Letter of Credit Guaranty. The Company hereby acknowledges that it -------------------------- has requested Holder (or its affiliates) to apply to American National Bank and Trust Company of Chicago or Bank One Corporation (either such entity, the "Bank"), on the Company's behalf, for the issuance of a letter of credit (the "Letter of Credit") in the stated amount of $5,859,378.60 for the benefit of Xxxxxxx Xxxxxxxxxxx & Supply Co., Inc. (the "Beneficiary"). The Company also acknowledges that the Letter of Credit would not be issued but for the approval thereof by Xxxxxx and/or Xxxxxx's obligation to reimburse its affiliates for any obligation such affiliates may have with respect to the Letter of Credit, and that the Bank has agreed to issue the Letter of Credit on the basis of Holder's or one of Holder's affiliates' agreement to reimburse the Bank for amounts paid to the Beneficiary upon any draw or draws on the Letter of Credit. Further, the Company acknowledges that Holder may elect to directly fund under this Note obligations which otherwise might be paid to the Beneficiary pursuant to a draw or draws on the Letter of Credit. Any and all amounts advanced hereunder to fund amounts that would otherwise be paid to the Beneficiary pursuant to a draw or draws on the Letter of Credit or to reimburse Holder for amounts owed by Holder to its affiliates or by Xxxxxx's affiliates to the Bank in respect of a draw or draws on the Letter of Credit shall, without duplication, be referred to herein as an "LC Advance". The Company hereby irrevocably authorizes Xxxxxx and Xxxxxx's affiliates to (a) cause the Letter of Credit to be issued, (b) make payments in satisfaction of reimbursement obligations in connection with draws on the Letter of Credit, and (c) fund advances hereunder, from time to time, and in one or more payments, in lieu of draws on the Letter of Credit, as aforesaid. The stated amount of the Letter of Credit shall constitute an advance hereunder solely for purposes of Section 3(c) hereof, provided that LC Advances shall not constitute an advance hereunder for purposes of said Section 3(c). The stated amount of the Letter of Credit shall not constitute outstanding principal amounts hereunder. LC Advances shall constitute outstanding principal amounts hereunder, including without limitation for the purposes of Section 5(a) hereunder. Without limitation to the foregoing, (i) from and after the issuance of the Letter of Credit until, and to the extent, of LC Advances, the issued but undrawn amount of the Letter -3- of Credit shall be subject to the Commitment Fee, and (ii) LC Advances shall accrue interest as provided in Section 1(a) of this Note.
Appears in 2 contracts
Samples: Subordinated Debt Agreement (Chart House Enterprises Inc), Annual Report (Chart House Enterprises Inc)
Letter of Credit Guaranty. The Company hereby acknowledges that it -------------------------- (a) In order to assist the Borrower in establishing or opening a standby letter of credit in the stated amount of the L/C Subfacility, to be issued by the L/C Issuer on the Effective Date in favor of the Existing Lender in order to provide for payment of all reimbursement and other payment obligations of the Borrower with respect to the Fleet Letter of Credit, the Borrower has requested Holder (or its affiliates) the Administrative Agent to apply to American National Bank and Trust Company of Chicago or Bank One Corporation (either join in the application for such entity, the "Bank"), on the Company's behalf, for the issuance of a letter of credit (the "Support Letter of Credit") in ), and/or guarantee payment or performance of the stated amount of $5,859,378.60 for the benefit of Xxxxxxx Xxxxxxxxxxx & Supply Co., Inc. (the "Beneficiary"). The Company also acknowledges that the Support Letter of Credit would and any drafts thereunder through the issuance of a Letter of Credit Guaranty, thereby lending the Administrative Agent's credit to that of the Borrower, 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 issued but required to be the issuer of the Support Letter of Credit. The Borrower will be the account party for the approval thereof by Xxxxxx and/or Xxxxxx's obligation to reimburse its affiliates application for any obligation such affiliates may have with respect to the Support Letter of Credit, which shall be substantially in the form of Exhibit K hereto or on a computer transmission system approved by the Administrative Agent and that the Bank has agreed L/C Issuer or such other written form or computer transmission system as may be approved by the L/C Issuer and the Administrative Agent, and shall be duly completed in a manner reasonably acceptable to issue 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 on Application"). In the basis event of Holder's or one of Holder's affiliates' agreement to reimburse any conflict between the Bank for amounts paid to the Beneficiary upon any draw or draws on the Letter of Credit. Further, the Company acknowledges that Holder may elect to directly fund under this Note obligations which otherwise might be paid to the Beneficiary pursuant to a draw or draws on the Letter of Credit. Any and all amounts advanced hereunder to fund amounts that would otherwise be paid to the Beneficiary pursuant to a draw or draws on the Letter of Credit or to reimburse Holder for amounts owed by Holder to its affiliates or by Xxxxxx's affiliates to the Bank in respect of a draw or draws on the Letter of Credit shall, without duplication, be referred to herein as an "LC Advance". The Company hereby irrevocably authorizes Xxxxxx and Xxxxxx's affiliates to (a) cause the Letter of Credit to be issued, (b) make payments in satisfaction of reimbursement obligations in connection with draws on the Letter of Credit, and (c) fund advances hereunder, from time to time, and in one or more payments, in lieu of draws on the Letter of Credit, as aforesaid. The stated amount terms of the Letter of Credit shall constitute an advance hereunder solely Application and this Agreement, for purposes of Section 3(cthis Agreement, the terms of this Agreement shall control.
(b) hereofThe terms and conditions of the Support Letter of Credit and all changes or modifications thereof by the 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, however, that LC Advances the Support Letter of Credit and all documentation in connection therewith shall not constitute an advance hereunder for purposes of said Section 3(c). be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer.
