Borrowing), upon demand of the Bank, the Bank Administrative Agent each applicable Letter of Credit Lender shall immediately advance the amount of its participation in such drawing to the Letter of Credit Bank Issuer and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-BorrowersBorrower.
(d) The Bank Each Letter of Credit Lender and the Co-Borrowers Borrower agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank Issuer shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the such Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchsuch document. The Letter of Credit Issuer shall not be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders (including the Required Lenders, as applicable); (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document executed in connection with a Letter of Credit.
(e) The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. The Letter of Credit Issuer shall not be liable or responsible for any of the matters described in clauses (i) through (vii) of subsection (f) below. In furtherance and not in limitation of the foregoing: (i) the Letter of Credit Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary; and (ii) the Letter of Credit Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning, or purporting to transfer or assign, a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
(f) The obligation of the Borrower under this Agreement to reimburse the Letter of Credit Issuer for a drawing under a Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement or any Letter of Credit Document;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of any Letter of Credit or any other amendment or waiver of, or any consent to or departure from, any Letter of Credit Document;
(iii) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Letter of Credit Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit;
(v) any payment by the Letter of Credit Issuer under any Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of any Letter of Credit; or any payment made by the Letter of Credit Issuer under any Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of any Letter of Credit, including any arising in connection with any insolvency proceeding;
(vi) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of, consent to or departure from, any other guarantee, for all or any of the obligations of the Borrower in respect of any Letter of Credit; and
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any Guarantor.
(g) Notwithstanding anything in this Section 2.9 to the contrary, including particularly subsections (e) and (f) above, the Borrower may have a claim against the Letter of Credit Issuer and the Letter of Credit Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower that the Borrower proves were caused by the Letter of Credit Issuer’s willful misconduct or gross negligence or the willful and wrongful failure by the Letter of Credit Issuer to pay under any Letter of Credit after the presentation to the Letter of Credit Issuer by the beneficiary of a sight draft and certificate strictly complying with the terms and conditions of such Letter of Credit.
(h) The Borrower shall indemnify, protect, defend and hold harmless each Indemnitee from and against all losses, liabilities, claims, damages, judgments, costs and expenses, including but not limited to all reasonable attorneys’ fees and legal expenses, incurred by the Indemnitees or imposed upon the Indemnitees at any time by reason of the issuance, demand for honor or honor of any Letter of Credit or the enforcement, protection or collection of the Letter of Credit Issuer’s claims against the Borrower under this Section 2.9 or by reason of any act or omission of any Indemnitee in connection with any of the foregoing; provided, however, that such indemnification shall not extend to losses, liabilities, claims, damages, judgments, costs and expenses to the extent arising from any act or omission of an Indemnitee that constitutes gross negligence or willful misconduct.
(i) The Borrower will pay to the Letter of Credit Issuer, on demand, all administrative fees charged by the Letter of Credit Issuer in the ordinary course of business in connection with the issuance of letters of credit, honoring of drafts under letters of credit, amendments thereto, transfers thereof and all other activity with respect to letters of credit, at the then-current rates established by the Letter of Credit Issuer from time to time for such services rendered on behalf of customers of the Letter of Credit Issuer generally.
Appears in 1 contract
Commitment to Issue Letters of Credit. The Letter of Credit Bank agrees, from the date hereof to and including the Revolving Commitment Termination Date, to issue one or more letters of credit for the account of the Co-Borrowers, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “Letter of Credit.” No Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant Subject to the terms and conditions of a Master Letter hereof, and so long as no Stop Issuance Notice is in effect, each Issuing Bank agrees to issue Letters of Credit Agreement by and between the Co-Borrowers and from time to time before the Letter of Credit Bank (Termination Date upon the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any request of the terms of such application are inconsistent with the terms and provisions of this AgreementBorrower; provided that, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to immediately after each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of is issued (i) an annual rate equal to the applicable Margin for Letters aggregate amount of Credit in effect on the date payment Revolving Outstandings shall not exceed the aggregate amount of the Revolving Commitments and (ii) the aggregate amount of the Letter of Credit Fee becomes due and payable hereunder, and (ii) Liabilities shall not exceed $150,000,000. Upon the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time date of issuance by an Issuing Bank of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such a Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Issuing Bank shall be deemed todeemed, without further action by any party hereto, to have sold to each Revolving Lender, and hereby irrevocably and unconditionally agrees toeach Revolving Lender shall be deemed, purchase without further action by any party hereto, to have purchased from the Letter of Credit Bank an undivided participating interest Issuing Bank, a participation in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount related Letter of any drawing thereunder, respectively and Credit Liabilities in the proportion its respective Revolving Commitment bears to the aggregate Revolving Commitments.
(ii) On the Revolving Facility. Whenever a draft submitted under a Restatement Date, without further action by any party hereto, each Issuing Bank that has issued an Existing Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested granted to each Revolving Lender, and each Revolving Lender shall be deemed to have acquired from such Issuing Bank, a Borrowing under participation in each Existing Letter of Credit and the related Letter of Credit Liabilities in the proportion its respective Revolving Facility Commitment bears to the aggregate Revolving Commitments, all on the same terms and conditions as if such Existing Letters of Credit had been issued on the Restatement Date pursuant to Section 2.2 and 2.16(a)
(1). Each Lender party to the Bank shall be notified of such request Original Credit Agreement, including each Departing Lender, agrees that its participation in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter Existing Letters of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank acquired pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Original Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and Agreement shall be entitled to interest cancelled on such participating interest at the Default Rate until reimbursed in full Restatement Date without further action by the Co-Borrowersany party.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Commitment to Issue Letters of Credit. The (a) Subject to the terms and conditions hereof and the execution and receipt of a Loan and Letter of Credit Bank agreesRequest by any Issuing Bank, from with a copy to the date hereof to and Administrative Agent, reflecting the Maximum Drawing Amount of all Letters of Credit (including the Revolving Commitment Termination Date, to issue one or more letters of credit for the account of the Co-Borrowers, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “requested Letter of Credit.” ) and a Letter of Credit Application, such Issuing Bank on behalf of the Banks and in reliance upon the agreement of the Banks set forth in §3.1.1(c) and upon the representations and warranties of the Borrowers contained herein, agrees to issue standby Letters of Credit in such form as may be requested from time to time by the Borrowers and agreed to by such Issuing Bank including, so called direct pay Letters of Credit, provided, however, that, after giving effect to such request, the Maximum Drawing Amount of all Letters of Credit issued under this Credit Agreement shall not exceed the Total Commitment minus the aggregate outstanding amount of the Revolving Credit Loans and Swing Line Loans and unpaid Reimbursement Obligations. No Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect have an expiration date later than thirty (30) days prior to the issuance of such Letter of Revolving Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Maturity Date and no Letter of Credit shall not be have an expiration date later than the earlier of one (A1) one year after the date of issuance of such Letter of Credit, or Credit (Bwhich may incorporate automatic extensions for periods of up to one (1) twenty-five year in accordance with subsection (25e) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewalhereof). Each Letter of Credit will be so issued under and pursuant to or extended shall (i) provide for the terms and conditions payment of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent sight drafts for honor thereunder when presented in accordance with the terms thereof and provisions of this Agreement, when accompanied by the terms documents described therein and provisions of this Agreement shall govern. (ii) be subject to either the Uniform Customs or the International Standby Practices.
