L/C Obligations Clause Samples
The L/C Obligations clause defines the responsibilities and requirements related to letters of credit (L/Cs) issued under an agreement. It typically outlines the conditions under which a party must arrange for, maintain, or reimburse L/Cs, and may specify limits, procedures for drawing on the L/C, and the consequences of default. For example, it might require a borrower to ensure that all L/Cs are backed by sufficient collateral or to reimburse the issuer promptly for any payments made under the L/C. The core function of this clause is to clearly allocate the duties and risks associated with letters of credit, ensuring that all parties understand their financial and procedural obligations.
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L/C Obligations. (i) Subject to the terms and conditions hereof, each Issuing Bank, in reliance on the agreements of the other Banks set forth in subsection 2.26(d)(i), agrees to issue letters of credit (“Letters of Credit”) for the account of the Company or the Capital Corporation on any Business Day during the Commitment Period in such form as may be approved from time to time by such Issuing Bank; provided that such Issuing Bank shall not issue any Letter of Credit if, after giving effect to such issuance, (A) the L/C Obligations would exceed the L/C Commitment, (B) the Total Extensions of Credit would be greater than the Total Commitments, (C) the aggregate L/C Obligations in respect of Letters of Credit issued by such Issuing Bank would exceed such Issuing Bank’s Issuing Bank L/C Commitment or (D) the Committed Extensions of Credit of such Issuing Bank (including in its capacity as a lender of Committed Rate Loans) would exceed its Commitment (it being understood that (a) rollovers and renewals of Letters of Credit and amendments which do not increase the drawable amount of a Letter of Credit shall be deemed not to be issuances for purposes of the preceding proviso and (b) the proviso will not be violated if Total Extensions of Credit exceed Total Commitments or an Issuing Bank’s Committed Extensions of Credit exceed its Commitment, in each case as a result of changes in Exchange Rates). Each Letter of Credit shall (1) be denominated in Dollars, and (2) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date that is five Business Days prior to the Termination Date, provided that any Letter of Credit with a one-year term may provide for the automatic renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).
(ii) An Issuing Bank shall not at any time be obligated to issue any Letter of Credit if such issuance would conflict with, or cause such Issuing Bank or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.
(iii) Existing Letters of Credit shall be deemed to be Letters of Credit issued under this Agreement on the Closing Date.
L/C Obligations. If for any reason (A) the aggregate amount of L/C Obligations to any L/C Issuer exceeds its L/C Commitment or (B) the aggregate amount of all L/C Obligations exceeds the Letter of Credit Sublimit then in effect, the Borrower shall immediately Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess. All amounts required to be Cash Collateralized pursuant to (1) Section 2.05(b)(iii)(A) shall be applied to such L/C Issuer and (2) Section 2.05(b)(iii)(B) shall be applied ratably to outstanding L/C Obligations. Within the parameters of the applications set forth above, prepayments shall be applied, as applicable, first to Base Rate Loans, second to LIBOR Daily Floating Rate Loans and then to Eurodollar Rate Loans in direct order of Interest Period maturities. All prepayments under this Section 2.05(b) shall be subject to Section 3.05, but otherwise without premium or penalty, and shall be accompanied by interest on the principal amount prepaid through the date of prepayment.
L/C Obligations. The term “L/C OBLIGATIONS” means collectively at any time of determination an amount equal to the sum of: (a) the aggregate undrawn and unexpired amount of the then outstanding LETTERS OF CREDIT; and (b) the aggregate amount in U.S. dollars of drawings under LETTERS OF CREDIT which have not then been reimbursed.
L/C Obligations. Upon the request of the Administrative Agent (given at the request or with the consent of the Required Banks), if, as of the Termination Date, any Letter of Credit for any reason remains outstanding and partially or wholly undrawn, the applicable Borrower shall immediately deliver to the Administrative Agent for the benefit of the applicable Fronting L/C Issuers and the Banks Cash Collateral in an amount sufficient to cover the then outstanding L/C Obligations plus any accrued and unpaid interest thereon.
L/C Obligations. As at any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
L/C Obligations. 19 L/C Participants.............................................19
L/C Obligations. RRL acknowledges that it has assumed the obligations of RSRL under the LC Agreement with respect to any letters of credit that remain outstanding in the name of RSRL
L/C Obligations. As of the date hereof (A) the aggregate amount of L/C Borrowings is $ , and (B) the aggregate then undrawn and unexpired amount of the outstanding Letters of Credit (calculated in accordance with Section 1.3 of the Credit Agreement) is $ .
L/C Obligations. If, on any date and for any reason, the Outstanding Amount of L/C Obligations exceeds the L/C Sublimit, then Borrower shall Cash Collateralize on such date L/C Obligations in an amount equal to such excess.
L/C Obligations. (i) Subject to the terms and conditions hereof, the Issuing Bank, in reliance on the agreements of the other Banks set forth in subsection 2.23(d)(i), agrees to issue letters of credit (“Letters of Credit”) for the account of a Borrower on any Business Day during the Commitment Period in such form as may be approved from time to time by the Issuing Bank; provided that the Issuing Bank shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (A) the L/C Obligations would exceed the L/C Commitment or (B) the Total Extensions of Credit would be greater than the Total Commitments. Each Letter of Credit shall (1) be denominated in Dollars, and (2) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date that is five Business Days prior to the Termination Date, provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).
(ii) The Issuing Bank shall not at any time be obligated to issue any Letter of Credit if such issuance would conflict with, or cause the Issuing Bank or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.