(c) The stated Administrative Agent shall have the right, without notice to the Borrower, 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 shall not constitute outstanding principal amounts hereunder. LC Advances shall constitute outstanding principal amounts hereunder, including without limitation for the purposes of Section 5(a) hereunder. Without limitation Guaranty or incurred by an L/C Issuer with respect to the foregoing, Support Letter of Credit at the earlier of (i) from and after payment by the issuance of Administrative Agent or the Lenders under the Letter of Credit until, and to the extent, of LC Advances, the issued but undrawn amount of the Letter -3- of Credit shall be subject to the Commitment Fee, and Guaranty or (ii) LC Advances the occurrence of an Event of Default. Any amount charged to the Loan Account shall accrue interest as provided in be deemed a Revolving Loan hereunder made by the Lenders to the Borrower, funded by the Administrative Agent on behalf of the Lenders and subject to Section 1(a) 2.02 of this Note.Agreement. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the Borrower's account by the L/C Issuer in connection with or arising out of the Support Letter of
Appears in 1 contract
Letter of Credit Guaranty. The Company hereby acknowledges (a) In order to assist the Borrowers in establishing or opening Letters of Credit, which shall not have expiration dates that it -------------------------- has requested Holder exceed two hundred and seventy (or its affiliates270) to apply to American National Bank and Trust Company days from the date of Chicago or Bank One Corporation (either such entityissuance, with the L/C Issuer, the "Bank")Borrowers have requested the Agent and/or one or more of the Lenders to join in the applications for such Letters of Credit, on the Company's behalf, for and/or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a letter Letter of Credit Guaranty, thereby lending the Agent’s and/or such Lender’s credit (to that of the "Borrowers, and the Agent and/or one or more Lenders have agreed to do so. These arrangements shall be coordinated by the Agent subject to the terms and conditions set forth below. The Agent and the Lenders shall not be required to be the issuer of any Letter of Credit") . The Borrowers will be the account party for application for a Letter of Credit, which shall be substantially in the stated amount form of $5,859,378.60 for Exhibit K hereto or on a computer transmission system approved by the benefit of Xxxxxxx Xxxxxxxxxxx & Supply Co.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 Agent, Inc. and shall be duly completed in a manner reasonably acceptable to the Agent, together with such other certificates, agreements, documents and other papers and information as the L/C Issuer or the Agent may reasonably request (the "Beneficiary"”Letter of Credit Application”). The Company also acknowledges that In the event of any conflict between the terms of the Letter of Credit would not be issued but Application and this Agreement, for purposes of this Agreement, the approval thereof by Xxxxxx and/or Xxxxxx's obligation to reimburse its affiliates for any obligation such affiliates may have with respect to the terms of this Agreement shall control.
(b) The aggregate Letter of CreditCredit Obligations shall not exceed the lower of (i) the difference between (A) the Total Revolving Credit Commitment and (B) the aggregate principal amount of Revolving Loans then outstanding and (ii) the L/C Sublimit. In addition, and that the Bank has agreed to issue the Letter of Credit on Obligations shall not exceed the basis difference between (A) the Borrowing Base and (B) the aggregate principal amount of Holder's the Revolving Loans then outstanding. The terms and conditions of all Letters of Credit and all changes or one modifications thereof consented to by any of Holder's affiliates' agreement to reimburse the Bank for amounts paid Borrowers and the L/C Issuer shall in all respects be subject to the Beneficiary upon any draw or draws on prior approval of the Agent in the reasonable exercise of its sole and absolute discretion, provided, however, that (i) no Letter of Credit. Further, the Company acknowledges that Holder may elect to directly fund under this Note obligations which otherwise might be paid Credit shall have an expiry date later than thirty days prior to the Beneficiary pursuant Maturity Date unless on or prior to a draw or draws on thirty days prior to the Maturity Date such Letter of Credit. Any Credit shall be cash collateralized in an amount equal to one hundred and all amounts advanced hereunder to fund amounts that would otherwise be paid to four percent (104%) of the Beneficiary pursuant to a draw or draws on the face amount of such Letter of Credit or to reimburse Holder for amounts owed by Holder to its affiliates the Borrowers shall have provided the Agent and the Lenders with an indemnification or by Xxxxxx's affiliates back-stop letter of credit, in form and substance satisfactory to the Bank Agent in respect of its absolute discretion, from a draw commercial bank or draws on other financial institution acceptable to the Agent for any Letter of Credit shall, without duplication, be referred Obligations with respect to herein as an "LC Advance". The Company hereby irrevocably authorizes Xxxxxx and Xxxxxx's affiliates to (a) cause the Letter of Credit to be issued, (b) make payments in satisfaction of reimbursement obligations in connection with draws on the Letter 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 Agent and the L/C Issuer.
(c) fund advances hereunderThe Agent shall have the right, from time without notice to timethe Borrowers, and in one or more payments, in lieu of draws on to charge the Letter of Credit, as aforesaid. The stated 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 Agent or the Lenders under the Letter of Credit shall constitute Guaranty or incurred by an advance hereunder solely for purposes L/C Issuer with respect to a Letter of Section 3(cCredit at the earlier of (i) hereof, provided that LC Advances shall not constitute an advance hereunder for purposes of said Section 3(c). The stated amount of payment by the 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 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 Agent for the 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 Agent and, when charged, shall be conclusive on the Borrowers absent manifest error. Each of the Lenders and the Borrowers agree that the 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 absolutely, unconditionally and irrevocably indemnify the Agent and each Lender and holds the Agent and each Lender harmless from any and all loss, claim or liability incurred by the 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, the 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 the Agent and each Lender harmless from any errors or omission, negligence or misconduct by the L/C Issuer. The Borrowers’ absolute, unconditional and irrevocable obligations to the Agent, the L/C Issuer and each Lender with respect to Letters of Credit hereunder shall not constitute outstanding principal amounts hereunderbe modified or diminished for any reason or in any manner whatsoever, other than as a result of the 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. LC Advances shall constitute outstanding principal amounts hereunder, including without limitation The Borrowers agree that any charges incurred by the Agent or the L/C Issuer for the purposes of Section 5(a) hereunder. Without limitation Borrowers’ account hereunder may be charged to the foregoing, Loan Account.
(ie) from and after Upon any payments made to the issuance of L/C Issuer under the Letter of Credit untilGuaranty, and the 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 Revolving 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 extent, of LC Advances, Agent and the issued but undrawn amount of Lenders and apply in all respects to the Letter -3- of Credit Agent and the Lenders and shall be subject in addition to the Commitment Feeany rights, and (ii) LC Advances shall accrue interest as provided in Section 1(a) of this Noteremedies, duties or obligations contained herein.
Appears in 1 contract
Letter of Credit Guaranty. The Company hereby acknowledges that it -------------------------- has requested Holder (a) In order to assist the Borrowers in establishing or its affiliates) to apply to American National Bank and Trust Company opening letters of Chicago or Bank One Corporation credit (either such entityeach, the a "BankLetter of Credit ---------------- Accommodation"), on which shall not have expiration dates later than ------------- the Company's behalfFinal Maturity Date, with the L/C issuer, the Borrowers have requested the Administrative Agent to join in the applications for such Letter of Credit Accommodations and/or guarantee payment or performance of such Letter of Credit Accommodations and any drafts thereunder through the issuance of a letter 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 Accommodation. The Borrowers will be the account parties for the application of each Letter of Credit Accommodation, which shall be in form and substance satisfactory to the Administrative Agent and the L/C Issuer 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 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 may reasonably request, which shall include, without limitation, the requested date of issuance and the name and address of the beneficiary (the "Letter of Credit") in the stated amount of $5,859,378.60 for the benefit of Xxxxxxx Xxxxxxxxxxx & Supply Co., Inc. (the "BeneficiaryCredit Application"). In the event of any ---------------------------- conflict between the terms of any Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control.
(b) The Company also acknowledges aggregate Letter of Credit Obligations shall not at any time exceed lowest of (i) the difference between (A) the Total Revolving A Credit Commitment and (B) the aggregate principal amount of all Revolving A Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of all Revolving A Loans then outstanding, and (iii) the L/C Subfacility. In addition, the terms and conditions of all 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 its reasonable business judgment; provided, however, that (i) the expiry date of -------- ------- all Letter of Credit Accommodations shall be no later than the Final Maturity Date and (ii) the Letter of Credit Accommodations and all documentation connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer.
