Issuance and Administration of Letters of Credit. (a) Agreement to Issue Letters of Credit. (i) Subject to the terms and conditions set forth herein: (A) Letter of Credit Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this SECTION 2.4, (1) from time to time on any Business Day during the period from the Agreement Date until the Letter of Credit Expiration Date, to issue Letters of Credit (denominated in Dollars) for the account of Borrower, and to amend or renew Letters of Credit previously issued by it, in accordance with SUBSECTION (b) below, and (2) to honor drafts under the Letters of Credit; and (B) Lenders severally agree to participate in Letters of Credit issued for the account of Borrower; provided that Letter of Credit Issuer shall not be obligated to issue, and no Lender shall be obligated to REVOLVING CREDIT AGREEMENT participate in, any Letter of Credit if as of the date of issuance of such Letter of Credit, (x) the Commitment Usage would exceed the Total Revolving Credit Commitment, (y) such Lender's Commitment Ratio of the principal amount of all Loans plus such Lender's Commitment Ratio of the Letter of Credit Exposure would exceed such Lender's Revolving Credit Commitment, or (z) the Letter of Credit Exposure would exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, Borrower's ability to obtain Letters of Credit shall be fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. (ii) Letter of Credit Issuer shall be under no obligation to issue any Letter of Credit if: (A) any order, judgment, or decree of any Governmental Authority shall by its terms purport to enjoin or restrain Letter of Credit Issuer from issuing such Letter of Credit, or any Applicable Law applicable to Letter of Credit Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over Letter of Credit Issuer shall prohibit, or request that Letter of Credit Issuer refrain from, the issuance of Letters of Credit generally or such Letter of Credit in particular or shall impose upon Letter of Credit Issuer with respect to such Letter of Credit any restriction, reserve, or capital requirement (for which Letter of Credit Issuer is not otherwise compensated hereunder) not in effect on the Agreement Date, or shall impose upon Letter of Credit Issuer any unreimbursed loss, cost, or expense which was not applicable on the Agreement Date and which Letter of Credit Issuer in good faith deems material to it; (B) subject tx XXXXXXX 0.4(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve (12) months after the date of issuance or last renewal, unless the Required Lenders have approved such expiry date; (C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all Lenders have approved such expiry date; (D) such Letter of Credit is in a face amount less than $10,000; or (E) such Letter of Credit is not a Performance Letter of Credit. (iii) Letter of Credit Issuer shall be under no obligation to amend any Letter of Credit if (A) Letter of Credit Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit. (iv) Subject to the satisfaction by Borrower of the conditions precedent to the issuance of Letters of Credit hereunder (including those set forth in SECTION 4) and in accordance with SECTION 2.4(b), letters of credit issued under the Existing Agreement ("EXISTING LETTERS OF CREDIT") may, at the request of Borrower, be renewed and extended as Letters of Credit hereunder. In such event, any such Existing Letters of Credit shall be deemed to be Letters of Credit hereunder for all purposes. REVOLVING CREDIT AGREEMENT (b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen Letters of Credit. (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of Borrower delivered to Letter of Credit Issuer (with a copy to Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by an Authorized Signatory of Borrower. Such Letter of Credit Application must be received by Letter of Credit Issuer and Administrative Agent not later than 10:00 a.m., at least five (5) Business Days (or such later date and time as Letter of Credit Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to Letter of Credit Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as Letter of Credit Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to Letter of Credit Issuer: (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as Letter of Credit Issuer may require. (ii) Promptly after receipt of any Letter of Credit Application, Letter of Credit Issuer will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has received a copy of such Letter of Credit Application from Borrower and, if not, Letter of Credit Issuer will provide Administrative Agent with a copy thereof. Upon receipt by Letter of Credit Issuer of confirmation from Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, Letter of Credit Issuer shall, on the requested date, issue a Letter of Credit for the account of Borrower or enter into the applicable amendment or extension, as the case may be. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Letter of Credit Issuer a participation in such Letter of Credit in an amount equal to the product of such Lender's Commitment Ratio times the amount of such Letter of Credit. (iii) If Borrower so requests in any applicable Letter of Credit Application, then Letter of Credit Issuer may, in it sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an "EVERGREEN LETTER OF CREDIT"); provided that any such Evergreen Letter of Credit must permit Letter of Credit Issuer to prevent any such renewal at least once in each twelve (12) month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "NONRENEWAL NOTICE DATE") in each such twelve (12) month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by Letter of Credit Issuer, Borrower shall not be required to make a specific request to Letter of Credit Issuer for any such renewal. Once an Evergreen Letter of Credit has been issued, Lenders shall be deemed to have authorized (but may not require) Letter of Credit Issuer to permit the renewal of such Letter of Credit at any time to a date not later than the Letter of Credit Expiration Date; provided, however, that Letter of Credit Issuer shall not permit any such renewal if (A) Letter of Credit Issuer would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the Business Day immediately preceding the Nonrenewal Notice Date from Administrative Agent, any Lender, or REVOLVING CREDIT AGREEMENT Borrower that one (1) or more of the applicable conditions specified in SECTION 4.2 is not then satisfied. Notwithstanding anything to the contrary contained herein, Letter of Credit Issuer shall have no obligation to permit the renewal of any Evergreen Letter of Credit at any time. (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, Letter of Credit Issuer will also deliver to Borrower and Administrative Agent a true and complete copy of such Letter of Credit or amendment. (c) Drawings and Reimbursements; Funding of Participations. (i) Upon any drawing under any Letter of Credit, Letter of Credit Issuer shall notify Borrower and Administrative Agent thereof. Not later than 10:00 a.m. on the next Business Day following the date of notice of any payment by Letter of Credit Issuer under a Letter of Credit (each such date, an "HONOR DATE"), Borrower shall reimburse Letter of Credit Issuer through Administrative Agent in an amount equal to the amount of such drawing, together with interest on the amount of such drawing from the date of such drawing until reimbursed at the rate per annum equal to the Applicable Rate. If Borrower fails to so reimburse Letter of Credit Issuer by such time, then Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing and any interest thereon (the "UNREIMBURSED AMOUNT"), and such Lender's Commitment Ratio thereof. In such event, Borrower shall be deemed to have requested an Advance to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in SECTION 2.2, but subject to the conditions set forth in SECTION 4.2 (other than