Commitments of the Banks Borrowing Conversion and Letter of Credit Procedures Clause Samples
This clause defines the obligations of the banks involved in a loan agreement, as well as the procedures for the borrower to request loans, convert existing loans between different types (such as from a floating to a fixed rate), and obtain letters of credit. It typically outlines the steps the borrower must follow to make borrowing requests, the notice periods required, and the documentation needed for conversions or for issuing letters of credit. By establishing clear procedures and responsibilities, this clause ensures efficient loan administration and reduces the risk of misunderstandings or delays in the lending process.
Commitments of the Banks Borrowing Conversion and Letter of Credit Procedures. On the Restatement Effective Date, immediately prior to the effectiveness of this Agreement, the principal amount of "Loans" outstanding under the Original Credit Agreement is $15,229,304.20, (such outstanding "Loans" collectively are referred to as the "Existing Loans"). The Company, Agent and the Banks agree that: (i) the principal amount of $7,229,304.20 outstanding of the Existing Loans shall continue as Revolving Loans hereunder; (ii) the principal amount of $6,000,000 outstanding of the Existing Loans shall continue as Term Loan A hereunder; and (iii) the principal amount of $2,000,000 outstanding of the Existing Loans shall continue as Term Loan B hereunder, in each such case without in any way causing a novation of any of the Company's obligations under the Original Credit Agreement. The parties hereto hereby acknowledge and agree that, immediately upon the effectiveness of this Agreement, the "Commitment Amount" under the Original Credit Agreement in the amounts set forth therein shall be permanently and irrevocably reduced to a Revolving Commitment Amount of $15,000,000 hereunder, and the aggregate amount of the Banks' Pro Rata Shares of the Revolving Loans hereunder shall not exceed $15,000,000. All portions of the Commitment Amount and the aggregate amount of the Banks' Pro Rata Shares of the Revolving Loans under the Original Agreement, in each case in excess of $15,000,000, shall be deemed to have permanently and irrevocably expired as of the Restatement Effective Date and shall not be available to the Company for purposes of borrowing Loans hereunder.
Commitments of the Banks Borrowing Conversion and Letter of Credit Procedures