Letter of Credit Guaranty. (a) In order to assist the Borrowers in establishing or opening standby letters of credit, which shall not have expiration dates that exceed 180 days from the date of issuance, or such sooner expiry date as is provided in Section 3.01(b) (the "LETTERS OF CREDIT"), with the L/C Issuer, the Borrowers have requested the Administrative Agent to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Agent's credit to that of the Borrowers, and the Administrative Agent has agreed to do so. These arrangements shall be coordinated by the Administrative Agent subject to the terms and conditions set forth below. The Administrative Agent shall not be required to be the issuer of any Letter of Credit. The Parent will be the account party for application for a Letter of Credit, which shall be substantially in the form of Exhibit G hereto or on a computer transmission system approved by the Administrative Agent and the L/C Issuer or such other written form or computer transmission system as may from time to time be approved by the L/C Issuer and the Administrative Agent, and shall be duly completed in a manner reasonably acceptable to the Administrative Agent, together with such other certificates, agreements, documents and other papers and information as the L/C Issuer or the Administrative Agent may reasonably request (THE "LETTER OF CREDIT APPLICATION"). In the event of any conflict between the terms of the Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the Agents. (b) The aggregate Letter of Credit Obligations shall not exceed the lowest of (i) the difference between (A) the Available Commitment and (B) the aggregate principal amount of Revolving Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of the Revolving Loans then outstanding, and (iii) the L/C Subfacility. In addition, the terms and conditions of all Letters of Credit and all changes or modifications thereof by the Borrowers and/or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the reasonable exercise of its sole and absolute discretion, PROVIDED, HOWEVER, that (i) the expiry date of all Letters of Credit shall be no later than fifteen days prior to the Revolving Loan Commitment Termination Date unless, on or prior to fifteen days prior to the Revolving Loan Commitment Termination Date either (x) such Letters of Credit shall be cash collateralized in an amount equal to 110% of the face amount of such Letters of Credit or (y) the Borrowers shall provide the Administrative Agent and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Agent, from a commercial bank or other financial institution acceptable to the Agents for any Letter of Credit Obligations with respect to such Letters of Credit, and (ii) the Letters of Credit and all documentation in connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer. (c) The Administrative Agent shall have the right, without notice to the Borrowers, to charge the Loan Account with the amount of any and all indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents or the Lenders under the Letter of Credit Guaranty or incurred by an L/C Issuer with respect to a Letter of Credit at the earlier of (i) payment by the Administrative Agent or the Lenders under the Letter of Credit Guaranty or (ii) the occurrence of an Event of Default. Any amount charged to the Loan Account shall be deemed a Revolving Loan hereunder made by the Lenders to the Borrowers, funded by the Administrative Agent on behalf of the Lenders and subject to Section 2.02 of this Agreement. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the Borrowers' account by the L/C Issuer in connection with or arising out of Letters of Credit or transactions relating thereto will be charged to the Loan Account in full when charged to or paid by the Administrative Agent and, when charged, shall be conclusive on the Borrowers absent manifest error. Each of the Lenders and the Borrowers agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 have been satisfied. (d) The Borrowers unconditionally jointly and severally indemnify each Agent and each Lender and hold each Agent and each Lender harmless from any and all loss, claim or liability incurred by any Agent or any Lender arising from any transactions or occurrences relating to Letters of Credit, any drafts or acceptances thereunder, the Collateral relating thereto, and all Obligations in respect thereof, including any such loss or claim due to any action taken by the L/C Issuer, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct of the L/C Issuer, any Agent or any Lender as determined by a final judgment of a court of competent jurisdiction. The Borrowers further agree to jointly and severally hold each Agent and each Lender harmless from any errors or omission, negligence or misconduct by the L/C Issuer. The Borrowers' unconditional obligations to each Agent, the L/C Issuer and each Lender with respect to Letters of Credit hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agent's, the L/C Issuer's or such Lender's gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree that any charges incurred by the Administrative Agent or the L/C Issuer for the Borrowers' account hereunder may be charged to the Loan Account. (e) Upon any payments made to the L/C Issuer under the Letter of Credit Guaranty, the Agents or the Lenders, as the case may be, shall, without prejudice to its rights under this Agreement (including that such unreimbursed amounts shall constitute Loans hereunder), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers in favor of the L/C Issuer in any application for Letters of Credit, any standing agreement relating to Letters of Credit or otherwise, all of which shall be deemed to have been granted to the Agents and the Lenders and apply in all respects to the Agents and the Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
Appears in 1 contract
Samples: Financing Agreement (High Voltage Engineering Corp)
Letter of Credit Guaranty. (a) In order to assist the Borrowers in establishing or opening documentary and standby letters of credit, which shall not have expiration dates that exceed 180 270 days in the case of documentary letters of credit and 365 days in the case of standby letters of credit (or such longer periods as may be approved by the Agents from the date of issuance, or such sooner expiry date as is provided in Section 3.01(b) issuance (the "LETTERS OF CREDITLetters of Credit"), with the L/C Issuer, the Borrowers have requested the Administrative Agent NationsBanc to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative AgentNationsBanc's credit to that of the Borrowers, and the Administrative Agent has agreed NationsBanc hereby agrees to do so. These arrangements shall be coordinated by the Administrative Agent NationsBanc subject to the terms and conditions set forth below. The Administrative Agent NationsBanc shall not be required to be the issuer of any Letter of Credit. The Parent A Borrower will be the account party for each application for a Letter of Credit, which shall be substantially in the form of Exhibit G F hereto or on a computer transmission system approved by the Administrative Agent NationsBanc and the L/C Issuer or such other written form or computer written transmission system as may from time to time be approved by the L/C Issuer and the Administrative AgentNationsBanc, and shall be duly completed in a manner reasonably acceptable to the Administrative AgentNationsBanc, together with such other certificates, agreements, documents and other papers and information as the L/C Issuer or the Administrative Agent NationsBanc may reasonably request (THE the "LETTER OF CREDIT APPLICATIONLetter of Credit Application"). In the event of any conflict between the terms of the Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the Agents.
(b) The aggregate Letter of Credit Obligations shall not exceed the lowest of (i) the difference between (A) the Available Total Revolving Credit Commitment and (B) the aggregate principal amount of Revolving Credit Loans then outstanding, (ii) the difference between (A) the aggregate Borrowing Base for the Borrowers on a combined basis and (B) the aggregate principal amount of the Revolving Credit Loans then outstanding, outstanding and (iii) the L/C Subfacility. In addition (x) the A Letter of Credit Obligations shall not exceed the difference between (1) the then current Borrowing Base of Squire on an individual basis and (2) the aggregate principal amount of A Revolving Credit Loans and (y) the B Letter of Credit Obligations shall not exceed the difference between (1) the then current Borrowing Base of Miss Erikx xx an individual basis and (2) the aggregate principal amount of B Revolving Credit Loans, provided that (AA) no Borrower shall be permitted to obtain a Letter of Credit that results in such Borrower having an Overadvance Amount if and to the extent that, at such time, the other Borrower has positive availability, (BB) except as provided in clause (AA) above, the Overadvance Amount shall be allocated between the Borrowers by the Administrative Agent, as described in Section 2.01(b) hereof, and (CC) nothing contained herein shall prohibit a Borrower with positive Availability at any time from opening a Letter of Credit for the account of another Borrower that does not have positive Availability at such time. Not more than $6 million of such Letter of Credit Obligations shall be Letter of Credit Obligations with respect to standby Letters of Credit. In addition, the terms and conditions of all Letters of Credit and all changes or modifications thereof by the Borrowers and/or the L/C Issuer shall in all respects be subject to the prior approval of NationsBanc (or, in the Administrative Agent case of Existing Letters of Credit issued by The Chase Manhattan Bank, CIT) in the reasonable exercise of its sole and absolute discretion; provided, PROVIDED, HOWEVERhowever, that (i) the expiry date of all Letters of Credit shall be no later than fifteen forty-five days prior to the Revolving Loan Commitment Termination Final Maturity Date unless, on or prior to fifteen forty-five days prior to the Revolving Loan Commitment Termination Date Final Maturity Date, either (x) such Letters of Credit shall be cash collateralized in an amount equal to 110105% of the face amount of such Letters of Credit or (y) the Borrowers shall provide the Administrative Agent Agents and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Collateral Agent, from a commercial bank or other financial institution acceptable to the Agents Collateral Agent for any Letter of Credit Obligations with respect to such Letters of Credit, Credit and (ii) the Letters of Credit and all documentation in connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent NationsBanc and the L/C Issuer. At the request of a Borrower, NationsBanc may, in its sole discretion, assist such Borrower in establishing or opening standby Letters of Credit that have expiry dates that will automatically be extended for an additional period or periods unless the L/C Issuer notifies the beneficiary that the then existing expiry date will not be extended ("Evergreen Letters of Credit"), provided that (x) NationsBanc shall have no obligation to assist any Borrower in establishing or opening any Evergreen Letter of Credit, (y) NationsBanc may at any time, in its sole discretion, instruct the L/C Issuer to notify the beneficiary of an Evergreen Letter of Credit that the expiry date of such Letter of Credit will not be automatically extended, if an Event of Default or Default has occurred and is continuing, and (z) all Evergreen Letters of Credit shall be subject to all of the terms and conditions contained in this Agreement applicable to Letters of Credit.
(c) The Administrative Agent shall have the right, without notice to the Borrowers, to charge the relevant Loan Account with the amount of any and all indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents Agents, NationsBanc, CIT or the Lenders under the Letter of Credit Guaranty or incurred by an L/C Issuer with respect to a Letter of Credit at the earlier of (i) payment by the Administrative Agent NationsBanc, CIT or the Lenders under the Letter of Credit Guaranty or (ii) the occurrence of an Event of Default. Any amount charged to the a Loan Account shall be deemed a Revolving Credit Loan hereunder made by the Lenders to the Borrowersrelevant Borrower, funded by the Administrative Agent on behalf of the Lenders and subject to Section 2.02 2.05 of this Agreement. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent NationsBanc or CIT for the Borrowers' a Borrower's account by the L/C Issuer in connection with or arising out of Letters of Credit or transactions relating thereto will be charged to the relevant Loan Account in full when charged to or paid by the Administrative Agent NationsBanc or CIT and, when charged, shall be conclusive on the Borrowers such Borrower absent manifest error. Each of the Lenders and the Borrowers agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 have been satisfied.
(d) The Borrowers unconditionally and jointly and severally indemnify each Agent Agent, NationsBanc, CIT and each Lender and hold each Agent Agent, NationsBanc, CIT and each Lender harmless from any and all loss, claim or liability incurred by any Agent Agent, NationsBanc, CIT or any Lender arising from any transactions or occurrences relating to Letters of Credit, any drafts or acceptances thereunder, the Collateral relating thereto, and all Obligations in respect thereof, including any such loss or claim due to any action taken by the L/C Issuer, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct of the L/C IssuerAgents, any Agent NationsBanc, CIT or any Lender as determined by a final judgment of a court of competent jurisdiction. The Borrowers further agree to jointly and severally hold each Agent the Agents, NationsBanc, CIT and each Lender harmless from any errors or omission, negligence or misconduct by the L/C Issuer. The Borrowers' unconditional unconditional, joint and several obligations to each Agentthe Agents, the L/C Issuer NationsBanc, CIT and each Lender with respect to the Letters of Credit hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agentthe Agents', NationsBanc's, the L/C IssuerCIT's or such Lender's gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree that any charges incurred by the Administrative Agent NationsBanc, CIT or the L/C Issuer for the Borrowers' a Borrower's account hereunder may be charged to the relevant Loan Account.
