Letters of Credit/Bankers’ Acceptances Issued for Subsidiaries Clause Samples
The "Letters of Credit/Bankers’ Acceptances Issued for Subsidiaries" clause authorizes a lender to issue letters of credit or bankers’ acceptances not only for the primary borrower but also for its subsidiary companies. In practice, this means that a parent company can arrange for its subsidiaries to receive financial instruments that guarantee payment to third parties or facilitate trade transactions, all under the umbrella of the main credit agreement. This clause streamlines access to credit facilities for subsidiaries, ensuring operational flexibility and efficiency across a corporate group, and addresses the need for centralized management of financial support within affiliated entities.
Letters of Credit/Bankers’ Acceptances Issued for Subsidiaries. Notwithstanding that a Letter of Credit or Bankers’ Acceptance issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Company shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit or Bankers’ Acceptance, as applicable. The Company hereby acknowledges that the issuance of Letters of Credit or Bankers’ Acceptances for the account of Subsidiaries inures to the benefit of the Company, that the Company’s business derives substantial benefits from the businesses of such Subsidiaries and that such issuance for the benefit of a Subsidiary constitutes an Investment by the Company in such Subsidiary that must comply with Section 7.02.
Letters of Credit/Bankers’ Acceptances Issued for Subsidiaries. Notwithstanding that a Letter of Credit or Bankers’ Acceptance issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Company shall be obligated to reimburse, indemnify and compensate the L/C Issuer hereunder for any and all drawings under such Letter of Credit or Bankers’ Acceptance, as applicable, as if such Letter of Credit or Bankers’ Acceptance, as applicable, had been issued solely for the account of a Borrower. Each Borrower irrevocably waives any and all defenses that might otherwise be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of such Letter of Credit or Bankers’ Acceptance. The Company hereby acknowledges that the issuance of Letters of Credit or Bankers’ Acceptances for the account of Subsidiaries inures to the benefit of the Company, that the Company’s business derives substantial benefits from the businesses of such Subsidiaries.
Letters of Credit/Bankers’ Acceptances Issued for Subsidiaries. Notwithstanding that a Letter of Credit or Bankers’ Acceptance issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Company shall be obligated to reimburse, indemnify and compensate the L/C Issuer hereunder for any and all drawings under such Letter of Credit or Bankers’ Acceptance, as applicable, as if such Letter of Credit or Bankers’ Acceptance, as applicable, had been issued solely for the account of a Borrower. Each Borrower irrevocably waives any and all defenses that might otherwise be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of such