the delivery of a Request for Advance). Any notice given by Letter of Credit Issuer or Administrative Agent pursuant to this SECTION 2.4(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice. (ii) Each Lender (including the Lender acting as Letter of Credit Issuer) shall upon any notice pursuant to SECTION 2.4(c)(i) make funds available to Administrative Agent for the account of Letter of Credit Issuer at Administrative Agent's office in an amount equal to its Commitment Ratio of the Unreimbursed Amount not later than 12:00 noon on the Business Day specified in such notice by Administrative Agent, whereupon, subject to the provisions of SECTION 2.4(c)(iii), each Lender that so makes funds available shall be deemed to have made an Advance to Borrower in such amount. Administrative Agent shall remit the funds so received to Letter of Credit Issuer. (iii) With respect to any Unreimbursed Amount that is not fully refinanced by an Advance because the conditions set forth in SECTION 4.2 cannot be satisfied, Borrower shall be deemed to have incurred from Letter of Credit Issuer a Letter of Credit Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender's payment to Administrative Agent for the account of Letter of Credit Issuer pursuant to SECTION 2.4(c)(ii) shall be deemed payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a Letter of Credit Advance from such Lender in satisfaction of its participation obligation under this SECTION 2.4. (iv) Until each Lender funds its Advance or Letter of Credit Advance pursuant to this SECTION 2.4(c) to reimburse Letter of Credit Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Commitment Ratio of such amount shall be solely for the account of Letter of Credit Issuer. REVOLVING CREDIT AGREEMENT (v) Each Lender's obligation to make Advances or Letter of Credit Advances to reimburse Letter of Credit Issuer for amounts drawn under Letters of Credit, as contemplated by this SECTION 2.4(c), shall be absolute and unconditional and shall not be affected by any circumstance, including: (A) any set-off, counterclaim, recoupment, defense, or other right which such Lender may have against Letter of Credit Issuer, Borrower, or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default; or (C) any other occurrence, event, or condition, whether or not similar to any of the foregoing. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to reimburse Letter of Credit Issuer for the amount of any payment made by Letter of Credit Issuer under any Letter of Credit, together with interest as provided herein. (vi) If any Lender fails to make available to Administrative Agent, for the account of Letter of Credit Issuer, any amount required to be paid by such Lender pursuant to the foregoing provisions of this SECTION 2.4(c) by the time specified in SECTION 2.4(c)(ii), then Letter of Credit Issuer shall be entitled to recover from such Lender (acting through Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to Letter of Credit Issuer for the first two (2) days that such amount is not repaid, at the Federal Funds Rate, and, thereafter, at the Federal Funds Rate plus four percent (4%) per annum. A certificate of Letter of Credit Issuer submitted to any Lender (through Administrative Agent) with respect to any amounts owing under this CLAUSE (VI) shall be conclusive absent manifest error. (vii) Borrower shall pay to Letter of Credit Issuer, promptly upon demand, the amount of any fees (in addition to the fees described in SECTION 2.5) which Letter of Credit Issuer customarily charges to a Person similarly situated in the ordinary course of its business for amending Letters of Credit and Letter of Credit Applications, for honoring drafts, and taking similar action in connection with Letters of Credit, together with all reasonable out-of-pocket expenses of Letter of Credit Issuer incurred in connection therewith. (viii) Administrative Agent and Letter of Credit Issuer shall provide to Lenders periodic information, but not more often than quarterly, regarding outstanding Letters of Credit (including issue date, expiry date, beneficiary, Evergreen Letters of Credit, and amount), the Letter of Credit Exposure, and each Lender's Commitment Ratio thereof.
Appears in 1 contract
Issuance and Administration of Letters of Credit. (a) Agreement to Issue Letters of Credit.
(i) Subject to the terms and conditions set forth herein: (A) each Letter of Credit Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this SECTION Section 2.4, (1) from time to time on any Business Day during the period from the Agreement Date until the Letter of Credit Expiration Date, to issue Letters of Credit (denominated in Dollars) for the account of Borrower, and to amend or renew Letters of Credit previously issued by it, in accordance with SUBSECTION subsection (b) below, and (2) to honor drafts under the Letters of Credit; and (B) Lenders severally agree to participate in Letters of Credit issued for the account of Borrower; provided that no Letter of Credit Issuer shall not be obligated to issue, and no Lender shall be obligated to REVOLVING CREDIT AGREEMENT participate in, any Letter of Credit if as of the date of issuance of such Letter of Credit, (x) the Commitment Usage would exceed the Total Revolving Credit Commitment, (y) such Lender's ’s Commitment Ratio of the principal amount of all Loans plus such Lender's ’s Commitment Ratio of the Letter of Credit Exposure would exceed such Lender's ’s Revolving Credit Commitment, or (z) the Letter of Credit Exposure would exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, Borrower's ’s ability to obtain Letters of Credit shall be fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Agreement Date shall be subject to and governed by the terms and conditions hereof.
(ii) No Letter of Credit Issuer shall be under no any obligation to issue any Letter of Credit if:
(A) any order, judgment, or decree of any Governmental Authority shall by its terms purport to enjoin or restrain such Letter of Credit Issuer from issuing such Letter of Credit, or any Applicable Law applicable to such Letter of Credit Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Letter of Credit Issuer shall prohibit, or request that such Letter of Credit Issuer refrain from, the issuance of Letters of Credit generally or such Letter of Credit in particular or shall impose upon any Letter of Credit Issuer with respect to such Letter of Credit any restriction, reserve, or capital requirement (for which such Letter of Credit Issuer is not otherwise compensated hereunder) not in effect on the Agreement Date, or shall impose upon such Letter of Credit Issuer any unreimbursed loss, cost, or expense which was not applicable on the Agreement Date and which such Letter of Credit Issuer in good faith deems fxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate any Applicable Laws or one or more policies of such Letter of Credit Issuer with respect to the issuance of Letters of Credit generally;
(C) subject tx XXXXXXX 0.4(b)(iiito Section 2.4(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve (12) months after the date of issuance or last renewal, unless the Required Lenders have approved such expiry date;
(CD) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all Lenders have approved such expiry date;
(DE) a default of any Lender’s obligations to fund under Section 2.4(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless (1) such Letter of Credit Issuer has entered into satisfactory arrangements with Borrower or such Lender to eliminate such Letter of Credit Issuer’s risk with respect to such Lender, or (2) after giving effect to such Letter of Credit, the Commitment Usage does not exceed the Total Revolving Commitments excluding the Revolving Credit Commitment of such Defaulting Lender; or
(F) such Letter of Credit is in a face amount less than $10,000; or
(E) such Letter of Credit is not a Performance Letter of Credit.
