Letters of Credit. As regards policies or bonds issued by the Company within the scope of this Agreement, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement: A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid; B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement; C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner: A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference; B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 2 contracts
Samples: Quota Share Treaty (Amerinst Insurance Group LTD), Quota Share Treaty (Amerinst Insurance Group LTD)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the U.S. Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars for the account of the Company, and to amend or bonds extend Letters of Credit previously issued by it, in accordance with clause (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the U.S. Revolving Credit Lenders severally agree to participate in Letters of Credit issued for the account of the Company within the scope of this Agreement, the Company agrees and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(1) the Total Outstandings shall not exceed the Aggregate Commitments, (2) the Total U.S. Revolving Credit Outstandings shall not exceed the U.S. Revolving Credit Facility, (3) the aggregate Outstanding Amount of the U.S. Revolving Credit Loans of any U.S. Revolving Credit Lender, plus such U.S. Revolving Credit Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations shall not exceed such U.S. Revolving Credit Lender’s U.S. Revolving Credit Commitment, and containing provisions acceptable to (4) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Company that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Company’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Company may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) the expiry date of expiration or any future expiration such requested Letter of Credit would occur more than twelve months after the date of issuance, unless thirty the Required Lenders have approved such expiry date; or
(30B) days prior to any expiration the expiry date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the U.S. Revolving Credit Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $100,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) any U.S. Revolving Credit Lender is at that time a Defaulting Lender, unless the actual amount required for A) or C)L/C Issuer has entered into arrangements, including the Company shall promptly return delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of L/C Issuer (in its sole discretion) with the Company or such U.S. Revolving Credit Lender to eliminate the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows then proposed to be issued or that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
(F) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the U.S. Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX, subject to any limitations set forth therein, with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 2 contracts
Samples: Credit Agreement (Hain Celestial Group Inc), Credit Agreement (Hain Celestial Group Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for the account of the Borrower or bonds certain Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letter of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and any drawings thereunder; provided that when it the L/C Issuer shall file not be obligated to make any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bankand no Lender shall be obligated to participate in any Letter of Credit if as of the date of such L/C Credit Extension, and containing provisions acceptable to (x) the insurance regulatory authorities having jurisdiction over Total Outstandings would exceed the Company's reserves in an amount equal to Aggregate Commitments, (y) the Reinsurer's proportion aggregate Outstanding Amount of reserves in respect the Revolving Loans of lossesany Lender, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating theretoplus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, and losses and allocated loss adjustment expense paid plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans would exceed such Lender’s Commitment, or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally and applicable to all letter of credit applicants generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $10,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars; or
(E) any Lender is at that time a Defaulting Lender, unless the actual amount required for A) or C)L/C Issuer has entered into arrangements, including the Company shall promptly return delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrower or such Lender to eliminate the Company L/C Issuer’s actual or the disposition of funds withdrawn, except potential Fronting Exposure (after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30Section 2.16(a)(iv)) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows then proposed to be issued or that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which the amount L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 2 contracts
Samples: Credit Agreement (Gruma Sab De Cv), Credit Agreement (Gruma Sab De Cv)
Letters of Credit. As regards policies or bonds issued by (a) Upon the Company within request of the scope Borrower from time to time, the Lender shall, in accordance with the provisions of this AgreementSection 2.7, the Company agrees that when it shall file with the insurance regulatory authority issue one or set more Letters of Credit up on its books reserves for losses, unearned premium reserves and loss development allowance (to an aggregate amount available to be calculated using drawn (plus the formula belowaggregate amount of unreimbursed drawings under all Letters of Credit) covered hereunder which it at any time not to exceed the Letter of Credit Facility; provided, that (1) all Letter of Credit Documents in connection with each Letter of Credit shall be required by law to set up, it will forward satisfactory to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a cleanLender in its sole discretion, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The 2) no Letter of Credit shall be issued for a period if, after issuance thereof, the sum of not less than one yearthe aggregate principal amount of Revolving Credit Loans outstanding, plus the aggregate amount available to be drawn under all Letters of Credit, plus the aggregate amount of any unreimbursed drawings under Letters of Credit, would exceed the lesser of (A) the Revolving Credit Facility and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30B) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider Borrowing Base plus the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters Reserve, (3) each Letter of Credit provided by shall be a documentary letter of credit issued to or for the Reinsurer pursuant benefit of a supplier of the Borrower in connection with the purchase of Inventory or a standby letter of credit issued to a beneficiary and for a purpose acceptable to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this AgreementLender in its sole discretion, and be utilized by (4) no Letter of Credit shall have an initial term longer than one year or an expiration date later than the Company or any successor, by operation of law, of Termination Date.
