Letter of Credit Facility. 2.3.1. Issuance of Letters of Credit (a) Each Borrower acknowledges that Issuing Bank's willingness to issue any Letter of Credit is conditioned upon Issuing Bank's receipt of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. Issuing Bank shall have no obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC Application at least three Business Days prior to the requested date of issuance; and (ii) each LC Condition is satisfied. If Issuing Bank receives written notice from a Lender at least one Business Day before issuance of a Letter of Credit that any LC Condition has not been satisfied, Issuing Bank shall have no obligation to issue the requested Letter of Credit (or any other) until such notice is withdrawn in writing by that Lender or until Required Lenders have waived such condition in accordance with this Agreement. Prior to receipt of any such notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC Conditions. (b) Letters of Credit may be requested by a U.S. Borrower only (i) to support obligations of such Borrower incurred in the Ordinary Course of Business; or (ii) for other purposes as Agent and Lenders may approve from time to time in writing. The renewal or extension of any Letter of Credit shall be treated as the issuance of a new Letter of Credit, except that delivery of a new LC Application shall be required at the discretion of Issuing Bank. (c) Borrowers assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. In connection with issuance of any Letter of Credit, no Credit Party shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of any Credit Party, including any act or omission of a Governmental Authority. The rights and remedies of Issuing Bank under the Loan Documents shall be cumulative. Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with proceeds of any Letter of Credit. (d) In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, notice or other communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct of any such agents or attorneys-in-fact selected with reasonable care.
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Letter of Credit Facility. 2.3.1. Issuance of Letters of Credit. Issuing Bank agrees to issue Letters of Credit from time to time until 30 days prior to the Revolver Termination Date (or until the Commitment Termination Date, if earlier), on the terms set forth herein, including the following:
(a) Each Borrower acknowledges that Issuing Bank's ’s willingness to issue any Letter of Credit is conditioned upon Issuing Bank's ’s receipt of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. Issuing Bank shall have no obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC Application at least three Business Days prior to the requested date of issuance; and (ii) each LC Condition is satisfied. If Issuing Bank receives written notice from a Lender at least one five Business Day Days before issuance of a Letter of Credit that any LC Condition has not been satisfied, Issuing Bank shall have no obligation to issue the requested Letter of Credit (or any other) until such notice is withdrawn in writing by that Lender or until Required Lenders have waived such condition in accordance with this Agreement. Prior to receipt of any such notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC Conditions.
(b) Letters of Credit may be requested by a U.S. Borrower only (i) to support obligations of such Borrower incurred in the Ordinary Course of Business; or (ii) for other purposes as Agent and Lenders may approve from time to time in writing. The renewal or extension of any Letter of Credit shall be treated as the issuance of a new Letter of Credit, except that delivery of a new LC Application shall be required at the discretion of Issuing Bank.
(c) Borrowers assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. In connection with issuance of any Letter of Credit, no Credit Party none of Agent, Issuing Bank or any Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of Issuing Bank, Agent or any Credit PartyLender, including any act or omission of a Governmental Authority. The rights and remedies of Issuing Bank under the Loan Documents shall be cumulative. Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with proceeds of any Letter of Credit.
(d) In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, notice documentation or other communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct of any such agents or and attorneys-in-fact selected with reasonable care.
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Letter of Credit Facility. 2.3.1. 2.3.1 Issuance of Letters of Credit. Issuing Bank shall issue Letters of Credit from time to time until 30 days prior to the Revolver Termination Date (or until the Commitment Termination Date, if earlier), on the terms set forth herein, including the following:
(a) Each Borrower acknowledges that Issuing Bank's willingness to issue issuance of any Letter of Credit is conditioned upon Issuing Bank's receipt of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. Issuing Bank shall have no obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC Application at least three Business Days prior to the requested date of issuance; and (ii) each LC Condition is satisfied; and (iii) if a Defaulting Lender exists, such Lender or Borrowers have entered into arrangements satisfactory to Agent and Issuing Bank to eliminate any Fronting Exposure associated with such Lender. If If, in sufficient time to act, Issuing Bank receives written notice from Required Lenders that a Lender at least one Business Day before issuance of a Letter of Credit that any LC Condition has not been satisfied, Issuing Bank shall have no obligation to not issue the requested Letter of Credit (or any other) until such notice is withdrawn in writing by that Lender or until Required Lenders have waived such condition in accordance with this AgreementCredit. Prior to receipt of any such notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC Conditions.