(e) Upon any payments made to None of the Agents, NationsBanc, CIT, the Lenders and the L/C Issuer under shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of the goods purporting to be represented by any documents; any difference or variation in the character, quality, quantity, condition, packing, value or delivery of the goods from that expressed in the documents; the validity, sufficiency or genuineness of any documents or of any endorsements thereof 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 is made; partial or incomplete shipments, or failure or omission to ship any or all of the goods referred to in the Letters of Credit or documents; any deviation from instructions, delay, default, or fraud by the shipper and/or anyone else in connection with the Collateral or the shipping thereof; or any breach of contract between the shipper or vendors and the Borrowers. Furthermore, without limiting any of the foregoing, none of the Agents, NationsBanc, CIT and the Lenders shall be responsible for any act or omission with respect to or in connection with any goods covered by any Letter of Credit Guarantyexcept in the case of the Agents', the Agents NationsBanc's, CIT's or the Lenders' gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction.
(f) The Borrowers jointly and severally agree that any action taken by any Agent, as the case may beNationsBanc, shallCIT or any Lender, without prejudice to its rights under this Agreement (including that such unreimbursed amounts shall constitute Loans hereunder)if taken in good faith, acquire or any action taken by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers in favor of the L/C Issuer Issuer, under or in any application for connection with the Letters of Credit, the drafts or acceptances, the guarantees or the Collateral, shall be binding on the Borrowers and shall not put the Agents, NationsBanc, CIT or the Lenders in any standing agreement relating resulting liability to the Borrowers except in the case of the Agents', NationsBanc's, CIT's or the Lenders' gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. In furtherance of the foregoing, NationsBanc and CIT shall have the full right and authority to clear and resolve any questions of non-compliance of documents; to give any instructions as to acceptance or rejection of any documents or goods; to execute any and all steamship or airways guaranties (and applications therefore), indemnities or delivery orders; to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; and to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit or otherwise, all of which shall be deemed to have been granted to the Agents and the Lenders and apply in all respects to the Agents and the Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.Credit,
Appears in 1 contract
Letter of Credit Guaranty. (a1) In order to assist the Borrowers in establishing or opening standby documentary letters of creditcredit with the Letter of Credit Issuer, which shall not have expiration dates that exceed 180 days from the date of issuance, issuance thereof or such sooner expiry date as is provided in Section 3.01(b) that exceed 30 days prior to the Revolving Credit Termination Date (the "LETTERS OF CREDITLetters of Credit"), and with respect to the L/C IssuerLetters of Credit described in Section 2.17(j) hereof, the Borrowers have requested that the Administrative Agent to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Agent's credit to that of the Borrowers, and the Administrative Agent has agreed to do so. These arrangements shall be coordinated handled by the Administrative Agent subject to the terms and conditions set forth below. The Administrative Agent shall not be required to be the issuer of any Letter of Credit. The Parent Borrowers will be be, jointly and severally, the account party for any application for a Letter of Credit, which application shall be substantially in the form of Exhibit G hereto or on a computer transmission system approved by the Administrative Agent and the L/C Issuer or such other written form or computer transmission system as may from time to time be approved by the L/C Letter of Credit Issuer and the Administrative Agent, Agent and which shall be duly completed in a manner reasonably acceptable to the Administrative AgentAgent (such application, together with such other certificates, agreements, documents and other papers and information as the L/C Letter of Credit Issuer or the Administrative Agent may reasonably request (THE request, collectively the "LETTER OF CREDIT APPLICATIONLetter of Credit Application"). In the event of any conflict between the terms of the Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the Agents.
(b) The aggregate Letter of Credit Obligations shall not exceed the lowest of (i) the difference between (A) the Available Commitment and (B) the aggregate principal amount of Revolving Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of the Revolving Loans then outstanding, and (iii) the L/C Subfacility. In addition, the terms and conditions of all Letters of Credit and all changes or modifications thereof by the Borrowers and/or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the reasonable exercise of its sole and absolute discretion, PROVIDED, HOWEVER, that (i) the expiry date of all Letters of Credit shall be no later than fifteen days prior issued with respect to transactions occurring in the ordinary course of the business of the Borrowers.
(1) Notwithstanding anything to the Revolving Loan Commitment Termination Date unlesscontrary contained herein, on or prior to fifteen days prior to the Revolving Loan Commitment Termination Date either (x) such Letters of Credit shall be cash collateralized in an amount equal to 110% of the face amount of such Letters of Credit or (y) the Borrowers shall provide the Administrative Agent and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Agent, from a commercial bank or other financial institution acceptable to the Agents for any Letter of Credit Obligations with respect to such Letters of CreditUsage shall not exceed $35,000,000 at any time, and (ii) the Letters no Letter of Credit and all documentation in connection therewith Guaranty shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuerissued hereunder if, after giving effect thereto, Availability would be less than zero.
(c2) The Administrative Agent shall have the right, without notice to the Borrowers, to charge the Loan Account Borrowers' account with the Administrative Agent with the amount of any and all indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents Administrative Agent or the Lenders under the Letter of Credit Guaranty or incurred by an L/C a Letter of Credit Issuer with respect to a Letter of Credit at the earlier of (iA) payment by the Administrative Agent or the Lenders under the Letter of Credit Guaranty or (iiB) the occurrence of an Event of Default. Any amount so charged to the Loan Account Borrowers' account with the Administrative Agent shall be deemed a Revolving Credit Loan hereunder made by the Lenders to the Borrowers, funded by the Administrative Agent on behalf of the Lenders and subject to Section 2.02 2.05 and Section 2.09(c) of this AgreementAgreement and subject further to the requirement that the Borrowers immediately prepay outstanding Revolving Credit Loans so that the outstanding principal balance of all Revolving Credit Loans will not exceed $55,000,000. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the Borrowers' account by the L/C Letter of Credit Issuer in connection with or arising out of Letters of Credit or transactions relating thereto will be charged to the Loan Account Borrowers' account with the Administrative Agent in full when charged to or paid by the Administrative Agent and, when charged, shall be conclusive on the Borrowers absent manifest error. Each of the Lenders and the Borrowers agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 5.01 have been satisfied.
(d3) The Borrowers unconditionally jointly and severally indemnify each the Administrative Agent and each Lender and hold each the Administrative Agent and each Lender harmless from any and all loss, claim or liability (including, without limitation, reasonable attorneys' fees and disbursements) incurred by any the Administrative Agent or any Lender arising from any transactions or occurrences relating to Letters of Credit, any drafts or acceptances thereunder, the Collateral collateral relating thereto, and all Obligations in respect thereof, including any such loss or claim due to any action taken by the L/C Letter of Credit Issuer, other than for to the extent that any such loss, claim or liability arising out of directly results from the gross negligence or willful misconduct of the L/C Issuer, any Administrative Agent or any Lender Lender, respectively, as determined by a final judgment of a court of competent jurisdiction. The Borrowers further agree to jointly and severally hold each the Administrative Agent and each Lender harmless from any errors or omission, negligence negligence, unlawful conduct or misconduct by the L/C Letter of Credit Issuer. The Borrowers' unconditional unconditional, joint and several obligations to each Agent, the L/C Issuer Administrative Agent and each Lender with respect to the Letters of Credit hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agent's, the L/C Issuer's or such Lender's gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree Each Borrower and each Guarantor agrees that any charges incurred by the Administrative Agent or the L/C Letter of Credit Issuer for the Borrowers' account hereunder may be charged to the Loan AccountBorrowers' account with the Administrative Agent.
(e4) None of the Administrative Agent, the Lenders and the Letter of Credit Issuer shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of the goods purporting to be represented by any documents; any difference or variation in the character, quality, condition, packing, value or delivery of the goods from that expressed in the documents; the validity, sufficiency or genuineness of any documents or of any endorsements thereof 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 is made; partial or incomplete shipments, or failure or omission to ship any or all of the goods referred to in the Letters of Credit or documents; any deviation from instructions, delay, default, or fraud by the shipper and/or anyone else in connection with the collateral or the shipping thereof; or any breach of contract between the shipper or vendors and the Borrowers. Furthermore, without limiting any of the foregoing, neither the Administrative Agent nor the Lenders shall be responsible for any act or omission with respect to or in connection with any goods covered by any Letter of Credit.
(5) The Borrowers jointly and severally agree that any action taken by the Administrative Agent or any Lender, or any action taken by the Letter of Credit Issuer, under or in connection with the Letters of Credit, the drafts or acceptances, the guarantees or the collateral, shall be binding on the Borrowers and shall not put the Administrative Agent, or the Lenders in any resulting liability to the Borrowers. In furtherance of the foregoing, the Administrative Agent shall have the full right and authority to clear and resolve any questions of non-compliance of documents; to give any instructions as to acceptance or rejection of any documents or goods; to execute any and all steamship or airways guaranties (and applications therefor), indemnities or delivery orders; to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; and to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or acceptances, all in the Administrative Agent's sole name, and the Letter of Credit Issuer shall be entitled to comply with and honor any and all such documents or instruments executed by or received solely from the Administrative Agent, all without any notice to or any consent from the Borrowers. The Administrative Agent shall use reasonable efforts to consult with the Borrowers before taking any action pursuant to this Section 2.17(f).
(6) Without the Administrative Agent's express consent, the Borrowers jointly and severally agree: (x) not to execute any and all applications for steamship or airway guaranties, indemnities or delivery orders; to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; or to agree to any amendments, renewals, extensions, modification, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or acceptances; and (y) after the occurrence of any Event of Default which is not cured within any applicable grace period, if any, or waived as provided under Section 11.08 hereof, not to (A) clear and resolve any questions of non-compliance of documents, or (B) give any instructions as to acceptances or rejection of any documents or goods.
(7) The Borrowers jointly and severally agree that any necessary and material import, export or other license or certificate for the import or handling of inventory will have been promptly procured; all foreign and domestic governmental laws and regulations in regard to the shipment and importation of inventory or the financing thereof will have been promptly and fully complied with and any certificates in that regard that the Administrative Agent may at any time reasonably request will be promptly furnished. In this connection, the Borrowers warrant and represent that all shipments made under any Letters of Credit are in accordance with the laws and regulations of the countries in which the shipments originate and terminate, and are not prohibited by any such laws and regulations. As between the Borrowers, on the one hand, and the Administrative Agent, the Lenders and the Letter of Credit Issuer, on the other hand, the Borrowers jointly and severally assume all risk, liability and responsibility for, and agree to pay and discharge, all present and future local, state, federal or foreign taxes, duties or levies. As between the Borrowers, on the one hand, and the Administrative Agent, the Lenders and the Letter of Credit Issuer, on the other hand, any embargo, restriction, laws, customs or regulations of any country, state, city or other political subdivision, where such inventory is or may be located, or wherein payments are to be made, or wherein drafts may be drawn, negotiated, accepted or paid, shall be solely the Borrowers' joint and several risk, liability and responsibility.
(8) Upon any payments made to the L/C Letter of Credit Issuer under the a Letter of Credit Guaranty, the Agents Administrative Agent or the Lenders, as the case may be, shall, without prejudice to its or their respective rights under this Agreement (including that such unreimbursed amounts shall constitute Revolving Credit Loans hereunderhereunder in accordance with subsection (c) of this Section 2.17), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers in favor of the L/C Letter of Credit Issuer in any application for Letters of Credit, any standing agreement relating to Letters of Credit or otherwise, all of which shall be deemed to have been granted to the Agents Administrative Agent and the Lenders and apply in all respects to the Agents Administrative Agent and the Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
(9) Schedule 2.17(j) annexed hereto contains a description of (i) all letters of credit issued for the benefit of the Borrowers with respect to which The Chase Manhattan Bank is the Letter of Credit Issuer outstanding on the Closing Date and (ii) the $200,000 stand-by letter of credit issued to support insurance premiums on the Borrowers' workers' compensation policy. Each such letter of credit, including any extension or renewal thereof, shall constitute a "Letter of Credit" for all purposes of this Agreement, issued on the Closing Date.