(b) The Borrower acknowledges and agrees that if and to the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of extent the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. Borrower shall fail to reimburse the Company for the Reinsurer's Obligations, the payment of which is due Lender under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C)Documents, the Company shall promptly return Borrower hereby irrevocably requests and directs the Lender, subject to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever and in connection accordance with the propriety provisions of withdrawals made by the Company or the disposition of funds withdrawnSection 2.1, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing make payment on its behalf and the amount of credit any such payment by the amount Lender shall constitute a Revolving Credit Loan made at the time of such difference;payment.
B. if however(c) The issuance and negotiation of Letters of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (1993 Revision), as published in the statement shows that International Chamber of Commerce Uniform Customs and Practices, Publication No. 500 or such other policies and practices as may be followed by the Reinsurer's Obligations are less than the balance Lender with respect to similar letters of credit as of at the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credittime.
Appears in 2 contracts
Samples: Loan Agreement (International Comfort Products Corp), Loan and Security Agreement (International Comfort Products Corp)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the any member of the Consolidated Group, and to amend or bonds extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, (y) without duplication, the aggregate Outstanding Amount of the Committed Revolving Loans of any Revolving Lender, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve (12) months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Revolving Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer reasonably deems material to it;
(B) the Letter of Credit is a commercial letter of credit or the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than Five Hundred Thousand and No/100 Dollars ($500,000.00);
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) any Revolving Lender is at that time a Defaulting Lender, unless the actual amount required for A) or C)L/C Issuer has entered into arrangements, including the Company shall promptly return delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrower or such Revolving Lender to eliminate the Company L/C Issuer’s actual or the disposition of funds withdrawn, except potential Fronting Exposure (after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30Section 2.16(a)(iv)) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the amount of credit by the amount of such difference;L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30F) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing contains any provisions for automatic restatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 2 contracts
Samples: Credit Agreement (Cole Credit Property Trust III, Inc.), Credit Agreement (Cole Credit Property Trust III, Inc.)
Letters of Credit. As regards policies or bonds issued by Upon notice to Administrative Agent, any Applicable Lender that is an Accelerating Lender may draw on a letter of credit posted for its benefit upon demand to the Company within applicable issuing bank (the scope “Requested Draw”) and upon receipt of this Agreementany such Requested Draw, apply any such amounts to such Applicable Lender’s Advances (and the Advances of all Agented Lenders with respect to such Applicable Lender). If upon receipt of the Requested Draw, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which so received is in excess of the actual amount required to such Applicable Lender’s (and its Agented Lender’s) Advances (or other Obligations then due and owing such Lenders), pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in any such excess of the prime rate shall accrue amounts to the benefit Administrative Agent to be applied as provided in Section 7.03(a) (except that, solely for purposes of applying such excess, the Reinsurerreferences to “Lenders” in clauses Second, Third and Fourth of such Section 7.03(a) will be deemed to refer to all Lenders other than such Applicable Lender and any Agented Lender with respect to such Applicable Lender, for so long as the Obligations of such Lenders (other than such Applicable Lender and any Agented Lender with respect to such Applicable Lender) have not been indefeasibly paid in full). In the event the amount drawn by the Company on that any Applicable Lender is not a named beneficiary to any Eligible Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return because it has become a Lender subsequent to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice issue date of such excess, secure delivery to the Company of an amendment to the Eligible Letter of Credit increasing or if the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the any Eligible Letter of Credit reducing needs to be adjusted in amount as a result of an assignment among Lenders that alters the amount Pro Rata Basis among Lenders, the Loan Parties and the assigning Lender shall use commercially reasonable efforts to replace or revise such Eligible Letter of credit available by Credit to allow such Applicable Lender to be a named beneficiary thereunder (or to revise the amount amounts of such excess Eligible Letters of Credit) as soon as practicable after such assignment and until such placements are made, the assigning Lender shall act as Applicable Lender for such Agented Lender with respect to any non-replaced or revised letter of credit.