(c) 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 Borrowers (or the Administrative Borrower on behalf of the Borrowers) 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 Borrowers (or the Administrative Borrower on behalf of the Borrowers) prior to such time on such date, then no later than 12:00 noon (New York City time) on the Business Day that the Borrowers (or the Administrative Borrower on behalf of the Borrowers) 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 other Indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Administrative Agent or the Revolving A Lenders under the Letter of Credit Guaranty or incurred by 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 A Lenders under the Letter of Credit Guaranty or (ii) the occurrence of any Default or Event of Default. Any amount charged to the Loan Account shall be deemed a Revolving A Loan hereunder made by the Revolving A Lenders to the Borrowers, funded by the Administrative Agent on behalf of the Revolving A Lenders and subject to Section 2.02. 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 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 A Lenders and the Borrowers agree that the Administrative Agent shall have the right to make such charges regardless of whether any Default or Event of Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 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 Borrowers (or the Administrative Borrower on behalf of the Borrowers) request and are entitled to obtain a Revolving 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 Revolving A Loan available to the Borrowers.
(d) The Borrowers understand that the Letter of Credit would 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 Borrowers against such L/C Issuer. The Borrowers unconditionally and jointly and severally indemnify each Agent and each Lender and 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 transaction or occurrences relating to Letter of Credit Accommodations, any drafts or acceptances thereunder, the Collateral relating thereof, and all Obligations in respect thereto, 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 of omission, negligence or misconduct by the L/C Issuer. The Borrowers agree 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 Borrowers' account or by the Administrative Agent's interpretations of any Letter of Credit Accommodation issued for the Borrowers' account, even though such interpretation may be different from the Borrowers' own, and the Borrowers understand and agree that the Lenders, the Agents and the L/C Issuer shall not be issued but for the approval thereof by Xxxxxx and/or Xxxxxx's obligation to reimburse its affiliates liable for any obligation such affiliates may have with respect to error, negligence, or mistake, whether of omission or commission, in following the Letter of Credit, and that the Bank has agreed to issue Borrowers' instructions or those contained in the Letter of Credit on Accommodation or any modifications, amendments, or supplements thereto. The Borrowers' unconditional obligations to each Agent, each Lender and the basis L/C Issuer with respect to Letter of HolderCredit 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 one the L/C Issuer's gross negligence or willful misconduct as determined by a final judgment of Holder's affiliatesa court of competent jurisdiction. The Borrowers agree that any charges incurred by the Administrative Agent or the L/C Issuer for the Borrowers' agreement to reimburse the Bank for amounts paid account hereunder may be charged to the Beneficiary upon Loan Account.
(e) Upon any draw or draws on the Letter of Credit. Further, the Company acknowledges that Holder may elect to directly fund under this Note obligations which otherwise might be paid payments made to the Beneficiary pursuant to a draw or draws on the Letter of Credit. Any and all amounts advanced hereunder to fund amounts that would otherwise be paid to the Beneficiary pursuant to a draw or draws on L/C Issuer under the Letter of Credit Guaranty, the Administrative Agent or the Revolving A Lenders, as the case may be, shall, without prejudice to reimburse Holder their rights under this Agreement (including that such unreimbursed amounts shall constitute Revolving A 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 amounts owed by Holder to its affiliates or by Xxxxxx's affiliates to the Bank in respect of a draw or draws on the Letter of Credit shallAccommodations, without duplication, be referred any standing agreement relating to herein as an "LC Advance". The Company hereby irrevocably authorizes Xxxxxx and Xxxxxx's affiliates to (a) cause the Letter of Credit Accommodations or otherwise, all of which shall be deemed to be issued, (b) make payments in satisfaction of reimbursement obligations in connection with draws on the Letter of Credit, and (c) fund advances hereunder, from time to time, and in one or more payments, in lieu of draws on the Letter of Credit, as aforesaid. The stated amount of the Letter of Credit shall constitute an advance hereunder solely for purposes of Section 3(c) hereof, provided that LC Advances shall not constitute an advance hereunder for purposes of said Section 3(c). The stated amount of the Letter of Credit shall not constitute outstanding principal amounts hereunder. LC Advances shall constitute outstanding principal amounts hereunder, including without limitation for the purposes of Section 5(a) hereunder. Without limitation have been granted to the foregoing, (i) from Administrative Agent and after the issuance of the Letter of Credit until, Revolving A Lenders and apply in all respects to the extent, of LC Advances, Administrative Agent and the issued but undrawn amount of the Letter -3- of Credit Revolving A Lenders and shall be subject in addition to the Commitment Feeany rights, and (ii) LC Advances shall accrue interest as provided in Section 1(a) of this Noteremedies, duties or obligations contained herein.
Appears in 1 contract
Samples: Financing Agreement (Solutia Inc)
Letter of Credit Guaranty. The Company hereby acknowledges (a) In order to assist the Borrowers in establishing or opening documentary and standby letters of credit, which shall not have expiration dates that it -------------------------- has requested Holder exceed 365 days (or its affiliatessuch longer period as may be approved by the Required Lenders) to apply to American National Bank and Trust Company from the date of Chicago or Bank One Corporation issuance (either such entity, the "BankLetters of Credit"), on with the Company's behalfL/C Issuer, the Borrowers have requested CIT 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 Letter of Credit Guaranty, thereby lending CIT's credit to that of the Borrowers, and CIT has agreed to do so. These arrangements shall be coordinated by CIT subject to the terms and conditions set forth below. CIT shall not be required to be the issuer of any Letter of Credit. The Borrowers will be the account party for each application for a Letter of Credit, which shall be substantially in the form of Exhibit E hereto or on a computer transmission system approved by CIT and the L/C Issuer or such other written form or written transmission system as may from time to time be approved by the L/C Issuer and CIT, and shall be duly completed in a manner reasonably acceptable to CIT, together with such other certificates, agreements, documents and other papers and information as the L/C Issuer or CIT may reasonably request (the "Letter of Credit") in the stated amount of $5,859,378.60 for the benefit of Xxxxxxx Xxxxxxxxxxx & Supply Co., Inc. (the "BeneficiaryCredit Application"). The Company also acknowledges that In the Letter event of Credit would not be issued but for any conflict between the approval thereof by Xxxxxx and/or Xxxxxx's obligation to reimburse its affiliates for any obligation such affiliates may have with respect to the Letter of Credit, and that the Bank has agreed to issue the Letter of Credit on the basis of Holder's or one of Holder's affiliates' agreement to reimburse the Bank for amounts paid to the Beneficiary upon any draw or draws on the Letter of Credit. Further, the Company acknowledges that Holder may elect to directly fund under this Note obligations which otherwise might be paid to the Beneficiary pursuant to a draw or draws on the Letter of Credit. Any and all amounts advanced hereunder to fund amounts that would otherwise be paid to the Beneficiary pursuant to a draw or draws on the Letter of Credit or to reimburse Holder for amounts owed by Holder to its affiliates or by Xxxxxx's affiliates to the Bank in respect of a draw or draws on the Letter of Credit shall, without duplication, be referred to herein as an "LC Advance". The Company hereby irrevocably authorizes Xxxxxx and Xxxxxx's affiliates to (a) cause the Letter of Credit to be issued, (b) make payments in satisfaction of reimbursement obligations in connection with draws on the Letter of Credit, and (c) fund advances hereunder, from time to time, and in one or more payments, in lieu of draws on the Letter of Credit, as aforesaid. The stated amount terms of the Letter of Credit shall constitute an advance hereunder solely Application and this Agreement, for purposes of Section 3(cthis Agreement, the terms of this Agreement shall control.