(iii) No Letter of Credit Issuer shall be under no any obligation to amend any Letter of Credit if (A) such Letter of Credit Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(iv) Subject to the satisfaction by Borrower of the conditions precedent to the issuance of Letters No Letter of Credit hereunder (including those set forth in SECTION 4) and in accordance with SECTION 2.4(b), letters of credit issued under the Existing Agreement ("EXISTING LETTERS OF CREDIT") may, at the request of Borrower, be renewed and extended as Letters Issuer shall issue any Letter of Credit hereunder. In such event, any such having an expiry date that would occur after the Letter of Credit Expiration Date without the consent of all Lenders.
(v) The Existing Letters of Credit shall be deemed to be Letters of Credit hereunder for all purposes. REVOLVING CREDIT AGREEMENTpurposes and shall be subject to and governed by the terms of this Agreement.
(b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of Borrower delivered to a Letter of Credit Issuer (with a copy to Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by an Authorized Signatory of Borrower. Such Letter of Credit Application must be received by the applicable Letter of Credit Issuer and Administrative Agent not later than 10:00 a.m., at least five (5) Business Days (or such later date and time as the applicable Letter of Credit Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable Letter of Credit Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as such Letter of Credit Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable Letter of Credit Issuer: (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as such Letter of Credit Issuer may require.
(ii) Promptly after receipt of any Letter of Credit Application, the applicable Letter of Credit Issuer will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has received a copy of such Letter of Credit Application from Borrower and, if not, such Letter of Credit Issuer will provide Administrative Agent with a copy thereof. Upon receipt by the applicable Letter of Credit Issuer of confirmation from Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such Letter of Credit Issuer shall, on the requested date, issue a Letter of Credit for the account of Borrower or enter into the applicable amendment or extension, as the case may be. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from such Letter of Credit Issuer a participation in such Letter of Credit in an amount equal to the product of such Lender's ’s Commitment Ratio times the amount of such Letter of Credit.
(iii) If Borrower so requests in any applicable Letter of Credit Application, then a Letter of Credit Issuer may, in it sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an "EVERGREEN LETTER OF CREDIT"“Evergreen Letter of Credit”); provided that any such Evergreen Letter of Credit must permit such Letter of Credit Issuer to prevent any such renewal at least once in each twelve (12) month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "NONRENEWAL NOTICE DATE"“Nonrenewal Notice Date”) in each such twelve (12) month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the applicable Letter of Credit Issuer, Borrower shall not be required to make a specific request to such Letter of Credit Issuer for any such renewal. Once an Evergreen Letter of Credit has been issued, Lenders shall be deemed to have authorized (but may not require) the applicable Letter of Credit Issuer to permit the renewal of such Letter of Credit at any time to a date not later than the Letter of Credit Expiration Date; provided, however, that such Letter of Credit Issuer shall not permit any such renewal if (A) Letter of Credit Issuer would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the Business Day immediately preceding the Nonrenewal Notice Date from Administrative Agent, any Lender, or REVOLVING CREDIT AGREEMENT Borrower that one (1) or more of the applicable conditions specified in SECTION Section 4.2 is not then satisfied. Notwithstanding anything to the contrary contained herein, no Letter of Credit Issuer shall have no any obligation to permit the renewal of any Evergreen Letter of Credit at any time.
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable Letter of Credit Issuer will also deliver to Borrower and Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon any drawing under any Letter of Credit, Letter of Credit Issuer shall notify Borrower and Administrative Agent thereof. Not later than 10:00 a.m. on the next Business Day following the date of notice of any payment by Letter of Credit Issuer under a Letter of Credit (each such date, an "HONOR DATE"), Borrower shall reimburse Letter of Credit Issuer through Administrative Agent in an amount equal to the amount of such drawing, together with interest on the amount of such drawing from the date of such drawing until reimbursed at the rate per annum equal to the Applicable Rate. If Borrower fails to so reimburse Letter of Credit Issuer by such time, then Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing and any interest thereon (the "UNREIMBURSED AMOUNT"), and such Lender's Commitment Ratio thereof. In such event, Borrower shall be deemed to have requested an Advance to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in SECTION 2.2, but subject to the conditions set forth in SECTION 4.2 (other than the delivery of a Request for Advance). Any notice given by Letter of Credit Issuer or Administrative Agent pursuant to this SECTION 2.4(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as Letter of Credit Issuer) shall upon any notice pursuant to SECTION 2.4(c)(i) make funds available to Administrative Agent for the account of Letter of Credit Issuer at Administrative Agent's office in an amount equal to its Commitment Ratio of the Unreimbursed Amount not later than 12:00 noon on the Business Day specified in such notice by Administrative Agent, whereupon, subject to the provisions of SECTION 2.4(c)(iii), each Lender that so makes funds available shall be deemed to have made an Advance to Borrower in such amount. Administrative Agent shall remit the funds so received to Letter of Credit Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by an Advance because the conditions set forth in SECTION 4.2 cannot be satisfied, Borrower shall be deemed to have incurred from Letter of Credit Issuer a Letter of Credit Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender's payment to Administrative Agent for the account of Letter of Credit Issuer pursuant to SECTION 2.4(c)(ii) shall be deemed payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a Letter of Credit Advance from such Lender in satisfaction of its participation obligation under this SECTION 2.4.