(b) The Letter of Credit Issuing Bank shall not be obligated under any obligation to issue a any Letter of Credit unless if:
(1) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any Applicable Law applicable to the Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank, shall prohibit, or request that the Issuing Bank refrain from the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the date of issuance all of hereof and which the conditions precedent specified Issuing Bank in Section 3.2 shall have been satisfied as fully as if good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(2) the issuance of such Letter of Credit were a Revolving Advance.would violate one or more policies of the Issuing Bank applicable to letters of credit generally;
(b3) The Co-Borrowers agree to pay to except as otherwise agreed by the Administrative Agent and the Issuing Bank, a commission with respect to each such Letter of Credit is in an initial stated amount less than $100,000;
(herein, the “4) such Letter of Credit Fee”is to be denominated in a currency other than Dollars;
(5) computed as the product a default of (i) an annual rate equal any Revolving Credit Bank’s obligations to the applicable Margin for Letters of fund under §§2.61 or 3.3 exists or any Revolving Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable Bank is at such time a Defaulting Bank hereunder, and (ii) unless the face amount of Issuing Bank has entered into satisfactory arrangements with the applicable Letter of Borrowers or such Revolving Credit outstanding from time Bank to time. The Letter of Credit Fee shall be payable quarterly in arrears on eliminate the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Issuing Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect ’s risk with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Revolving Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earnedBank.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Each Bank severally agrees that it shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (includingabsolutely liable, without limitation, regard to the occurrence of a any Default or Event of Default or any other condition precedent whatsoever, to the failure extent of such Bank’s Commitment Percentage thereof, to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit applicable Issuing Bank on demand for the amount of the each draft so paid by the such Issuing Bank under each Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the extent that such amount is not reimbursed by the Borrowers pursuant to §3.2 (such agreement for a Bank being called herein the “Letter of Credit Participation” of such Bank). Without limiting the foregoing, with interest upon such amount at the Default Rate from and after the date such draft is paid by the each Revolving Credit Bank’s obligation to purchase Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank Participations shall be absolute and unconditional and shall not be affected by any circumstance, including (a) any set-off, counterclaim, recoupment, defense or other right which such Bank may have obtained reimbursement against the Administrative Agent, the Issuing Bank, any Borrower or any other Person for any drawing under a Letter reason whatsoever; (b) the occurrence and continuation of Credit any Default or Event of Default; (whether from c) any adverse change in the Co-Borrowers condition (financial or as proceeds otherwise) of a Borrowing), upon demand any Borrower or any Bank; (d) any breach of any of the Loan Documents by any Borrower or any Revolving Credit Bank; or (e) any other circumstance, happening or event whatsoever, whether or not similar to any of the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowersforegoing.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under Each such payment made by a Letter of Credit, the Letter of Credit Bank shall not have be treated as the purchase by such Bank of a participating interest in the Borrowers’ Reimbursement Obligation under §3.2 in an amount equal to such payment. Each Bank shall share in accordance with its participating interest in any responsibility interest which accrues pursuant to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such§3.2.
Appears in 1 contract
Sources: Revolving Credit Agreement (Waste Industries Usa Inc)
Commitment to Issue Letters of Credit. The Issuer agrees to issue under the several responsibilities of the Lenders in accordance with their respective Percentages, from time to time after the Effective Date and until the Letter of Credit Bank agrees, from the date hereof to and including the Revolving Commitment Termination Date, to issue one or more standby letters of credit (herein collectively called the “Letters of Credit” and individually called a “Letter of Credit”) for the account of the Co-BorrowersBorrower or any other Obligor, on in the terms and subject to name of the conditions set forth below:
(a) Borrower or any other Obligor. Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “Letter of Credit.” No Letter of Credit shall be issued by denominated in Dollars, shall be payable only upon presentation of sight drafts or other forms of demand together with any other documents which may be required to be presented at the time of any drawing thereunder (the exact wording of any such documents, if any, having been specified in, or attached as a copy to, the relevant Letter of Credit Bank ifRequest), after giving effect to and shall be otherwise upon such terms as the issuance of such Borrower may specify in a Letter of Credit Request delivered to the Issuer at least three (i3) Business Days (or such shorter period as may be agreed among the Issuer, the Administrative Agent and the Borrower) before the proposed date of issuance thereof. Each Letter of Credit Amount would exceed must be in form and substance satisfactory to the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The Issuer and shall have a fixed expiration date of any Letter of Credit shall occurring not be later than the earlier of one (A1) one year after the date of the issuance of such thereof, provided that each Letter of CreditCredit may contain provisions to extend the expiry thereof automatically for one or more successive periods of not more than one year each; provided, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew however, that in no event shall any Letter of Credit with a one year tenor provide for additional one year periods upon five an expiry (5including any evergreen provision) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less later than five (5) Business Days’ Days prior written application from the Co-Borrowers to the Letter Stated Maturity Date. It is understood by the parties hereto that for all purposes of Credit Bank as contemplated therein. The application requesting issuance this Agreement, each renewal, if applicable, of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank considered an issuance thereof and the Co-Borrowers. In Borrower shall be required to comply with all the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The with respect to any such renewal to the same extent as if a new Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless was being issued on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount renewal date. Upon fulfillment of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly conditions set forth in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect Article V with respect to such Letter of Credit, Credit and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior subject to the end of its stated term)terms hereof, the Co-Borrowers Issuer shall be entitled to a credit for the amount of any issue such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice promptly to the Bankrequested beneficiary and give to the Lenders prompt written notice (in reasonable detail) of such issuance. Promptly after the issuance of, the Bank shall be deemed or amendment to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter Issuer shall notify the Administrative Agent and the Borrower, in writing, of Credit Bank such issuance or amendment, and such notice shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required be accompanied by a copy of such issuance or amendment. Upon receipt of such notice, the Letter Administrative Agent shall notify the Lenders in writing of Credit) such issuance or to ascertain amendment and, upon receipt of written request from a Lender, shall provide such Lender with copies of such issuance or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchamendment.
Appears in 1 contract
Commitment to Issue Letters of Credit. (i) The Letter Borrower may from time to time request that the Issuing Bank issue a letter of Credit credit pursuant to which the Issuing Bank shall be obligated to the beneficiary to pay any drawings made thereunder and the Banks shall be obligated to the Issuing Bank to participate ratably in such drawings in proportion to their respective Commitments as hereinafter provided.
(ii) Subject to Section 2.07(a)(iv) below, and in accordance with its customary procedures (to the extent such procedures are not inconsistent with the terms of this Agreement), the Issuing Bank agrees, from on the date hereof to terms and including conditions set forth in this Agreement and at the Revolving Commitment Termination Daterequest of the Borrower, to issue one or more letters Letters of credit Credit for the account of the Co-Borrowers, on the terms and subject Borrower or any of its Subsidiaries from time to time prior to the conditions set forth below:
(a) Termination Date. Each letter of credit issued pursuant Bank agrees to this Section 2.6, shall be referred participate ratably in proportion to herein as a “its Commitment in any drawings made under each Letter of Credit.” No
(iii) Notwithstanding any reference in any Existing Letter of Credit to the Existing Credit Agreement, on and as of the Effective Date, each Existing Letter of Credit shall be issued by the deemed to be a Letter of Credit Bank if, after giving effect and to have been issued pursuant to clause (ii) above on the Effective Date.