(b) hereof, provided that LC Advances The aggregate Letter of Credit Obligations shall not constitute an advance hereunder for purposes exceed the lowest of said Section 3(c). The stated (i) the difference between (A) the Total Commitment and (B) the aggregate principal amount of Revolving Credit Loans then outstanding, (ii) the difference between (A) the Borrowing Base and (B) the aggregate principal amount of the Revolving Credit Loans then outstanding and (iii) the L/C Subfacility. Not more than $4,000,000 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 CIT 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 Final Maturity Date unless, on or prior to fifteen days prior to the Final Maturity Date either such Letters of Credit shall be cash collateralized in an amount equal to 105% of the face amount of such Letters of Credit or the Borrowers shall provide the Agent and the Lenders with an indemnification, in form and substance reasonably satisfactory to the Agent, from a commercial bank or other financial institution acceptable to the Agent 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 CIT and the L/C Issuer.
(c) The 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 Agent, CIT or the Lenders under the Letter of Credit shall not constitute outstanding principal amounts hereunder. LC Advances shall constitute outstanding principal amounts hereunder, including without limitation for Guaranty or incurred by an L/C Issuer with respect to a Letter of Credit at the purposes earlier of Section 5(a) hereunder. Without limitation to the foregoing, (i) from and after payment by CIT or the issuance of Lenders under the Letter of Credit untilGuaranty 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 Borrowers, funded by the Agent on behalf of the Lenders and subject to Section 2.05 of this Agreement. Any charges, fees, commissions, costs and expenses charged to CIT 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 CIT and, when charged, shall be conclusive on the Borrowers absent manifest error. Each of the Lenders and the Borrowers agrees that the 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 the Agent, CIT and each Lender and hold the Agent, CIT and each Lender harmless from any and all loss, claim or liability incurred by the Agent, 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 Agent, 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 the Agent, CIT and each Lender harmless from any errors or omission, negligence or misconduct by the L/C Issuer. The Borrowers' unconditional, joint and several obligations to the extentAgent, of LC AdvancesCIT, the issued but undrawn amount L/C Issuer 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 the Letter -3- Agent's, CIT'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 CIT or the L/C Issuer for the Borrowers' account hereunder may be charged to the Loan Account.
(e) None of the Agent, 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 Agent, CIT and the Lenders shall be subject 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, 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 Agent, CIT or the Lenders in any resulting liability to the Commitment FeeBorrowers. In furtherance of the foregoing, 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 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 CIT, all without any notice to or any consent from the Borrowers. CIT shall use reasonable efforts to consult with the Borrowers before taking any action pursuant to this Section 3.01(f).
(g) Without CIT's 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 applications, Letters of Credit, drafts or Letter of Credit Applications; and (ii) LC Advances shall accrue interest as provided in Section 1(a) after the occurrence of an Event of Default which is not cured within any applicable grace period, if any, or waived pursuant to the terms of this NoteAgreement, 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 CIT 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, 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 37 or foreign taxes, duties, or levies. As between the Borrowers, on the one hand, and the Agent, 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, CIT, the 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 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 CIT, the Agent and the Lenders and apply in all respects to CIT, the 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. The Company hereby acknowledges that it -------------------------- has requested Holder (a) In order to assist the Borrowers in establishing or its affiliates) to apply to American National Bank and Trust Company opening letters of Chicago or Bank One Corporation credit (either such entityeach, the a "BankLetter of Credit Accommodation"), on which shall not have expiration dates later than the Company's behalfFinal Maturity Date, with the L/C Issuer, from time to time after the Final Facility Effective Date to the Final Maturity Date, the Borrowers will request the Administrative Agent to join in the applications for such Letter of Credit Accommodations and/or guarantee payment or performance of such Letter of Credit Accommodations and any drafts thereunder through the issuance of a letter 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. The Administrative Agent shall have no obligation to assist the Borrowers in establishing or opening any Letter of Credit Accommodations prior to the Final Facility 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 Accommodation. The Borrowers will be the account parties for the application of each Letter of Credit Accommodation, which shall be in form and substance satisfactory to the Administrative Agent and the L/C Issuer 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 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 may reasonably request, which shall include, without limitation, the requested date of issuance and the name and address of the beneficiary (the "Letter of Credit") in the stated amount of $5,859,378.60 for the benefit of Xxxxxxx Xxxxxxxxxxx & Supply Co., Inc. (the "BeneficiaryCredit Application"). In the event of any conflict between the terms of any Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control.
(b) The Company also acknowledges aggregate Letter of Credit Obligations shall not at any time exceed lowest of (i) the difference between (A) the 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 all Revolving Loans then outstanding, and (iii) the L/C Subfacility. In addition, the terms and conditions of all 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 its reasonable business judgment; provided, however, that (i) the expiry date of all Letter of Credit Accommodations shall be no later than the Final Maturity Date and (ii) the Letter of Credit Accommodations and all documentation connection therewith shall be in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer.
(c) 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 Borrowers (or the Administrative Borrower on behalf of the Borrowers) 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 Borrowers (or the Administrative Borrower on behalf of the Borrowers) prior to such time on such date, then no later than 12:00 noon (New York City time) on the Business Day that the Borrowers (or the Administrative Borrower on behalf of the Borrowers) 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 other Indebtedness, liabilities and obligations of any kind (including indemnification for breakage costs, capital adequacy and reserve requirement charges) incurred by the Administrative Agent or the Revolving Loan Lenders under the Letter of Credit Guaranty or incurred by 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 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. 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 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 agree that the Administrative Agent shall have the right to make such charges regardless of whether any Default or Event of Default shall have occurred and be continuing or whether any of the conditions precedent in Section 6.03 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 Borrowers (or the Administrative Borrower on behalf of the Borrowers) request and 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 understand that the Letter of Credit would 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 Borrowers against such L/C Issuer. The Borrowers unconditionally and jointly and severally indemnify each Agent and each Lender and 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 transaction or occurrences relating to Letter of Credit Accommodations, any drafts or acceptances thereunder, the Collateral relating thereof, and all Obligations in respect thereto, 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 of omission, negligence or misconduct by the L/C Issuer. The Borrowers agree 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 Borrowers' account or by the Administrative Agent's interpretations of any Letter of Credit Accommodation issued for the Borrowers' account, even though such interpretation may be different from the Borrowers' own, and the Borrowers understand and agree that the Lenders, the Agents and the L/C Issuer shall not be issued but for the approval thereof by Xxxxxx and/or Xxxxxx's obligation to reimburse its affiliates liable for any obligation such affiliates may have with respect to error, negligence, or mistake, whether of omission or commission, in following the Letter of Credit, and that the Bank has agreed to issue Borrowers' instructions or those contained in the Letter of Credit on Accommodation or any modifications, amendments, or supplements thereto. The Borrowers' unconditional obligations to each Agent, each Lender and the basis L/C Issuer with respect to Letter of HolderCredit 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 one the L/C Issuer's gross negligence or willful misconduct as determined by a final judgment of Holder's affiliatesa court of competent jurisdiction. The Borrowers agree that any charges incurred by the Administrative Agent or the L/C Issuer for the Borrowers' agreement to reimburse the Bank for amounts paid account hereunder may be charged to the Beneficiary upon Loan Account.