(iv) Until each Lender funds its Advance or Letter of Credit Advance pursuant to this SECTION 2.4(c) to reimburse Letter of Credit Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Commitment Ratio of such amount shall be solely for the account of Letter of Credit Issuer. REVOLVING CREDIT AGREEMENT
(v) Each Lender's obligation to make Advances or Letter of Credit Advances to reimburse Letter of Credit Issuer for amounts drawn under Letters of Credit, as contemplated by this SECTION 2.4(c), shall be absolute and unconditional and shall not be affected by any circumstance, including: (A) any set-off, counterclaim, recoupment, defense, or other right which such Lender may have against Letter of Credit Issuer, Borrower, or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default; or (C) any other occurrence, event, or condition, whether or not similar to any of the foregoing. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to reimburse Letter of Credit Issuer for the amount of any payment made by Letter of Credit Issuer under any Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to Administrative Agent, for the account of Letter of Credit Issuer, any amount required to be paid by such Lender pursuant to the foregoing provisions of this SECTION 2.4(c) by the time specified in SECTION 2.4(c)(ii), then Letter of Credit Issuer shall be entitled to recover from such Lender (acting through Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to Letter of Credit Issuer for the first two (2) days that such amount is not repaid, at the Federal Funds Rate, and, thereafter, at the Federal Funds Rate plus four percent (4%) per annum. A certificate of Letter of Credit Issuer submitted to any Lender (through Administrative Agent) with respect to any amounts owing under this CLAUSE (VI) shall be conclusive absent manifest error.
(vii) Borrower shall pay to Letter of Credit Issuer, promptly upon demand, the amount of any fees (in addition to the fees described in SECTION 2.5) which Letter of Credit Issuer customarily charges to a Person similarly situated in the ordinary course of its business for amending Letters of Credit and Letter of Credit Applications, for honoring drafts, and taking similar action in connection with Letters of Credit, together with all reasonable out-of-pocket expenses of Letter of Credit Issuer incurred in connection therewith.
(viii) Administrative Agent and Letter of Credit Issuer shall provide to Lenders periodic information, but not more often than quarterly, regarding outstanding Letters of Credit (including issue date, expiry date, beneficiary, Evergreen Letters of Credit, and amount), the Letter of Credit Exposure, and each Lender's Commitment Ratio thereof.
Appears in 1 contract
Issuance and Administration of Letters of Credit. (a) Agreement to Issue Letters of Credit.
(i) Subject to the terms and conditions set forth herein: (A) Letter of Credit Issuer agreeshereof, in reliance upon the agreements of the other Lenders set forth in this SECTION 2.4Issuing Bank, (1) from time to time on any Business Day during the period from the Agreement Date until the Letter of Credit Expiration Date, to issue Letters of Credit (denominated in Dollars) for the account of Borrower, and to amend or renew Letters of Credit previously issued by it, in accordance with SUBSECTION (b) below, and (2) to honor drafts under the Letters of Credit; and (B) Lenders severally agree to participate in Letters of Credit issued for the account of Borrower; provided that Letter of Credit Issuer shall not be obligated to issue, and no Lender shall be obligated to REVOLVING CREDIT AGREEMENT participate in, any Letter of Credit if as of the date of issuance of such Letter of Credit, (x) the Commitment Usage would exceed the Total Revolving Credit Commitment, (y) such Lender's Commitment Ratio of the principal amount of all Loans plus such Lender's Commitment Ratio behalf of the Letter of Credit Exposure would exceed such Lender's Revolving Credit CommitmentBanks, or (z) and in reliance on the agreements of the Letter of Credit Exposure would exceed Banks set forth in subsection (d) below, hereby agrees to issue one or more Letters of Credit up to an aggregate face amount equal to the Available Letter of Credit Sublimit. Within Commitment, provided, however, that the foregoing limits, and subject to the terms and conditions hereof, Borrower's ability to obtain Letters of Credit Issuing Bank shall be fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) Letter of Credit Issuer shall be under no obligation to issue any Letter of Credit if:
(A) any orderif a Default or Event of Default would be caused thereby; and provided further, judgmenthowever, or decree of any Governmental Authority that at no time shall by its terms purport to enjoin or restrain the total Letter of Credit Issuer from issuing such Letter of Credit, or any Applicable Law applicable to Obligations outstanding hereunder exceed $25,000,000. Each Letter of Credit Issuer or any request or directive shall (whether or not having the force of law1) from any Governmental Authority with jurisdiction over Letter of Credit Issuer shall prohibitbe denominated in U.S. dollars, or request that Letter of Credit Issuer refrain from, the issuance of Letters of Credit generally or such Letter of Credit in particular or shall impose upon Letter of Credit Issuer with respect to such Letter of Credit any restriction, reserve, or capital requirement and (for which Letter of Credit Issuer is not otherwise compensated hereunder2) not in effect on the Agreement Date, or shall impose upon Letter of Credit Issuer any unreimbursed loss, cost, or expense which was not applicable on the Agreement Date and which Letter of Credit Issuer in good faith deems material to it;
(B) subject tx XXXXXXX 0.4(b)(iii), the expiry date of such requested Letter of Credit would occur more expire no later than twelve (12) months after the date of issuance or last renewal, unless the Required Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Maturity Date, unless all Lenders have approved such expiry date;
(D) such . A Letter of Credit is in a face amount less than $10,000; or
(E) may contain provisions for automatic renewal provided that no Default or Event of Default exists on the renewal date or would be caused by such renewal and provided further that the new expiration date does not extend beyond the Letter of Credit is not a Performance Letter of Credit.
(iii) Maturity Date. Each Letter of Credit Issuer shall be under no obligation subject to amend the Uniform Customs and Practices for Documentary Credits and, to the extent not inconsistent therewith, the laws of the State of Georgia and shall be in a form reasonably acceptable to the Issuing Bank. The Issuing Bank shall not at any time be obligated to issue, or cause to be issued, any Letter of Credit if (A) such issuance would conflict with, or cause the Issuing Bank to exceed any limits imposed by, any Applicable Law. If a Letter of Credit Issuer would have no obligation at such time provides that it is automatically renewable unless notice is given by the Issuing Bank that it will not be renewed, the Issuing Bank shall not be bound to issue such give a notice of non-renewal unless directed to do so by the Letter of Credit in its amended form under Banks at least thirty (30) days prior to the terms hereof, or (B) date on which such notice of non-renewal is required to be delivered to the beneficiary of such the applicable Letter of Credit does not accept pursuant to the proposed amendment to such terms thereof. The Borrower hereby agrees that upon the Letter of Credit.