(iv) In addition to the issuance conditions precedent set forth in Article 3, the obligations of the Issuing Bank to issue Letters of Credit pursuant to clause (ii) above are subject to the additional conditions that:
(A) no Letter of Credit shall have an expiry date later than one Domestic Business Day prior to the Termination Date; provided that with respect to a Letter of Credit issued for the purpose of providing credit support for obligations of the Borrower or any of its Subsidiaries in connection with self-insurance provided by or insurance procured on behalf of the Borrower and its Subsidiaries, it shall not be a violation of the condition set forth in this clause (iv) if such Letter of Credit (i1) is certified by an Authorized Officer of the Borrower to be required by applicable insurance law or regulation to provide, and does provide, that if there shall occur with respect to the Issuing Bank one of the events described in Article 17 of the 1993 revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (Publication No. 500), as the same may be revised, amended, supplemented or superseded, the expiry date shall be extended until not later than a specified number of days (the "EXTENSION PERIOD") after the resumption of business of the Issuing Bank following such event and (2) provides for an expiry date prior to the Termination Date by at least 30 days more than the number of days included in the Extension Period; and
(B) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year fact that, immediately after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any no Bank's Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Exposure will exceed such Bank's Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving AdvanceCommitment.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Commitment to Issue Letters of Credit. The (i) Subject to the terms and conditions hereof, each Issuing Lender agrees (1) to issue Letters of Credit from time to time on a Domestic Business Day not less than 30 days prior to the Termination Date upon the request of each Borrower and to amend Letters of Credit previously issued by it in accordance with subsection (b) of this Section 2.18 and (2) to honor drawings under the Letters of Credit; provided that, immediately after each Letter of Credit Bank agreesis issued, from (i) the date hereof Total Outstanding Amount shall not exceed the aggregate amount of the Commitments, (ii) the aggregate amount of Letter of Credit Liabilities of all Lenders shall not exceed $1,200,000,000, (iii) the aggregate amount of Letter of Credit Liabilities in respect of Letters of Credit issued by any Issuing Lender shall not exceed $100,000,000 without the consent of such Issuing Lender and (iv) the aggregate outstanding principal amount of Loans to and including any Borrower plus the Revolving Commitment Termination Date, to issue one or more letters aggregate amount of credit Letter of Credit Liabilities for the account of such Borrower shall not exceed the Co-Borrowers, on Maximum Availability of such Borrower; provided further that Barclays Bank PLC shall only be required to issue standby Letters of Credit. Upon the terms and subject to the conditions set forth below:
(a) Each letter date of credit issued pursuant to this Section 2.6, shall be referred to herein as issuance by an Issuing Lender of a “Letter of Credit.” No Letter of Credit , the Issuing Lender shall be issued deemed, without further action by any party hereto, to have sold to each Lender, and each Lender shall be deemed, without further action by any party hereto, to have purchased from the Letter of Credit Bank ifIssuing Lender, after giving effect to the issuance of a participation in such Letter of Credit (i) and the related Letter of Credit Amount would exceed Liabilities in the proportion its respective Commitment bears to the aggregate Commitments. Letters of Credit outstanding under the Existing Revolving Credit Agreement on the Effective Date shall be deemed to be issued on such date under this Agreement.
(ii) The Issuing Lender shall not issue any Letter of Credit, if:
(A) subject to Section 2.18(b), the expiry date of the requested Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later occur more than the earlier of (A) one year twelve months after the date of issuance or last extension of such Letter of Credit, or unless the Required Lenders have approved such expiry date; or
(B) twenty-five (25) days prior to the Revolving Commitment expiry date of the requested Letter of Credit would occur after the Letter of Credit Termination Date. , unless all the Lenders have approved such expiry date.
(iii) The Co-Borrowers may renew Issuing Lender shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any governmental authority shall by its terms purport to enjoin or restrain the Issuing Lender from issuing the Letter of Credit, or any law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any governmental authority with a one year tenor for additional one year periods jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon five (5) days prior written notice the Issuing Lender with respect to the Letter of Credit Bankany restriction, so long as reserve or capital requirement (for which the expiry date thereof complies with Issuing Lender is not otherwise compensated hereunder) not in effect on the preceding sentence upon such renewal. Each Letter Effective Date;
(B) the issuance of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank would violate one or more policies of the Issuing Lender applicable to letters of credit generally;
(the “Master Letter of Credit Agreement”C) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance is to be denominated in a currency other than U.S. dollars; or
(D) any Lender is at that time a Defaulting Lender, unless the Issuing Lender has entered into arrangements, including the delivery of a Letter of Credit shall be on Cash Collateral, satisfactory to the Issuing Lender (in its sole discretion) with the Borrower or such Lender to eliminate the Issuing Lender’s actual or potential Fronting Exposure (after giving effect to Section 2.20(c)(i)) with respect to the Defaulting Lender arising from either the Letter of Credit Bank’s standard form then proposed to be issued or that Letter of Credit and all other Letter of Credit Liabilities as to which the Issuing Lender has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The Issuing Lender shall not amend any Letter of Credit if the Issuing Lender would not be permitted at such other form as may be agreed time to by issue the Letter of Credit Bank in its amended form under the terms hereof.
(v) The Issuing Lender shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the Co-Borrowers. In documents associated therewith, and the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement Issuing Lender shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance have all of the conditions precedent specified benefits and immunities (A) provided to the Administrative Agent in Section 3.2 shall have been satisfied Sections 7.03, 7.04, 7.05 and 7.07 with respect to any acts taken or omissions suffered by the Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the issuance of term “Administrative Agent” as used in such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to Sections included the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect Issuing Lender with respect to such Letter of Creditacts or omissions, and (iiB) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior additionally provided herein with respect to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earnedIssuing Lender.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Sources: Credit Agreement (Consolidated Edison Co of New York Inc)
Commitment to Issue Letters of Credit. The Subject to the terms and conditions hereof and the execution and delivery by the Borrowers of a letter of credit application on the Issuing Bank's customary form (a "Letter of Credit Application") the Issuing Bank agreesin reliance upon the agreement of the Banks set forth in Section 3.1.4 and upon the representations and warranties of the Borrowers contained herein, from the date hereof agrees to issue, extend and including the Revolving Commitment Termination Date, to issue one or more letters of credit renew for the account of the Co-Borrowers, on Borrowers from time to time from the terms and subject Closing Date to the conditions set forth below:
date which is fourteen (a14) Each letter Business Days prior to the Maturity Date one or more standby letters of credit issued pursuant to this Section 2.6(each, shall be referred to herein as individually, a “"Letter of Credit.” No "); provided, that, if requested by the Borrowers at least ten (10) days prior to the Maturity Date, the Issuing Bank shall issue, in connection with the GECC Operating Lease Financing, up to three (3) Letters of Credit, with final expiry dates not more than twelve (12) months beyond the Maturity Date, in an aggregate amount not greater than $2,000,000; provided, that, ten (10) days prior to the Maturity Date, the Borrowers shall Cash Collateralize such Letters of Credit in an amount not less than 105% of the Maximum Drawing Amount of such Letters of Credit plus any additional amounts owing under such Letters of Credit or provide to the Administrative Agent, on behalf of the Issuing Bank and the Lenders, a back-up letter of credit, on terms and from an issuer satisfactory to the Administrative Agent and the Issuing Bank, in an amount not less than 105% of the Maximum Drawing Amount of such Letters of. Credit Rims any additional amounts owing under such Letters of Credit. Each Letter of Credit shall be issued in such form as may be requested from time to time by the Letter of Credit Bank ifBorrowers and agreed to by the Issuing Bank; provided, that, after giving effect to the issuance of such Letter of Credit request, (ia) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product aggregate Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not exceed Twenty Million Dollars ($20,000,000) at any one time, (b) the sum of (i) the sum of Maximum Drawing Amount, (1ii) the Margin otherwise in effect with respect to such Letter of Creditall Unpaid Reimbursement Obligations, and (iiiii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee all Loans Outstanding shall not earned.