(b) Letters of Credit may be requested by a U.S. Borrower only (i) to support obligations of such Borrower incurred in the Ordinary Course of Business; , or (ii) for other purposes as Agent and Lenders may approve from time to time in writingotherwise approved by Agent. The renewal or extension of any Letter of Credit shall be treated as the issuance of a new Letter of Credit, except that delivery of a new LC Application shall be required at the discretion of Issuing Bank.
(c) Borrowers assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. In connection with issuance of any Letter of Credit, no Credit Party none of Agent, Issuing Bank or any Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of Issuing Bank, Agent or any Credit PartyLender, including any act or omission of a Governmental Authority. The rights and remedies of Issuing Bank under the Loan Documents shall be cumulative. Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with proceeds of any Letter of Credit.
(d) In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, notice documentation or other communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct (including, without limitation, the gross negligence or willful misconduct) of any such agents or and attorneys-in-fact selected with reasonable care.
Appears in 1 contract
Samples: Loan and Security Agreement (Frozen Food Express Industries Inc)
Letter of Credit Facility. 2.3.1. 2.3.1 Issuance of Letters of Credit. Issuing Bank agrees to issue Letters of Credit from time to time until 30 days prior to the Revolver Termination Date (or until the Commitment Termination Date, if earlier), on the terms set forth herein, including the following:
(a) Each Borrower Obligor acknowledges that Issuing Bank's ’s willingness to issue any Letter of Credit is conditioned upon Issuing Bank's ’s receipt of a LC Application (appropriately completed and executed by a Borrower or conforming with the electronic letter of credit system at the applicable Issuing Bank, as applicable) with respect to the requested Letter of Credit, as well as such other instruments and agreements as the Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. The Issuing Bank shall have no obligation to issue any Letter of Credit unless (i) (A) Issuing Bank receives a LC Request with concurrent notice thereof to Agent and (B) Issuing Bank receives a LC Application Application, in each case, at least three Business Days prior to the requested date of issuance; provided, however, that if an application is received via the applicable Issuing Bank’s electronic letter of credit system on any Business Day, such Letter of Credit shall be issued on or prior to 5:00 p.m. the next succeeding Business Day (or at such later date and time as the applicable Issuing Bank may agree in a particular instance in its sole discretion); and (ii) each LC Condition is satisfied. If Upon receipt of notice of a LC Request in accordance with this section, the Agent shall notify the Issuing Bank as to whether the issuance of such Letter of Credit is authorized. The Issuing Bank shall not issue any Letter of Credit or amendment of a Letter of Credit increasing the amount thereof without first receiving such authorization. In addition, if the Issuing Bank receives written notice from a Lender at least one Business Day before issuance of a Letter of Credit that any LC Condition has not been satisfied, the Issuing Bank shall have no obligation to issue the requested Letter of Credit (or any other) until such notice is withdrawn in writing by that Lender or until Required Lenders have waived such condition in accordance with this Agreement. Prior to receipt of any such notice, the Issuing Bank shall not be deemed to have knowledge of any failure of LC Conditions.
(b) If a Borrower so requests in any applicable LC Application, the Issuing Bank may, in it sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the Issuing Bank to prevent any such extension at least once in each twelve-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 “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the Issuing Bank, a Borrower shall not be required to make a specific request to the Issuing Bank for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the Issuing Bank to permit the extension of such Letter of Credit at any time to an expiry date not later than thirty (30) days prior to the Revolver Termination Date; provided, however, that the Issuing Bank shall not permit any such extension if (A) the Issuing Bank has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five (5) Business Days before the Non-Extension Notice Date (1) from the Agent that the Required Lenders have elected not to permit such extension or (2) from the Agent, any Lender or any Borrower that one or more of the applicable conditions specified in Section 6.2 is not then satisfied, and in each such case directing such Issuing Bank not to permit such extension.
