Letter of Credit; Alternate Credit Facility. (a) On or before the Issue Date, the Company shall cause to be delivered to the Trustee the Initial Letter of Credit. The Company may at any time and from time to time, but shall not be required to, deliver a Substitute Letter of Credit to the Trustee in substitution for the Existing Letter of Credit. (b) The following provisions define the Company's alternative obligations with respect to a Substitute Letter of Credit, depending on the event prompting delivery thereof: (1) The Company shall give the Trustee at least 45 days' prior written notice of a proposed Letter of Credit Substitution Date, which notice shall specify (A) the name of the issuer of the proposed Substitute Letter of Credit, (B) the branch address, contact person and phone number with respect to such issuer, (C) any short-term or long-term ratings assigned by any Rating Agency to the obligations of such issuer, (D) the name of the counsel to such issuer which shall render the opinion required pursuant to subsection (d)(3) of this Section 5.8 and (E) the proposed Letter of Credit Substitution Date. Not fewer than 10 days prior to a proposed Letter of Credit Substitution Date, the Company shall deliver to the Trustee a binding commitment for the issuance of such Substitute Letter of Credit and the Related Documentation. (2) At least 30 days prior to the Stated Expiration Date of the Existing Letter of Credit, the Company shall, unless it has determined to let the Bonds become subject to Mandatory Tender in connection with such Stated Expiration Date, furnish or cause to be furnished to the Trustee either (A) a binding commitment from the Bank for the issuance of an Extension Letter of Credit, or (B) a binding commitment for the issuance of a Substitute Letter of Credit from the issuer thereof, accompanied by the information set forth in the first sentence of subsection (b)(1) of this Section. (3) If the Company intends that the Bonds be secured by a Letter of Credit following a Proposed Conversion Date (as defined in the Indenture), the Company shall, at the time it gives the notice required under Section 202(g) of the Indenture, furnish or cause to be furnished to the Trustee a binding commitment for the issuance of a Substitute Letter of Credit from the issuer thereof, accompanied by the information set forth in the first sentence of subsection (b)(1) of this Section. (c) Each Substitute Letter of Credit delivered to the Trustee pursuant to this Section must meet the following criteria: (1) such Substitute Letter of Credit shall be substantially in the same form and of the same tenor as the Initial Letter of Credit, including provision for the payment of interest on the Bonds (or the interest portion of the purchase price of Bonds tendered, or deemed tendered, for purchase) for a period of 120 days (A) at the Cap Rate (as defined in the Indenture), if the Bonds then bear interest at the Seven-Day Rate (as defined in the Indenture), or (B) at the Fixed Rate (as defined in the Indenture) then borne or about to be borne by the Bonds; (2) the effective date of such Substitute Letter of Credit shall be (A) the Conversion Date, (B) the first Business Day of the calendar month in which the Stated Expiration Date is to occur or (C) the Letter of Credit Substitution Date, whichever shall have been the corresponding event prompting delivery of the Substitute Letter of Credit; and (3) such Substitute Letter of Credit must have a Stated Expiration Date that is not sooner than one year after its effective date. (d) Each Substitute Letter of Credit (other than any Extension Letter of Credit) delivered to the Trustee must be accompanied by the following Related Documentation, to the extent applicable: (1) documentation satisfying one of the following three provisions: (A) if the Bonds are then rated, written evidence from each Rating Agency that maintains a rating with respect to the Bonds that (i) such Rating Agency has reviewed the proposed Substitute Letter of Credit, and (ii) the substitution of the proposed Substitute Letter of Credit will not, by itself, result in a reduction or permanent withdrawal of its rating of the Bonds; (B) if the Bonds are not then rated, written evidence from either Moody's or S & P to the effect that the short-xxxx (xf the Bonds then bear interest at the Seven-Day Rate) or long-term (if the Bonds then bear interest at the Fixed Rate) rating of the issuer of the proposed Substitute Letter of Credit is in the same category as or a higher category than the applicable rating of the issuer of the Existing Letter of Credit; or (C) whether or not the Bonds are then rated, (i) written evidence from either Moody's or S & P to the effect that the short-xxxx (xf the Bonds then bear interest at the Seven-Day Rate) or long-term (if the Bonds then bear interest at the Fixed Rate) rating of the issuer of the proposed Substitute Letter of Credit is at least P-3 or A-3 (short-term) or Baa3 or BBB- (long-term), respectively, and (ii) a Non-Taxability Opinion specifically addressing (I) the reduction or permanent withdrawal of the rating on the Bonds, if the Bonds are then rated, or (II) if the Bonds are not then rated, the fact that the short-term or long-term rating of the issuer of the proposed Substitute Letter of Credit is in a lower category than the applicable rating of the issuer of the Existing Letter of Credit; (2) a Non-Taxability Opinion with respect to the proposed substitution, further opining to the effect that such Substitute Letter of Credit is authorized by this Lease Agreement and the Indenture; and (3) an opinion of counsel for the issuer of such Substitute Letter of Credit to the effect that (A) such Substitute Letter of Credit is a valid, binding and enforceable obligation of the issuer thereof; (B) use of the proceeds of a drawing on such Substitute Letter of Credit to pay Debt Service on the Bonds would not be avoidable as a preferential payment under Section 547 of the Bankruptcy Code recoverable under Section 550 thereof should the Company or the IDB become a debtor in a proceeding commenced thereunder; and (C) the Substitute Letter of Credit and the Bonds are not required to be registered under the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended. (e) At the close of business on the effective date of any Substitute Letter of Credit, the Trustee shall return the Existing Letter of Credit to the issuer thereof, provided that any draws on such Existing