exceed the Total Commitment or, if less the amount to which the Borrowers' secured Obligations are limited as set forth in the proviso contained in Section 6 hereof and (c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, Borrowers are in compliance with the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth covenant contained in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers10.4 hereof.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such"
Appears in 1 contract
Sources: Revolving Credit Agreement (Trico Marine Services Inc)
Commitment to Issue Letters of Credit. The Letter of Credit Bank agrees, from the date hereof to and including the Revolving Commitment Termination Date, to issue one or more letters of credit for the account of the Co-BorrowersBorrower, on the terms and subject to the conditions set forth below:
(a) Each new letter of credit issued pursuant to this Section 2.6, 2.7 and each letter of credit issued by the Bank for the account of the Borrower and outstanding as of the date of this Agreement shall be referred to herein as a “"Letter of Credit.” No Letter of Credit shall be issued by ". Notwithstanding anything in the Letter of Credit Bank if, after giving effect foregoing to the issuance of such Letter of Credit (i) contrary, the Letter of Credit Amount would outstanding at any one time shall not exceed the Letter lesser of Credit Sublimit (i) $1,000,000 or (ii) the Revolving Facility Outstanding Commitment Amount would exceed less the Borrowing Baseaggregate outstanding principal balance of all outstanding Advances. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ ' prior written application from the Co-Borrowers Borrower to the Letter of Credit Bank as contemplated thereinBank. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s 's standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-BorrowersBorrower. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving an Advance.
(b) The Co-Borrowers agree Borrower agrees to pay to the Bank, Bank a commission with respect to each Letter of Credit (herein, the “issued as a standby Letter of Credit Fee”at a rate of one percent (1.00%) computed as the product per annum of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of such standby Letter of Credit, payable annually in advance. The Borrower agrees to pay to the applicable Bank a commission with respect to each Letter of Credit outstanding from time to time. The issued as a documentary Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon at such other terms annual rate as may be agreed upon by the Co-Borrowers Borrower and the Bank at the time of issuance of any such documentary Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers Borrower shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank Advance pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchto
Appears in 1 contract
Commitment to Issue Letters of Credit. The Letter of Credit Bank Issuer agrees, from the date hereof Closing Date to and including the thirtieth (30th) day prior to the Revolving Commitment Termination Date, to issue one or more standby letters of credit (including those which include a provision which automatically extends the expiry date thereof for a specified period unless, within the same prior of time in advance of the then applicable expiry date thereof, the Letter of Credit Issuer gives notice to the beneficiary thereof to the effect that such letter of credit shall not be so extended) or commercial letters of credit for the account of the Co-BorrowersBorrower, and the Lenders agree to participate in the risk of such letters of credit issued for the account of the Borrower hereunder, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, 2.6 shall be referred to herein as a “Letter of Credit.” No Letter of Credit shall be issued by the Letter of Credit Bank Issuer if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount Exposure would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing BaseAggregate Revolving Commitment Amount. The expiration date of any Letter of Credit constituting a commercial letter of credit shall not be later than the earlier of (Ai) 180 days after the date of issuance of such Letter of Credit and (ii) 10 days prior to the Revolving Commitment Termination Date. The expiration date of any Letter of Credit constituting a standby letter of credit shall not be later than the earlier of (i) one year after the date of issuance of such Letter of Credit, or Credit and (Bii) twenty-five (25) 10 days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master such Letter of Credit Agreement by and between the Co-Borrowers and Documents as the Letter of Credit Bank (the “Master Issuer may reasonably require. The Borrower shall request each Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no not less than five three (53) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit BankIssuer’s standard form or such other form as may be agreed to by the Letter of Credit Bank Issuer and the Co-BorrowersBorrower. In the event that If any of the terms of such application any Letter of Credit Document are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank Issuer shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance. Promptly after issuance of a Letter of Credit pursuant hereto, the Administrative Agent shall so advise each Lender of all relevant information with respect thereto.
(b) The Co-Borrowers agree to Borrower will pay to the BankAdministrative Agent, for the pro rata account of all Lenders, a commission fee with respect to each undrawn Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) at an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment (i) two and one-half percent (2.5%) of the undrawn amount of each outstanding Letter of Credit Fee becomes due and payable hereunder, constituting a standby letter of credit and (ii) such fee as shall be determined by the face amount of the applicable Required Lenders with respect to each outstanding Letter of Credit outstanding from time to time. The Letter constituting a commercial letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Creditcredit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the BankRequired Lenders, upon written notice from the applicable Administrative Agent the Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of applicable fee under clause (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and or (ii) the face amount of the applicable Letter of Credit outstanding from time to timeabove plus two percent (2.0%). If any The Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for payable in arrears on the amount last day of each calendar quarter, and on the Maturity Date, or upon such other terms as may be agreed upon by the Borrower and the Required Lenders at the time of issuance of any such Letter of Credit. Letter of Credit Fee not earnedFees payable by the Borrower to the Lenders in accordance with this subsection (b) shall be shared among the Lenders pro rata in accordance with their respective Percentages.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bankany Lender, the Bank each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank Issuer an undivided participating interest in the Letter of Credit BankIssuer’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank Issuer to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank Issuer to obtain reimbursement from the Co-Borrowers Borrower in the amount of such drawing, and all other rights of the Letter of Credit Bank Issuer with respect thereto, in an amount equal to the product such Lender’s Percentage of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit BankIssuer, the Letter of Credit Bank Issuer shall so notify the Bank Administrative Agent, the Administrative Agent shall so notify each Lender and shall request immediate reimbursement from the Co-Borrowers Borrower for the amount of the draft. If sufficient funds are not immediately paid to the Bank Administrative Agent by the Co-BorrowersBorrower, the Co-Borrowers Borrower shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank Lenders shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate ABR Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank Issuer for the amount of such draft so paid by the Letter of Credit Bank Issuer (less any amounts realized by the Letter of Credit Bank Issuer pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, including but not limited to the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does Lenders do not make such Revolving Advances as contemplated above and the Co-Borrowers do Borrower does not otherwise reimburse the Letter of Credit Bank Issuer for the amount of the draft so paid by the Letter of Credit BankIssuer, the Co-Borrowers Borrower shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit BankIssuer, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank Issuer until the amount thereof is repaid to the Letter of Credit Bank Issuer in full. If the Letter of Credit Bank Issuer shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers Borrower or as proceeds of a Borrowing), upon demand of the Bank, the Bank Administrative Agent each Lender shall immediately advance the amount of its participation in such drawing to the Letter of Credit Bank Issuer and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-BorrowersBorrower.
