Common use of Defaulting Financial Institutions Clause in Contracts

Defaulting Financial Institutions. (a) If any Financial Institution becomes a Defaulting Financial Institution at any time when there are undrawn Letters of Credit outstanding, then such Defaulting Financial Institution shall (i) within two (2) Business Days following notice by any LC Bank, cash collateralize for the benefit of the XX Xxxxx a portion of the amount of the then outstanding Letters of Credit equal to such Defaulting Financial Institution’s Pro Rata Share of the undrawn stated amount of outstanding Letters of Credit by depositing such amount into the Defaulting Financial Institution Account, and (ii) maintain funds in the Defaulting Financial Institution Account to cash collateralize such Defaulting Financial Institution’s Pro Rata Share of the undrawn stated amount of outstanding Letters of Credit. The Agent shall apply funds deposited into the Defaulting Financial Institution Account to satisfy a Defaulting Financial Institution’s obligation to fund its portion of an LC Participation Advance required to be made by such Defaulting Financial Institution.