Letter of Credit made on or prior to such date have been honored. Any draws that, under the terms of the Indenture, are to be made on the Letter of Credit on or prior to the effective date of a Substitute Letter of Credit shall be made under the Existing Letter of Credit. Not later than the close of business on the effective date of a Substitute Letter of Credit, the Bank shall deliver to the Trustee written evidence that all obligations of the Company to the issuer of the Existing Letter of Credit for reimbursement of amounts drawn thereunder shall have been satisfied, and upon receipt of such evidence any Bank Bonds held by the Tender Agent (as both said terms are defined in the Indenture) under the Indenture for the benefit of the issuer of the Existing Letter of Credit shall be delivered to, or upon the order of, the Company. (f) The Company may, at its option, provide for the delivery to the Trustee of an Alternate Credit Facility to supplement the Letter of Credit or to provide credit enhancement in place of a Letter of Credit. Any such Alternate Credit Facility shall be payable to the Trustee for the benefit of the Holders of the Bonds and shall have administrative provisions satisfactory to the Trustee. The preconditions for delivery of an Alternate Credit Facility shall be identical in substance to those detailed in this Section for delivery of a Substitute Letter of Credit, with such modifications, however, as shall be appropriate to comport with the form and character of the Alternate Credit Facility. [END OF ARTICLE V]
Appears in 1 contract
Samples: Lease Agreement (Ocean Bio Chem Inc)
Letter of Credit; Alternate Credit Facility. (a) On or before the Issue Date, the Company shall cause to be delivered to the Trustee the Initial Letter of Credit. The Company may at any time and from time to time, but shall not be required to, deliver a Substitute Letter of Credit to the Trustee in substitution for the Existing Letter of Credit.
(b) The following provisions define the Company's βs alternative obligations with respect to a Substitute Letter of Credit, depending on the event prompting delivery thereof:
(1) The Company shall give the Trustee at least 45 days' β prior written notice of a proposed Letter of Credit Substitution Date, which notice shall specify (A) the name of the issuer of the proposed Substitute Letter of Credit, (B) the branch address, contact person and phone number with respect to such issuer, (C) any short-term or long-term ratings assigned by any Rating Agency to the obligations of such issuer, (D) the name of the counsel to such issuer which shall render the opinion required pursuant to subsection (d)(3) of this Section 5.8 and (E) the proposed Letter of Credit Substitution Date. Not fewer than 10 days prior to a proposed Letter of Credit Substitution Date, the Company shall deliver to the Trustee a binding commitment for the issuance of such Substitute Letter of Credit and the Related Documentation.
(2) At least 30 65 days prior to the Stated Expiration Termination Date of the Existing Letter of Credit, the Company shall, unless it has determined to let the IDB Bonds become subject to Mandatory Tender in connection with such Stated Expiration Termination Date, furnish or cause to be furnished to the Trustee either (A) a binding commitment from the Bank for the issuance of an Extension Letter of Credit, or (B) a binding commitment for the issuance of a Substitute Letter of Credit from the issuer thereof, accompanied by the information set forth in the first sentence of subsection (b)(1) of this SectionSection 5.8.
(3) If the Company intends that the IDB Bonds be secured by a Letter of Credit following a Proposed Conversion Date (as defined in the IDB Indenture), the Company shall, at the time it gives the notice required under Section 202(g) or (h) of the IDB Indenture, furnish or cause to be furnished to the Trustee a binding commitment for the issuance of a Substitute Letter of Credit from the issuer thereof, accompanied by the information set forth in the first sentence of subsection (b)(1) of this SectionSection 5.8.
(c) Each Substitute Letter of Credit delivered to the Trustee pursuant to this Section must meet the following criteria:
(1) if such Substitute Letter of Credit will be effective during a Seven-Day Rate Period (as defined in the IDB Indenture), such Substitute Letter of Credit shall be substantially in the same form and of the same tenor as the Initial Letter of Credit, including provision for the payment of interest on the IDB Bonds (or the interest portion of the purchase price of IDB Bonds tendered, or deemed tendered, for purchase) for a period of 120 36 days (A) at the Cap maximum rate per annum, specified in such Substitute Letter of Credit, at which there has been calculated the amount available to be drawn thereunder with respect to interest on the IDB Bonds;
(2) if such Substitute Letter of Credit will be effective during a Yearly Fixed Rate Period or the Permanent Fixed Rate Period (both as defined in the IDB Indenture), if such Substitute Letter of Credit shall be substantially in the same form and of the same tenor as the Initial Letter of Credit, except that such Substitute Letter of Credit must provide for the payment of (A) interest on the IDB Bonds then bear (or the interest portion of the purchase price of IDB Bonds tendered, or deemed tendered, for purchase) for a period of 210 days at the Seven-Day Rate (as defined in the Indenture), or (B) at the Fixed Rate (as defined in the Indenture) then borne or about rate per annum to be borne by the IDB Bonds during such Yearly Fixed Rate Period or Permanent Fixed Rate Period, plus (B) an amount equal to 2% of the then principal amount of the IDB Bonds, to enable the Trustee to pay the redemption premium on the IDB Bonds in the event of the optional redemption thereof;
(23) the effective date of such Substitute Letter of Credit shall be (A) the Conversion Date, (B) the first Business Day of the calendar month in which the Stated Expiration Termination Date is to occur or (C) the Letter of Credit Substitution DateDate (which may in no event be later than the first Business Day of the calendar month in which the Stated Termination Date is to occur), whichever shall have been the corresponding event prompting delivery of the Substitute Letter of Credit; and
(34) such Substitute Letter of Credit must have a Stated Expiration Termination Date that is not sooner than one year after its effective date.