(d) The Bank Each Lender and the Co-Borrowers agree Borrower agrees that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank Issuer shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the such Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchsuch document. The Letter of Credit Issuer shall not be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders (including the Required Lenders, as applicable); (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document executed in connection with a Letter of Credit.
(e) The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as the Borrower may have against the beneficiary or transferee at law or under any other agreement. The Letter of Credit Issuer shall not be liable or responsible for any of the matters described in clauses (i) through (vii) of subsection (f) below. In furtherance and not in limitation of the foregoing: (i) the Letter of Credit Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary; and (ii) the Letter of Credit Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
(f) The obligation of the Borrower under this Agreement to reimburse the Letter of Credit Issuer for a drawing under a Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) Any lack of validity or enforceability of this Agreement or any Letter of Credit Document.
(ii) Any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of any Letter of Credit or any other amendment or waiver of or any consent to departure from any Letter of Credit Document.
(iii) The existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Letter of Credit Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or any unrelated transaction.
(iv) Any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit.
(v) Any payment by the Letter of Credit Issuer under any Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of any Letter of Credit; or any payment made by the Letter of Credit Issuer under any Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of any Letter of Credit, including any arising in connection with any insolvency proceeding.
(vi) Any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the obligations of the Borrower in respect of any Letter of Credit.
(vii) Any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any other Obligor.
(g) Notwithstanding anything in this Section 2.6 to the contrary, including particularly subsections (e) and (f) above, the Borrower may have a claim against the Letter of Credit Issuer and the Letter of Credit Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the Letter of Credit Issuer’s willful misconduct or gross negligence or the willful and wrongful failure by the Letter of Credit Issuer to pay under any Letter of Credit after the presentation to the Letter of Credit Issuer by the beneficiary of a sight draft and certificate strictly complying with the terms and conditions of such Letter of Credit.
(h) The Borrower shall indemnify, protect, defend and hold harmless each Indemnitee from and against all losses, liabilities, claims, damages, judgments, costs and expenses, including but not limited to all reasonable attorneys’ fees and legal expenses, incurred by the Indemnitees or imposed upon the Indemnitees at any time by reason of the issuance, demand for honor or honor of any Letter of Credit or the enforcement, protection or collection of the Letter of Credit Issuer’s claims against the Borrower under this Section 2.6 or by reason of any act or omission of any Indemnitee in connection with any of the foregoing; provided, however, that such indemnification shall not extend to losses, liabilities, claims, damages, judgments, costs and expenses to the extent arising from any act or omission of an Indemnitee which constitutes gross negligence or willful misconduct.
(i) The Borrower will pay to the Letter of Credit Issuer, on demand, all administrative fees charged by the Letter of Credit Issuer in the ordinary course of business in connection with the issuance of Letters of Credit, honoring of drafts under Letters of Credit, amendments thereto, transfers thereof and all other activity with respect to Letters of Credit, at the then current rates established by the Letter of Credit Issuer from time to time for such services rendered on behalf of customers of the Letter of Credit Issuer generally.
Appears in 1 contract
Commitment to Issue Letters of Credit. The (a) Subject to the terms and conditions set forth herein and the execution and delivery by the Borrower of a letter of credit application on the applicable Fronting Bank’s customary form (a “Letter of Credit Application”), (i) each Fronting Bank on behalf of the Revolving Credit Banks and in reliance upon the agreement of the Revolving Credit Banks set forth in §3.1.4 and upon the representations and warranties of the Borrower contained herein, agrees, in its individual capacity (x) from time to time on any Business Day during the period from the date hereof to and including Closing Date until the Revolving Commitment Termination Maturity Date, to issue one or more letters of credit issue, extend and renew for the account of the Co-BorrowersBorrower (or, so long as the Borrower remains fully liable on the terms and subject to applicable Letter of Credit Application, for the conditions set forth below:
(aaccount of a Wholly-owned Subsidiary of the Borrower or a Partially-Owned Entity) Each letter one or more standby letters of credit issued pursuant to this Section 2.6denominated in Dollars or in one or more Alternative Currencies providing for the payment of cash (in Dollars or such Alternative Currency, shall be referred to herein as applicable) upon the honoring of a presentation thereunder (individually, a “Letter of Credit.” No Letter of Credit shall be issued by the Letter of Credit Bank if”), after giving effect to the issuance of in such Letter of Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s standard form or such other form as may be requested from time to time by the Borrower and reasonably agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the applicable Fronting Bank, a commission with respect and to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for amend Letters of Credit previously issued by it, in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunderaccordance with §3.1.2, and (iiy) to honor drawings under the face amount of the applicable Letter Letters of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon issued by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Creditit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Credit Banks severally agree to participate in such Letters of Credit and any drawings thereunder; provided that, after giving effect to such Letter of Credit is paid by Application (and upon issuance, amendment, extension, reinstatement or renewal of such Letter of Credit the Borrower shall be deemed to represent and warrant that), (1) the Outstanding Amount of all Revolving Credit Loans and Letter of Credit Obligations shall not at any time exceed the Total Revolving Credit Commitment, (2) the Revolving Credit Exposure of any Bank (exclusive of such Bank’s Bid Rate Loans) shall not at any time exceed such Bank’s Revolving Credit Commitment, and (3) the Outstanding Amount of all Letter of Credit Obligations shall not at any time exceed the Letter of Credit Bank, Sublimit. It is acknowledged that the Letter Existing Letters of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing treated as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter Letters of Credit Bank hereunder for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (all purposes, including, without limitation, with respect to the occurrence of a Default or Event of Default or the failure to satisfy any Reimbursement Obligations of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above Borrower under §3.2 and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount funding obligations of the draft so paid by the Letter of Revolving Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing Banks under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers§3.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Sources: Credit Agreement (Boston Properties LTD Partnership)
Commitment to Issue Letters of Credit. The Letter of Credit Bank agrees, from the date hereof to and including the Revolving Commitment Termination Date, to issue one or more letters of credit for the account of the Co-BorrowersBorrower, and the Banks agree to participate in the risk of such letters of credit issued for the account of the Borrower hereunder, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.62.7, shall be referred to herein as a “"Letter of Credit.” " No Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the sum of the Revolving Facility Outstanding Amount and the Swingline Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers Borrower may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers Borrower and the Letter of Credit Bank (the “"Master Letter of Credit Agreement”") governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ ' prior written application from the Co-Borrowers Borrower to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit Bank’s 's standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-BorrowersBorrower. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance. Promptly after issuance of a Letter of Credit pursuant hereto, the Agent shall so advise each Bank of all relevant information with respect thereto.
