Nature of Obligation under this Agreement; Defaulting Lenders. (1) The obligations of each Lender and of the Agent under this Agreement are several. The failure of any Lender to carry out its obligations hereunder shall not relieve the other Lenders, the Agent or ~~the~~ either Borrower of any of their respective obligations hereunder. (2) ~~Without~~ Subject to and without derogating from the operation of Section ~~13.14~~ 15.14 and this Section ~~14.2~~16.2, neither the Agent nor any Lender shall be responsible for the obligations of any other Lender hereunder. (3) Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender: (a) the standby fees payable pursuant to Section ~~5.6~~ 5.8 shall cease to accrue on the unused portion of the Commitment of such Defaulting Lender; (b) a Defaulting Lender shall not be included in determining whether, and the Commitment and the Rateable Portion of the Outstanding Principal of such Defaulting Lender shall not be included in determining ~~whether,~~ whether all Lenders or the Majority of the Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section ~~14.10~~16.10), provided that any ~~waiver,~~ waiver or amendment ~~or modification~~ requiring the consent of all Lenders or each affected Lender that (i) affects such Defaulting Lender ~~differently than~~ in a manner that differs in any material respect from its application to other affected ~~Lenders~~ Lenders, (ii) increases the Commitment of such Defaulting Lender, (iii) extends the Maturity Date applicable to such Defaulting Lender, (iv) decreases the Applicable Pricing Rate applicable to such Defaulting Lender or (v) postpones, reduces or waives any principal payment due to such Defaulting Lender hereunder shall in each case require the consent of such Defaulting Lender; and (c) for the avoidance of doubt, the ~~Borrower~~ Borrowers shall retain and reserve its other rights and remedies respecting each Defaulting Lender. (4) ~~Should any~~ If the Agent has actual knowledge that a Lender ~~fail~~ is a Defaulting Lender at the time that the Agent receives a Drawdown Notice or a Rollover Notice that relates to a Fronted LC, or a Conversion Notice (or deemed notice) that will result in a currency conversion, then each other Lender (each a “Non-Defaulting Lender”) shall fund its Rateable Portion of a such affected Loan ~~hereunder~~(and, ~~then each other Lender shall fund a portion of such defaulted amount in an amount equal to such other Lender’s Rateable Portion (and~~ in calculating such Rateable Portion, the ~~Rateable Portion of a Lender, ignoring~~ applicable Agent shall ignore the Commitments of each such Defaulting ~~Lenders) of such unfunded portion~~Lender); provided that, for certainty, no Lender shall be obligated by this Section to make or provide Loans in excess of its Commitment. If the Agent acquires actual knowledge that a Lender is a Defaulting Lender at any time after the applicable Agent receives a Drawdown Notice or a Rollover Notice that relates to a Fronted LC or a Conversion Notice (or deemed notice) that will result in a currency conversion, then the Agent shall promptly notify the Canadian Borrower that such Lender is a Defaulting Lender (and such Lender shall be deemed to have consented to such disclosure). Each Defaulting Lender agrees to indemnify each other Lender for any amounts paid by such Lender under this Section 16.2(4) and which would otherwise have been paid by the Defaulting Lender if its Commitment had been included in determining the Rateable Portions of such affected Loans. (5) If any Fronted LC is outstanding at the time that a Lender becomes a Defaulting Lender then: (a) all or any part of such Defaulting Lender’s Rateable Portion of such Fronted LC shall be re-allocated among the Non-Defaulting Lenders in accordance with their respective Rateable Portions; provided that such re-allocation may only be effected if and to the extent that (i) such re-allocation would not cause any Non-Defaulting Lender’s Rateable Portion of all Loans to exceed its applicable Commitment(s) and (ii) the conditions precedent in Section 3.1 are satisfied at such time; (b) if the re-allocation described in clause (a) above cannot be effected, or can only partially be effected, then such Defaulting Lender shall, within one Banking Day following notice by the Agent, provide cash collateral for such Defaulting Lender’s Rateable Portion of such Fronted LC (after giving effect to any partial re-allocation pursuant to clause (a) above) in accordance with the procedures set forth in Section 15.14 for so long as such Fronted LC is outstanding; and (c) if the Rateable Portions of the Non-Defaulting Lenders are re-allocated pursuant to this Section 16.2(5), then the issuance fees payable to the Lenders pursuant to Section 7.9 shall be adjusted to give effect to such re-allocations in accordance with each such Non-Defaulting Lender’s Rateable Portions. (6) So long as any Lender is a Defaulting Lender, no Fronting Lender shall be required to issue, amend or increase any Fronted LC unless such Fronting Lender is satisfied that the related exposure will be 100% covered by the Commitments of the Non-Defaulting Lenders and/or cash collateralized in accordance with Section 15.14, and participating interests in any such newly issued or increased Letter of Credit shall be allocated among Non-Defaulting Lenders in a manner consistent with Section 16.2(4) or 16.2(5)(a) as applicable (and the Defaulting Lenders shall not participate therein). (7) If any Lender shall cease to be a Defaulting Lender, then, upon becoming aware of the same, the Agent shall notify the ~~other~~ Non-Defaulting Lenders and (in accordance with the written direction of the Agent) such Lender (which has ceased to be a Defaulting Lender) shall purchase, and the ~~other~~ Non-Defaulting Lenders