(d) Each Substitute Letter of Credit (other than any Extension Letter of Credit) delivered to the Trustee must shall be accompanied by the following Related Documentation, if and to the extent applicable:
(1) documentation satisfying one if the short-term or long-term obligations of the following three provisions:
(A) if issuer of the Bonds proposed Substitute Letter of Credit are then rated, written evidence a letter from each Rating Agency that maintains a any such rating with respect to the Bonds stating (A) such rating or ratings, (B) that (i) such Rating Agency has reviewed the proposed Substitute Letter of Credit, and (iiC) the substitution rating or ratings, if any, that such Rating Agency has assigned or would assign to the IDB Bonds (if any such ratings be then sought) by reason of the proposed Substitute Letter of Credit will not, by itself, result in a reduction or permanent withdrawal of its rating of the Bonds;
(B) if the Bonds are not then rated, written evidence from either Moody's or S & P to the effect that the short-xxxx (xf the Bonds then bear interest at the Seven-Day Rate) or long-term (if the Bonds then bear interest at the Fixed Rate) rating of the issuer of the proposed Substitute Letter of Credit is in the same category as or a higher category than the applicable rating of the issuer of the Existing Letter of Credit; or
(C) whether or not the Bonds are then rated, (i) written evidence from either Moody's or S & P to the effect that the short-xxxx (xf the Bonds then bear interest at the Seven-Day Rate) or long-term (if the Bonds then bear interest at the Fixed Rate) rating of the issuer of the proposed Substitute Letter of Credit is at least P-3 or A-3 (short-term) or Baa3 or BBB- (long-term), respectively, and (ii) a Non-Taxability Opinion specifically addressing (I) the reduction or permanent withdrawal of the rating on the Bonds, if the Bonds are then rated, or (II) if the Bonds are not then rated, the fact that the short-term or long-term rating of the issuer of the proposed Substitute Letter of Credit is in a lower category than the applicable rating of the issuer of the Existing Letter of Creditsubstitution;
(2) a Non-Taxability Opinion with respect to the proposed substitution, further opining to the effect that such Substitute Letter of Credit is authorized by this Lease Agreement and the IDB Indenture; and
(3) an opinion of counsel for the issuer of such Substitute Letter of Credit to the effect that (A) such Substitute Letter of Credit is a valid, binding and enforceable obligation of the issuer thereof; (B) use of the proceeds of a drawing on such Substitute Letter of Credit to pay Debt Service on or Purchase Price of the IDB Bonds would not be constitute an avoidable as a preferential payment preference under Section 547 of the Bankruptcy Code recoverable under Section 550 thereof should in the event of the filing of a petition thereunder by or against the Company or by the IDB become a debtor in a proceeding commenced thereunderIDB; and (C) the Substitute Letter of Credit and the IDB Bonds are not required to be registered under the Securities Act of 1933, as amended, and the IDB Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended.
(e) At the close of business on the effective date of any Substitute Letter of Credit, the Trustee shall return the Existing Letter of Credit to the issuer thereof, provided that any draws on such Existing Letter of Credit made on or prior to such date have been honored. Any draws that, under the terms of the IDB Indenture, are to be made on the Letter of Credit on or prior to the effective date of a Substitute Letter of Credit shall be made under the Existing Letter of Credit. Not later than the close of business on the effective date of a Substitute Letter of Credit, the Bank shall deliver to the Trustee written evidence that all obligations of the Company to the issuer of the Existing Letter of Credit for reimbursement of amounts drawn thereunder shall have been satisfied, and upon receipt of such evidence any Bank Bonds held by the Tender Agent (as both said terms are defined in the IDB Indenture) under the IDB Indenture for the benefit of the issuer of the Existing Letter of Credit shall be delivered to, or upon the order of, the Company.
(f) The Company may, at its option, provide for the delivery to the Trustee of an Alternate Credit Facility to supplement the Letter of Credit or to provide credit enhancement in place of a Letter of Credit. Any such Alternate Credit Facility shall be payable to the Trustee for the benefit of the Holders of the Bonds and shall have administrative provisions satisfactory to the Trustee. The preconditions for delivery of an Alternate Credit Facility shall be identical in substance to those detailed in this Section for delivery of a Substitute Letter of Credit, with such modifications, however, as shall be appropriate to comport with the form and character of the Alternate Credit Facility. [END OF ARTICLE V].