(c) Letters of Credit may be requested by a U.S. Borrower only (i) to support obligations of such a Borrower incurred in the Ordinary Course of Business; or (ii) for other purposes as Agent and Lenders may approve from time to time in writing. The renewal or extension of any Letter of Credit shall be treated as the issuance of a new Letter of Credit, except that delivery of a new subject to LC Application shall be required at the discretion of Issuing BankConditions.
(cd) Borrowers The Obligors assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. In connection with issuance of any Letter of Credit, no Credit Party none of Agent, Issuing Bank or any Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a Borroweran Obligor; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of the Issuing Bank, Agent or any Credit PartyLender, including any act or omission of a Governmental Authority. The rights and remedies of Issuing Bank under the Loan Documents shall be cumulative. The Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers Obligors are discharged with proceeds of any Letter of Credit.
(de) In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, the Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, notice or other communication in whatever form believed by the Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. The Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. The Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Letters of Credit or LC Documents, and and, subject to Section 2.3.2(d), shall not be liable for the negligence or misconduct of any such agents or attorneys-in-fact selected and retained with reasonable care.
Appears in 1 contract
Letter of Credit Facility. 2.3.1. Issuance CIT agrees, during the term of this Agreement and for so long as no Default or Event of Default exists, to endeavor to procure from Issuing Bank one or more Letters of CreditCredit upon Borrower's request therefor, subject to the following terms and conditions:
(a) Each 3.3.1 Borrower acknowledges that Issuing Bank's willingness to issue any Letter of Credit is conditioned upon Issuing Bank's receipt of a (a) the LC Guaranty duly executed and delivered to Issuing Bank by CIT, (b) an LC Application with respect to the requested Letter of Credit, as well as Credit and (c) such other instruments and agreements as Issuing Bank may customarily require for the issuance of a letter of credit of similar equivalent type and amountamount as the requested Letter of Credit. Issuing Bank CIT shall have no obligation to issue execute any Letter of Credit LC Guaranty or to join with Borrower in executing an LC Application unless (ix) Issuing Bank CIT receives a LC Request and LC Application from Borrower, at least three (3) Business Days prior to the requested date on which Borrower desires to submit such LC Application to Issuing Bank, an LC Request, and (y) each of the LC Conditions is satisfied on the date of issuance; CIT's receipt of the LC Request and (ii) each at the time of the requested execution of the LC Condition is satisfiedApplication. If In no event shall CIT have any liability or obligation to Borrower for any failure or refusal by an Issuing Bank receives written notice from a Lender at least one Business Day before issuance to issue, for such Issuing Bank's delay in issuing, or for any error of a such Issuing Bank in issuing any Letter of Credit that any LC Condition has not been satisfied, Issuing Bank shall have no obligation to issue the requested Letter of Credit (or any other) until such notice is withdrawn in writing by that Lender or until Required Lenders have waived such condition in accordance with this Agreement. Prior to receipt of any such notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC ConditionsCredit.
(b) 3.3.2 Letters of Credit may be requested hereunder by a U.S. Borrower only if they are to be used (ia) to support obligations of such Borrower incurred in the Ordinary Course ordinary course of Business; its business, as presently conducted or (iib) for such other purposes as Agent and Lenders CIT may approve from time to time time.