Appears in 1 contract
Samples: Credit Agreement (Donnkenny Inc)
Letter of Credit Guaranty. (a) In order to assist the Borrowers in establishing or opening documentary and standby letters of credit, which shall not have expiration dates that exceed 180 270 days in the case of documentary letters of credit and 365 days in the case of standby letters of credit (or such longer periods as may be approved by the Agents from the date of issuance, or such sooner expiry date as is provided in Section 3.01(b) issuance (the "LETTERS OF CREDITLetters of Credit"), with ----------------- the L/C Issuer, the Borrowers have requested the Administrative Agent NationsBanc to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative AgentNationsBanc's credit to that of the Borrowers, and the Administrative Agent has agreed NationsBanc hereby agrees to do so. These arrangements shall be coordinated by the Administrative Agent NationsBanc subject to the terms and conditions set forth below. The Administrative Agent NationsBanc shall not be required to be the issuer of any Letter of Credit. The Parent A Borrower will be the account party for each application for a Letter of Credit, which shall be substantially in the form of Exhibit G E hereto or on a computer transmission system approved by the Administrative Agent NationsBanc and the L/C Issuer or such other written form or computer written transmission system as may from time to time be approved by the L/C Issuer and the Administrative AgentNationsBanc, and shall be duly completed in a manner reasonably acceptable to the Administrative AgentNationsBanc, together with such other certificates, agreements, documents and other papers and information as the L/C Issuer or the Administrative Agent NationsBanc may reasonably request (THE the "LETTER OF CREDIT APPLICATIONLetter of Credit Application"). In the ---------------------------- event of any conflict between the terms of the Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the Agents.
(b) The aggregate Letter of Credit Obligations shall not exceed the lowest of (i) the difference between (A) the Available Total Commitment and (B) the --------- aggregate principal amount of Revolving Loans then outstanding, (ii) the difference between (A) the aggregate Borrowing Base for the Borrowers on a combined basis and (B) the aggregate principal amount of the Revolving Loans then outstanding, outstanding and (iii) the L/C Subfacility. In addition (x) the A Letter of Credit Obligations shall not exceed the difference between (1) the then current Borrowing Base of Squire on an individual basis and (2) the aggregate principal amount of A Revolving Credit Loans, (y) the B Letter of Credit Obligations shall not exceed the difference between (1) the then current Borrowing Base of Miss Xxxxx on an individual basis and (2) the aggregate principal amount of B Revolving Credit Loans and (z) the C Letter of Credit Obligations shall not exceed the difference between (1) the then current Borrowing Base of Xxxx-Xx on an individual basis and (2) the aggregate principal amount of C Revolving Credit Loans, provided that (AA) no Borrower shall be permitted to obtain a Letter of Credit that results in such Borrower having an Overadvance Amount if and to the extent that, at such time, any other Borrower has positive availability, (BB) except as provided in clause (AA) above, the Overadvance Amount shall be allocated among the Borrowers by the Administrative Agent, as described in Section 2.01(b) hereof, and (CC) nothing contained herein shall prohibit a Borrower with positive Availability at any time from opening a Letter of Credit for the account of another Borrower that does not have positive Availability at such time. Not more than $45 million of such Letter of Credit Obligations shall be Letter of Credit Obligations with respect to standby Letters of Credit and not more than $130 million of such Letter of Credit Obligations shall be Letter of Credit Obligations with respect to documentary Letters of Credit (including $45 million of such Letters of Credit available to Xxxx-Xx under its Borrowing Base, subject to all of the terms of this Agreement). In addition, the terms and conditions of all Letters of Credit and all changes or modifications thereof by the Borrowers and/or the L/C Issuer shall in all respects be subject to the prior approval of NationsBanc (or, in the Administrative Agent case of Existing Letters of Credit and Indemnified Letters of Credit issued by The Chase Manhattan Bank or Marine Midland Bank, N.A., CIT) in the reasonable exercise of its sole and absolute discretion; provided, PROVIDED, HOWEVERhowever, that (i) the expiry date of all Letters of Credit -------- ------- shall be no later than fifteen forty-five days prior to the Revolving Loan Commitment Termination Final Maturity Date unless, on or prior to fifteen forty-five days prior to the Revolving Loan Commitment Termination Date Final Maturity Date, either (x) such Letters of Credit shall be cash collateralized in an amount equal to 110105% of the face amount of such Letters of Credit or (y) the Borrowers shall provide the Administrative Agent Agents and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Collateral Agent, from a commercial bank or other financial institution acceptable to the Agents Collateral Agent for any Letter of Credit Obligations with respect to such Letters of Credit, Credit and (ii) the Letters of Credit and all documentation in connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent NationsBanc and the L/C Issuer. At the request of a Borrower, NationsBanc may, in its sole discretion, assist such Borrower in establishing or opening standby Letters of Credit that have expiry dates that will automatically be extended for an additional period or periods unless the L/C Issuer notifies the beneficiary that the then existing expiry date will not be extended ("Evergreen Letters of Credit"), provided that (x) --------------------------- NationsBanc shall have no obligation to assist any Borrower in establishing or opening any Evergreen Letter of Credit, (y) NationsBanc may at any time, in its sole discretion, instruct the L/C Issuer to notify the beneficiary of an Evergreen Letter of Credit that the expiry date of such Letter of Credit will not be automatically extended, if an Event of Default or Default has occurred and is continuing, and (z) all Evergreen Letters of Credit shall be subject to all of the terms and conditions contained in this Agreement applicable to Letters of Credit.
(c) The Administrative Agent shall have the right, without notice to the Borrowers, to charge the relevant Loan Account with the amount of any and all indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents Agents, NationsBanc, CIT or the Lenders under the Letter of Credit Guaranty or incurred by an L/C Issuer with respect to a Letter of Credit at the earlier of (i) payment by the Administrative Agent NationsBanc, CIT or the Lenders under the Letter of Credit Guaranty or (ii) the occurrence of an Event of Default. Any amount charged to the a Loan Account shall be deemed a Revolving Loan hereunder made by the Lenders to the Borrowersrelevant Borrower, funded by the Administrative Agent on behalf of the Lenders and subject to Section 2.02 2.05 of this Agreement. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent NationsBanc or CIT for the Borrowers' a Borrower's account by the L/C Issuer in connection with or arising out of Letters of Credit or transactions relating thereto will be charged to the relevant Loan Account in full when charged to or paid by the Administrative Agent NationsBanc or CIT and, when charged, shall be conclusive on the Borrowers such Borrower absent manifest error. Each of the Lenders and the Borrowers agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 have been satisfied.
(d) The Borrowers unconditionally and jointly and severally indemnify each Agent Agent, NationsBanc, CIT and each Lender and hold each Agent Agent, NationsBanc, CIT and each Lender harmless from any and all loss, claim or liability incurred by any Agent Agent, NationsBanc, CIT or any Lender arising from any transactions or occurrences relating to Letters of Credit, any drafts or acceptances thereunder, the Collateral relating thereto, and all Obligations in respect thereof, including any such loss or claim due to any action taken by the L/C Issuer, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct of the L/C IssuerAgents, any Agent NationsBanc, CIT or any Lender as determined by a final judgment of a court of competent jurisdiction. The Borrowers further agree to jointly and severally hold each Agent the Agents, NationsBanc, CIT and each Lender harmless from any errors or omission, negligence or misconduct by the L/C Issuer. The Borrowers' unconditional unconditional, joint and several obligations to each Agentthe Agents, the L/C Issuer NationsBanc, CIT and each Lender with respect to the Letters of Credit hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agentthe Agents', NationsBanc's, the L/C IssuerCIT's or such Lender's gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree that any charges incurred by the Administrative Agent NationsBanc, CIT or the L/C Issuer for the Borrowers' a Borrower's account hereunder may be charged to the relevant Loan Account.
(e) None of the Agents, NationsBanc, CIT, the Lenders and the L/C Issuer shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of the goods purporting to be represented by any documents; any difference or variation in the character, quality, quantity, condition, packing, value or delivery of the goods from that expressed in the documents; the validity, sufficiency or genuineness of any documents or of any endorsements thereof 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 is made; partial or incomplete shipments, or failure or omission to ship any or all of the goods referred to in the Letters of Credit or documents; any deviation from instructions, delay, default, or fraud by the shipper and/or anyone else in connection with the Collateral or the shipping thereof; or any breach of contract between the shipper or vendors and the Borrowers. Furthermore, without limiting any of the foregoing, none of the Agents, NationsBanc, CIT and the Lenders shall be responsible for any act or omission with respect to or in connection with any goods covered by any Letter of Credit except in the case of the Agents', NationsBanc's, CIT's or the Lenders' gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction.
(f) The Borrowers jointly and severally agree that any action taken by any Agent, NationsBanc, CIT or any Lender, if taken in good faith, or any action taken by the L/C Issuer, under or in connection with the Letters of Credit, the drafts or acceptances, the guarantees or the Collateral, shall be binding on the Borrowers and shall not put the Agents, NationsBanc, CIT or the Lenders in any resulting liability to the Borrowers except in the case of the Agents', NationsBanc's, CIT's or the Lenders' gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. In furtherance of the foregoing, NationsBanc and CIT shall have the full right and authority to clear and resolve any questions of non-compliance of documents; to give any instructions as to acceptance or rejection of any documents or goods; to execute any and all steamship or airways guaranties (and applications therefore), indemnities or delivery orders; to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; and to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or acceptances, all in NationsBanc's or CIT's sole name, and the L/C Issuer shall be entitled to comply with and honor any and all such documents or instruments executed by or received solely from NationsBanc or CIT, all without any notice to or any consent from the Borrowers. NationsBanc and CIT, as applicable, shall use reasonable efforts to consult with the Borrowers before taking any action pursuant to this Section 3.01(f).
(g) Without NationsBanc's or CIT's, as applicable, express consent, the Borrowers jointly and severally agree: (i) not to execute any and all applications for steamship or airway guaranties, indemnities or delivery orders; to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; or to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the Letter of Credit Applications, Letters of Credit, drafts or acceptances; and (ii) after the occurrence of an Event of Default which is not cured within any applicable grace period, if any, or waived, not to (A) clear and resolve any questions of non-compliance of documents, or (B) give any instructions as to acceptances or rejection of any documents or goods.
(h) The Borrowers jointly and severally agree that any necessary and material import, export or other license or certificate for the import or handling of Inventory will have been promptly procured; all foreign and domestic material governmental laws and regulations in regard to the shipment and importation of Inventory or the financing thereof will have been promptly and fully complied with, in each case, where the failure to obtain such certificate or license or the failure to comply with such laws would have a Material Adverse Effect; and any certificates in that regard that NationsBanc or CIT, as applicable, may at any time reasonably request will be promptly furnished. In this connection, the Borrowers warrant and represent that all shipments made under any Letters of Credit are in accordance with the laws and regulations of the countries in which the shipments originate and terminate, and are not prohibited by any such laws and regulations except where the failure to be in compliance with such laws and regulations would not have a Material Adverse Effect. As between the Borrowers, on the one hand, and the Agents, NationsBanc, CIT, the Lenders and the L/C Issuer, on the other hand, the Borrowers jointly and severally assume all risk, liability and responsibility for, and agree to pay and discharge, all present and future local, state, federal or foreign taxes, duties, or levies in respect of the shipment and importation of Inventory. As between the Borrowers, on the one hand, and the Agents, NationsBanc, CIT, the Lenders and the L/C Issuer, on the other hand, any embargo, restriction, laws, customs or regulations of any country, state, city, or other political subdivision, where such Inventory is or may be located, or wherein payments are to be made, or wherein drafts may be drawn, negotiated, accepted, or paid, shall be solely the Borrowers' joint and several risk, liability and responsibility.