(b) The Co-Borrowers agree Borrower agrees to pay to the BankAgent for the pro rata account of all Banks, a commission with respect to each Letter of Credit (herein, the “"Letter of Credit Fee”") computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers Borrower and the Bank Required Banks at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the BankRequired Banks, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (2) two percent (2%), and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers Borrower shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned. Letter of Credit Fees payable by the Borrower to the Banks in accordance with this subsection (b) shall be shared among the Banks pro rata in accordance with their respective Percentages of the Revolving Facility.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the any Bank, the each Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s 's risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers Borrower in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Percentage of the Revolving FacilityFacility of such Bank. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Agent, the Agent shall so notify each Bank and shall request immediate reimbursement from the Co-Borrowers Borrower for the amount of the draft. If sufficient funds are not immediately paid to the Bank Agent by the Co-BorrowersBorrower, the Co-Borrowers Borrower shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 2.3(a) and the Bank Banks shall be notified of such request in accordance with Section 2.2 2.3(a) and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c2.7(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does Banks do not make such Revolving Advances as contemplated above and the Co-Borrowers do Borrower does not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers Borrower shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers Borrower or as proceeds of a Borrowing), upon demand of the Bank, the Agent each Bank shall immediately advance the amount of its participation in such drawing to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-BorrowersBorrower.
(d) The Each Bank and the Co-Borrowers Borrower agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchsuch document. The Letter of Credit Bank shall not be liable to any Bank for: (i) any action taken or omitted in connection herewith at the request or with the approval of the Banks (including the Required Banks, as applicable); (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document executed in connection with a Letter of Credit.
(e) The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. The Letter of Credit Bank shall not be liable or responsible for any of the matters described in clauses (i) through (vii) of
(f) below. In furtherance and not in limitation of the foregoing: (i) the Letter of Credit Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary; and (ii) the Letter of Credit Bank shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
(f) The obligation of the Borrower under this Agreement to reimburse the Letter of Credit Bank for a drawing under a Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement, the Master Letter of Credit Agreement or any letter of credit application;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of any Letter of Credit or any other amendment or waiver of or any consent to departure from any letter of credit application;
(iii) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Letter of Credit Bank or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit;
(v) any payment by the Letter of Credit Bank under any Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of any Letter of Credit; or any payment made by the Letter of Credit Bank under any Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of any Letter of Credit, including any arising in connection with any insolvency proceeding;
(vi) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the obligations of the Borrower in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor.
(g) Notwithstanding anything in this Section 2.7 to the contrary, including particularly subsections (e) and (f) above, the Borrower may have a claim against the Letter of Credit Bank and the Letter of Credit Bank may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the Letter of Credit Bank's willful misconduct or gross negligence or the willful failure to pay under any Letter of Credit after the presentation to the Letter of Credit Bank by the beneficiary of a sight draft and certificate strictly complying with the terms and conditions of a Letter of Credit.
(h) The Borrower shall indemnify, protect, defend and hold harmless each Indemnitee from and against all losses, liabilities, claims, damages, judgments, costs and expenses, including but not limited to all reasonable attorneys' fees and legal expenses, incurred by the Indemnitees or imposed upon the Indemnitees at any time by reason of the issuance, demand for honor or honor of any Letter of Credit or the enforcement, protection or collection of the Letter of Credit Bank's claims against the Borrower under this Section 2.7 or by reason of any act or omission of any Indemnitee in connection with any of the foregoing; provided, however, that such indemnification shall not extend to losses, liabilities, claims, damages, judgments, costs and expenses to the extent arising from any act or omission of an Indemnitee which constitutes gross negligence or willful misconduct.
(i) The Borrower hereby agrees to pay to the Letter of Credit Bank, on demand, all administrative fees charged by the Letter of Credit Bank in the ordinary course of business in connection with the issuance of letters of credit, honoring of drafts under letters of credit, amendments thereto, transfers thereof and all other activity with respect to letters of credit, at the then current rates established by the Letter of Credit Bank from time to time for such services rendered on behalf of customers of the Letter of Credit Bank generally.
Appears in 1 contract
Sources: Credit Agreement (Luiginos Inc)
Commitment to Issue Letters of Credit. The Subject to the terms and conditions hereof, including, without limitation, satisfaction of the conditions set forth in § 9 and § 10 hereof, and the execution and delivery by the Borrower of a letter of credit application on the Lender’s customary form (a “Letter of Credit Bank agreesApplication”), from the date hereof Lender, in reliance upon the representations and warranties of the Borrower contained herein, agrees to issue, extend and including the Revolving Commitment Termination Date, to issue one or more letters of credit renew for the account of the Co-BorrowersBorrower the ▇▇▇ Letter of Credit and the Westwood Letter of Credit (collectively, on the terms “Letters of Credit” and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6each individually, shall be referred to herein as a “Letter of Credit.” No ”), in such form as may be requested from time to time by the Borrower and agreed to by the Lender and the Borrower; provided, however, that, after giving effect to such request, (a) the sum of the aggregate Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not exceed $4,450,534 at any one time, (b) the Maximum Drawing Amount and all Unpaid Reimbursement Obligations of the ▇▇▇ Letter of Credit shall not exceed $3,850,000 at any time; (c) the Maximum Drawing Amount and all Unpaid Reimbursement Obligations of the Westwood Letter of Credit shall not exceed $650,000 at any time and (d) the only Letters of Credit to be issued and outstanding hereunder shall be the ▇▇▇ Letter of Credit and the Westwood Letter of Credit. In addition, the parties hereto hereby acknowledge and agree that the Westwood Letter of Credit shall, on the Closing Date, constitute a Letter of Credit hereunder, notwithstanding the date of issuance thereof, the letter of credit application for such Westwood Letter of Credit shall be issued by the considered a Letter of Credit Application hereunder, and such Westwood Letter of Credit shall, from and after the Closing Date, be governed by the terms of this Credit Agreement. To the extent the Borrower would like any Letter of Credit extended or renewed upon its stated expiry date, the Borrower shall provide the Bank if, after giving effect with prior written notice of its request for such an extension or renewal (which notice shall also set forth the extension or renewal date and the new expiry date (which shall not be more than 364 days from the then existing expiry date)) by a date which is not more than ninety (90) days prior to the issuance then scheduled expiry date of such Letter of Credit and not later than seventy five (i75) days prior to the then scheduled expiry date of such Letter of Credit. To the extent the Lender has not provided the Borrower with written notice of its intention to not extend or renew such Letter of Credit Amount would exceed as requested by the Letter Borrower within sixty (60) days of Credit Sublimit the then scheduled expiry date, the Lender shall be deemed to have consented to such extension or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance renewal of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master Letter of Credit Agreement by and between the Co-Borrowers and the Letter provisions of Credit Bank (the “Master Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit §2.7 shall be on the Letter of Credit Bank’s standard form or such other form as may be agreed to by the Letter of Credit Bank and the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advanceapplicable.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank an undivided participating interest in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does not make such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowers.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Commitment to Issue Letters of Credit. The Letter of Credit Bank Issuer agrees, from the date hereof Closing Date to and including the thirtieth (30th) day prior to the Revolving Commitment Termination Date, to issue one or more letters of credit for the account of the Co-BorrowersBorrower, and the Revolving Lenders agree to participate in the risk of such letters of credit issued for the account of the Borrower hereunder, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “Letter of Credit.” No Letter of Credit shall be issued by the Letter of Credit Bank Issuer if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount Exposure would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit constituting a commercial letter of credit shall not be later than the earlier of (A1) 180 days after the date of issuance of such Letter of Credit and (2) 30 days prior to the Revolving Commitment Termination Date. The expiration date of any Letter of Credit constituting a standby letter of credit shall not be later than the earlier of (1) one year after the date of issuance of such Letter of Credit, or Credit and (B2) twenty-five (25) 30 days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant to the terms and conditions of a Master such Letter of Credit Agreement by and between the Co-Borrowers and Documents as the Letter of Credit Bank (the “Master Issuer may reasonably require. The Borrower shall request each Letter of Credit Agreement”) governing all Letters of Credit to be issued hereunder, and upon no not less than five (5) Business Days’ prior written application from the Co-Borrowers to the Letter of Credit Bank as contemplated therein. The application requesting issuance of a Letter of Credit shall be on the Letter of Credit BankIssuer’s standard form or such other form as may be agreed to by the Letter of Credit Bank Issuer and the Co-BorrowersBorrower. In the event that If any of the terms of such application any Letter of Credit Document are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank Issuer shall not be obligated to issue a Letter of Credit unless on the date of issuance all of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance. Promptly after issuance of a Letter of Credit pursuant hereto, the Administrative Agent shall so advise each Lender of all relevant information with respect thereto.