(e) Upon any draw or draws on the Letter of Credit. Further, the Company acknowledges that Holder may elect to directly fund under this Note obligations which otherwise might be paid payments made to the Beneficiary pursuant to a draw or draws on the Letter of Credit. Any and all amounts advanced hereunder to fund amounts that would otherwise be paid to the Beneficiary pursuant to a draw or draws on L/C Issuer under the Letter of Credit Guaranty, the Administrative Agent or the Revolving Loan Lenders, as the case may be, shall, without prejudice to reimburse Holder 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 in favor of the L/C Issuer in any application for amounts owed by Holder to its affiliates or by Xxxxxx's affiliates to the Bank in respect of a draw or draws on the Letter of Credit shallAccommodations, without duplication, be referred any standing agreement relating to herein as an "LC Advance". The Company hereby irrevocably authorizes Xxxxxx and Xxxxxx's affiliates to (a) cause the Letter of Credit Accommodations or otherwise, all of which shall be deemed to be issued, (b) make payments in satisfaction of reimbursement obligations in connection with draws on the Letter of Credit, and (c) fund advances hereunder, from time to time, and in one or more payments, in lieu of draws on the Letter of Credit, as aforesaid. The stated amount of the Letter of Credit shall constitute an advance hereunder solely for purposes of Section 3(c) hereof, provided that LC Advances shall not constitute an advance hereunder for purposes of said Section 3(c). The stated amount of the Letter of Credit shall not constitute outstanding principal amounts hereunder. LC Advances shall constitute outstanding principal amounts hereunder, including without limitation for the purposes of Section 5(a) hereunder. Without limitation have been granted to the foregoing, (i) from Administrative Agent and after the issuance of the Letter of Credit until, Revolving Loan Lenders and apply in all respects to the extent, of LC Advances, Administrative Agent and the issued but undrawn amount of the Letter -3- of Credit Revolving Loan Lenders and shall be subject in addition to the Commitment Feeany rights, and (ii) LC Advances shall accrue interest as provided in Section 1(a) of this Noteremedies, duties or obligations contained herein.
Appears in 1 contract
Samples: Financing Agreement (Solutia Inc)
Letter of Credit Guaranty. The Company hereby acknowledges (a) In order to assist the Borrowers in establishing or opening documentary letters of credit with the Letter of Credit Issuer, which shall not have expiration dates that it -------------------------- has requested Holder exceed 180 days from the date of issuance thereof or that exceed 30 days prior to the Revolving Credit Termination Date (or its affiliates) to apply to American National Bank and Trust Company of Chicago or Bank One Corporation (either such entity, the "BankLetters of Credit"), on and with respect to the Company's behalfLetters of Credit described in Section 2.17(j) hereof, the Borrowers have requested that the Administrative Agent 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 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 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 Borrowers will 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 such other form as may from time to time be approved by the Letter of Credit Issuer and the Administrative Agent and which shall be duly completed in a manner reasonably acceptable to the Administrative Agent (such application, together with such other certificates, documents and other papers and information as the Letter of Credit Issuer or the Administrative Agent may reasonably request, collectively the "Letter of Credit") in the stated amount of $5,859,378.60 for the benefit of Xxxxxxx Xxxxxxxxxxx & Supply Co., Inc. (the "BeneficiaryCredit Application"). The Company also acknowledges that Letters of Credit shall be issued with respect to transactions occurring in the ordinary course of the business of the Borrowers.
(b) Notwithstanding anything to the contrary contained herein, the Letter of Credit would Usage shall not exceed $35,000,000 at any time, and no Letter of Credit Guaranty shall be issued but 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 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 Administrative Agent or the Lenders under the Letter of Credit Guaranty or incurred by a Letter of Credit Issuer with respect to a Letter of Credit at the earlier of (A) payment by the Administrative Agent or the Lenders under the Letter of Credit Guaranty or (B) the occurrence of an Event of Default. Any amount so charged to the 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 2.05 and Section 2.09(c) of this Agreement 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 $70,000,000. Any charges, fees, commissions, costs and expenses charged to the Administrative Agent for the approval thereof Borrowers' account by Xxxxxx and/or Xxxxxx's obligation the Letter of Credit Issuer in connection with or arising out of Letters of Credit or transactions relating thereto will be charged to reimburse its affiliates for the 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 obligation Event of Default or Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.01 have been satisfied.
(d) The Borrowers unconditionally indemnify the Administrative Agent and each Lender and hold 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 the Administrative 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 affiliates may have loss or claim due to any action taken by the Letter of Credit Issuer, other than to the extent that any such loss, claim or liability directly results from the gross negligence or willful misconduct of the Administrative Agent or any Lender, respectively, as determined by a final judgment of a court of competent jurisdiction. The Borrowers further agree to jointly and severally hold the Administrative Agent and each Lender harmless from any errors or omission, negligence, unlawful conduct or misconduct by the Letter of Credit Issuer. The Borrowers' unconditional, joint and several obligations to the Administrative Agent and each Lender with respect to the Letter Letters of Credit, Credit hereunder shall not be modified or diminished for any reason or in any manner whatsoever. Each Borrower and each Guarantor agrees that any charges incurred by the Bank has agreed to issue Administrative Agent or the Letter of Credit on Issuer for the basis of Holder's or one of Holder's affiliatesBorrowers' agreement to reimburse the Bank for amounts paid account hereunder may be charged to the Beneficiary upon any draw or draws on Borrowers' account with the Letter Administrative Agent.
(e) None of Credit. Furtherthe Administrative Agent, the Company acknowledges that Holder may elect to directly fund under this Note obligations which otherwise might be paid to the Beneficiary pursuant to a draw or draws on the Letter of Credit. Any Lenders and all amounts advanced hereunder to fund amounts that would otherwise be paid to the Beneficiary pursuant to a draw or draws on the Letter of Credit Issuer shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of the goods purporting to reimburse Holder 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 amounts owed any act or omission with respect to or in connection with any goods covered by Holder to its affiliates any Letter of Credit.