(i) Upon any payments made to the L/C Issuer under the Letter of Credit Guaranty, NationsBanc, CIT, the Agents or the Lenders, as the case may be, shall, without prejudice to its rights under this Agreement (including that such unreimbursed amounts shall constitute Loans hereunder), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers in favor of the L/C Issuer in any application for Letters of Credit, any standing agreement relating to Letters of Credit or otherwise, all of which shall be deemed to have been granted to NationsBanc, CIT, the Agents and the Lenders and apply in all respects to NationsBanc, CIT, the Agents and the Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
Appears in 1 contract
Letter of Credit Guaranty. (a) In order to assist the Borrowers in establishing or opening standby letters of creditcredit (each, a “Letter of Credit Accommodation”), which shall not have expiration dates that exceed 180 days from later than the date of issuance, that is five (5) days prior to the Maturity Date (or such sooner expiry later date as is provided in Section 3.01(b) (may be agreed to by the "LETTERS OF CREDIT"Agents, the L/C Issuer and the Required Lenders), with the L/C Issuer, the Borrowers have requested the Administrative Agent to join in the applications for such Letters Letter of Credit, Credit Accommodations and/or guarantee payment or performance of such Letters Letter of Credit Accommodations and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Agent's ’s credit to that of the Borrowers, and the Administrative Agent has agreed to do so. These arrangements shall be coordinated by the Administrative Agent Agent, subject to the terms and conditions set forth below. The Administrative Agent shall not be required to be the issuer of any Letter of CreditCredit Accommodation. The Parent Administrative Borrower will be the account party for the application for a of each Letter of CreditCredit Accommodation, which shall be substantially in form and substance satisfactory to the form of Exhibit G hereto Administrative Agent and the L/C Issuer or on a computer transmission system approved by the Administrative Agent and the L/C Issuer Issuer, or such other written form or computer transmission system as may from time to time be approved by the Administrative Agent and the L/C Issuer and the Administrative AgentIssuer, and shall be duly completed in a manner and at a time reasonably acceptable to the Administrative Agent, together with such other certificates, agreements, documents and other papers and information as the Administrative Agent and the L/C Issuer or the Administrative Agent may reasonably request request, which shall include, without limitation, the requested date of issuance and the name and address of the beneficiary (THE "LETTER OF CREDIT APPLICATION"the “Letter of Credit Application”). In the event of any conflict between the terms of the any Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the Agents.
(b) The aggregate Letter of Credit Obligations shall not at any time exceed the lowest lower of (i) the difference between (A) the Available Commitment Availability and (B) the aggregate principal amount of Revolving Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of the all Revolving Loans then outstanding, and (iiiii) the L/C Subfacility. In addition, the terms and conditions of all Letters Letter of Credit Accommodations and all changes or modifications thereof by the Borrowers and/or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the reasonable exercise of its sole and absolute discretionPermitted Discretion; provided, PROVIDED, HOWEVERhowever, that (i) the expiry date of all Letters Letter of Credit Accommodations shall be no later than fifteen days five (5) Business Days prior to the Revolving Loan Commitment Termination Maturity Date unless(or such later date as may be agreed to by the Agents, on or prior to fifteen days prior to the Revolving Loan Commitment Termination Date either L/C Issuer and the Required Lenders), (xii) such no more than thirty (30) Letters of Credit shall Accommodations may be cash collateralized in an amount equal to 110% of the face amount of such Letters of Credit or outstanding at any time, and (yiii) the Borrowers shall provide the Administrative Agent and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Agent, from a commercial bank or other financial institution acceptable to the Agents for any Letter of Credit Obligations with respect to such Letters of Credit, and (ii) the Letters of Credit Accommodations and all documentation in connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer.
(c) The If the Administrative Agent is obligated to advance funds under a Letter of Credit Guaranty or in connection with a Letter of Credit Accommodation, the Administrative Agent may immediately reimburse such disbursement by charging the Loan Account as set forth below. In the event that the Administrative Agent does not charge the Loan Account, the Borrowers shall, upon demand by the Administrative Agent, immediately reimburse such disbursement to the Administrative Agent by paying to it an amount equal to such disbursement not later than 12:00 noon (New York City time) on the date that such disbursement is made, if the Administrative Borrower shall have received written or telephone notice of such disbursement prior to 11:00 a.m. (New York City time) on such date, or, if such notice has not been received by the Administrative Borrower prior to such time on such date, then no later than 12:00 noon (New York City time) on the Business Day that the Administrative Borrower receives such notice, if such notice is received prior to 11:00 a.m. (New York City time) on the date of receipt. In the absence of such reimbursement, the Administrative Agent shall have the right, without notice to the Borrowers, to charge the Loan Account with the amount of such disbursement and the Administrative Agent shall have the right, without notice to the Borrowers, to charge the Loan Account with the amount of any and all indebtednessother Indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents Administrative Agent or the Revolving Loan Lenders under the Letter of Credit Guaranty or incurred by an the L/C Issuer with respect to a Letter of Credit Accommodation at the earlier of (i) payment by the Administrative Agent or the Revolving Loan Lenders under the Letter of Credit Guaranty or (ii) the occurrence of an any Default or Event of Default. Any amount charged to the Loan Account shall be deemed a Revolving Loan hereunder made by the Revolving Loan Lenders to the Borrowers, funded by the Administrative Agent on behalf of the Revolving Loan Lenders and subject to Section 2.02 of this Agreement2.02. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the Borrowers' ’ account by the L/C Issuer in connection with or arising out of Letters Letter of Credit Accommodations or transactions relating thereto will be charged to the Loan Account in full when charged to or paid by the Administrative Agent and, when charged, shall be conclusive on the Borrowers absent manifest error. Each of the Revolving Loan Lenders and the Borrowers each Borrower agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Default or Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 6.01(j) have been satisfied. If any such reimbursement of disbursements made by the Administrative Agent is not made by the Administrative Agent by charging the Loan Account and the Administrative Borrower requests and the Borrowers are entitled to obtain a Revolving Loan to reimburse such disbursements on the date such reimbursement is due, such reimbursement shall be made no later than the time that the Administrative Agent makes the proceeds of the Revolving Loan available to the Borrowers.
(d) The Borrowers Each Loan Party understands that the Letter of Credit Guaranties may require the Administrative Agent and/or the Lenders to indemnify the L/C Issuer for certain costs or liabilities arising out of claims by any Borrower against such L/C Issuer. Each Loan Party unconditionally jointly and severally indemnify indemnifies each Agent and each Lender and hold holds each Agent and each Lender harmless from any and all loss, claim or liability incurred by any Agent or any Lender arising from any transactions transaction or occurrences relating to Letters Letter of CreditCredit Accommodations, any drafts or acceptances thereunder, the Collateral relating theretothereof, and all Obligations in respect thereofthereto, including any such loss or claim due to any action taken by the L/C Issuer, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct of the L/C Issuer, any Agent or any Lender as determined by a final judgment of a court of competent jurisdiction. The Borrowers Each Loan Party further agree agrees to jointly and severally hold each Agent and each Lender harmless from any errors or of omission, negligence, or misconduct (but not gross negligence or misconduct willful misconduct, as finally determined by a court of competent jurisdiction) by the L/C Issuer. The Borrowers' Each Borrower agrees to be bound by the L/C Issuer’s regulations and interpretations of any Letter of Credit Accommodation that is the subject of a Letter of Credit Guaranty and opened to or for any Borrower’s account or by the Administrative Agent’s interpretations of any Letter of Credit Accommodation issued for any Borrower’s account, even though such interpretation may be different from such Borrower’s own, and each Borrower understands and agrees that the Lenders, the Agents and the L/C Issuer shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following each such Borrower’s instructions or those contained in the Letter of Credit Accommodation or any modifications, amendments, or supplements thereto. Each Loan Party’s unconditional obligations to each Agent, each Lender and the L/C Issuer and each Lender with respect to Letters Letter of Credit Accommodations hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agent's’s, such Lender’s or the L/C Issuer's or such Lender's ’s gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree Each Loan Party agrees that any charges incurred by the Administrative Agent or the L/C Issuer for the Borrowers' such Loan Party’s account hereunder may be charged to the Loan Account.
(e) Upon any payments made to the L/C Issuer under the Letter of Credit Guaranty, the Agents Administrative Agent or the Revolving Loan Lenders, as the case may be, shall, without prejudice to its their rights under this Agreement (including that such unreimbursed amounts shall constitute Revolving Loans hereunder), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers any Borrower in favor of the L/C Issuer in any application for Letters Letter of CreditCredit Accommodations, any standing agreement relating to Letters Letter of Credit Accommodations or otherwise, all of which shall be deemed to have been granted to the Agents Administrative Agent and the Revolving Loan Lenders and apply in all respects to the Agents Administrative Agent and the Revolving Loan Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
Appears in 1 contract
Letter of Credit Guaranty. (a) In order to assist the Borrowers Borrower in establishing or opening standby letters of credit, which shall not have expiration dates that exceed 180 365 days from the date of issuance, or such sooner expiry date as is provided in Section 3.01(b) issuance (the "LETTERS OF CREDIT"), with the L/C IssuerIssuing Lender, the Borrowers have Borrower has requested the Administrative Funding Agent to join in the applications for such Letters of Credit, to cause the issuance and/or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Funding Agent's credit to that of the BorrowersBorrower, and the Administrative Funding Agent has agreed to do so. These arrangements shall be coordinated by the Administrative Funding Agent subject to the terms and conditions set forth below. The Administrative Funding Agent shall not be required to be the issuer of any Letter of Credit. The Parent Borrower, or at the Funding Agent's discretion, the Funding Agent, will be the account party for application for a Letter of Credit, which shall be substantially in a form customarily used by the form of Exhibit G hereto Funding Agent or the Issuing Lender or on a computer transmission system approved by the Administrative Funding Agent and the L/C Issuer Issuing Lender or such other written form or computer transmission system as may from time to time be approved by the L/C Issuer Issuing Lender and the Administrative Funding Agent, and shall be duly completed in a manner reasonably acceptable to the Administrative Funding Agent, together with such other certificates, agreements, documents and other papers and information as the L/C Issuer Issuing Lender or the Administrative Funding Agent may reasonably request (THE the "LETTER OF CREDIT L/C APPLICATION"). In the event of any conflict between the terms of the Letter of Credit L/C Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the Agents.
(b) The aggregate Letter of Credit Obligations shall not exceed the lowest of (i) the difference between (A) the Available Total Revolving Credit Commitment and (B) the aggregate principal amount of Revolving Credit Loans then outstanding, (ii) the difference between amount by which (A) the Borrowing Base and exceeds (B) the aggregate principal amount of the Revolving Loans then outstanding, and (iii) the L/C Subfacility. In addition, the terms and conditions of all Letters of Credit and all changes or modifications thereof thereto by the Borrowers Borrower and/or the L/C Issuer Issuing Lender shall in all respects be subject to the prior approval of the Administrative Funding Agent in the reasonable exercise of its sole and absolute discretion, PROVIDED, HOWEVER, that (i) the expiry date of all Letters of Credit shall be no later than fifteen days prior to the Revolving Loan Commitment Termination Final Maturity Date unless, on or prior to fifteen days prior to the Revolving Loan Commitment Termination Final Maturity Date either (x) such Letters of Credit shall be cash collateralized in an amount equal to 110% of the face amount of such Letters of Credit or (y) the Borrowers Borrower shall provide the Administrative Funding Agent and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative AgentAgents, from a commercial bank or other financial institution acceptable to the Agents for any Letter of Credit Obligations with respect to such Letters of Credit, Credit and (ii) the Letters of Credit and all documentation in connection therewith shall be in form and substance reasonably satisfactory to the Administrative Funding Agent and the L/C IssuerIssuing Lender.