(b) The Co-Borrowers agree to Borrower will pay to the BankAdministrative Agent, for the sole and exclusive account of the Letter of Credit Issuer, a fronting fee with respect to each Letter of Credit in the amount determined in accordance with the Fee Letters (herein, the “Fronting Fee”). The Borrower also will pay to the Administrative Agent, for the pro rata account of all Lenders, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) at an annual rate equal to (i) the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee thereof becomes due and payable hereunder, hereunder with respect to Letters of Credit constituting standby letters of credit and (ii) such fee as shall be determined by the face amount of the applicable Letter Required Lenders with respect to Letters of Credit outstanding from time to timeconstituting commercial letters of credit. The Letter of Credit Fee shall be payable quarterly in arrears on the last 15th day of each calendar quarter, and on the Maturity Date, or upon such other terms as may be agreed upon by the Co-Borrowers Borrower and the Bank Required Lenders at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the BankRequired Lenders, upon written notice from the Administrative Agent the applicable Letter of Credit Fee Margin payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1iii) the Margin otherwise in effect with respect to such Letter of Credit, and (iiiv) the face amount of the applicable Letter of Credit outstanding from time to time2%. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers Borrower shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned. Letter of Credit Fees payable by the Borrower to the Revolving Lenders in accordance with this subsection (b) shall be shared among the Revolving Lenders pro rata in accordance with their respective Revolving Percentages.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bankany Lender, the Bank each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Letter of Credit Bank Issuer an undivided participating interest in the Letter of Credit BankIssuer’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank Issuer to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank Issuer to obtain reimbursement from the Co-Borrowers Borrower in the amount of such drawing, and all other rights of the Letter of Credit Bank Issuer with respect thereto, in an amount equal to the product such Revolving Lender’s Revolving Percentage of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a Letter of Credit is paid by the Letter of Credit BankIssuer, the Letter of Credit Bank Issuer shall so notify the Bank Administrative Agent, the Administrative Agent shall so notify each Revolving Lender and shall request immediate reimbursement from the Co-Borrowers Borrower for the amount of the draft. If sufficient funds are not immediately paid to the Bank Administrative Agent by the Co-BorrowersBorrower, the Co-Borrowers Borrower shall be deemed to have requested a Revolving Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank Revolving Lenders shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Revolving Percentages) for purposes of reimbursing the Letter of Credit Bank Issuer for the amount of such draft so paid by the Letter of Credit Bank Issuer (less any amounts realized by the Letter of Credit Bank Issuer pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, including but not limited to the occurrence of a Default or Event of Default or the failure to satisfy any of the conditions set forth in Section 3.2) the Bank does Revolving Lenders do not make such Revolving Advances as contemplated above and the Co-Borrowers do Borrower does not otherwise reimburse the Letter of Credit Bank Issuer for the amount of the draft so paid by the Letter of Credit BankIssuer, the Co-Borrowers Borrower shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit BankIssuer, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank Issuer until the amount thereof is repaid to the Letter of Credit Bank Issuer in full. If the Letter of Credit Bank Issuer shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers Borrower or as proceeds of a Borrowing), upon demand of the Bank, the Bank Administrative Agent each Revolving Lender shall immediately advance the amount of its participation in such drawing to the Letter of Credit Bank Issuer and shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-BorrowersBorrower.
(d) The Bank Each Revolving Lender and the Co-Borrowers Borrower agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank Issuer shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the such Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any suchsuch document. The Letter of Credit Issuer shall not be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders (including the Required Lenders, as applicable); (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document executed in connection with a Letter of Credit.
(e) The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. The Letter of Credit Issuer shall not be liable or responsible for any of the matters described in clauses (i) through (vii) of subsection (f) below. In furtherance and not in limitation of the foregoing: (i) the Letter of Credit Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary; and (ii) the Letter of Credit Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
(f) The obligation of the Borrower under this Agreement to reimburse the Letter of Credit Issuer for a drawing under a Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) Any lack of validity or enforceability of this Agreement or any Letter of Credit Document.
(ii) Any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of any Letter of Credit or any other amendment or waiver of or any consent to departure from any Letter of Credit Document.
(iii) The existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Letter of Credit Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or any unrelated transaction.
(iv) Any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit.
(v) Any payment by the Letter of Credit Issuer under any Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of any Letter of Credit; or any payment made by the Letter of Credit Issuer under any Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of any Letter of Credit, including any arising in connection with any insolvency proceeding.
(vi) Any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the obligations of the Borrower in respect of any Letter of Credit.
(vii) Any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor.
(g) Notwithstanding anything in this Section 2.6 to the contrary, including particularly subsections (e) and (f) above, the Borrower may have a claim against the Letter of Credit Issuer and the Letter of Credit Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the Letter of Credit Issuer’s willful misconduct or gross negligence or the willful and wrongful failure by the Letter of Credit Issuer to pay under any Letter of Credit after the presentation to the Letter of Credit Issuer by the beneficiary of a sight draft and certificate strictly complying with the terms and conditions of such Letter of Credit.
(h) The Borrower shall indemnify, protect, defend and hold harmless each Indemnitee from and against all losses, liabilities, claims, damages, judgments, costs and expenses, including but not limited to all reasonable attorneys’ fees and legal expenses, incurred by the Indemnitees or imposed upon the Indemnitees at any time by reason of the issuance, demand for honor or honor of any Letter of Credit or the enforcement, protection or collection of the Letter of Credit Issuer’s claims against the Borrower under this Section 2.6 or by reason of any act or omission of any Indemnitee in connection with any of the foregoing; provided, however, that such indemnification shall not extend to losses, liabilities, claims, damages, judgments, costs and expenses to the extent arising from any act or omission of an Indemnitee which constitutes gross negligence or willful misconduct.
(i) The Borrower will pay to the Letter of Credit Issuer, on demand, all administrative fees charged by the Letter of Credit Issuer in the ordinary course of business in connection with the issuance of letters of credit, honoring of drafts under letters of credit, amendments thereto, transfers thereof and all other activity with respect to letters of credit, at the then current rates established by the Letter of Credit Issuer from time to time for such services rendered on behalf of customers of the Letter of Credit Issuer generally.