shall on a rateable basis sell and assign to such Lender, portions of such Loans equal in total to such Lender’s Rateable Portion thereof without regard to Section ~~14.2 (4~~15.2(4). (8) Each Defaulting Lender hereby indemnifies the Borrowers for any losses, claims, costs, damages or liabilities (including reasonable out-of-pocket expenses and reasonable legal fees on a solicitor and his own client basis) incurred by the Borrowers as a result of such Defaulting Lender failing to comply with the terms of this Agreement including any failure to fund its portion of any Loans required to be made by it hereunder. (9) The Borrowers shall have the right, at its option, to (i) replace Defaulting Lenders under the Credit Facilities (by causing them to assign their rights and interests under the Credit Facilities to additional financial institutions which have agreed to become Lenders or by increasing the Commitments of existing Lenders under the Credit Facilities with, in the latter case, the consent of such increasing Lenders, or any combination thereof), (ii) repay the Obligations outstanding to Defaulting Lenders under the Credit Facilities and cancelling their Commitments (without corresponding repayment to other Lenders), or (iii) any combination of the foregoing; provided that increases in the Commitments of existing Lenders and the addition of new financial institutions as Lenders shall require the consent of the Agent and each Fronting Lender, such consents not to be unreasonably withheld or delayed (except for consent of the Fronting Lenders which shall be in each Fronting Lender’s sole discretion). (10) In order to give effect to the provisions of Section 16.2(9)(but subject to such provisions), the relevant Borrower may, from time to time: (a) require any Defaulting Lender to assign all of its rights, benefits and interests under the Documents, its Commitments and its Rateable Portion of all Loans and other Obligations (collectively, the “Defaulting Lender’s Assigned Interests”) to (i) any other Lenders which have agreed to increase their Commitments and purchase the Defaulting Lender’s Assigned Interests, and (ii) to third party financial institutions selected by such Borrower. The relevant Borrower shall provide the Agent and each Fronting Lender with 10 Banking Days’ prior written notice of its desire to proceed under this Section. The assignment of the Defaulting Lender’s Assigned Interests shall be effective upon: (w) execution and delivery of assignment documentation satisfactory to the relevant Defaulting Lender the assignee, the relevant Borrower and the Agent (each acting reasonably); (x) upon payment to the relevant Defaulting Lender, by the relevant assignee of an amount equal to such Lender’s Rateable Portion of all Loans being assigned and all accrued but unpaid interest and fees hereunder in respect of those portions of the Loans and Commitments being assigned; (y) upon payment by the relevant assignee to the applicable Agent (for the applicable Agent’s own account) of the transfer fee contemplated in Section 16.6; and (z) upon provision satisfactory to the Defaulting Lender (acting reasonably) being made for (I) payment at maturity of outstanding Bankers’ Acceptances accepted by it and (II) indemnity in respect of its share of outstanding Letters of Credit or, with respect to outstanding Fronted LCs, release by the relevant Fronting Lenders of its obligations in respect thereof. Upon such assignment and transfer, the assigning Defaulting Lender shall have no further right, interest, benefit or obligation in respect of the Defaulting Lender’s Assigned Interests (except as provided in Section 7.8(3)) and the assignee thereof shall succeed to the position of such Lender as if the same was an original party hereto in the place and stead of such Defaulting Lender; for such purpose, the assignee shall execute and deliver an Assignment Agreement and such other documentation as may be reasonably required by the Agent, the Fronting Lenders and the relevant Borrower to confirm its agreement to be bound by the provisions hereof as a Lender and to give effect to the foregoing; and (b) to the extent that a Borrower has not caused any Defaulting Lender to assign its rights, benefits and interests to another Lender or other financial institution as provided in paragraph (a) above, repay to such Defaulting Lender at any time while such Lender continues to be a Defaulting Lender, all such Lender’s Rateable Portion of all Loans outstanding under the Credit Facilities, together with all accrued but unpaid interest and fees thereon and with respect to its Commitments, without making corresponding repayment to the other Lenders and, upon such repayment and provision satisfactory to the relevant Defaulting Lender, (acting reasonably) being made for (i) payment at maturity of all outstanding Bankers’ Acceptances accepted by such Lender and (ii) indemnity in respect of its share of outstanding Letters of Credit or, with respect to outstanding Fronted LCs, release by the relevant Fronting Lenders of its obligations in respect thereof, the relevant Borrower may cancel such Lender’s Commitments. Upon completion of the foregoing, such Defaulting Lender shall have no further right, interest, benefit or obligation in respect of the Credit Facilities (except as provided in Section 7.8(3)) and each Credit Facility shall be reduced by the amount of such Lender’s cancelled Commitment thereunder.

Appears in 1 contract

Sources: Credit Agreement (Enerflex Ltd.)

Appears in 1 contract

Sources: Credit Agreement (Baytex Energy Corp.)

Appears in 1 contract

Sources: Credit Agreement (Baytex Energy Corp.)

Appears in 1 contract

Sources: Credit Facilities (Hammerhead Energy Inc.)

Common use of Nature of Obligation under this Agreement; Defaulting Lenders Clause in Contracts