Appears in 1 contract
Letter of Credit; Alternate Credit Facility. (a) On or before the Issue Date, the Company shall cause to be delivered to the Trustee the Initial Letter of Credit. The Company may at any time and from time to time, but shall not be required to, deliver a Substitute Letter of Credit to the Trustee in substitution for the Existing Letter of Credit.
(b) The following provisions define the Company's alternative obligations with respect to a Substitute Letter of Credit, depending on the event prompting delivery thereof:
(1) The Company shall give the Trustee at least 45 30 days' prior written notice of its intention to deliver a proposed Substitute Letter of Credit Substitution Date, not fewer than 21 days prior to the date on which notice shall specify (A) the name of the issuer of the proposed such Substitute Letter of CreditCredit is proposed to be delivered, (B) the branch address, contact person and phone number with respect to such issuer, (C) any short-term or long-term ratings assigned by any Rating Agency to the obligations of such issuer, (D) the name of the counsel to such issuer which date shall render the opinion required pursuant to subsection (d)(3) of this Section 5.8 and (E) the proposed Letter of Credit Substitution Date. Not fewer than 10 days prior to be a proposed Letter of Credit Substitution DateBusiness Day, the Company shall deliver to the Trustee a binding commitment for the issuance of such Substitute Letter of Credit and the Related Documentation.
(2) At least 30 days prior to the Stated Expiration Date of the Existing Letter of Credit, the Company shall, unless it has determined to let the Bonds become subject to Mandatory Tender Documentation described in connection with such Stated Expiration Date, furnish or cause to be furnished to the Trustee either (A) a binding commitment from the Bank for the issuance of an Extension Letter of Credit, or (B) a binding commitment for the issuance of a Substitute Letter of Credit from the issuer thereof, accompanied by the information set forth in the first sentence of subsection (b)(1) of this Section.
(3) If the Company intends that the Bonds be secured by a Letter of Credit following a Proposed Conversion Date (as defined in the Indenture), the Company shall, at the time it gives the notice required under Section 202(g) of the Indenture, furnish or cause to be furnished to the Trustee a binding commitment for the issuance of a Substitute Letter of Credit from the issuer thereof, accompanied by the information set forth in the first sentence of subsection (b)(1d)(i) of this Section.
(c) Each Substitute Letter of Credit delivered to the Trustee pursuant to this Section must meet the following criteria:
(1i) if such Substitute Letter of Credit will be effective during a Seven Day Rate Period (as defined in the Indenture), such Substitute Letter of Credit shall be substantially in the same form and of the same tenor as the Initial Letter of Credit, including provision for the payment of interest on the Bonds (or the interest portion of the purchase price of Bonds tendered, or deemed tendered, for purchase) for a period of 120 60 days at the maximum rate per annum, specified in such Substitute Letter of Credit, at which there has been calculated the amount available to be drawn thereunder with respect to interest on the Bonds;
(ii) If such Substitute Letter of Credit will be effective during a Yearly Fixed Rate Period or the Permanent Fixed Rate Period (both as defined In the Indenture), such Substitute Letter of Credit shall be substantially in the same form and of the same tenor as the Initial Letter of Credit except this such Substitute Letter of Credit must provide for the payment of (A) interest on the Bonds (or the interest portion of the purchase price of Bonds tendered, or deemed tendered, for purchase) for a period of 210 days at the Cap rate per annum to be borne by the Bonds during such Yearly Fixed Rate Period or Permanent Fixed Rate Period, plus (B) an amount equal to 2% of the then principal amount of the Bonds, to enable the Trustee to pay the redemption premium on the Bonds in the event of the optional redemption thereof,
(iii) if such Substitute Letter of Credit is being delivered in connection with a Letter of Credit Substitution Date or with a conversion of the Interest rate borne by the Bonds on a Conversion Date or Seven-Day Rate Recommencement Date (all as defined in the Indenture), if the Bonds then bear interest at the Seven-Day Rate (as defined in the Indenture), or (B) at the Fixed Rate (as defined in the Indenture) then borne or about to be borne by the Bonds;
(2) the effective date of such Substitute Letter of Credit shall be (A) the Conversion such Letter of Credit Substitution Date, (B) Conversion Date or Seven-Day Rate Recommencement Date, as the case may be; and if such Substitute Letter of Credit is being delivered in connection with the Stated Termination Date of the Existing Letter of Credit, then the effective date of such Substitute Letter of Credit shall be the first Business Day of the calendar month in which the such Stated Expiration Termination Date is to occur or (C) the Letter of Credit Substitution Dateoccur, whichever shall have been the corresponding event prompting delivery of the Substitute Letter of Credit; and
(3iv) such Substitute Letter of Credit must have a Stated Expiration Termination Date that is (A) the 15th day of a calendar month and (B) not sooner than one year after its effective date.
