Defaulting Bank Clause Samples
The defaulting-bank clause defines the rights and remedies available when a bank involved in a financial transaction fails to meet its obligations, such as making required payments or delivering collateral. In practice, this clause typically outlines the steps that can be taken against the defaulting bank, which may include suspending its participation, terminating agreements, or triggering close-out netting provisions. Its core function is to protect the non-defaulting parties by providing a clear process for managing the risks and consequences associated with a bank's default, thereby ensuring stability and predictability in financial arrangements.
POPULAR SAMPLE Copied 1 times
Defaulting Bank. Notwithstanding any provision of this Agreement to the contrary, if any Bank becomes a Defaulting Bank, then the following provisions shall apply for so long as such Bank is a Defaulting Bank:
(a) A Defaulting Bank shall be deemed to have assigned any and all payments due to it from each Borrower, whether on account of outstanding Loans, interest or otherwise in respect of such Borrower in each case arising under this Agreement or the Loan Documents, to the Administrative Agent and the remaining non-Defaulting Banks for application as follows:
(i) first, to the payment of any amounts owing by such Defaulting Bank to the Administrative Agent hereunder in respect of such Borrower,
(ii) second, pro rata, to the payment of any amounts owing by such Defaulting Bank to the Swing Line Lenders hereunder in respect of such Borrower,
(iii) third, to the funding of any Loan in respect of such Borrower in respect of which such Defaulting Bank has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent,
(iv) fourth, if so determined by the Administrative Agent and the applicable Borrower, held in a non-interest bearing account as cash collateral for future funding obligations of the Defaulting Bank under this Agreement in respect of such Borrower,
(v) fifth, pro rata, to the payment of any amounts owing to such Borrower or the non-Defaulting Banks as a result of any judgment of a court of competent jurisdiction obtained by such Borrower or Banks against such Defaulting Bank as a result of such Defaulting Bank’s breach of its obligations under this Agreement in respect of such Borrower, and
(vi) sixth, to such Defaulting Bank or as otherwise directed by a court of competent jurisdiction.
(b) The Commitment Percentage of such Defaulting Bank shall not be included in determining whether the Required Banks have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 8.5); provided, (i) such Defaulting Bank’s Commitment may not be increased or extended without its consent and (ii) the principal amount of, or interest payable on, Loans may not be reduced or excused or the final date of payment of any principal or interest may not be postponed as to such Defaulting Bank without such Defaulting Bank’s consent.
(c) No Defaulting Bank shall be entitled to receive any commitment fee for any period during which that Bank is a Defaulting Bank (and no Borrower...
Defaulting Bank. Any Bank which fails or refuses to perform its obligations under this Agreement within the time period specified for performance of such obligation or, if no time frame is specified, if such failure or refusal continues for a period of five (5) Business Days after notice from the Agent.
Defaulting Bank. See §14.5(c).
Defaulting Bank. Each Bank understands and agrees that if such Bank is a Defaulting Bank, then notwithstanding any provisions of this Agreement to the contrary, it shall not be entitled to vote on any matter requiring the consent of the Banks or to object to any matter requiring the consent of the Banks; provided, however, that all other benefits and obligations under the Loan Documents shall apply to such Defaulting Bank.
Defaulting Bank. Notwithstanding anything stated to the contrary in this Agreement:
(a) The Company shall have the right to terminate the Commitment of any Defaulting Bank by written notice to the Agent and the Defaulting Bank at any time within ten (10) Business Days of the date the Company is informed by the Agent that such Bank has become a Defaulting Bank. If the Company terminates the Commitment of a Defaulting Bank, repayment of any Loans due the Defaulting Bank shall be made by the Company in the ordinary course of business pursuant hereto and be subject to Section 2.3 hereof; and
(b) The fees otherwise payable to a Bank pursuant to Section 4.1, 4.2 and 4.3 hereof shall not be payable by Company to the Agent for the benefit of a Defaulting Bank for any period a Bank is a Defaulting Bank; and
(c) If a Defaulting Bank makes any payment required pursuant to subsections (a) or (b) of the definition of Defaulting Bank together with interest thereon, within three (3) Business Days following the date it became a Defaulting Bank, the provisions of this Section 11.23 shall be inapplicable.
Defaulting Bank. In the event that, at any time, any Bank shall be a Defaulting Bank, (a) a Defaulted Amount owed to Agent or another Bank shall bear interest at an annual rate equal to the Federal Funds Rate for the first three business days such Defaulted Amount is owing, and thereafter at a rate of 3% above the Federal Funds Rate, and (b) Agent may apply all monies that would otherwise be payable to the Defaulting Bank under the Loan Documents instead to the payment of any Defaulted Amounts owed to the following persons, in the following order of priority: first to Agent, then to the Banks, then to Borrowers. In addition, a Person owed a Defaulted Amount may exercise all available remedies to collect such Defaulted Amount from the Defaulting Bank.
Defaulting Bank. See §14.5(c). Derivatives Contract. Any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement. Not in limitation of the foregoing, the term “Derivatives Contract” includes any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement of similar type, including any such obligations or liabilities under any such master agreement. Derivatives Provider. The Agent, any Lender or any affiliate thereof which is the counterparty under any Derivatives Provider Contract.
Defaulting Bank. See Section 14.5(c). Directions. See Section 14.12.
Defaulting Bank. Subject to §5.14, any Bank that, as determined by the Administrative Agent, (a) has failed to perform any of its funding obligations hereunder, including in respect of Loans or participations in respect of Letters of Credit or Swing Line Loans within three Business Days of the date required to be funded by it hereunder unless such obligation is the subject of a good faith dispute, (b) has notified the Borrower, or the Administrative Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements generally in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent that it will comply with its funding obligations, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Bank shall not be a Defaulting Bank solely by virtue of the ownership or acquisition of any equity interest in that Bank or any direct or indirect parent company thereof by a governmental agency or the exercise of ownership control in that Bank or any direct or indirect parent company by a governmental agency.
Defaulting Bank. See Section 6.12.