3.3.3 Borrower shall comply with all of the terms and conditions imposed on Borrower by Issuing Bank, whether such terms and conditions are contained in writingan LC Application or in any agreement with respect thereto, and subject to the rights of Issuing Bank, CIT shall have the same rights and remedies that Issuing Bank has under any agreements that Borrower may have with Issuing Bank in addition to any rights and remedies contained in any of the Loan Documents. The renewal or extension of Borrower agrees to reimburse Issuing Bank for any draw under any Letter of Credit immediately upon demand, and to pay Issuing Bank the amount of all other liabilities and obligations payable to Issuing Bank under or in connection with any Letter of Credit immediately when due, irrespective of any claim, setoff, defense or other right that Borrower may have at any time against Issuing Bank or any other Person, but without waiving any claim Borrower may have against Issuing Bank in connection therewith. If CIT shall be treated as pay any amount under the issuance of a new LC Guaranty with respect to any Letter of Credit, except that delivery of a new LC Application then Borrower shall be required absolutely and unconditionally obligated to pay to CIT, on the first Business Day following the date on which payment was made by CIT under such LC Guaranty, an amount equal to the amount paid by CIT under such LC Guaranty together with interest from and after the date of CIT's payment under such LC Guaranty until payment in full is made by Borrower at the discretion of a variable rate per annum in effect from time to time hereunder for Revolving Loans. Borrower agrees that any claim made upon CIT by Issuing BankBank under an LC Guaranty shall be conclusive on CIT and Borrower shall forthwith satisfy and discharge any such claim, on demand, failing which Borrower shall be obligated to reimburse CIT for any payment made by CIT under an LC Guaranty in connection with such claim as hereinabove provided.
(c) Borrowers assume 3.3.4 Borrower assumes all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. In connection with issuance of any Letter of Credit, no Credit Party shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of any Credit Party, including any act or omission of a Governmental Authority. The rights and remedies of Issuing Bank under the Loan Documents shall be cumulative. Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with proceeds of any Letter of Credit.
(d) In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, notice or other communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct of any such agents or attorneys-in-fact selected with reasonable care.
Appears in 1 contract
Samples: Financing Agreement (Simcala Inc)
Letter of Credit Facility. 2.3.1. Issuance of Letters of Credit. Issuing Bank agrees to issue Letters of Credit from time to time until 30 days prior to the Revolver Termination Date (or until the Commitment Termination Date, if earlier), on the terms set forth herein, including the following:
(a) Each Borrower acknowledges that Issuing Bank's ’s willingness to issue any Letter of Credit is conditioned upon Issuing Bank's ’s receipt of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. Issuing Bank shall have no obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC Application at least three Business Days prior to the requested date of issuance; and (ii) each LC Condition is satisfied. If Issuing Bank receives written notice from a Lender at least one Business Day before issuance of a Letter of Credit that any LC Condition has not been satisfied, Issuing Bank shall have no obligation to issue the requested Letter of Credit (or any other) until such notice is withdrawn in writing by that Lender or until Required Lenders have waived such condition in accordance with this Agreement. Prior to receipt of any such notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC Conditions.
(b) Letters of Credit may be requested by a U.S. Borrower Agent on behalf of any Borrower only (i) to support obligations of such Borrower incurred in the Ordinary Course of Business; or (ii) for other purposes as Administrative Agent and Lenders may approve from time to time in writing. The renewal or extension of any Letter of Credit shall be treated as the issuance of a new Letter of Credit, except that delivery of a new LC Application shall be required at the discretion of Issuing Bank.
(c) Borrowers assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. In connection with issuance of any Letter of Credit, no Credit Party none of Administrative Agent, Issuing Bank or any Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of Issuing Bank, Administrative Agent or any Credit PartyLender, including any act or omission of a Governmental AuthorityAuthority (except to the extent any of the foregoing arise solely from Issuing Bank’s actual gross negligence or willful misconduct). The rights and remedies of Issuing Bank under the Loan Credit Documents shall be cumulative. Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with proceeds of any Letter of Credit.
(d) In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, notice or other communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct of any such agents or attorneys-in-fact selected with reasonable care.