Credit Maturity Date (ivwhether by reason of acceleration or otherwise) Subject to the satisfaction by Borrower of the conditions precedent to the issuance of Letters of Credit hereunder (including those set forth in SECTION 4) and in accordance with SECTION 2.4(b), letters of credit issued under the Existing Agreement ("EXISTING LETTERS OF CREDIT") may, at the request of Borrowerthe Administrative Agent, be renewed and extended the Borrower shall deposit in an interest bearing account with the Administrative Agent, as Letters of Credit hereunder. In such eventcash collateral for the Obligations, an amount equal to the maximum amount currently or at any such Existing Letters of Credit shall be deemed time thereafter available to be Letters of Credit hereunder for drawn on all purposes. REVOLVING CREDIT AGREEMENT
(b) Procedures for Issuance and Amendment of outstanding Letters of Credit, and the Borrower hereby grants to the Administrative Agent (for itself and on behalf of the Issuing Bank) a security interest in all such cash. Upon receipt of the cash collateral referred to in the preceding sentence, the obligations of the Letter of Credit Banks under this Section 2.4 shall cease; Evergreen provided that, if for any reason, all or any part of such cash collateral must be surrendered or disgorged by the Administrative Agent, then such obligations shall be automatically reinstated. The terms hereof shall govern the reimbursement obligation of the Borrower with respect to the Letters of Credit.
(ib) Each Letter of Credit shall be issued or amended, as The Borrower may from time to time request that the case may be, upon the request of Borrower delivered to Letter of Credit Issuer (with a copy to Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by an Authorized Signatory of Borrower. Such Letter of Credit Application must be received by Letter of Credit Issuer and Administrative Agent not later than 10:00 a.m., at least five (5) Business Days (or such later date and time as Letter of Credit Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of Issuing Bank issue a Letter of Credit, such . The Borrower shall execute and deliver to the Administrative Agent and the Issuing Bank a Request for Issuance of Letter of Credit Application shall specify in form and detail satisfactory to for each Letter of Credit Issuer: to be issued by the Issuing Bank, not later than 12:00 noon (AEastern time) on the proposed issuance fifth (5th) Business Day preceding the date of on which the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents is to be presented by issued, or such beneficiary in case shorter notice as may be acceptable to the Issuing Bank and the Administrative Agent. Upon receipt of any drawing thereunder; (F) the full text such Request for Issuance of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as Letter of Credit Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, subject to satisfaction of all conditions precedent thereto as set forth in Article 4 hereof, the Issuing Bank shall process such Request for Issuance of Letter of Credit Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall specify in form and detail satisfactory to Letter of Credit Issuer: (1) promptly issue the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which requested thereby. The Issuing Bank shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as Letter of Credit Issuer may require.
(ii) Promptly after receipt of any Letter of Credit Application, Letter of Credit Issuer will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has received furnish a copy of such Letter of Credit Application from to the Borrower andand the Administrative Agent following the issuance thereof. The Borrower shall pay or reimburse the Issuing Bank on demand for normal and customary costs and expenses incurred by the Issuing Bank in effecting payment under, if not, amending or otherwise administering the Letters of Credit.
(c) At such time as the Administrative Agent shall be notified by the Issuing Bank that the beneficiary under any Letter of Credit Issuer will provide has drawn on the same, the Administrative Agent with a copy thereof. Upon receipt by shall promptly notify the Borrower and each Letter of Credit Issuer Bank, by telephone or telecopy, of confirmation from Administrative Agent that the requested issuance or amendment is permitted amount of the draw and, in the case of each Letter of Credit Bank, such Letter of Credit Bank's portion of such draw amount as calculated in accordance with its Letter of Credit Bank Commitment Ratio.
(d) The Borrower hereby agrees to immediately reimburse the terms hereofIssuing Bank for amounts paid by the Issuing Bank in respect of draws under a Letter of Credit issued at the Borrower's request. In order to facilitate such repayment, thenthe Borrower hereby irrevocably requests the Letter of Credit Banks, subject to and the Letter of Credit Banks hereby severally agree, on the terms and conditions hereofof this Agreement (other than as provided in Article 2 hereof with respect to the amounts of, Letter the timing of Credit Issuer shallrequests for, on and the requested daterepayment of Advances hereunder), issue with respect to any drawing under a Letter of Credit prior to the occurrence of an event described in clauses (e) or (f) of Section 6.1 hereof, to make an Advance hereunder on each day on which a draw is made under any Letter of Credit and in the amount of such draw, and to pay the proceeds of such Advance directly to the Issuing Bank to reimburse the Issuing Bank for the account amount paid by it upon such draw. Each Letter of Borrower Credit Bank shall pay its share of such Advance by paying its portion of such Advance to the Administrative Agent in accordance with Section 2.2(c) hereof and its Letter of Credit Bank Commitment Ratio, without reduction for any set-off or enter into counterclaim of any nature whatsoever and regardless of whether any Default or Event of Default (other than with respect to an event described in clauses (e) or (f) of Section 6.1 hereof) then exists or would be caused thereby. If at any time that any Letters of Credit are outstanding, any of the applicable amendment events described in clauses (e) or extension(f) of Section 6.1 hereof shall have occurred, as the case may be. Immediately upon the issuance of then each Letter of CreditCredit Bank shall, each Lender shall be deemed toautomatically upon the occurrence of any such event and without any action on the part of the Issuing Bank, and hereby irrevocably and unconditionally agrees tothe Borrower, purchase from the Administrative Agent, the Banks or the Letter of Credit Issuer a Banks, be deemed to have purchased an undivided participation in such Letter the face amount of all Letters of Credit then outstanding in an amount equal to the product of such Lender's Commitment Ratio times the amount of such Letter of Credit.
