Provisions Regarding Letters of Credit Sample Clauses
The "Provisions Regarding Letters of Credit" clause defines the rules and requirements governing the use of letters of credit in a contractual relationship. It typically outlines the conditions under which a letter of credit must be issued, the responsibilities of the parties involved, and the procedures for drawing funds or making claims under the letter of credit. For example, it may specify the form of the letter, the issuing bank, and the documentation required to trigger payment. This clause ensures that both parties have a clear understanding of how financial guarantees will be managed, reducing the risk of disputes and providing security for payment obligations.
Provisions Regarding Letters of Credit. (a) Notwithstanding anything herein to the contrary, Borrower may meet its obligations to fund any or all of the Initial Deposits or other deposits required to be made and maintained during a Triggering Event Period, by delivering to Lender a Letter of Credit in such amount as may be necessary to meet the deposit obligations under this Article 7. Any Letter of Credit delivered under this Agreement shall be additional security for the payment of the Debt. Upon the occurrence and continuance of an Event of Default, Lender shall have the right, at its option, to draw on any such Letter of Credit and to apply all or any part thereof to the payment of the items for which such Letter of Credit was established or to apply each such Letter of Credit to payment of the Debt in such order, proportion or priority as Lender may determine. On the Maturity Date if the Debt is not paid in full, any such Letter of Credit may be applied to reduce the Debt.
(b) In addition to any other right Lender may have to draw upon a Letter of Credit pursuant to the terms and conditions of this Agreement, Lender shall have the additional rights to draw in full on any Letter of Credit: (i) if Lender has received a notice from the Issuing Bank that the Letter of Credit will not be renewed and either (y) a substitute Letter of Credit or (z) Cash in the amount of the Letter of Credit is not provided at least ten (10) Business Days prior to the date on which the outstanding Letter of Credit is scheduled to expire; (ii) upon receipt of notice from the Issuing Bank that the Letter of Credit will be terminated; or (iii) if the bank issuing the Letter of Credit shall cease to satisfy the Minimum L/C Rating and Borrower fails to deliver a substitute Letter of Credit or Cash in the amount of the Letter of Credit within ten (10) Business Days of such event. Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw down on any Letter of Credit upon the happening of an event specified in (i), (ii) or (iii) above and shall not be liable for any losses sustained by Borrower due to the insolvency of the bank issuing the Letter of Credit if Lender has not drawn the Letter of Credit and in the event of the insolvency of the bank issuing the Letter of Credit or if the bank issuing the Letter of Credit ceases to satisfy the Minimum L/C Rating, Borrower shall provide to Lender within the time frames set forth above either (y) a substitute Letter of Credit meeting the re...
Provisions Regarding Letters of Credit. (i) Requests for Letters of Credit and Letter of Credit Fees. Each request for issuance of a Letter of Credit shall be made by the Borrower's execution and
Provisions Regarding Letters of Credit. (a) On or prior to the Effective Date, the Company shall deliver to the Trustee a Letter of Credit in the amount of the Five Million Dollars ($5,000,000.00) which shall be available to be drawn down at any time after the issuance thereof and the Trustee shall have the right to draw down such Letter of Credit as set forth herein. For purposes of this Section 10.6, the term “Letter of Credit” means an irrevocable, unconditional, transferable, clean sight draft letter of credit in favor of the Trustee and entitling the Trustee to draw thereon as provided in this Section 10.6 in New York, New York (whether in person or by facsimile), issued in U.S. Dollars by a domestic Eligible Institution or the U.S. agency or branch of a foreign Eligible Institution. For purposes of this Section 10.6, “Eligible Institution” means a depository institution insured by the Federal Deposit Insurance Corporation the short term unsecured debt obligations or commercial paper of which are rated at least “A-1” by Standard & Poor’s Ratings Group, “P-1” by ▇▇▇▇▇’▇ Investors Service, Inc. and “F-1+” by Fitch IBCA, Inc. in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of letters of credit or accounts in which funds are held for more than thirty (30) days, the long term unsecured debt obligations of which are rated at least “AA” by Fitch IBCA, Inc. and Standard & Poor’s Ratings Group and “Aa2” by ▇▇▇▇▇’▇ Investors Service, Inc.).
Provisions Regarding Letters of Credit