Appears in 2 contracts
Samples: Margin Loan Agreement (HNA Tourism Group Co., Ltd.), Margin Loan Agreement (HNA Tourism Group Co., Ltd.)
Letters of Credit. As regards policies In the event that, on or bonds issued after the CAM Exchange Date, the aggregate amount of the Designated Obligations shall change as a result of the making of a US Borrower L/C Disbursement by the Company within Issuing Lender that is not reimbursed by the scope US Borrower, then (i) each US Borrower L/C Participant shall pay its US Borrower Revolving Percentage of this Agreementsuch unreimbursed US Borrower L/C Disbursement to the Administrative Agent, in accordance with Section 3.4, and the Administrative Agent will promptly pay to the Issuing Lender the amounts so received by it from the US Borrower L/C Participants, (ii) the Administrative Agent shall redetermine the CAM Percentages after giving effect to such US Borrower L/C Disbursement and the Lenders shall automatically and without further act be deemed to have exchanged interests in the Designated Obligations such that each Lender shall own an interest equal to such Lender’s CAM Percentages (as so redetermined) in the Designated Obligations in each Class of Loans and each other category of Designated Obligations, and (iii) in the event distributions shall have been made in accordance with Section 10.1(b), the Company agrees that when it Lenders shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (make such payments to be calculated using the formula below) covered hereunder which it one another as shall be required necessary in order that the amounts received by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount Lenders shall be equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by amounts they would have received had each US Borrower L/C Disbursement been outstanding on the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations")CAM Exchange Date. The Letter of Credit Each such redetermination shall be issued for a period binding on each of not less than one year, the Lenders and their successors and assigns and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeconclusive, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurerabsent manifest error. In the event that any US Borrower L/C Participant shall default in its obligation to pay over any amount to the amount drawn by the Company on Administrative Agent in respect of any Letter of Credit is US Borrower L/C Disbursement as provided in excess of the actual amount required for A) or C)this Section 10.2, the Company Issuing Lender shall promptly return have a claim against such Lender to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency same extent as if such Lender had defaulted on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditits obligations under Section 3.4.
Appears in 2 contracts
Samples: Credit Agreement (Dollar Financial Corp), Credit Agreement (Dollar Financial Corp)
Letters of Credit. As regards policies The Parent and the Purchaser agree to use their reasonable efforts (a) to arrange for substitute letters of credit and the Parent and the Purchaser guarantee, respectively, to replace (i) the letters of credit and guarantees entered into by or bonds issued by on behalf of the Company within the scope of this Agreement, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration Seller or any future expiration of its Affiliates (other than the Publishing Subsidiaries) outstanding as of the date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at in connection with any time, notwithstanding Business as set forth in Section 5.07 of the Disclosure Schedule and (ii) any other provision letters of this Agreement, credit and be utilized guarantees entered into by or on behalf of the Company Seller or any successor, by operation of law, its Affiliates (other than the Publishing Subsidiaries) in the ordinary course of business consistent with past practice on or after the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms date of this Agreement and which has not been otherwise paid;
B. prior to make refund the Closing (together, the "SELLER LOCS") or (b) to assume all obligations of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations reimbursement under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate each Seller LOC, obtaining from the Company's other assetsapplicable creditor a full release of all parties liable, and interest thereon not in excess of the prime rate shall accrue directly or indirectly, for reimbursement to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever creditor in connection with amounts drawn under a Seller LOC under the propriety existing terms of withdrawals made a Seller LOC. The Parent and the Purchaser further agree that to the extent the beneficiary under any Seller LOC refuses to accept any such substitute letter of credit or Parent or Purchaser guarantee proffered by the Company Parent or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterlyPurchaser, the Company Parent or the Purchaser shall prepare a specific statement of indemnify, defend and hold harmless the ReinsurerSeller against and reimburse the Seller for any and all costs or expenses in connection with such Seller LOCs, including the Seller's Obligationsexpenses in maintaining such Seller LOCs whether or not any such Seller LOC is drawn upon, for and shall in any event promptly reimburse the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery Seller to the Company of an amendment extent any Seller LOC is called upon and the Seller makes any payment thereunder or is obligated to reimburse the Letter of Credit increasing party issuing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditSeller LOC.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Viacom Inc), Stock Purchase Agreement (Pearson PLC)
Letters of Credit. As regards policies or bonds issued by the Company within the scope of this Agreement, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula belowa) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued Commitments.