(iii) If Borrower so requests in any applicable Letter of Credit Application, then Letter of Credit Issuer may, in it sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an "EVERGREEN LETTER OF CREDIT"); provided that any such Evergreen Letter of Credit must permit Letter of Credit Issuer to prevent any such renewal at least once in each twelve (12) month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "NONRENEWAL NOTICE DATE") in each such twelve (12) month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by Bank's Letter of Credit IssuerBank Commitment Ratio, Borrower shall not be required to make a specific request to and each Letter of Credit Issuer for any Bank shall, notwithstanding such renewal. Once an Evergreen Letter of Credit has been issuedDefault, Lenders shall be deemed to have authorized (but may not require) Letter of Credit Issuer to permit the renewal of such Letter of Credit at any time to upon a date not later than the Letter of Credit Expiration Date; provided, however, that Letter of Credit Issuer shall not permit any such renewal if (A) Letter of Credit Issuer would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the Business Day immediately preceding the Nonrenewal Notice Date from Administrative Agent, any Lender, or REVOLVING CREDIT AGREEMENT Borrower that one (1) or more of the applicable conditions specified in SECTION 4.2 is not then satisfied. Notwithstanding anything to the contrary contained herein, Letter of Credit Issuer shall have no obligation to permit the renewal of any Evergreen Letter of Credit at any time.
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, Letter of Credit Issuer will also deliver to Borrower and Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon any drawing under any Letter of Credit, Letter of Credit Issuer shall notify Borrower and Administrative Agent thereof. Not later than 10:00 a.m. on the next Business Day following the date of notice of any payment by Letter of Credit Issuer under a Letter of Credit (each such date, an "HONOR DATE"), Borrower shall reimburse Letter of Credit Issuer through Administrative Agent in an amount equal immediately pay to the amount of such drawing, together with interest on the amount of such drawing from the date of such drawing until reimbursed at the rate per annum equal to the Applicable Rate. If Borrower fails to so reimburse Letter of Credit Issuer by such time, then Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing and any interest thereon (the "UNREIMBURSED AMOUNT"), and such Lender's Commitment Ratio thereof. In such event, Borrower shall be deemed to have requested an Advance to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in SECTION 2.2, but subject to the conditions set forth in SECTION 4.2 (other than the delivery of a Request for Advance). Any notice given by Letter of Credit Issuer or Administrative Agent pursuant to this SECTION 2.4(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as Letter of Credit Issuer) shall upon any notice pursuant to SECTION 2.4(c)(i) make funds available to Administrative Agent for the account of the Issuing Bank, in immediately available funds, the amount of such Letter of Credit Issuer at Administrative AgentBank's office in an amount equal participation (and the Issuing Bank shall deliver to its Commitment Ratio of the Unreimbursed Amount not later than 12:00 noon on the Business Day specified in such notice by Administrative Agent, whereupon, subject to the provisions of SECTION 2.4(c)(iii), each Lender that so makes funds available shall be deemed to have made an Advance to Borrower in such amount. Administrative Agent shall remit the funds so received to Letter of Credit Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by an Advance because Bank a loan participation certificate dated the conditions set forth date of the occurrence of such event and in SECTION 4.2 cannot be satisfied, Borrower shall be deemed to have incurred from the amount of such Letter of Credit Issuer Bank's Letter of Credit Bank Commitment Ratio). The disbursement of funds in connection with a draw under a Letter of Credit Borrowing in pursuant to this Section shall be subject to the amount terms and conditions of the Unreimbursed Amount that is not so refinanced, which Section 2.2(c) hereof. The obligation of each Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender's payment to Administrative Agent for the account of Letter of Credit Issuer pursuant to SECTION 2.4(c)(ii) shall be deemed payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a Letter of Credit Advance from such Lender in satisfaction of its participation obligation under this SECTION 2.4.
(iv) Until each Lender funds its Advance or Letter of Credit Advance pursuant to this SECTION 2.4(c) to reimburse Letter of Credit Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Commitment Ratio of such amount shall be solely for the account of Letter of Credit Issuer. REVOLVING CREDIT AGREEMENT
(v) Each Lender's obligation Bank to make Advances or Letter of Credit Advances payments to reimburse Letter of Credit Issuer for amounts drawn under Letters of Credit, as contemplated by this SECTION 2.4(c), shall be absolute and unconditional and shall not be affected by any circumstance, including: (A) any set-off, counterclaim, recoupment, defense, or other right which such Lender may have against Letter of Credit Issuer, Borrower, or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default; or (C) any other occurrence, event, or condition, whether or not similar to any of the foregoing. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to reimburse Letter of Credit Issuer for the amount of any payment made by Letter of Credit Issuer under any Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to Administrative Agent, for the account of the Issuing Bank, in accordance with this Section 2.4 shall be absolute and unconditional and no Letter of Credit Issuer, Bank shall be relieved of its obligations to make such payments by reason of noncompliance by any amount required to be paid by such Lender pursuant to other Person with the foregoing provisions terms of this SECTION 2.4(c) by the time specified in SECTION 2.4(c)(ii), then Letter of Credit Issuer or for any other reason. The Administrative Agent shall be entitled promptly remit to recover the Issuing Bank the amounts so received from such Lender (acting through Administrative Agent)the Letter of Credit Banks. Any overdue amounts payable by any of the Letter of Credit Banks to the Issuing Bank in respect of a draw under any Letter of Credit shall bear interest, payable on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to Letter of Credit Issuer for the first two (2) days that of such amount is not repaidnon-payment, at the Overnight Federal Funds Rate, and, thereafter, at the Overnight Federal Funds Rate plus four percent (4%) per annum. A certificate of Letter of Credit Issuer submitted to any Lender (through Administrative Agent) with respect to any amounts owing under this CLAUSE (VI) shall be conclusive absent manifest error).
(viie) The obligation of the Borrower shall pay to Letter of Credit Issuer, promptly upon demand, the amount of any fees (in addition to the fees described in SECTION 2.5) which Letter of Credit Issuer customarily charges to a Person similarly situated in the ordinary course of its business for amending Letters of Credit and Letter of Credit Applications, for honoring drafts, and taking similar action in connection with Letters of Credit, together with all reasonable out-of-pocket expenses of Letter of Credit Issuer incurred in connection therewith.