(d) Each Substitute Letter of Credit (other than any Extension Letter of Credit) delivered to the Trustee must be accompanied by the following Related Documentation, to the extent applicable:
(1i) documentation satisfying one of the following three provisions:
(A) if the Bonds are then rated, written evidence from each Rating Agency that maintains a rating with respect to the Bonds of (A) the fact that (i) such Rating Agency has reviewed the proposed Substitute Letter of Credit, and Credit (iiB) the substitution rating or ratings, if any, assigned or to be assigned by such Rating Agency to the Issuer of the proposed Substitute Letter of Credit will notand (C) the rating or ratings, if any, that such Rating Agency has assigned or would assign to the Bonds by itself, result in a reduction or permanent withdrawal of its rating reason of the Bondssubstitution;
(B) if the Bonds are not then rated, written evidence from either Moody's or S & P to the effect that the short-xxxx (xf the Bonds then bear interest at the Seven-Day Rate) or long-term (if the Bonds then bear interest at the Fixed Rate) rating of the issuer of the proposed Substitute Letter of Credit is in the same category as or a higher category than the applicable rating of the issuer of the Existing Letter of Credit; or
(C) whether or not the Bonds are then rated, (i) written evidence from either Moody's or S & P to the effect that the short-xxxx (xf the Bonds then bear interest at the Seven-Day Rate) or long-term (if the Bonds then bear interest at the Fixed Rate) rating of the issuer of the proposed Substitute Letter of Credit is at least P-3 or A-3 (short-term) or Baa3 or BBB- (long-term), respectively, and (ii) a Non-Taxability Opinion specifically addressing (I) the reduction or permanent withdrawal an opinion of the rating on the Bonds, if the Bonds are then rated, or (II) if the Bonds are not then rated, the fact that the short-term or long-term rating of the issuer of the proposed Substitute Letter of Credit is in a lower category than the applicable rating of the issuer of the Existing Letter of Credit;
(2) a Non-Taxability Opinion with respect to the proposed substitution, further opining Bond Counsel to the effect that such Substitute Letter of Credit is authorized by this Lease Loan Agreement and the Indenture; and
(3iii) an opinion of counsel for the issuer of such Substitute Letter of Credit to the effect that (A) such Substitute Letter of Credit is a valid, binding and enforceable obligation of the issuer thereof; thereof (B) use of the proceeds of a drawing on such Substitute Letter of Credit to pay Debt Service on the Bonds would not be avoidable as a preferential payment under Section 547 of the Bankruptcy Code recoverable under Section 550 thereof should the Company or the IDB Issuer become a debtor in a proceeding commenced thereunder; , and (C) the Substitute Letter of Credit and the Bonds are not required to be registered under the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended.
(e) At the close of business on the effective date of any Substitute Letter of Credit, the Trustee shall return the Existing Letter of or Credit to the issuer thereof, provided that any draws on such Existing Letter of Credit made on or prior to such date have been honored. Any draws that, that under the terms of the Indenture, are to be made on the Letter of Credit on or prior to the effective date of a Substitute Letter of Credit shall be made under the Existing Letter of Credit. Not Credit not later than the close of business on the effective date of a Substitute Letter of Credit, the Bank shall deliver to the Trustee written evidence that all obligations of the Company to the issuer of the Existing Letter of Credit for reimbursement of amounts drawn thereunder shall have been satisfied, and upon receipt of such evidence any Bank Bonds held by the Tender Agent (as both said terms are defined in the Indenture) under the Indenture for the benefit of the issuer of the Existing Letter of Credit shall be delivered to, or upon the order of, the Company.
(f) The Company may, at its option, provide for the delivery to the Trustee of an Alternate Credit Facility to supplement the Letter of Credit or to provide credit enhancement in In place of a Letter of Credit. Any such Alternate Credit Facility shall be payable to the Trustee for the benefit of the Holders of the Bonds and shall have administrative provisions satisfactory to the Trustee. The preconditions for delivery of an Alternate Credit Facility shall be identical in substance to those detailed in this Section for delivery of a Substitute Letter of Credit, Credit with such modifications, however, as shall be appropriate to comport with the form and character of the Alternate Credit Facility. [END OF ARTICLE V]
Appears in 1 contract
Samples: Loan Agreement (Simcala Inc)
Letter of Credit; Alternate Credit Facility. (a) On or before the Issue Date, the Company shall cause to be delivered to the Trustee the Initial Letter of Credit. The Company may at any time and from time to time, but shall not be required to, ,
deliver a Substitute Letter of Credit to the Trustee in substitution for the Existing Letter of Credit.
(b) The following provisions define the Company's alternative obligations with respect to a Substitute Letter of Credit, depending on the event prompting delivery thereof:
(1) The Company shall give the Trustee at least 45 days' prior written notice of a proposed Letter of Credit Substitution Date, which notice shall specify (A) the name of the issuer of the proposed Substitute Letter of Credit, (B) the branch address, contact person and phone number with respect to such issuer, (C) any short-term or long-term ratings assigned by any Rating Agency to the obligations of such issuer, (D) the name of the counsel to such issuer which shall render the opinion required pursuant to subsection (d)(3) of this Section 5.8 5.6 and (E) the proposed Letter of Credit Substitution Date. Not fewer than 10 days prior to a proposed Letter of Credit Substitution Date, the Company shall deliver to the Trustee a binding commitment for the issuance of such Substitute Letter of Credit and the Related Documentation.
(2) At least 30 65 days prior to the Stated Expiration Termination Date of the Existing Letter of Credit, the Company shall, unless it has determined to let the Bonds become subject to Mandatory Tender in connection with such Stated Expiration Termination Date, furnish or cause to be furnished to the Trustee either (A) a binding commitment from the Bank for the issuance of an Extension Letter of Credit, or (B) a binding commitment for the issuance of a Substitute Letter of Credit from the issuer thereof, accompanied by the information set forth in the first sentence of subsection (b)(1) of this SectionSection 5.6.