Appears in 1 contract
Samples: Credit and Security Agreement (PNA Group Holding CORP)
Letter of Credit Facility. 2.3.1. Issuance of Letters of Credit. Borrowers acknowledge and agree that, as of the Closing Date, the “Letters of Credit” listed on Schedule 2.2.1 have been issued and are outstanding under the Initial Loan Agreement. On the Closing Date, such “Letters of Credit” automatically, and without any action on the part of any Person, shall be deemed to be Letters of Credit issued hereunder for all purposes. Issuing Bank shall issue Letters of Credit from time to time until 30 days prior to the Revolver Termination Date (or until the Commitment Termination Date, if earlier), on the terms set forth herein, including the following:
(a) Each Borrower acknowledges that Issuing Bank's willingness to issue ’s issuance of any Letter of Credit is conditioned upon Issuing Bank's ’s receipt of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. Issuing Bank shall have no obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC Application at least three Business Days prior to the requested date of issuance; and (ii) each LC Condition is satisfied; and (iii) if a Defaulting Lender exists, such Lender or Borrowers have entered into arrangements satisfactory to Agent and Issuing Bank to eliminate any Fronting Exposure associated with such Lender. If If, in sufficient time to act, Issuing Bank receives written notice from Required Lenders that a Lender at least one Business Day before issuance of a Letter of Credit that any LC Condition has not been satisfied, Issuing Bank shall have no obligation to not issue the requested Letter of Credit (or any other) until such notice is withdrawn in writing by that Lender or until Required Lenders have waived such condition in accordance with this AgreementCredit. Prior to receipt of any such notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC Conditions.
(b) Letters of Credit may be requested by a U.S. Borrower only (i) to support obligations of such Borrower incurred in the Ordinary Course of Business; , or (ii) for other purposes as Agent and Lenders may approve from time to time in writingotherwise approved by Agent. The renewal or extension of any Letter of Credit shall be treated as the issuance of a new Letter of Credit, except that delivery of a new LC Application shall be required at the discretion of Issuing Bank.
(c) Borrowers assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. In connection with issuance of any Letter of Credit, no Credit Party none of Agent, Issuing Bank or any Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of Issuing Bank, Agent or any Credit PartyLender, including any act or omission of a Governmental Authority. The rights and remedies of Issuing Bank under the Loan Documents shall be cumulative. Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with proceeds of any Letter of Credit.be
(d) In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, notice documentation or other communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the gross negligence or willful misconduct of any such agents or and attorneys-in-fact selected with reasonable care.
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Letter of Credit Facility. 2.3.1. Issuance CIT agrees, during the term of this Agreement and for so long as no Default or Event of Default exists, to endeavor to procure from Issuing Bank one or more Letters of CreditCredit upon Borrower's request therefor, subject to the following terms and conditions:
(a) Each 3.3.1 Borrower acknowledges that Issuing Bank's willingness to issue any Letter of Credit is conditioned upon Issuing Bank's receipt of a (a) the LC Guaranty duly executed and delivered to Issuing Bank by CIT, (b) an LC Application with respect to the requested Letter of Credit, as well as Credit and (c) such other instruments and agreements as Issuing Bank may customarily require for the issuance of a letter of credit of similar equivalent type and amountamount as the requested Letter of Credit. Issuing Bank CIT shall have no obligation to issue execute any Letter of Credit LC Guaranty or to join with Borrower in executing an LC Application unless (ix) Issuing Bank CIT receives a LC Request and LC Application from Borrower, at least three (3) Business Days prior to the requested date on which Borrower desires to submit such LC Application to Issuing Bank, an LC Request, and (y) each of the LC Conditions is satisfied on the date of issuance; CIT's receipt of the LC Request and (ii) each at the time of the requested execution of the LC Condition is satisfiedApplication. If In no event shall CIT have any liability or obligation to Borrower for any failure or refusal by an Issuing Bank receives written notice from a Lender at least one Business Day before issuance to issue, for such Issuing Bank's delay in issuing, or for any error of a such Issuing Bank in issuing any Letter of Credit that any LC Condition has not been satisfied, Issuing Bank shall have no obligation to issue the requested Letter of Credit (or any other) until such notice is withdrawn in writing by that Lender or until Required Lenders have waived such condition in accordance with this Agreement. Prior to receipt of any such notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC ConditionsCredit.