(f) The Borrowers jointly and severally agree that any action taken by the Administrative Agent or any Lender, or any action taken by Xxxxxx's affiliates to the Bank in respect of a draw or draws on the Letter of Credit shallIssuer, without duplicationunder or in connection with the Letters of Credit, the drafts or acceptances, the guarantees or the collateral, shall be referred binding on the Borrowers and shall not put the Administrative Agent, or the Lenders in any resulting liability to herein 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 an "LC Advance". The Company hereby irrevocably authorizes Xxxxxx to acceptance or rejection of any documents or goods; to execute any and Xxxxxxall 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 affiliates to (a) cause 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).
(g) 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.
(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 Administrative Agent may at any time reasonably request will be issuedpromptly furnished. In this connection, (b) make payments the Borrowers warrant and represent that all shipments made under any Letters of Credit are in satisfaction accordance with the laws and regulations of reimbursement obligations the countries in connection with draws 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 CreditCredit 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.
(i) Upon any payments to the Letter of Credit Issuer under a Letter of Credit Guaranty, the 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 hereunder in accordance with subsection (c) fund advances hereunderof this Section 2.17), from time to timeacquire by subrogation, and any rights, remedies, duties or obligations granted or undertaken by the Borrowers in one or more payments, in lieu of draws on the Letter of Credit, as aforesaid. The stated amount favor of the 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 constitute an advance hereunder solely be deemed to have been granted to the Administrative Agent and the Lenders and apply in all respects to the Administrative 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 all letters of credit issued for purposes the benefit of Section 3(c) hereof, provided that LC Advances shall not constitute an advance hereunder for purposes of said Section 3(c). the Borrowers with respect to which The stated amount of Chase Manhattan Bank is the Letter of Credit shall not constitute Issuer outstanding principal amounts hereunderon the Amendment Date. LC Advances Each such letter of credit, including any extension or renewal thereof, shall constitute outstanding principal amounts hereunder, including without limitation a "Letter of Credit" for the all purposes of Section 5(a) hereunder. Without limitation to this Agreement, issued on the foregoing, (i) from and after the issuance of the Letter of Credit until, and to the extent, of LC Advances, the issued but undrawn amount of the Letter -3- of Credit shall be subject to the Commitment Fee, and (ii) LC Advances shall accrue interest as provided in Section 1(a) of this NoteAmendment Date.
Appears in 1 contract
Samples: Credit Agreement (Donnkenny Inc)
Letter of Credit Guaranty. The Company hereby acknowledges that it -------------------------- has requested Holder (a) In order to assist the Borrower in establishing or its affiliates) to apply to American National Bank and Trust Company opening standby letters of Chicago or Bank One Corporation credit, which shall not have expiration dates later than the Final Maturity Date (either such entity, the each a "BankLetter of Credit"), on with the Company's behalfL/C Issuer, the 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 Letter of Credit Guaranty, thereby lending the Administrative Agent's credit to that of the Borrower, 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 Borrower will be the account party for the application for each Letter of Credit, which shall be in form and substance satisfactory to the Administrative Agent and the L/C Issuer 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 reasonably approved by the Administrative Agent and the L/C Issuer, and shall be duly completed at a time and 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 may reasonably request, which shall include without limitation, the requested date of issuance and the name and address of the beneficiary (the "Letter of CreditCredit Application"). In the event of any conflict between the terms of any Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control.
(b) The aggregate Letter of Credit Obligations shall not exceed the lowest of (i) the difference between (A) the Total Revolving A Credit Commitment and (B) the aggregate principal amount of all Revolving A Loans then outstanding, (ii) the difference between (A) the Revolver A Borrowing Base and (B) the aggregate principal amount of all Revolving A 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 Borrower and/or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the stated exercise of its reasonable discretion; provided, however, that (i) the expiry date of all Letters of Credit shall be no later than the Final Maturity Date unless, on or prior to the Final Maturity Date either (A) such Letters of Credit shall be cash collateralized in an amount equal to 110% of the face amount of $5,859,378.60 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 Xxxxxxx Xxxxxxxxxxx & Supply Co., Inc. the Administrative Agent and/or the L/C Issuer (the "BeneficiaryLetter of Credit Collateral Account")) or (B) the Borrower shall provide the Administrative Agent and the Revolving A Loan Lenders with an indemnification or back-up letter of credit, in form and substance reasonably satisfactory to the Administrative Agent, from a commercial bank reasonably 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) If the Administrative Agent is obligated to advance funds under a Letter of Credit, the Administrative Agent may immediately reimburse such disbursement by charging the Loan Account as set forth below. The Company also acknowledges Administrative Agent shall have the right, without notice to the Borrower, 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 Revolving A Loan Lenders under the Letter of Credit Guaranty or incurred by the L/C Issuer with respect to a Letter of Credit at the earlier of (i) payment by the Administrative Agent or the
Revolving A Loan Lenders under the Letter of Credit Guaranty or (ii) the occurrence of any Default or Event of Default. Any amount charged to the Loan Account shall be deemed a Revolving A Loan hereunder made by the Revolving A Loan Lenders to the Borrower, funded by the Administrative Agent on behalf of the Revolving A 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 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 Borrower absent manifest error. Each of the Revolving A Loan Lenders and the Borrower agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Default or Event of Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 have been satisfied.
(d) The Borrower understands that the Letter of Credit would not be issued but Guaranties may require the Revolving A Loan Lenders to indemnify the L/C Issuer for certain costs or liabilities arising out of claims by the approval thereof Borrower against such L/C Issuer. The Borrower agrees to unconditionally indemnify each Agent and each Revolving A Loan Lender and holds each Agent and each Revolving A Loan Lender harmless from any and all loss, claim or liability incurred by Xxxxxx and/or Xxxxxx's obligation any Agent or any Revolving A Loan Lender arising from any transactions or occurrences relating to reimburse its affiliates for any obligation such affiliates may have with respect to the Letter Letters of Credit, any drafts or acceptances thereunder, the Collateral relating thereto, and that all Obligations in respect thereof, including any such loss or claim due to any action taken by the Bank has agreed 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 Borrower further agrees to issue hold each Agent and each Lender harmless from any errors or omission, negligence or misconduct by the L/C Issuer. The Borrower agrees to be bound by the L/C Issuer's regulations and interpretations of any Letter of Credit on that is the basis subject of Holder's or one of Holder's affiliates' agreement to reimburse the Bank for amounts paid to the Beneficiary upon any draw or draws on the a Letter of Credit. FurtherCredit Guaranty and opened to or for the Borrower's account or by the Administrative Agent's interpretations of any Letter of Credit 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 Company acknowledges that Holder may elect to directly fund under this Note obligations which otherwise might Agents and the L/C Issuer shall not be paid to liable for any error, negligence or mistake, whether of omission or commission, in following the Beneficiary pursuant to a draw Borrower's instructions or draws on the Letter of Credit. Any and all amounts advanced hereunder to fund amounts that would otherwise be paid to the Beneficiary pursuant to a draw or draws on those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. The Borrower's unconditional obligations to reimburse Holder each Agent, each Lender and the L/C Issuer with respect to Letters of Credit hereunder shall not be modified or diminished for amounts owed 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 gross negligence or willful misconduct as determined by Holder to its affiliates a final judgment of a court of competent jurisdiction. The Borrower agrees that any charges incurred by the Administrative Agent or by Xxxxxxthe L/C Issuer for the Borrower's affiliates account hereunder may be charged to the Bank in respect of a draw or draws on Loan Account.