(3) If the Company intends that the Bonds be secured by a Letter of Credit following a Proposed Conversion Date (as defined in the Indenture), the Company shall, at the time it gives the notice required under Section 202(g) of the Indenture, furnish or cause to be furnished to the Trustee a binding commitment for the issuance of a Substitute Letter of Credit from the issuer thereof, accompanied by the information set forth in the first sentence of subsection (b)(1) of this SectionSection 5.6.
(c) Each Substitute Letter of Credit delivered to the Trustee pursuant to this Section must meet the following criteria:
(1) if such Substitute Letter of Credit will be effective during a Seven-Day Rate Period (as defined in the Indenture), such Substitute Letter of Credit shall be substantially in the same form and of the same tenor as the Initial Letter of Credit, including provision for the payment of interest on the Bonds (or the interest portion of the purchase price of Bonds tendered, or deemed tendered, for purchase) for a period of 120 days (A) at the Cap maximum rate per annum, specified in such Substitute Letter of Credit, at which there has been calculated the amount available to be drawn thereunder with respect to interest on the Bonds;
(2) if such Substitute Letter of Credit will be effective during a Yearly Fixed Rate Period or the Permanent Fixed Rate Period (both as defined in the Indenture), if such Substitute Letter of Credit shall be substantially in the same form and of the same tenor as the Initial Letter of Credit, except that such Substitute Letter of Credit must provide for the payment of (A) interest on the Bonds then bear (or the interest portion of the purchase price of Bonds tendered, or deemed tendered, for purchase) for a period of 120 days at the Seven-Day Rate (as defined in the Indenture), or (B) at the Fixed Rate (as defined in the Indenture) then borne or about rate per annum to be borne by the Bonds during such Yearly Fixed Rate Period or Permanent Fixed Rate Period, plus (B) an amount equal to 2% of the then principal amount of the Bonds, to enable the Trustee to pay the redemption premium on the Bonds in the event of the optional redemption thereof;
(23) the effective date of such Substitute Letter of Credit shall be (A) the Conversion Date, (B) the first Business Day of the calendar month in which the Stated Expiration Termination Date is to occur or (C) the Letter of Credit Substitution DateDate (which may in no event be later than the first Business Day of the calendar month in which the Stated Termination Date is to occur), whichever shall have been the corresponding event prompting delivery of the Substitute Letter of Credit; and
(34) such Substitute Letter of Credit must have a Stated Expiration Termination Date that is not sooner than one year after its effective date.
(d) Each Substitute Letter of Credit (other than any Extension Letter of Credit) delivered to the Trustee must shall be accompanied by the following Related Documentation, if and to the extent applicable:
(1) documentation satisfying one of the following three provisions:
(A) if the Bonds are then rated, written evidence from each Rating Agency (if any) that maintains a rating with respect to the Bonds of (A) the fact that (i) such Rating Agency has reviewed the proposed Substitute Letter of Credit, and (ii) the substitution of the proposed Substitute Letter of Credit will not, by itself, result in a reduction or permanent withdrawal of its rating of the Bonds;
(B) the rating or ratings, if the Bonds are not then ratedany, written evidence from either Moody's assigned or S & P to the effect that the short-xxxx (xf the Bonds then bear interest at the Seven-Day Rate) or long-term (if the Bonds then bear interest at the Fixed Rate) rating of be assigned by such Rating Agency to the issuer of the proposed Substitute Letter of Credit is in the same category as or a higher category than the applicable rating of the issuer of the Existing Letter of Credit; or
and (C) whether the rating or not ratings, if any, that such Rating Agency has assigned or would assign to the Bonds are then rated, (i) written evidence from either Moody's or S & P to the effect that the short-xxxx (xf the Bonds then bear interest at the Seven-Day Rate) or long-term (if the Bonds any such ratings be then bear interest at the Fixed Ratesought) rating by reason of the issuer of the proposed Substitute Letter of Credit is at least P-3 or A-3 (short-term) or Baa3 or BBB- (long-term), respectively, and (ii) a Non-Taxability Opinion specifically addressing (I) the reduction or permanent withdrawal of the rating on the Bonds, if the Bonds are then rated, or (II) if the Bonds are not then rated, the fact that the short-term or long-term rating of the issuer of the proposed Substitute Letter of Credit is in a lower category than the applicable rating of the issuer of the Existing Letter of Creditsubstitution;
(2) a Non-Taxability Opinion with respect to the proposed substitution, further opining to the effect that such Substitute Letter of Credit is authorized by this Second Supplemental Lease Agreement and the Indenture; and
(3) an opinion of counsel for the issuer of such Substitute Letter of Credit to the effect that (A) such Substitute Letter of Credit is a valid, binding and enforceable obligation of the issuer thereof; (B) use of the proceeds of a drawing on such Substitute Letter of Credit to pay Debt Service on or Purchase Price of the Bonds would not be constitute an avoidable as a preferential payment preference under Section 547 of the Bankruptcy Code recoverable under Section 550 thereof should in the event of the filing of a petition thereunder by or against the Company or by the IDB become a debtor in a proceeding commenced thereunderIssuer; and (C) the Substitute Letter of Credit and the Bonds are not required to be registered under the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended.