(b) 3.3.2 Letters of Credit may be requested hereunder by a U.S. Borrower only if they are to be used (ia) to support obligations of such Borrower incurred in the Ordinary Course ordinary course of Business; its business, as presently conducted or (iib) for such other purposes as Agent and Lenders CIT may approve from time to time time.
3.3.3 Borrower shall comply with all of the terms and conditions imposed on Borrower by Issuing Bank, whether such terms and conditions are contained in writingan LC Application or in any agreement with respect thereto, and subject to the rights of Issuing Bank, CIT shall have the same rights and remedies that Issuing Bank has under any agreements that Borrower may have with Issuing Bank in addition to any rights and remedies contained in any of the Loan Documents. The renewal or extension of Borrower agrees to reimburse Issuing Bank for any draw under any Letter of Credit immediately upon demand, and to pay Issuing Bank the amount of all other liabilities and obligations payable to Issuing Bank under or in connection with any Letter of Credit immediately when due, irrespective of any claim, setoff, defense or other right that Borrower may have at any time against Issuing Bank or any other Person, but without waiving any claim Borrower may have against Issuing Bank in connection therewith. If CIT shall be treated as pay any amount under the issuance of a new LC Guaranty with respect to any Letter of Credit, except that delivery of a new LC Application then Borrower shall be required absolutely and unconditionally obligated to pay to CIT, on the first Business Day following the date on which payment was made by CIT under such LC Guaranty, an amount equal to the amount paid by CIT under such LC Guaranty together with interest from and after the date of CIT's payment under such LC Guaranty until payment in full is made by Borrower at the discretion of a variable rate per annum in effect from time to time hereunder for Revolving Loans. Borrower agrees that any claim made upon CIT by Issuing BankBank under an LC Guaranty shall be conclusive on CIT and Borrower shall forthwith satisfy and discharge any such claim, on demand, failing which Borrower shall be obligated to reimburse CIT for any payment made by CIT under an LC Guaranty in connection with such claim as hereinabove provided.
(c) Borrowers assume 3.3.4 Borrower assumes all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiarybeneficiary thereof. In connection with issuance The obligation of Borrower to reimburse CIT for any payment made by CIT under an LC Guaranty shall be absolute, unconditional and irrevocable and shall be paid without regard to any lack of validity or enforceability of any Letter of Credit, the existence of any claim, setoff, defense or other right which Borrower may have at any time against a beneficiary of any Letter of Credit, or untimely or improper honor by Issuing Bank of any draw request under a Letter of Credit. Without limiting the generality of the foregoing, if presentation of a demand, draft or certificate or other document does not comply with the terms of a Letter of Credit and Borrower contends that, as a consequence of such noncompliance it has no Credit Party obligation to reimburse Issuing Bank for any payment made with respect thereto, Borrower shall nevertheless be obligated to reimburse CIT for any payment made under the LC Guaranty with respect to such Letter of Credit, but without waiving any claim Borrower may have against Issuing Bank in connection therewith.