Appears in 1 contract
Commitment to Issue Letters of Credit. The Letter of Credit Bank agrees, from the date hereof to and including the Revolving Commitment Termination Date, to issue one or more letters of credit for the account of the Co-Borrowers, on the terms and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.6, shall be referred to herein as a “Letter of Credit.” No Letter of Credit shall be issued by the Letter of Credit Bank if, after giving effect to the issuance of such Letter of Credit (i) the Letter of Credit Amount would exceed the Letter of Credit Sublimit or (ii) the Revolving Facility Outstanding Amount would exceed the Borrowing Base. The expiration date of any Letter of Credit shall not be later than the earlier of (A) one year after the date of issuance of such Letter of Credit, or (B) twenty-five (25) days prior to the Revolving Commitment Termination Date. The Co-Borrowers may renew any Letter of Credit with a one year tenor for additional one year periods upon five (5) days prior written notice to the Letter of Credit Bank, so long as the expiry date thereof complies with the preceding sentence upon such renewal. Each Letter of Credit will be issued under and pursuant Subject to the terms and conditions hereof, and so long as no Stop Issuance Notice is in effect, each Issuing Bank in reliance upon the agreements of a Master Letter the other Banks set forth in this Section 2.18 agrees to issue Letters of Credit Agreement by and between the Co-Borrowers and from time to time before the Letter of Credit Bank (Termination Date upon the “Master request of the Borrower; provided that immediately after each Letter of Credit Agreement”is issued (x) governing all Letters the Total Outstanding Amount shall not exceed the aggregate amount of Credit to be issued hereunderthe Commitments, and upon no less than five (5y) Business Days’ prior written application from the Co-Borrowers to aggregate amount of the Letter of Credit Liabilities of all Banks shall not exceed $100,000,000 and (z) the aggregate amount of the Letter of Credit Liabilities in respect of Letters of Credit issued by any Issuing Bank shall not exceed such Issuing Bank’s Letter of Credit Commitment without the consent of such Issuing Bank; and provided further that if (i) the Termination Date has been extended as contemplated therein. The application requesting to some but not all Banks pursuant to Section 2.01(b) and (ii) the Borrower requests the issuance of a Letter of Credit shall be on which expires later than the Letter of Credit Bank’s standard form or Termination Date in effect prior to such other form as may extension, then compliance with clause (x) above shall be agreed determined solely with reference to by the Letter of Credit Bank and Banks whose Commitments have been so extended. If the Co-Borrowers. In the event that any of the terms of such application are inconsistent with the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern. The Letter of Credit Bank shall not be obligated Borrower so requests (in order to issue accommodate a Letter of Credit unless on having an available amount greater than an Issuing Bank’s Letter of Credit Commitment or otherwise), an Issuing Bank may assign all or a portion of its Letter of Credit Commitment to another Issuing Bank that agrees to accept such assignment. Upon the date of issuance all by an Issuing Bank of the conditions precedent specified in Section 3.2 shall have been satisfied as fully as if the issuance of such Letter of Credit were a Revolving Advance.
(b) The Co-Borrowers agree to pay to the Bank, a commission with respect to each Letter of Credit (herein, the “Letter of Credit Fee”) computed as the product of (i) an annual rate equal to the applicable Margin for Letters of Credit in effect on the date payment of the Letter of Credit Fee becomes due and payable hereunder, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. The Letter of Credit Fee shall be payable quarterly in arrears on the last day of each calendar quarter, or upon such other terms as may be agreed upon by the Co-Borrowers and the Bank at the time of issuance of any such Letter of Credit; provided, however, that from and after the occurrence of an Event of Default and continuing thereafter until such Event of Default shall be remedied to the written satisfaction of the Bank, the applicable Letter of Credit Fee payable hereunder with respect to each Letter of Credit shall be equal to the sum of the product of (i) the sum of (1) the Margin otherwise in effect with respect to such Letter of Credit, and (ii) the face amount of the applicable Letter of Credit outstanding from time to time. If any Letter of Credit Fee so paid is greater than the amount that actually accrues (as a result of cancellation of the Letter of Credit prior to the end of its stated term), the Co-Borrowers shall be entitled to a credit for the amount of any such Letter of Credit Fee not earned.
(c) Upon issuance of a Letter of Credit hereunder, and without any further notice to the Bank, the Issuing Bank shall be deemed todeemed, without further action by any party hereto, to have sold to each Bank, and hereby irrevocably and unconditionally agrees toeach Bank shall be deemed, purchase without further action by any party hereto, to have purchased from the Letter of Credit Bank an undivided participating interest such Issuing Bank, a participation in the Letter of Credit Bank’s risk and obligation under such Letter of Credit and in the obligation of the Letter of Credit Bank to honor drafts thereunder, and in the amount of any drawing thereunder, and in all rights of the Letter of Credit Bank to obtain reimbursement from the Co-Borrowers in the amount of such drawing, and all other rights of the Letter of Credit Bank with respect thereto, in an amount equal to the product of (i) the maximum amount available to be drawn under such Letter of Credit and the amount of any drawing thereunder, respectively and (ii) the Revolving Facility. Whenever a draft submitted under a related Letter of Credit Liabilities in the proportion its respective Commitment bears to the aggregate Commitments. Each Bank acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is paid absolute and unconditional and shall not be affected by the any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit Bank, the Letter of Credit Bank shall so notify the Bank and shall request immediate reimbursement from the Co-Borrowers for the amount of the draft. If sufficient funds are not immediately paid to the Bank by the Co-Borrowers, the Co-Borrowers shall be deemed to have requested a Borrowing under the Revolving Facility pursuant to Section 2.2 and the Bank shall be notified of such request in accordance with Section 2.2 and shall fund such request for a Borrowing as Floating Rate Advances (in accordance with their respective Percentages) for purposes of reimbursing the Letter of Credit Bank for the amount of such draft so paid by the Letter of Credit Bank (less any amounts realized by the Letter of Credit Bank pursuant to the second sentence of this Section 2.6(c)). If for any reason or under any circumstance (including, without limitation, the occurrence and continuance of a Default or Event of Default reduction or the failure to satisfy any termination of the conditions set forth in Section 3.2) the Bank does not make Commitments, and that each such Revolving Advances as contemplated above and the Co-Borrowers do not otherwise reimburse the Letter of Credit Bank for the amount of the draft so paid by the Letter of Credit Bank, the Co-Borrowers shall nonetheless be obligated to reimburse the amount of the draft to the Letter of Credit Bank, with interest upon such amount at the Default Rate from and after the date such draft is paid by the Letter of Credit Bank until the amount thereof is repaid to the Letter of Credit Bank in full. If the Letter of Credit Bank shall not have obtained reimbursement for any drawing under a Letter of Credit (whether from the Co-Borrowers or as proceeds of a Borrowing), upon demand of the Bank, the Bank shall immediately advance the amount to the Letter of Credit Bank and payment shall be entitled to interest on such participating interest at the Default Rate until reimbursed in full by the Co-Borrowersmade without any offset, abatement, withholding or reduction whatsoever.
(d) The Bank and the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such
Appears in 1 contract
Sources: Credit Agreement (Clorox Co /De/)