(e) Upon any payments made to the L/C Issuer under the Letter of Credit Guaranty, the Agents or the Revolving A Loan Lenders, as the case may be, shall, without duplicationprejudice to their rights under this Agreement (including that such unreimbursed amounts shall constitute Loans hereunder), be referred to herein as an "LC Advance". The Company hereby irrevocably authorizes Xxxxxx and Xxxxxx's affiliates to (a) cause acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Letter Borrower in favor of Credit to be issued, (b) make payments the L/C Issuer in satisfaction of reimbursement obligations in connection with draws on the Letter any application for Letters of Credit, and (c) fund advances hereunder, from time any standing agreement relating to time, and in one or more payments, in lieu of draws on the Letter of Credit, as aforesaid. The stated amount of the Letter Letters of Credit or otherwise, all of which shall constitute an advance hereunder solely for purposes of Section 3(c) hereof, provided that LC Advances shall not constitute an advance hereunder for purposes of said Section 3(c). The stated amount of the Letter of Credit shall not constitute outstanding principal amounts hereunder. LC Advances shall constitute outstanding principal amounts hereunder, including without limitation for the purposes of Section 5(a) hereunder. Without limitation be deemed to have been granted to the foregoing, (i) from Agents and after the issuance of the Letter of Credit until, Revolving A Loan Lenders and apply in all respects to the extent, of LC Advances, Agents and the issued but undrawn amount of the Letter -3- of Credit Revolving A Loan Lenders and shall be subject in addition to the Commitment Feeany rights, and (ii) LC Advances shall accrue interest as provided in Section 1(a) of this Noteremedies, duties or obligations contained herein.
Appears in 1 contract
Samples: Credit Agreement (KCS Energy Inc)
Letter of Credit Guaranty. The Company hereby acknowledges (a) In order to assist the Borrower in establishing or opening standby letters of credit, which shall not have initial expiration dates that it -------------------------- has requested Holder exceed 360 days or, if acceptable to the L/C Issuer, 366 days, from the date of issuance (or its affiliates) to apply to American National Bank and Trust Company each a "Letter of Chicago or Bank One Corporation (either such entity, the "BankCredit"), with the L/C Issuer, on and after the Company's behalfL/C Subfacility Effective Date, the Borrower may request 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 Letter of Credit Guaranty, thereby lending the Administrative Agent's credit to that of the Borrower, and the Administrative Agent will agree to do so. These arrangements shall be coordinated by the Administrative Agent, subject to the terms and conditions set forth below and the terms and provisions of this Article III shall not be applicable prior to the L/C Subfacility Effective Date. The Administrative Agent shall not be required to be the issuer of any Letter of Credit. The Borrower will be the account party for the application for each Letter of Credit, which shall be in form and substance satisfactory to the Administrative Agent and the L/C Issuer 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 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 may reasonably request (the "Letter of CreditCredit Application"). In the event of any conflict between the terms of any Letter of Credit Application and this Agreement, for purposes of this Agreement, the terms of this Agreement shall control.
(b) The aggregate Letter of Credit Obligations shall not exceed the lowest of (i) the difference between (A) the 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 all Revolving Loans then outstanding, (iii) the L/C Subfacility, (iv) the difference between (A) an amount equal to (x) two (2) multiplied by (y) the Consolidated EBITDA of the Borrower and its Subsidiaries for the most recently completed twelve months and (B) the aggregate principal amount of Loans then outstanding, and (v) the difference between (A) the maximum principal amount of Indebtedness which, in accordance with the Indenture, is permitted to be incurred and (B) the aggregate principal amount of Loans then outstanding. In addition, the terms and conditions of all Letters of Credit and all changes or modifications thereof by the Borrower and/or the L/C Issuer shall in all respects be subject to the prior approval of the Administrative Agent in the stated exercise of its reasonable business judgment; provided, however, that (i) the expiry date of all Letters of Credit shall be no later than fifteen days prior to the Final Maturity Date unless, on or prior to fifteen days prior to the Final Maturity Date either (A) such Letters of Credit shall be cash collateralized in an amount equal to 110% of the face amount of $5,859,378.60 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 Xxxxxxx Xxxxxxxxxxx & Supply Co., Inc. the Administrative Agent and/or the L/C Issuer (the "BeneficiaryLetter of Credit Collateral Account"). ) or (B) the 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 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 Company also acknowledges that Administrative Agent shall have the right, without notice to the Borrower, 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 Revolving Loan Lenders under the Letter of Credit would not be issued but for Guaranty or incurred by the approval thereof by Xxxxxx and/or Xxxxxx's obligation to reimburse its affiliates for any obligation such affiliates may have L/C Issuer with respect to the a Letter of Credit, and that Credit at the Bank has agreed to issue earlier of (i) payment by the Administrative Agent or the Revolving Loan Lenders under the Letter of Credit Guaranty or (ii) the occurrence of 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 Borrower, 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 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 basis Borrower absent manifest error. Each of Holderthe Revolving Loan Lenders and the Borrower agrees that the Administrative Agent shall have the right to make such charges regardless of whether any Default or Event of Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 have been satisfied.
(d) The Borrower unconditionally indemnifies each Agent and each Lender and 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 Borrower further 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. The Borrower's unconditional obligations to each Agent, each Lender and the L/C Issuer 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, such Lender's or one the L/C Issuer's gross negligence or willful misconduct as determined by a final judgment of Holdera court of competent jurisdiction. The Borrower agrees that any charges incurred by the Administrative Agent or the L/C Issuer for the Borrower's affiliates' agreement to reimburse the Bank for amounts paid account hereunder may be charged to the Beneficiary upon Loan Account.