3.3.5 If any LC Outstandings, whether or not then due or payable, shall for any reason be outstanding (i) at any time that an Event of Default exists, (ii) on any date that an Out-of Formula Condition exists, or (iii) on the effective date of termination of this Agreement pursuant to Section 6 hereof, then Borrower shall, upon demand, forthwith deposit with CIT, in cash, an amount equal to the maximum aggregate amount of all LC Outstandings then outstanding or, in the event an Out-of Formula Condition exists, payment to the extent of the Out-of Formula Condition. If Borrower fails to make such deposit on CIT's demand therefor, CIT may advance such amount as a Revolving Loan (whether or not an Out-of-Formula Condition is created thereby). Such cash (together with any interest accrued thereon) shall be held by CIT in the Cash Collateral Account and may be invested, in CIT's discretion, in cash or, as determined by CIT, cash equivalents. Borrower hereby pledges, and grants to CIT a security interest in, all of Borrower's right, title and interest in the Cash Collateral Account and all Cash Collateral held in the Cash Collateral Account from time to time and all proceeds thereof, as security for the payment of the LC Outstandings, whether or not then due or payable. From time to time after cash is deposited in the Cash Collateral Account, CIT may apply any Cash Collateral then held in the Cash Collateral Account to the payment of any amounts, in such order as CIT may elect, as shall be or shall become due and payable by Borrower to CIT with respect to the Obligations which may then be outstanding. Neither Borrower nor any other Person claiming by, through or under or on behalf of Borrower shall have any right to withdraw any of the funds held in the Cash Collateral Account, including any accrued interest, provided that upon termination of all Letters of Credit and the payment and satisfaction in full of the LC Outstandings, any Cash Collateral remaining in the Cash Collateral Account shall be returned to Borrower unless an Event of Default then exists (in which event CIT may apply such funds to the payment of any other Obligations outstanding) and after payment in full of all Obligations, all such Cash Collateral shall be refunded to the Borrower. Notwithstanding the foregoing, CIT shall invest any Cash Collateral in Cash Equivalents mutually agreed to by CIT and Borrower and, unless an Event of Default has occurred and is continuing, CIT shall remit to Borrower on a monthly basis, all interest and other income earned on such investments, to such account as Borrower shall direct.
3.3.6 No Letter of Credit shall be extended or amended in any respect that is not solely ministerial, unless all of the LC Conditions are met as though a new Letter of Credit were being requested and issued.
3.3.7 CIT shall not be responsible for for: the existence, character, quality, quantity, condition, packing, value or delivery of any the goods purported purporting to be represented by any Documentsdocuments; any differences difference or variation in the character, quality, quantity, condition, packing, value or delivery of any the goods from that expressed in any Documentsthe documents; the form, validity, sufficiency, accuracy, sufficiency or genuineness or legal effect of any Documents documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment ofshipment, or failure or omission to ship, ship any or all of the goods referred to in a Letter the Letters of Credit or Documentsdocuments; any deviation from instructions, ; delay, default default, or fraud by any the shipper or other Person and/or anyone else in connection with any goods, shipment the Collateral or deliverythe shipping thereof; or any breach of contract between a the shipper or vendor vendors and a Borrower; errors. Furthermore, omissionswithout being limited by the foregoing, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of any Credit Party, including CIT shall not be responsible for any act or omission with respect to or in connection with any Collateral.
3.3.8 In addition to and without limiting any other right or remedy of a Governmental Authority. The rights and remedies CIT contained in this Agreement or in any of Issuing Bank under the other Loan Documents shall be cumulative. Issuing Bank Documents, CIT shall be fully subrogated to the rights and remedies of Issuing Bank under any agreement made between Borrower and Issuing Bank, including each beneficiary whose claims against Borrowers are discharged with proceeds LC Application, relating to the issuance of any Letter of Credit.
(d) In connection with its administration of , each such agreement being incorporated herein by reference, and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing Bank CIT shall be entitled to actexercise all such rights and remedies thereunder and under Applicable Law in such regard as fully as if it were Issuing Bank. If any Letter of Credit is drawn upon to discharge any obligation of Borrower to the beneficiary of such Letter of Credit, and in whole or in part, CIT shall be fully protected in acting, upon any certification, notice or other communication in whatever form believed by Issuing Bank, in good faith, subrogated to be genuine and correct and the rights of such beneficiary with respect to have been signed, sent or made by a proper Person. Issuing Bank may consult the obligation of Borrower to such beneficiary discharged with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by the proceeds of such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Letters Letter of Credit or LC Documents, and shall not be liable for the negligence or misconduct of any such agents or attorneys-in-fact selected with reasonable careCredit.
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Samples: Financing Agreement (Simcala Inc)