(c) The Administrative Funding Agent shall have the right, without notice to the BorrowersBorrower, to charge the Loan Account with the amount of any and all indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents Funding Agent or the Lenders under the Letter of Credit Guaranty or incurred by an L/C Issuer Issuing Lender with respect to a Letter of Credit at the earlier of (i) payment by the Administrative Funding Agent or the Lenders under the Letter of Credit Guaranty or (ii) the occurrence of an Event of Default. Any amount charged to the Loan Account shall be deemed a Revolving Credit Loan hereunder made by the Lenders to the BorrowersBorrower, funded by the Administrative Funding Agent on behalf of the Lenders and subject to Section 2.02 subsection 2.2 of this Agreement. Any charges, fees, commissions, costs and expenses charged to the Administrative Funding Agent for the Borrowers' Borrower's account by the L/C Issuer Issuing Lender in connection with or arising out of Letters of Credit or transactions relating thereto will be charged to the Loan Account in full when charged to or paid by the Administrative Funding Agent and, when charged, shall be conclusive on the Borrowers Borrower absent manifest error. Each of the Lenders and the Borrowers Borrower agrees that the Administrative Funding Agent shall have the right to make such charges regardless of whether any Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 subsection 6.2 have been satisfied.
(d) The Borrowers Borrower unconditionally jointly and severally indemnify indemnifies each Agent and each Lender and hold holds each Agent and each Lender harmless from any and all loss, claim or liability incurred by any Agent or any Lender arising from any transactions or occurrences relating to Letters of Credit, any drafts or acceptances thereunder, the Collateral relating thereto, and all Obligations in respect thereof, including any such loss or claim due to any action taken by the L/C IssuerIssuing Lender, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct of the L/C IssuerIssuing Lender, any Agent or any Lender as determined by a final judgment of a court of competent jurisdiction. The Borrowers Borrower further agree agrees to jointly and severally hold each Agent and each Lender harmless from any errors or omission, negligence or misconduct by the L/C IssuerIssuing Lender. The Borrowers' Borrower's unconditional obligations to each Agent, the L/C Issuer Issuing Lender and each Lender with respect to Letters of Credit hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agent's, the L/C IssuerIssuing Lender's or such Lender's gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree Borrower agrees that any charges incurred by the Administrative Funding Agent or the L/C Issuer Issuing Lender for the Borrowers' Borrower's account hereunder may be charged to the Loan Account.
(e) Upon any payments made to the L/C Issuer Issuing Lender under the Letter of Credit Guaranty, the Agents Funding Agent or the Lenders, as the case may be, shall, without prejudice to its rights under this Agreement (including that such unreimbursed amounts shall constitute Loans hereunder), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers Borrower in favor of the L/C Issuer Issuing Lender in any application for Letters of Credit, any standing agreement relating to Letters of Credit or otherwise, all of which shall be deemed to have been granted to the Agents Funding Agent and the Lenders and apply in all respects to the Agents Funding Agent and the Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
Appears in 1 contract
Letter of Credit Guaranty. (a) In order to assist the Borrowers Borrower in establishing or opening standby letters of credit, which shall not have expiration dates that exceed 180 days from the date of issuance, or such sooner expiry date as is provided in Section 3.01(b) issuance (the "LETTERS OF CREDIT"each a “Letter of Credit”), with the L/C Issuer, the Borrowers have Borrower has requested the Administrative Agent to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Agent's ’s credit to that of the BorrowersBorrower, and the Administrative Agent has agreed to do so. These arrangements shall be coordinated by the Administrative Agent Agent, subject to the terms and conditions set forth below. The Administrative Agent shall not be required to be the issuer of any Letter of Credit. The Parent Borrower will be the account party for the application for a each Letter of Credit, which shall be substantially in the a written form of Exhibit G hereto or on a computer transmission system approved by the Administrative Agent and the L/C Issuer or such other written form or computer transmission system as may from time to time be approved by the Administrative Agent and the L/C Issuer and the Administrative AgentIssuer, and shall be duly completed in a manner reasonably acceptable to the Administrative Agent, together with such other certificates, agreements, documents and other papers and information as the Administrative Agent and the L/C Issuer or the Administrative Agent may reasonably request (THE "LETTER OF CREDIT APPLICATION"the “Letter of Credit Application”). In the event of any conflict between the terms of the any Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the Agents.
(b) The aggregate Letter of Credit Obligations Obligations, subject to Section 2.05(c)(i), shall not exceed the lowest of (i) the difference between (A) the Available Total Revolving Credit Commitment and (B) the aggregate principal amount of all Revolving Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of the all Revolving Loans then outstanding, and (iii) the L/C Subfacility. In addition, the terms and conditions of all Letters of Credit and all changes or modifications thereof by the Borrowers Borrower and/or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the reasonable exercise of its sole and absolute discretion; provided, PROVIDED, HOWEVERhowever, that (i) the expiry date of all Letters of Credit shall be no later than fifteen 15 days prior to the Revolving Loan Commitment Termination Final Maturity Date unless, on or prior to fifteen 15 days prior to the Revolving Loan Commitment Termination Final Maturity Date either (xA) such Letters of Credit shall be cash collateralized in an amount equal to 110% of the face amount of such Letters of Credit by deposit of cash in such amount in an account under the sole and exclusive control of the Administrative Agent for the benefit of the Administrative Agent and/or the L/C Issuer (the “Letter of Credit Collateral Account”) or (yB) the Borrowers Borrower shall provide the Administrative Agent and the Revolving Loan Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Agent, from a commercial bank or other financial institution acceptable to the Agents for any Letter of Credit Obligations with respect to such Letters of Credit, Credit and (ii) the Letters of Credit and all documentation in connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer.
(c) The Administrative Agent shall have the right, without notice to the BorrowersBorrower, to charge the Loan Account with the amount of any and all indebtednessIndebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents or the Revolving Loan Lenders under the Letter of Credit Guaranty or incurred by an the L/C Issuer with respect to a Letter of Credit at the earlier of (i) payment by the Administrative Agent or the Revolving Loan Lenders under the Letter of Credit Guaranty or (ii) the occurrence and continuation of an any Default or Event of DefaultDefault (without waiver of any rights the Borrower may have or may acquire against any third party with respect thereto). Any amount charged to the Loan Account shall be deemed a Revolving Loan hereunder made by the Revolving Loan Lenders to the BorrowersBorrower, funded by the Administrative Agent on behalf of the Revolving Loan Lenders and subject to Section 2.02 of this Agreement. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the Borrowers' Borrower’s account by the L/C Issuer in connection with or arising out of Letters of Credit or transactions relating thereto will be charged to the Loan Account in full when charged to or paid by the Administrative Agent and, when charged, shall be conclusive on the Borrowers Borrower absent manifest error. Each of the Revolving Loan Lenders and the Borrowers Borrower agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Default or Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 5.03 have been satisfied.
(d) The Borrowers Borrower unconditionally jointly and severally indemnify indemnifies each Agent and each Lender and hold holds each Agent and each Lender harmless from any and all loss, claim or liability incurred by any Agent or any Lender arising from any transactions or occurrences relating to Letters of Credit, any drafts or acceptances thereunder, the Collateral relating thereto, and all Obligations in respect thereof, including any such loss or claim due to any action taken by the L/C Issuer, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct of the L/C Issuer, any Agent or any Lender as determined by a final judgment of a court of competent jurisdiction. The Borrowers Borrower further agree agrees, to the extent permitted by law, to jointly and severally hold each Agent and each Lender harmless from any errors or omission, negligence or misconduct by the L/C Issuer and with respect to any loss, cost, expense (including reasonable attorneys fees), or liability incurred as a result of their indemnification of the L/C Issuer. The Borrowers' Borrower further agrees to be bound by the L/C Issuer’s regulations with respect to any Letter of Credit. The Borrower’s unconditional obligations to each Agent, each Lender and the L/C Issuer and each Lender with respect to Letters of Credit hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agent's’s, such Lender’s or the L/C Issuer's or such Lender's ’s gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree Borrower agrees that any charges incurred by the Administrative Agent or the L/C Issuer for the Borrowers' Borrower’s account hereunder may be charged to the Loan AccountAccount (without waiver of any rights the Borrower may have or may acquire against any third party with respect thereto).
(e) Upon any payments made to the L/C Issuer under the Letter of Credit Guaranty, the Agents or the Revolving Loan Lenders, as the case may be, shall, without prejudice to its their rights under this Agreement (including that such unreimbursed amounts shall constitute Loans hereunder), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers Borrower in favor of the L/C Issuer in any application for Letters of Credit, any standing agreement relating to Letters of Credit or otherwise, all of which shall be deemed to have been granted to the Agents and the Revolving Loan Lenders and apply in all respects to the Agents and the Revolving Loan Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
(f) Borrower hereby authorizes and directs any L/C Issuer to deliver to the Administrative Agent all instruments, documents, and other writings and property received by such L/C Issuer pursuant to such Letter of Credit and to accept and rely upon the Administrative Agent’s instructions with respect to all matters arising in connection with such Letter of Credit and the related application.
(g) Borrower and the Lender Group acknowledge and agree that certain Letters of Credit may be issued to support letters of credit that already are outstanding as of the Effective Date. Each Letter of Credit shall be in form and substance acceptable to the L/C Issuer and Administrative Agent, including the requirement that the amounts payable thereunder must be payable in Dollars.
Appears in 1 contract
Letter of Credit Guaranty. (a) In order to assist the Borrowers Borrower in establishing or opening standby letters of creditcredit (each, a "Letter of Credit Accommodation"), which shall not have expiration dates that exceed 180 days from later than the date of issuance, or such sooner expiry date as that is provided in Section 3.01(bfive (5) (days prior to the "LETTERS OF CREDIT")Final Maturity Date, with the L/C Issuerissuer, the Borrowers Borrower have requested the Administrative Agent to join in the applications for such Letters Letter of Credit, Credit Accommodations and/or guarantee payment or performance of such Letters Letter of Credit Accommodations and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Agent's credit to that of the BorrowersBorrower, and the Administrative Agent has agreed to do so. These arrangements shall be coordinated by the Administrative Agent Agent, subject to the terms and conditions set forth below. The Administrative Agent shall not be required to be the issuer of any Letter of CreditCredit Accommodation. The Parent Borrower will be the account party for the application for a of each Letter of CreditCredit Accommodation, which shall be substantially in form and substance satisfactory to the form of Exhibit G hereto Administrative Agent and the L/C Issuer or on a computer transmission system approved by the Administrative Agent and the L/C Issuer Issuer, or such other written form or computer transmission system as may from time to time be approved by the Administrative Agent and the L/C Issuer and the Administrative AgentIssuer, and shall be duly completed in a manner and at a time reasonably acceptable to the Administrative Agent, together with such other certificates, agreements, documents and other papers and information as the Administrative Agent and the L/C Issuer or the Administrative Agent may reasonably request request, which shall include, without limitation, the requested date of issuance and the name and address of the beneficiary (THE the "LETTER OF CREDIT APPLICATIONLetter of Credit Application"). In the event of any conflict between the terms of the any Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the Agents.