(viii) Administrative Agent and Letter of Credit Issuer shall provide to Lenders periodic information, but not more often than quarterly, regarding outstanding Letters of Credit (including issue date, expiry date, beneficiary, Evergreen Letters of Credit, and amount), reimburse the Letter of Credit ExposureBanks for Advances made to reimburse the Issuing Bank for draws under any Letters of Credit shall be absolute, unconditional and irrevocable, and each Lender's Commitment Ratio thereof.shall be paid strictly in accordance with the terms of this Agreement under all circumstances whatsoever, including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any Loan Document; (ii) Any amendment or waiver of or consent to any departure from any or all of the Loan Documents;
Appears in 1 contract
Samples: Loan Agreement (Horton D R Inc /De/)
Issuance and Administration of Letters of Credit. (a) Agreement to Issue Letters of Credit.
(i) Subject to the terms and conditions set forth herein: (A) Each Letter of Credit Issuer agreesissued hereunder shall be executed and delivered by the Several L/C Issuing Bank (or any its Affiliates or branches pursuant to the definition of “Several L/C Issuing Bank”), in reliance upon the agreements name of the other Lenders set forth in this SECTION 2.4and on behalf of, and as attorney-in-fact for, (1) from time to time on any Business Day during in the period from the Agreement Date until the case of a Tranche A Letter of Credit Expiration DateCredit, to issue Letters of Credit (denominated in Dollars) for the account of Borrower, and to amend or renew Letters of Credit previously issued by it, in accordance with SUBSECTION (b) below, Tranche A Lenders and (2) to honor drafts under in the Letters case of a Tranche B Letter of Credit; and (B) Lenders severally agree to participate in Letters of Credit issued for , the account of Borrower; provided that Letter of Credit Issuer shall not be obligated to issueTranche B Lenders, and no the Several L/C Issuing Bank shall act as the agent of each such Tranche A Lender shall be obligated or Tranche B Lender, as applicable, to REVOLVING CREDIT AGREEMENT participate in(i) receive drafts, any Letter of Credit if as of other demands and other documents presented by the date of issuance of beneficiary under such Letter of Credit, (xii) the Commitment Usage would exceed the Total Revolving Credit Commitmentdetermine whether such drafts, (y) such Lender's Commitment Ratio of the principal amount of all Loans plus such Lender's Commitment Ratio of the Letter of Credit Exposure would exceed such Lender's Revolving Credit Commitment, or (z) the Letter of Credit Exposure would exceed the Letter of Credit Sublimit. Within the foregoing limits, demands and subject to documents are in compliance with the terms and conditions hereof, Borrower's ability to obtain Letters of Credit shall be fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) such Letter of Credit Issuer and (iii) notify each Tranche A Lender or Tranche B Lender, as applicable, the Administrative Agent and the Borrower that a valid drawing has been made and the date that the related L/C Disbursement is to be made; provided that the Several L/C Issuing Bank, acting in such capacity, shall be under have no obligation to issue or liability for any Letter of Credit if:
(A) any order, judgment, or decree of any Governmental Authority shall by its terms purport to enjoin or restrain Letter of Credit Issuer from issuing L/C Disbursement under such Letter of Credit, or any Applicable Law applicable to and each Letter of Credit Issuer or shall expressly so provide. Each Lender hereby irrevocably appoints and designates the Several L/C Issuing Bank as its attorney-in-fact, acting through any request or directive (whether or not having duly authorized officer of the force Person that is serving as the Several L/C Issuing Bank, to execute and deliver in the name and on behalf of law) from any Governmental Authority with jurisdiction over such Lender each Tranche A Letter of Credit Issuer shall prohibit, or request that Tranche B Letter of Credit Issuer refrain fromCredit, as applicable, to be issued by the issuance Tranche A Lenders or Tranche B Lenders, as applicable, hereunder. Promptly on the request of Letters the Several L/C Issuing Bank, each Lender will furnish to the Several L/C Issuing Bank such powers of Credit generally attorney or other evidence as any beneficiary of any such Letter of Credit may reasonably request in particular or shall impose upon Letter of Credit Issuer with respect order to demonstrate that the Several L/C Issuing Bank has the power to act as attorney-in-fact for such Letter of Credit any restriction, reserve, or capital requirement (for which Letter of Credit Issuer is not otherwise compensated hereunder) not in effect on the Agreement Date, or shall impose upon Letter of Credit Issuer any unreimbursed loss, cost, or expense which was not applicable on the Agreement Date Lender to execute and which Letter of Credit Issuer in good faith deems material to it;
(B) subject tx XXXXXXX 0.4(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve (12) months after the date of issuance or last renewal, unless the Required Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all Lenders have approved such expiry date;
(D) such Letter of Credit is in a face amount less than $10,000; or
(E) such Letter of Credit is not a Performance deliver each Letter of Credit.
(iii) Letter of Credit Issuer shall be under no obligation to amend any Letter of Credit if (A) Letter of Credit Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(iv) Subject to the satisfaction by Borrower of the conditions precedent to the issuance of Letters of Credit hereunder (including those set forth in SECTION 4) and in accordance with SECTION 2.4(b), letters of credit issued under the Existing Agreement ("EXISTING LETTERS OF CREDIT") may, at the request of Borrower, be renewed and extended as Letters of Credit hereunder. In such event, any such Existing Letters of Credit shall be deemed to be Letters of Credit hereunder for all purposes. REVOLVING CREDIT AGREEMENT
(b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of Borrower delivered to Letter of Credit Issuer (with a copy to Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by an Authorized Signatory of Borrower. Such Letter of Credit Application must be received by Letter of Credit Issuer and Administrative Agent not later than 10:00 a.m., at least five (5) Business Days (or such later date and time as Letter of Credit Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to Letter of Credit Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as Letter of Credit Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to Letter of Credit Issuer: (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as Letter of Credit Issuer may require.