(e) Upon any draw or draws on the Letter of Credit. Further, the Company acknowledges that Holder may elect to directly fund under this Note obligations which otherwise might be paid payments made to the Beneficiary pursuant to a draw or draws on the Letter of Credit. Any and all amounts advanced hereunder to fund amounts that would otherwise be paid to the Beneficiary pursuant to a draw or draws on L/C Issuer under the Letter of Credit Guaranty, the Agents or to reimburse Holder for amounts owed by Holder to its affiliates or by Xxxxxx's affiliates to the Bank in respect of a draw or draws on Revolving Loan Lenders, as the Letter of Credit case may be, shall, without duplicationprejudice to their rights under this Agreement (including that such unreimbursed amounts shall constitute Loans hereunder), be referred to herein as an "LC Advance". The Company hereby irrevocably authorizes Xxxxxx and Xxxxxx's affiliates to (a) cause acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Letter Borrower in favor of Credit to be issued, (b) make payments the L/C Issuer in satisfaction of reimbursement obligations in connection with draws on the Letter any application for Letters of Credit, and (c) fund advances hereunder, from time any standing agreement relating to time, and in one or more payments, in lieu of draws on the Letter of Credit, as aforesaid. The stated amount of the Letter Letters of Credit or otherwise, all of which shall constitute an advance hereunder solely for purposes of Section 3(c) hereof, provided that LC Advances shall not constitute an advance hereunder for purposes of said Section 3(c). The stated amount of the Letter of Credit shall not constitute outstanding principal amounts hereunder. LC Advances shall constitute outstanding principal amounts hereunder, including without limitation for the purposes of Section 5(a) hereunder. Without limitation be deemed to have been granted to the foregoing, (i) from Agents and after the issuance of the Letter of Credit until, Revolving Loan Lenders and apply in all respects to the extent, of LC Advances, Agents and the issued but undrawn amount of the Letter -3- of Credit Revolving Loan Lenders and shall be subject in addition to the Commitment Feeany rights, and (ii) LC Advances shall accrue interest as provided in Section 1(a) of this Noteremedies, duties or obligations contained herein.
Appears in 1 contract
Samples: Credit Agreement (Packaged Ice Inc)
Letter of Credit Guaranty. The Company hereby acknowledges (a) In order to assist the Borrowers in establishing or opening Letters of Credit, which shall not have expiration dates that it -------------------------- has requested Holder exceed two hundred and seventy (or its affiliates270) to apply to American National Bank and Trust Company days from the date of Chicago or Bank One Corporation (either such entityissuance, with the L/C Issuer, the "Bank")Borrowers have requested the Agent and/or one or more of the Lenders to join in the applications for such Letters of Credit, on the Company's behalf, for and/or guarantee payment or performance of such Letters of Credit and any drafts thereunder through the issuance of a letter Letter of Credit Guaranty, thereby lending the Agent’s and/or such Lender’s credit (to that of the "Borrowers, and the Agent and/or one or more Lenders have agreed to do so. These arrangements shall be coordinated by the Agent subject to the terms and conditions set forth below. The Agent and the Lenders shall not be required to be the issuer of any Letter of Credit") . The Borrowers will be the account party for application for a Letter of Credit, which shall be substantially in the stated amount form of $5,859,378.60 for Exhibit K hereto or on a computer transmission system approved by the benefit of Xxxxxxx Xxxxxxxxxxx & Supply Co.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 Agent, Inc. and shall be duly completed in a manner reasonably acceptable to the Agent, together with such other certificates, agreements, documents and other papers and information as the L/C Issuer or the Agent may reasonably request (the "Beneficiary"“Letter of Credit Application”). The Company also acknowledges that In the event of any conflict between the terms of the Letter of Credit would not be issued but Application and this Agreement, for purposes of this Agreement, the approval thereof by Xxxxxx and/or Xxxxxx's obligation to reimburse its affiliates for any obligation such affiliates may have with respect to the terms of this Agreement shall control.
(b) The aggregate Letter of CreditCredit Obligations shall not exceed the lower of (i) the difference between (A) the Total Revolving Credit Commitment and (B) the aggregate principal amount of Revolving Loans then outstanding and (ii) the L/C Sublimit. In addition, and that the Bank has agreed to issue the Letter of Credit on Obligations shall not exceed the basis difference between (A) the Borrowing Base and (B) the aggregate principal amount of Holder's the Revolving Loans then outstanding. The terms and conditions of all Letters of Credit and all changes or one modifications thereof consented to by any of Holder's affiliates' agreement to reimburse the Bank for amounts paid Borrowers and the L/C Issuer shall in all respects be subject to the Beneficiary upon any draw or draws on prior approval of the Agent in the reasonable exercise of its sole and absolute discretion, provided, however, that (i) no Letter of Credit. Further, the Company acknowledges that Holder may elect to directly fund under this Note obligations which otherwise might be paid Credit shall have an expiry date later than thirty days prior to the Beneficiary pursuant Maturity Date unless on or prior to a draw or draws on thirty days prior to the Maturity Date such Letter of Credit. Any Credit shall be cash collateralized in an amount equal to one hundred and all amounts advanced hereunder to fund amounts that would otherwise be paid to four percent (104%) of the Beneficiary pursuant to a draw or draws on the face amount of such Letter of Credit or to reimburse Holder for amounts owed by Holder to its affiliates the Borrowers shall have provided the Agent and the Lenders with an indemnification or by Xxxxxx's affiliates back-stop letter of credit, in form and substance satisfactory to the Bank Agent in respect of its absolute discretion, from a draw commercial bank or draws on other financial institution acceptable to the Agent for any Letter of Credit shall, without duplication, be referred Obligations with respect to herein as an "LC Advance". The Company hereby irrevocably authorizes Xxxxxx and Xxxxxx's affiliates to (a) cause the Letter of Credit to be issued, (b) make payments in satisfaction of reimbursement obligations in connection with draws on the Letter 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 Agent and the L/C Issuer.
(c) fund advances hereunderThe Agent shall have the right, from time without notice to timethe Borrowers, and in one or more payments, in lieu of draws on to charge the Letter of Credit, as aforesaid. The stated 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 Agent or the Lenders under the Letter of Credit shall constitute Guaranty or incurred by an advance hereunder solely for purposes L/C Issuer with respect to a Letter of Section 3(cCredit at the earlier of (i) hereof, provided that LC Advances shall not constitute an advance hereunder for purposes of said Section 3(c). The stated amount of payment by the 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 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 Agent for the 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 Agent and, when charged, shall be conclusive on the Borrowers absent manifest error. Each of the Lenders and the Borrowers agree that the 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 absolutely, unconditionally and irrevocably indemnify the Agent and each Lender and holds the Agent and each Lender harmless from any and all loss, claim or liability incurred by the 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, the 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 the Agent and each Lender harmless from any errors or omission, negligence or misconduct by the L/C Issuer. The Borrowers’ absolute, unconditional and irrevocable obligations to the Agent, the L/C Issuer and each Lender with respect to Letters of Credit hereunder shall not constitute outstanding principal amounts hereunderbe modified or diminished for any reason or in any manner whatsoever, other than as a result of the 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. LC Advances shall constitute outstanding principal amounts hereunder, including without limitation The Borrowers agree that any charges incurred by the Agent or the L/C Issuer for the purposes of Section 5(a) hereunder. Without limitation Borrowers’ account hereunder may be charged to the foregoing, Loan Account.
(ie) from and after Upon any payments made to the issuance of L/C Issuer under the Letter of Credit untilGuaranty, and the 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 Revolving 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 extent, of LC Advances, Agent and the issued but undrawn amount of Lenders and apply in all respects to the Letter -3- of Credit Agent and the Lenders and shall be subject in addition to the Commitment Feeany rights, and (ii) LC Advances shall accrue interest as provided in Section 1(a) of this Noteremedies, duties or obligations contained herein.
Appears in 1 contract
Samples: Financing Agreement (Frederick's of Hollywood Group Inc /Ny/)