(b) The aggregate Letter of Credit Obligations shall not at any time exceed the lowest lower of (i) the difference between (A) the Available Commitment Availability and (B) the aggregate principal amount of Revolving Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of the Revolving all Loans then outstanding, and (iiiii) the L/C Subfacility. In addition, the terms and conditions of all Letters Letter of Credit Accommodations and all changes or modifications thereof by the Borrowers Borrower and/or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the its reasonable exercise of its sole and absolute discretioncredit judgment; provided, PROVIDED, HOWEVERhowever, that (i) the expiry date of all Letters Letter of Credit Accommodations shall be no later than fifteen days five (5) Business Days prior to the Revolving Loan Commitment Termination Date unlessFinal Maturity Date, on or prior to fifteen days prior to the Revolving Loan Commitment Termination Date either (xii) such no more than thirty (30) Letters of Credit shall Accommodations may be cash collateralized in an amount equal to 110% of the face amount of such Letters of Credit or outstanding at any time, and (yiii) the Borrowers shall provide the Administrative Agent and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Agent, from a commercial bank or other financial institution acceptable to the Agents for any Letter of Credit Obligations with respect to such Letters of Credit, and (ii) the Letters of Credit Accommodations and all documentation in connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer.
(c) The If the Administrative Agent is obligated to advance funds under a Letter of Credit Guaranty or in connection with a Letter of Credit Accommodation, the Administrative Agent may immediately reimburse such disbursement by charging the Loan Account as set forth below. In the event that the Administrative Agent does not charge the Loan Account, the Borrower shall, upon demand by the Administrative Agent, immediately reimburse such disbursement to the Administrative Agent by paying to it an amount equal to such disbursement not later than 12:00 noon (New York City time) on the date that such disbursement is made, if the Borrower shall have received written or telephone notice of such disbursement prior to 11:00 a.m. (New York City time) on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then no later than 12:00 noon (New York City time) on the Business Day that the Borrower receives such notice, if such notice is received prior to 11:00 a.m. (New York City time) on the date of receipt. In the absence of such reimbursement, the Administrative Agent shall have the right, without notice to the BorrowersBorrower, to charge the Loan Account with the amount of such disbursement and the Administrative Agent shall have the right, without notice to the Borrower, to charge the Loan Account with the amount of any and all indebtednessother Indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents Administrative Agent or the Lenders under the Letter of Credit Guaranty or incurred by an the L/C Issuer with respect to a Letter of Credit Accommodation at the earlier of (i) payment by the Administrative Agent or the Lenders under the Letter of Credit Guaranty or (ii) the occurrence of an any Default or Event of Default. Any amount charged to the Loan Account shall be deemed a Revolving Loan hereunder made by the Lenders to the BorrowersBorrower, funded by the Administrative Agent on behalf of the Lenders and subject to Section 2.02 of this Agreement2.02. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the Borrowers' Borrower's account by the L/C Issuer in connection with or arising out of Letters Letter of Credit Accommodations or transactions relating thereto will be charged to the Loan Account in full when charged to or paid by the Administrative Agent and, when charged, shall be conclusive on the Borrowers Borrower absent manifest error. Each of the Lenders and the Borrowers agrees Borrower agree that the Administrative Agent shall have the right to make such charges regardless of whether any Default or Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 6.02 have been satisfied. If any such reimbursement of disbursements made by the Administrative Agent is not made by the Administrative Agent by charging the Loan Account and the Borrower request and are entitled to obtain a Loan to reimburse such disbursements on the date such reimbursement is due, such reimbursement shall be made no later than the time that the Administrative Agent makes the proceeds of the Loan available to the Borrower.
(d) The Borrowers Borrower understands that the Letter of Credit Guaranties may require the Administrative Agent and/or the Lenders to indemnify the L/C Issuer for certain costs or liabilities arising out of claims by the Borrower against such L/C Issuer. The Borrower unconditionally jointly and severally indemnify indemnifies each Agent and each Lender and hold holds each Agent and each Lender harmless from any and all loss, claim or liability incurred by any Agent or any Lender arising from any transactions transaction or occurrences relating to Letters Letter of CreditCredit Accommodations, any drafts or acceptances thereunder, the Collateral relating theretothereof, and all Obligations in respect thereofthereto, including any such loss or claim due to any action taken by the L/C Issuer, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct of the L/C Issuer, any Agent or any Lender as determined by a final judgment of a court of competent jurisdiction. The Borrowers Borrower further agree agrees to jointly and severally hold each Agent and each Lender harmless from any errors or of omission, negligence, or misconduct (but not gross negligence or misconduct willful misconduct, as finally determined by a court of competent jurisdiction) by the L/C Issuer. The Borrowers' Borrower agrees to be bound by the L/C Issuer's regulations and interpretations of any Letter of Credit Accommodation that is the subject of a Letter of Credit Guaranty and opened to or for the Borrower's account or by the Administrative Agent's interpretations of any Letter of Credit Accommodation issued for the Borrower's account, even though such interpretation may be different from the Borrower's own, and the Borrower understands and agrees that the Lenders, the Agents and the L/C Issuer shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following the Borrower's instructions or those contained in the Letter of Credit Accommodation or any modifications, amendments, or supplements thereto. The Borrower's unconditional obligations to each Agent, each Lender and the L/C Issuer and each Lender with respect to Letters Letter of Credit Accommodations hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agent's, such Lender's or the L/C Issuer's or such Lender's gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree Borrower agrees that any charges incurred by the Administrative Agent or the L/C Issuer for the Borrowers' Borrower's account hereunder may be charged to the Loan Account.
(e) Upon any payments made to the L/C Issuer under the Letter of Credit Guaranty, the Agents Administrative Agent or the Lenders, as the case may be, shall, without prejudice to its their rights under this Agreement (including that such unreimbursed amounts shall constitute Loans hereunder), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers Borrower in favor of the L/C Issuer in any application for Letters Letter of CreditCredit Accommodations, any standing agreement relating to Letters Letter of Credit Accommodations or otherwise, all of which shall be deemed to have been granted to the Agents Administrative Agent and the Lenders and apply in all respects to the Agents Administrative Agent and the Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
Appears in 1 contract
Letter of Credit Guaranty. (a) In order to assist the Borrowers in establishing or opening standby documentary letters of creditcredit with the Letter of Credit Issuer, which shall not have expiration dates that exceed 180 days from the date of issuance, issuance thereof or such sooner expiry date as is provided in Section 3.01(b) that exceed 30 days prior to the Revolving Credit Termination Date (the "LETTERS OF CREDITLetters of Credit"), with the L/C Issuer, ) the Borrowers have requested that the Administrative Agent to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Agent's credit to that of the Borrowers, and the Administrative Agent has agreed to do so. These arrangements shall be coordinated handled by the Administrative Agent subject to the terms and conditions set forth below. The Administrative Agent shall not be required to be the issuer of any Letter of Credit. The Parent Borrowers will be be, jointly and severally, the account party for any application for a Letter of Credit, which application shall be substantially in the form of Exhibit G hereto or on a computer transmission system approved by the Administrative Agent and the L/C Issuer or such other written form or computer transmission system as may from time to time be approved by the L/C Letter of Credit Issuer and the Administrative Agent, Agent and which shall be duly completed in a manner reasonably acceptable to the Administrative AgentAgent (such application, together with such other certificates, agreements, documents and other papers and information as the L/C Letter of Credit Issuer or the Administrative Agent may reasonably request (THE request, collectively the "LETTER OF CREDIT APPLICATIONLetter of Credit Application"). In the event of any conflict between the terms of the Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters be issued with respect to transactions occurring in the ordinary course of Credit for purposes the business of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the AgentsBorrowers.
(b) The aggregate Notwithstanding anything to the contrary contained herein, the Letter of Credit Obligations Usage shall not exceed the lowest of (i) the difference between (A) the Available Commitment and (B) the aggregate principal amount of Revolving Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of the Revolving Loans then outstanding$35,000,000 at any time, and (iii) the L/C Subfacility. In addition, the terms and conditions of all Letters of Credit and all changes or modifications thereof by the Borrowers and/or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the reasonable exercise of its sole and absolute discretion, PROVIDED, HOWEVER, that (i) the expiry date of all Letters of Credit shall be no later than fifteen days prior to the Revolving Loan Commitment Termination Date unless, on or prior to fifteen days prior to the Revolving Loan Commitment Termination Date either (x) such Letters of Credit shall be cash collateralized in an amount equal to 110% of the face amount of such Letters of Credit or (y) the Borrowers shall provide the Administrative Agent and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Agent, from a commercial bank or other financial institution acceptable to the Agents for any Letter of Credit Obligations with respect to such Letters of Credit, and (ii) the Letters of Credit and all documentation in connection therewith Guaranty shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuerissued hereunder if, after giving effect thereto, Availability would be less than zero.
(c) The Administrative Agent shall have the right, without notice to the Borrowers, to charge the Loan Account Borrowers' account with the Agent with the amount of any and all indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents Agent or the Lenders under the Letter of Credit Guaranty or incurred by an L/C a Letter of Credit Issuer with respect to a Letter of Credit at the earlier of (iA) payment by the Administrative Agent or the Lenders under the Letter of Credit Guaranty or (iiB) the occurrence of an Event of Default. Any amount so charged to the Loan Account Borrowers' account with the Agent shall be deemed a Revolving Prime Rate Loan hereunder made by the Lenders to the Borrowers, funded by the Administrative Agent on behalf of the Lenders and subject to Section 2.02 2.05 and Section 2.09(c) of this AgreementAgreement and subject further to the requirement that the Borrowers immediately prepay outstanding Revolving Credit Loans so that the aggregate outstanding principal balance of the Loans will not exceed $75,000,000. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the Borrowers' account by the L/C Letter of Credit Issuer in connection with or arising out of Letters of Credit or transactions relating thereto will be charged to the Loan Account Borrowers' account with the Agent in full when charged to or paid by the Administrative Agent and, when charged, shall be conclusive on the Borrowers absent manifest error. Each of the Lenders and the Borrowers agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 5.01 have been satisfied.
(d) The Borrowers unconditionally jointly and severally indemnify each the Agent and each Lender and hold each the Agent and each Lender harmless from any and all loss, claim or liability (including, without limitation, reasonable attorneys' fees and disbursements) incurred by any the Agent or any Lender arising from any transactions or occurrences relating to Letters of Credit, any drafts or acceptances thereunder, the Collateral collateral relating thereto, and all Obligations in respect thereof, including any such loss or claim due to any action taken by the L/C Letter of Credit Issuer, other than for to the extent that any such loss, claim or liability arising out of directly results from the gross negligence or willful misconduct of the L/C Issuer, any Agent or any Lender Lender, respectively, as determined by a final judgment of a court of competent jurisdiction. The Borrowers further agree to jointly and severally hold each the Agent and each Lender harmless from any errors or omission, negligence negligence, unlawful conduct or misconduct by the L/C Letter of Credit Issuer. The Borrowers' unconditional unconditional, joint and several obligations to each Agent, the L/C Issuer Agent and each Lender with respect to the Letters of Credit hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agent's, the L/C Issuer's or such Lender's gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree Each Borrower and each Guarantor agrees that any charges incurred by the Administrative Agent or the L/C Letter of Credit Issuer for the Borrowers' account hereunder may be charged to the Loan AccountBorrowers' account with the Agent.
(e) None of the Agent, the Lenders and the Letter of Credit Issuer shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of the goods purporting to be represented by any documents; any difference or variation in the character, quality, condition, packing, value or delivery of the goods from that expressed in the documents; the validity, sufficiency or genuineness of any documents or of any endorsements thereof 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 is made; partial or incomplete shipments, or failure or omission to ship any or all of the goods referred to in the Letters of Credit or documents; any deviation from instructions, delay, default, or fraud by the shipper and/or anyone else in connection with the collateral or the shipping thereof; or any breach of contract between the shipper or vendors and the Borrowers. Furthermore, without limiting any of the foregoing, neither the Agent nor the Lenders shall be responsible for any act or omission with respect to or in connection with any goods covered by any Letter of Credit.