(ii) Promptly after receipt of any Letter of Credit Application, Letter of Credit Issuer will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has received a copy of such Letter of Credit Application from Borrower and, if not, Letter of Credit Issuer will provide Administrative Agent with a copy thereof. Upon receipt by Letter of Credit Issuer of confirmation from Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, Letter of Credit Issuer shall, on the requested date, issue a Letter of Credit for the account of Borrower or enter into the applicable amendment or extension, as the case may be. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Letter of Credit Issuer a participation in such Letter of Credit in an amount equal to the product of such Lender's Commitment Ratio times the amount of such Letter of Credit.
(iii) If Borrower so requests in any applicable Letter of Credit Application, then Letter of Credit Issuer may, in it sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an "EVERGREEN LETTER OF CREDIT"); provided that any such Evergreen Letter of Credit must permit Letter of Credit Issuer to prevent any such renewal at least once in each twelve (12) month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "NONRENEWAL NOTICE DATE") in each such twelve (12) month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by Letter of Credit Issuer, Borrower shall not be required to make a specific request to Letter of Credit Issuer for any such renewal. Once an Evergreen Letter of Credit has been issued, Lenders shall be deemed to have authorized (but may not require) Letter of Credit Issuer to permit the renewal of such Letter of Credit at any time to a date not later than the Letter of Credit Expiration Date; provided, however, that Letter of Credit Issuer shall not permit any such renewal if (A) Letter of Credit Issuer would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the Business Day immediately preceding the Nonrenewal Notice Date from Administrative Agent, any Lender, or REVOLVING CREDIT AGREEMENT Borrower that one (1) or more of the applicable conditions specified in SECTION 4.2 is not then satisfied. Notwithstanding anything to the contrary contained herein, Letter of Credit Issuer shall have no obligation to permit the renewal of any Evergreen Letter of Credit at any time.
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, Letter of Credit Issuer will also deliver to Borrower and Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon any drawing under any Letter of Credit, Letter of Credit Issuer shall notify Borrower and Administrative Agent thereof. Not later than 10:00 a.m. on the next Business Day following the date of notice of any payment by Letter of Credit Issuer under a Letter of Credit (each such date, an "HONOR DATE"), Borrower shall reimburse Letter of Credit Issuer through Administrative Agent in an amount equal to the amount of such drawing, together with interest on the amount of such drawing from the date of such drawing until reimbursed at the rate per annum equal to the Applicable Rate. If Borrower fails to so reimburse Letter of Credit Issuer by such time, then Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing and any interest thereon (the "UNREIMBURSED AMOUNT"), and such Lender's Commitment Ratio thereof. In such event, Borrower shall be deemed to have requested an Advance to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in SECTION 2.2, but subject to the conditions set forth in SECTION 4.2 (other than the delivery of a Request for Advance). Any notice given by Letter of Credit Issuer or Administrative Agent pursuant to this SECTION 2.4(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as Letter of Credit Issuer) shall upon any notice pursuant to SECTION 2.4(c)(i) make funds available to Administrative Agent for the account of Letter of Credit Issuer at Administrative Agent's office in an amount equal to its Commitment Ratio of the Unreimbursed Amount not later than 12:00 noon on the Business Day specified in such notice by Administrative Agent, whereupon, subject to the provisions of SECTION 2.4(c)(iii), each Lender that so makes funds available shall be deemed to have made an Advance to Borrower in such amount. Administrative Agent shall remit the funds so received to Letter of Credit Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by an Advance because the conditions set forth in SECTION 4.2 cannot be satisfied, Borrower shall be deemed to have incurred from Letter of Credit Issuer a Letter of Credit Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender's payment to Administrative Agent for the account of Letter of Credit Issuer pursuant to SECTION 2.4(c)(ii) shall be deemed payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a Letter of Credit Advance from such Lender in satisfaction of its participation obligation under this SECTION 2.4.
(iv) Until each Lender funds its Advance or Letter of Credit Advance pursuant to this SECTION 2.4(c) to reimburse Letter of Credit Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Commitment Ratio of such amount shall be solely for the account of Letter of Credit Issuer. REVOLVING CREDIT AGREEMENT
(v) Each Lender's obligation to make Advances or Letter of Credit Advances to reimburse Letter of Credit Issuer for amounts drawn under Letters of Credit, as contemplated by this SECTION 2.4(c), shall be absolute and unconditional and shall not be affected by any circumstance, including: (A) any set-off, counterclaim, recoupment, defense, or other right which such Lender may have against Letter of Credit Issuer, Borrower, or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default; or (C) any other occurrence, event, or condition, whether or not similar to any of the foregoing. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to reimburse Letter of Credit Issuer for the amount of any payment made by Letter of Credit Issuer under any Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to Administrative Agent, for the account of Letter of Credit Issuer, any amount required to be paid by such Lender pursuant to the foregoing provisions of this SECTION 2.4(c) by the time specified in SECTION 2.4(c)(ii), then Letter of Credit Issuer shall be entitled to recover from such Lender (acting through Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to Letter of Credit Issuer for the first two (2) days that such amount is not repaid, at the Federal Funds Rate, and, thereafter, at the Federal Funds Rate plus four percent (4%) per annum. A certificate of Letter of Credit Issuer submitted to any Lender (through Administrative Agent) with respect to any amounts owing under this CLAUSE (VI) shall be conclusive absent manifest error.
(vii) Borrower shall pay to Letter of Credit Issuer, promptly upon demand, the amount of any fees (in addition to the fees described in SECTION 2.5) which Letter of Credit Issuer customarily charges to a Person similarly situated in the ordinary course of its business for amending Letters of Credit and Letter of Credit Applications, for honoring drafts, and taking similar action in connection with Letters of Credit, together with all reasonable out-of-pocket expenses of Letter of Credit Issuer incurred in connection therewith.
(viii) Administrative Agent and Letter of Credit Issuer shall provide to Lenders periodic information, but not more often than quarterly, regarding outstanding Letters of Credit (including issue date, expiry date, beneficiary, Evergreen Letters of Credit, and amount), the Letter of Credit Exposure, and each Lender's Commitment Ratio thereof.
Appears in 1 contract
Samples: Letter of Credit Facility Agreement (Enstar Group LTD)