(e) At the close of business on the effective date of any Substitute Letter of Credit, the Trustee shall return the Existing Letter of Credit to the issuer thereof, provided that any draws on such Existing Letter of Credit made on or prior to such date have been honored. Any draws that, under the terms of the Indenture, are to be made on the Letter of Credit on or prior to the effective date of a Substitute Letter of Credit shall be made under the Existing Letter of Credit. Not later than the close of business on the effective date of a Substitute Letter of Credit, the Bank shall deliver to the Trustee written evidence that all obligations of the Company to the issuer of the Existing Letter of Credit for reimbursement of amounts drawn thereunder shall have been satisfied, and upon receipt of such evidence any Bank Bonds held by the Tender Agent (as both said terms are defined in the Indenture) under the Indenture for the benefit of the issuer of the Existing Letter of Credit shall be delivered to, or upon the order of, the Company.
(f) The Company may, at its option, provide for the delivery to the Trustee of an Alternate Credit Facility to supplement the Letter of Credit or to provide credit enhancement in place of a Letter of Credit. Any such Alternate Credit Facility shall be payable to the Trustee for the benefit of the Holders of the Bonds and shall have administrative provisions satisfactory to the Trustee. The preconditions for delivery of an Alternate Credit Facility shall be identical in substance to those detailed in this Section for delivery of a Substitute Letter of Credit, with such modifications, however, as shall be appropriate to comport with the form and character of the Alternate Credit Facility. [END OF ARTICLE V]
Appears in 1 contract
Samples: Second Supplemental Lease Agreement (Ocean Bio Chem Inc)
Letter of Credit; Alternate Credit Facility. (a) On or before the Issue Date, the The Company shall cause the Original Letter of Credit to be delivered to the Trustee on or before the Initial Issue Date. The Original Letter of Credit shall terminate no earlier than the earliest of (i) the payment in full by the Bank of funds authorized to be drawn thereunder, (ii) payment in full of the Series 1992 Bonds pursuant to the provisions of the Indenture, as certified by the Trustee to the Bank, (iii) 5 p.m., Detroit, Michigan time, on June 15, 1997 (subject to extensions) or (iv) the fifth day following the Conversion Date. The Company shall have the right (but is not obligated) to arrange for the renewal, reissuance or extension of any Letter of Credit. The Company may at any time and from time to timeAny renewal, but shall not be required to, deliver a Substitute Letter of Credit to the Trustee in substitution for the Existing Letter of Credit.
(b) The following provisions define the Company's alternative obligations with respect to a Substitute Letter of Credit, depending on the event prompting delivery thereof:
(1) The Company shall give the Trustee at least 45 days' prior written notice of a proposed Letter of Credit Substitution Date, which notice shall specify (A) the name of the issuer of the proposed Substitute Letter of Credit, (B) the branch address, contact person and phone number with respect to such issuer, (C) any short-term reissuance or long-term ratings assigned by any Rating Agency to the obligations of such issuer, (D) the name of the counsel to such issuer which shall render the opinion required pursuant to subsection (d)(3) of this Section 5.8 and (E) the proposed Letter of Credit Substitution Date. Not fewer than 10 days prior to a proposed Letter of Credit Substitution Date, the Company shall deliver to the Trustee a binding commitment for the issuance of such Substitute Letter of Credit and the Related Documentation.
(2) At least 30 days prior to the Stated Expiration Date of the Existing Letter of Credit, the Company shall, unless it has determined to let the Bonds become subject to Mandatory Tender in connection with such Stated Expiration Date, furnish or cause to be furnished to the Trustee either (A) a binding commitment from the Bank for the issuance of an Extension Letter of Credit, or (B) a binding commitment for the issuance of a Substitute Letter of Credit from the issuer thereof, accompanied by the information set forth in the first sentence of subsection (b)(1) of this Section.
(3) If the Company intends that the Bonds be secured by a Letter of Credit following a Proposed Conversion Date (as defined in the Indenture), the Company shall, at the time it gives the notice required under Section 202(g) of the Indenture, furnish or cause to be furnished to the Trustee a binding commitment for the issuance of a Substitute Letter of Credit from the issuer thereof, accompanied by the information set forth in the first sentence of subsection (b)(1) of this Section.
(c) Each Substitute Letter of Credit delivered to the Trustee pursuant to this Section must meet the following criteria:
(1) such Substitute Letter of Credit extension shall be substantially in the same form and of the same tenor as the Initial Letter of Credit, including provision for the payment of interest on the Bonds (or the interest portion of the purchase price of Bonds tendered, or deemed tendered, for purchase) for a period of 120 days (A) at the Cap Rate (as defined in the Indenture), if the Bonds then bear interest at the Seven-Day Rate (as defined in the Indenture), or (B) at the Fixed Rate (as defined in the Indenture) then borne or about to be borne by the Bonds;
(2) the effective date of such Substitute Letter of Credit shall be (A) the Conversion Date, (B) the first Business Day of the calendar month in which the Stated Expiration Date is to occur or (C) the Letter of Credit Substitution Date, whichever shall have been the corresponding event prompting delivery of the Substitute Letter of Credit; and
(3) such Substitute Letter of Credit must have a Stated Expiration Date that is not sooner than least one year after its effective date.