(f) The Borrowers jointly and severally agree that any action taken by the Agent or any Lender, or any action taken by the Letter of Credit Issuer, under or in connection with the Letters of Credit, the drafts or acceptances, the guarantees or the collateral, shall be binding on the Borrowers and shall not put the Agent, or the Lenders in any resulting liability to the Borrowers. In furtherance of the foregoing, the Agent shall have the full right and authority to clear and resolve any questions of noncompliance of documents; to give any instructions as to acceptance or rejection of any documents or goods; to execute any and all steamship or airways guaranties (and applications therefor), indemnities or delivery orders; to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; and to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or acceptances, all in the Agent's sole name, and the Letter of Credit Issuer shall be entitled to comply with and honor any and all such documents or instruments executed by or received solely from the Agent, all without any notice to or any consent from the Borrowers. Provided no Default or Event of Default has occurred and is continuing, the Agent shall use reasonable efforts to consult with the Borrowers before taking any action pursuant to this Section 2.17(f).
(g) Without the Agent's express consent, the Borrowers jointly and severally agree: (x) not to execute any and all applications for steamship or airway guaranties, indemnities or delivery orders; not to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; and not to agree to any amendments, renewals, extensions, modification, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or acceptances; and (y) after the occurrence of any Event of Default which is not cured within any applicable grace period, if any, or waived as provided under Section 11.08 hereof, not to (A) clear and resolve any questions of noncompliance of documents, or (B) give any instructions as to acceptances or rejection of any documents or goods.
(h) The Borrowers jointly and severally agree that any necessary and material import, export or other license or certificate for the import or handling of inventory will have been promptly procured; all foreign and domestic governmental laws and regulations in regard to the shipment and importation of inventory or the financing thereof will have been promptly and fully complied with and any certificates in that regard that the Agent may at any time reasonably request will be promptly furnished. In this connection, the Borrowers warrant and represent that all shipments made under any Letters of Credit are in accordance with the laws and regulations of the countries in which the shipments originate and terminate, and are not prohibited by any such laws and regulations. As between the Borrowers, on the one hand, and the Agent, the Lenders and the Letter of Credit Issuer, on the other hand, the Borrowers jointly and severally assume all risk, liability and responsibility for, and agree to pay and discharge, all present and future local, state, federal or foreign taxes, duties or levies. As between the Borrowers, on the one hand, and the Agent, the Lenders and the Letter of Credit Issuer, on the other hand, any embargo, restriction, laws, customs or regulations of any country, state, city or other political subdivision, where such inventory is or may be located, or wherein payments are to be made, or wherein drafts may be drawn, negotiated, accepted or paid, shall be solely the Borrowers' joint and several risk, liability and responsibility.
(i) Upon any payments made to the L/C Letter of Credit Issuer under the a Letter of Credit Guaranty, the Agents Agent or the Lenders, as the case may be, shall, without prejudice to its or their respective rights under this Agreement (including that such unreimbursed amounts shall constitute Revolving Credit Loans hereunderhereunder in accordance with subsection (c) of this Section 2.17), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers in favor of the L/C Letter of Credit Issuer in any application for Letters of Credit, any standing agreement relating to Letters of Credit or otherwise, all of which shall be deemed to have been granted to the Agents Agent and the Lenders and apply in all respects to the Agents Agent and the Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
(j) Schedule 2.17(j) annexed hereto contains a description of (i) all letters of credit outstanding on the Closing Date issued for the benefit of the Borrowers with respect to which The Chase Manhattan Bank is the Letter of Credit Issuer and (ii) the $200,000 standby letter of credit issued to support insurance premiums on the Borrowers' workers' compensation policy. Each such letter of credit, including any extension or renewal thereof, (collectively, the "Existing Letters of Credit") shall constitute a "Letter of Credit" for all purposes of this Agreement.
Appears in 1 contract
Samples: Credit Agreement (Donnkenny Inc)
Letter of Credit Guaranty. (a) In order to assist the Borrowers Borrower in establishing or opening standby letters of credit, which shall not have expiration dates that exceed 180 days 12 months from the date of issuanceissuance (although, or subject to the terms and conditions hereof, any such sooner expiry date as is provided standby letter of credit may be extendable for successive periods of up to 12 months on terms and conditions reasonably satisfactory to the Administrative Agent and subject to the conditions set forth in Section 3.01(bArticle V) (the "LETTERS OF CREDIT"each a “Letter of Credit”), with the L/C Issuer, the Borrowers have Borrower has requested the Administrative Agent to join in the applications for such Letters of Credit, and/or or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Agent's ’s credit to that of the BorrowersBorrower, and the Administrative Agent has agreed (subject to the last sentence of this Section 3.01(a)) to do so. These arrangements shall be coordinated by the Administrative Agent Agent, subject to the terms and conditions set forth below. The Administrative Agent shall not be required to be the issuer of any Letter of Credit. The Parent Borrower will be the account party for the application for a each Letter of Credit, which shall be substantially in the form of Exhibit G hereto or on a computer transmission system approved by the Administrative Agent and the L/C Issuer Issuer, or such other written form or computer transmission system as may from time to time be approved by the Administrative Agent and the L/C Issuer and the Administrative AgentIssuer, and shall be duly completed in a manner reasonably acceptable satisfactory to the Administrative Agent, together with such other certificates, agreements, documents and other papers and information as the Administrative Agent and the L/C Issuer or the Administrative Agent may reasonably request (THE "LETTER OF CREDIT APPLICATION"the “Letter of Credit Application”). In the event of any conflict between the terms of the any Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement Notwithstanding anything herein to the extent such Fleet Letters contrary, prior to the appointment of Credit and Existing Letters Wxxxx Fargo Foothill, Inc. or another financial institution capable of Credit are supported by cash collateral or other providing letters of credit as the Administrative Agent, the Agents and the Lenders shall have no obligation whatsoever to issue or arrange for the issuance of any Letter of Credit, even if Borrower has fully satisfied all of the conditions precedent in Section 5.02 (it being understood and agreed that any request by Borrower to establish or open a manner satisfactory to Letter of Credit may be declined for any reason or no reason in the Agentssole and absolute discretion of the Administrative Agent).
(b) The aggregate Letter of Credit Obligations shall not exceed the lowest of (i) the difference between (A) the Available Total Revolving Credit Commitment and (B) the aggregate principal amount of all Revolving Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of the all Revolving Loans then outstanding, and (iii) the L/C Subfacility. In addition, the terms and conditions of all Letters of Credit and all changes or modifications thereof by the Borrowers and/or Borrower or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the reasonable exercise of its sole and absolute discretion; provided, PROVIDED, HOWEVERhowever, that (i) the expiry date of all Letters of Credit shall be no later than fifteen 5 days prior to the Revolving Loan Commitment Termination Final Maturity Date unless, on or prior to fifteen 5 days prior to the Revolving Loan Commitment Termination Final Maturity Date either (xA) such Letters of Credit shall be cash collateralized in an amount equal to 110105% of the face amount of such Letters of Credit by deposit of cash in such amount in an account under the sole and exclusive control of the Administrative Agent for the benefit of the Administrative Agent or the L/C Issuer (the “Letter of Credit Collateral Account”) or (yB) the Borrowers Borrower shall provide the Administrative Agent and the Revolving Loan Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Agent, from a commercial bank or other financial institution acceptable to the Agents for any Letter of Credit Obligations with respect to such Letters of Credit, Credit and (ii) the Letters of Credit and all documentation in connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer.
(c) The Administrative Agent shall have the right, without notice to the BorrowersBorrower, to charge the Loan Account with the amount of any and all indebtednessIndebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents or the Revolving Loan Lenders under the Letter of Credit Guaranty or incurred by an the L/C Issuer with respect to a Letter of Credit at the earlier of (i) payment by the Administrative Agent or the Revolving Loan Lenders under the Letter of Credit Guaranty or (ii) the occurrence of an any Default or Event of Default. Any amount charged to the Loan Account shall be deemed a Revolving Loan hereunder made by the Revolving Loan Lenders to the BorrowersBorrower, funded by the Administrative Agent on behalf of the Revolving Loan Lenders and subject to Section 2.02 of this Agreement. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the Borrowers' Borrower’s account by the L/C Issuer in connection with or arising out of Letters of Credit or transactions relating thereto will be charged to the Loan Account in full when charged to or paid by the Administrative Agent and, when charged, shall be conclusive on the Borrowers Borrower absent manifest error. Each of the Revolving Loan Lenders and the Borrowers Borrower agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Default or Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 have been satisfied.
(d) The Borrowers Borrower unconditionally jointly and severally indemnify indemnifies each Agent and each Lender and hold holds each Agent and each Lender harmless from any and all loss, claim or liability incurred by any Agent or any Lender arising from any transactions or occurrences relating to Letters of Credit, any drafts or acceptances thereunder, the Collateral relating thereto, and all Obligations in respect thereof, including any such loss or claim due to any action taken by the L/C Issuer, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct of the L/C Issuer, any Agent or any Lender as determined by a final non-appealable judgment of a court of competent jurisdiction. The Borrowers Borrower further agree agrees to jointly and severally hold each Agent and each Lender harmless from any errors or omission, negligence or misconduct by the L/C Issuer; provided that the foregoing shall not excuse any Agent or any Lender from any liability to the Borrower to the extent of any direct damages suffered by the Borrower that are caused by such Agent’s or such Lender’s gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. The Borrowers' Borrower’s unconditional obligations to each Agent, each Lender and the L/C Issuer and each Lender with respect to Letters of Credit hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agent's’s, such Lender’s or the L/C Issuer's or such Lender's ’s gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. The Borrowers agree Borrower agrees that any charges incurred by the Administrative Agent or the L/C Issuer for the Borrowers' Borrower’s account hereunder may be charged to the Loan Account.
(e) Upon any payments made to the L/C Issuer under the Letter of Credit Guaranty, the Agents or the Revolving Loan Lenders, as the case may be, shall, without prejudice to its their rights under this Agreement (including that such unreimbursed amounts shall constitute Loans hereunder), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers Borrower in favor of the L/C Issuer in any application for Letters of Credit, any standing agreement relating to Letters of Credit or otherwise, all of which shall be deemed to have been granted to the Agents and the Revolving Loan Lenders and apply in all respects to the Agents and the Revolving Loan Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
Appears in 1 contract
Samples: Financing Agreement (PRG Schultz International Inc)
Letter of Credit Guaranty. (a) In order to assist the Borrowers Borrower in establishing or opening standby letters of creditcredit (each, a “Letter of Credit Accommodation”), which shall not have expiration dates that exceed 180 days from later than the date of issuance, that is five (5) days prior to the Maturity Date (or such sooner expiry later date as is provided in Section 3.01(b) (may be agreed to by the "LETTERS OF CREDIT"Agents, the L/C Issuer and the Required Lenders), with the L/C Issuer, the Borrowers have Borrower has requested the Administrative Agent to join in the applications for such Letters Letter of Credit, Credit Accommodations and/or guarantee payment or performance of such Letters Letter of Credit Accommodations and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Agent's ’s credit to that of the BorrowersBorrower, and the Administrative Agent has agreed to do so. These arrangements shall be coordinated by the Administrative Agent Agent, subject to the terms and conditions set forth below. The Administrative Agent shall not be required to be the issuer of any Letter of CreditCredit Accommodation. The Parent Borrower will be the account party for the application for a of each Letter of CreditCredit Accommodation, which shall be substantially in form and substance satisfactory to the form of Exhibit G hereto Administrative Agent and the L/C Issuer or on a computer transmission system approved by the Administrative Agent and the L/C Issuer Issuer, or such other written form or computer transmission system as may from time to time be approved by the Administrative Agent and the L/C Issuer and the Administrative AgentIssuer, and shall be duly completed in a manner and at a time reasonably acceptable to the Administrative Agent, together with such other certificates, agreements, documents and other papers and information as the Administrative Agent and the L/C Issuer or the Administrative Agent may reasonably request request, which shall include, without limitation, the requested date of issuance and the name and address of the beneficiary (THE "LETTER OF CREDIT APPLICATION"the “Letter of Credit Application”). In the event of any conflict between the terms of the any Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the Agents.