(d) Each Substitute Letter of Credit (other than and shall expire on a June 15. At any Extension Letter of Credit) delivered time upon at least 45 days prior written notice to the Trustee must be accompanied by the following Related Documentation, to the extent applicable:
(1) documentation satisfying one of the following three provisions:
(A) if the Bonds are then rated, written evidence from each Rating Agency that maintains a rating with respect to the Bonds that (i) such Rating Agency has reviewed the proposed Substitute Letter of Credit, and (ii) the substitution of the proposed Substitute Letter of Credit will not, by itself, result in a reduction or permanent withdrawal of its rating of the Bonds;
(B) if the Bonds are not then rated, written evidence from either Moody's or S & P to the effect that the short-xxxx (xf the Bonds then bear interest at the Seven-Day Rate) or long-term (if the Bonds then bear interest at the Fixed Rate) rating of the issuer of the proposed Substitute Letter of Credit is in the same category as or a higher category than the applicable rating of the issuer of the Existing Letter of Credit; or
(C) whether or not the Bonds are then rated, (i) written evidence from either Moody's or S & P to the effect that the short-xxxx (xf the Bonds then bear interest at the Seven-Day Rate) or long-term (if the Bonds then bear interest at the Fixed Rate) rating of the issuer of the proposed Substitute Letter of Credit is at least P-3 or A-3 (short-term) or Baa3 or BBB- (long-term), respectively, and (ii) a Non-Taxability Opinion specifically addressing (I) the reduction or permanent withdrawal of the rating on the Bonds, if the Bonds are then rated, or (II) if the Bonds are not then ratedTrustee, the fact that the short-term or long-term rating of the issuer of the proposed Substitute Letter of Credit is in a lower category than the applicable rating of the issuer of the Existing Letter of Credit;
(2) a Non-Taxability Opinion with respect to the proposed substitution, further opining to the effect that such Substitute Letter of Credit is authorized by this Lease Agreement and the Indenture; and
(3) an opinion of counsel for the issuer of such Substitute Letter of Credit to the effect that (A) such Substitute Letter of Credit is a valid, binding and enforceable obligation of the issuer thereof; (B) use of the proceeds of a drawing on such Substitute Letter of Credit to pay Debt Service on the Bonds would not be avoidable as a preferential payment under Section 547 of the Bankruptcy Code recoverable under Section 550 thereof should the Company or the IDB become a debtor in a proceeding commenced thereunder; and (C) the Substitute Letter of Credit and the Bonds are not required to be registered under the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended.
(e) At the close of business on the effective date of any Substitute Letter of Credit, the Trustee shall return the Existing Letter of Credit to the issuer thereof, provided that any draws on such Existing Letter of Credit made on or prior to such date have been honored. Any draws that, under the terms of the Indenture, are to be made on the Letter of Credit on or prior to the effective date of a Substitute Letter of Credit shall be made under the Existing Letter of Credit. Not later than the close of business on the effective date of a Substitute Letter of Credit, the Bank shall deliver to the Trustee written evidence that all obligations of the Company to the issuer of the Existing Letter of Credit for reimbursement of amounts drawn thereunder shall have been satisfied, and upon receipt of such evidence any Bank Bonds held by the Tender Agent (as both said terms are defined in the Indenture) under the Indenture for the benefit of the issuer of the Existing Letter of Credit shall be delivered to, or upon the order of, the Company.
(f) The Company may, at its option, provide for the delivery to the Trustee of an Alternate Credit Facility to supplement which shall be effective on the Letter of date such Alternate Credit or to provide credit enhancement Facility is accepted by the Trustee in place of a accordance herewith. Any Alternate Credit Facility shall have the same terms as the Original Letter of Credit. Any , except that such Alternate Credit Facility shall be payable for a period of at least one year and shall expire on a June 15. On or before the date of delivery of any Alternate Credit Facility to the Trustee, as a condition of acceptance of any Alternate Credit Facility by the Trustee, the Company shall furnish to the Trustee for (i) an opinion of bond Counsel stating that the benefit delivery of such Alternate Credit Facility is authorized under and complies with this Section 3.7, and (ii) an opinion of Counsel stating that the Alternate Credit Facility is a binding and enforceable obligation of the Holders issuer thereof (except as enforceability may be limited by (A) bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors rights generally and (B) the availability of equitable remedies, including specific performance and injunctive relief), and that payments thereunder will not constitute a voidable preference under the United States Bankruptcy Code (in the event of bankruptcy, insolvency or reorganization of the Bonds and shall have administrative provisions satisfactory to Issuer, the Trustee"Company" or any "insider" of the Company). The preconditions for delivery In the case of an Alternate Credit Facility shall be identical in substance to those detailed in this Section for delivery issued by a branch or agency of a Substitute Letter foreign commercial bank there shall also be delivered an opinion of Credit, with such modifications, however, as shall be appropriate to comport with the form and character of the Alternate Credit Facility. [END OF ARTICLE V]Counsel
Appears in 1 contract
Samples: Loan Agreement (Walbro Corp)