(b) The aggregate Letter of Credit Obligations shall not at any time exceed the lowest lower of (i) the difference between (A) the Available Commitment Availability and (B) the aggregate principal amount of Revolving Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of the all Revolving Loans then outstanding, and (iiiii) the L/C Subfacility. In addition, the terms and conditions of all Letters Letter of Credit Accommodations and all changes or modifications thereof by the Borrowers Borrower and/or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the reasonable exercise of its sole and absolute discretionPermitted Discretion; provided, PROVIDED, HOWEVERhowever, that (i) the expiry date of all Letters Letter of Credit Accommodations shall be no later than fifteen days five (5) Business Days prior to the Revolving Loan Commitment Termination Maturity Date unless(or such later date as may be agreed to by the Agents, on or prior to fifteen days prior to the Revolving Loan Commitment Termination Date either L/C Issuer and the Required Lenders), (xii) such no more than thirty (30) Letters of Credit shall Accommodations may be cash collateralized in an amount equal to 110% of the face amount of such Letters of Credit or outstanding at any time, and (yiii) the Borrowers shall provide the Administrative Agent and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Agent, from a commercial bank or other financial institution acceptable to the Agents for any Letter of Credit Obligations with respect to such Letters of Credit, and (ii) the Letters of Credit Accommodations and all documentation in connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer.
(c) The If the Administrative Agent is obligated to advance funds under a Letter of Credit Guaranty or in connection with a Letter of Credit Accommodation, the Administrative Agent may immediately reimburse such disbursement by charging the Loan Account as set forth below. In the event that the Administrative Agent does not charge the Loan Account, the Borrower shall, upon demand by the Administrative Agent, immediately reimburse such disbursement to the Administrative Agent by paying to it an amount equal to such disbursement not later than 12:00 noon (New York City time) on the date that such disbursement is made, if the Borrower shall have received written or telephone notice of such disbursement prior to 11:00 a.m. (New York City time) on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then no later than 12:00 noon (New York City time) on the Business Day that the Borrower receives such notice, if such notice is received prior to 11:00 a.m. (New York City time) on the date of receipt. In the absence of such reimbursement, the Administrative Agent shall have the right, without notice to the BorrowersBorrower, to charge the Loan Account with the amount of such disbursement and the Administrative Agent shall have the right, without notice to the Borrower, to charge the Loan Account with the amount of any and all indebtednessother Indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents Administrative Agent or the Revolving Loan Lenders under the Letter of Credit Guaranty or incurred by an the L/C Issuer with respect to a Letter of Credit Accommodation at the earlier of (i) payment by the Administrative Agent or the Revolving Loan Lenders under the Letter of Credit Guaranty or (ii) the occurrence of an any Default or Event of Default. Any amount charged to the Loan Account shall be deemed a Revolving Loan hereunder made by the Revolving Loan Lenders to the BorrowersBorrower, funded by the Administrative Agent on behalf of the Revolving Loan Lenders and subject to Section 2.02 of this Agreement2.02. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the Borrowers' Borrower’s account by the L/C Issuer in connection with or arising out of Letters Letter of Credit Accommodations or transactions relating thereto will be charged to the Loan Account in full when charged to or paid by the Administrative Agent and, when charged, shall be conclusive on the Borrowers Borrower absent manifest error. Each of the Revolving Loan Lenders and the Borrowers agrees Borrower agree that the Administrative Agent shall have the right to make such charges regardless of whether any Default or Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 6.01(j) have been satisfied. If any such reimbursement of disbursements made by the Administrative Agent is not made by the Administrative Agent by charging the Loan Account and the Borrower requests and is entitled to obtain a Revolving Loan to reimburse such disbursements on the date such reimbursement is due, such reimbursement shall be made no later than the time that the Administrative Agent makes the proceeds of the Revolving Loan available to the Borrower.
(d) The Borrowers Each Loan Party understands that the Letter of Credit Guaranties may require the Administrative Agent and/or the Lenders to indemnify the L/C Issuer for certain costs or liabilities arising out of claims by the Borrower against such L/C Issuer. Each Loan Party unconditionally jointly and severally indemnify indemnifies each Agent and each Lender and hold holds each Agent and each Lender harmless from any and all loss, claim or liability incurred by any Agent or any Lender arising from any transactions transaction or occurrences relating to Letters Letter of CreditCredit Accommodations, any drafts or acceptances thereunder, the Collateral relating theretothereof, and all Obligations in respect thereofthereto, including any such loss or claim due to any action taken by the L/C Issuer, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct of the L/C Issuer, any Agent or any Lender as determined by a final judgment of a court of competent jurisdiction. The Borrowers Each Loan Party further agree agrees to jointly and severally hold each Agent and each Lender harmless from any errors or of omission, negligence, or misconduct (but not gross negligence or misconduct willful misconduct, as finally determined by a court of competent jurisdiction) by the L/C Issuer. The Borrowers' Borrower agrees to be bound by the L/C Issuer’s regulations and interpretations of any Letter of Credit Accommodation that is the subject of a Letter of Credit Guaranty and opened to or for the Borrower’s account or by the Administrative Agent’s interpretations of any Letter of Credit Accommodation issued for the Borrower’s account, even though such interpretation may be different from the Borrower’s own, and the Borrower understands and agrees that the Lenders, the Agents and the L/C Issuer shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following the Borrower’s instructions or those contained in the Letter of Credit Accommodation or any modifications, amendments, or supplements thereto. Each Loan Party’s unconditional obligations to each Agent, each Lender and the L/C Issuer and each Lender with respect to Letters Letter of Credit Accommodations hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agent's’s, such Lender’s or the L/C Issuer's or such Lender's ’s gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree Each Loan Party agrees that any charges incurred by the Administrative Agent or the L/C Issuer for the Borrowers' such Loan Party’s account hereunder may be charged to the Loan Account.
(e) Upon any payments made to the L/C Issuer under the Letter of Credit Guaranty, the Agents Administrative Agent or the Revolving Loan Lenders, as the case may be, shall, without prejudice to its their rights under this Agreement (including that such unreimbursed amounts shall constitute Revolving Loans hereunder), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers Borrower in favor of the L/C Issuer in any application for Letters Letter of CreditCredit Accommodations, any standing agreement relating to Letters Letter of Credit Accommodations or otherwise, all of which shall be deemed to have been granted to the Agents Administrative Agent and the Revolving Loan Lenders and apply in all respects to the Agents Administrative Agent and the Revolving Loan Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
Appears in 1 contract
Letter of Credit Guaranty. (a) In order to assist the Borrowers in establishing or opening not more than 3 standby letters of credit, which shall not have expiration dates that exceed 180 364 days from the date of issuance, or such sooner expiry date as is provided in Section 3.01(b) issuance (the "LETTERS OF CREDITLetters of Credit"), with the L/C Issuer, the Borrowers have requested the Administrative Agent to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Agent's credit to that of the Borrowers, and the Administrative Agent has agreed to do so. Letters of Credit shall only be issued on the Effective Date. These arrangements shall be coordinated by the Administrative Agent subject to the terms and conditions set forth below. The Administrative Agent shall not be required to be the issuer of any Letter of Credit. The Parent Borrowers will be the account party parties for application for a Letter of Credit, which shall be substantially in the form of Exhibit G K hereto or on a computer transmission system approved by the Administrative Agent and the L/C Issuer or such other written form or computer transmission system as may from time to time be approved by the L/C Issuer and the Administrative Agent, and shall be duly completed in a manner reasonably acceptable to the Administrative Agent, together with such other certificates, -38- 47 agreements, documents and other papers and information as the L/C Issuer or the Administrative Agent may reasonably request (THE the "LETTER OF CREDIT APPLICATIONLetter of Credit Application"). In the event of any conflict between the terms of the Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control. The parties hereby agree that the Fleet Letters of Credit and the Existing Letters of Credit shall not constitute Letters of Credit for purposes of this Agreement to the extent such Fleet Letters of Credit and Existing Letters of Credit are supported by cash collateral or other letters of credit in a manner satisfactory to the Agents.
(b) The aggregate Letter of Credit Obligations shall not exceed the lowest of (i) the difference between (A) the Available Total Revolving Credit Commitment and (B) the aggregate principal amount of Revolving Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of the Revolving Loans then outstanding, and (iii) the L/C Subfacility. In addition, the terms and conditions of all Letters of Credit and all changes or modifications thereof by the Borrowers and/or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the reasonable exercise of its sole and absolute discretion, PROVIDEDprovided, HOWEVERhowever, that (i) the expiry date of all Letters of Credit shall be no later than fifteen days prior to the Revolving Loan Commitment Termination Final Maturity Date unless, on or prior to fifteen days prior to the Revolving Loan Commitment Termination Final Maturity Date either (x) such Letters of Credit shall be cash collateralized in an amount equal to 110105% of the face amount of such Letters of Credit or (y) the Borrowers shall provide the Administrative Agent and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Administrative Agent, from a commercial bank or other financial institution acceptable to the Agents for any Letter of Credit Obligations with respect to such Letters of Credit, Credit and (ii) the Letters of Credit and all documentation in connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer.
(c) The Administrative Agent shall have the right, without notice to the Borrowers, to charge the Loan Account with the amount of any and all indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Agents or the Lenders under the Letter of Credit Guaranty or incurred by an L/C Issuer with respect to a Letter of Credit at the earlier of (i) payment by the Administrative Agent or the Lenders under the Letter of Credit Guaranty or (ii) the occurrence of an Event of Default. Any amount charged to the Loan Account shall be deemed a Revolving Loan hereunder made by the Lenders to the Borrowers, funded by the Administrative Agent on behalf of the Lenders and subject to Section 2.02 of this Agreement. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the Borrowers' account by the L/C Issuer in connection with or arising out of Letters of Credit or transactions relating thereto will be charged to the Loan Account in full when charged to or paid by the Administrative Agent and, when charged, shall be conclusive on the Borrowers absent manifest error. Each of the Lenders and the Borrowers agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 have been satisfied.
(d) The Borrowers unconditionally jointly and severally indemnify each Agent and each Lender and hold each Agent and each Lender harmless from any and all loss, claim or liability incurred by any Agent or any Lender arising from any transactions or occurrences relating to Letters of Credit, any drafts or acceptances thereunder, the Collateral relating thereto, and all -39- 48 Obligations in respect thereof, including any such loss or claim due to any action taken by the L/C Issuer, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct of the L/C Issuer, any Agent or any Lender as determined by a final judgment of a court of competent jurisdiction. The Borrowers further agree to jointly and severally hold each Agent and each Lender harmless from any errors or omission, negligence or misconduct by the L/C Issuer. The Borrowers' unconditional obligations to each Agent, the L/C Issuer and each Lender with respect to Letters of Credit hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of such Agent's, the L/C Issuer's or such Lender's gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Borrowers agree that any charges incurred by the Administrative Agent or the L/C Issuer for the Borrowers' account hereunder may be charged to the Loan Account.
(e) Upon any payments made to the L/C Issuer under the Letter of Credit Guaranty, the Agents or the Lenders, as the case may be, shall, without prejudice to its their rights under this Agreement (including that such unreimbursed amounts shall constitute Loans hereunder), acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers in favor of the L/C Issuer in any application for Letters of Credit, any standing agreement relating to Letters of Credit or otherwise, all of which shall be deemed to have been granted to the Agents and the Lenders and apply in all respects to the Agents and the Lenders and shall be in addition to any rights, remedies, duties or obligations contained herein.
Appears in 1 contract