(i) Subject to Section 10.24(e) and the other terms and conditions set forth herein, (1) each L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders under the Revolving Credit Facility set forth in this Section 2.03, (x) from time to time on any Business Day following the Revolver Closing Date during the Availability Period for a period the Revolving Credit Facility, to issue Letters of not less than one year, and shall be automatically extended Credit for one year from its date the account of expiration or the Borrower (provided that any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended may be for the account of any additional period. The Reinsurer and Subsidiary of the Company agree Borrower; provided, further that the Borrower hereby acknowledges that the issuance of Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment account of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue Subsidiaries inures to the benefit of the Reinsurer. In Borrower, and that the event Borrower’s business derives substantial benefits from the amount businesses of such Subsidiaries, and the Borrower hereby irrevocably agrees to be bound jointly and severally to reimburse the applicable L/C Issuer for amounts drawn by the Company on any Letter of Credit is issued for the account of any Subsidiary) and to amend or extend Letters of Credit previously issued by it, in excess accordance with Section 2.03(b), and (y) to honor drafts under the Letters of Credit and (2) the Revolving Credit Lenders under the Revolving Credit Facility severally agree to participate in Letters of Credit issued pursuant to this Section 2.03; provided that no L/C Issuer shall be obligated to make any L/C Credit Extension with respect to any Letter of Credit and no Revolving Credit Lender shall be obligated to participate in any Letter of Credit if immediately after giving effect to such L/C Credit Extension, (w) the Total Revolving Outstandings would exceed the Revolving Credit Commitments then in effect, (x) the sum of the actual amount required aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, would exceed such Lender’s Revolving Credit Commitment, (y) the aggregate L/C Exposure would exceed the Letter of Credit Sublimit or (z) the aggregate L/C Exposure in respect of Letters of Credit issued by such L/C Issuer would exceed such L/C Issuer’s L/C Commitment. Letters of Credit shall constitute utilization of the Revolving Credit Commitments. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. It is hereby acknowledged and agreed that each of the letters of credit (including the Target Existing Letters of Credit) described on Schedule 2.03(a) (the “Existing Letters of Credit”) shall constitute a “Letter of Credit” for all purposes of this Agreement and shall be deemed issued under this Agreement on the Term Loan Closing Date.
(ii) An L/C Issuer shall be under no obligation to issue any Letter of Credit if:
(A) any order, judgment or C), the Company decree of any Governmental Authority or arbitrator shall promptly return by its terms purport to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company enjoin or the Reinsurer. The restrain such L/C Issuer from issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, or any Law applicable to such L/C Issuer or any directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or direct that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Revolver Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Revolver Closing Date and which the L/C Issuer in good fxxxx xxxxx material to it;
(B) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the relevant L/C Issuer has approved such expiry date;
(C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Facility Expiration Date, unless the relevant L/C Issuer has approved such expiry date (it being understood that the participations of the Revolving Credit Lenders under the Revolving Credit Facility in any undrawn Letter of Credit shall in any event terminate on the Letter of Credit Facility Expiration Date);
(D) in the following manner:case of Letters of Credit, if such Letter of Credit is to be denominated in a currency other than Dollars or an Approved Currency; or
A. if (E) any Revolving Lender of the statement shows that applicable Class is at such time a Defaulting Lender, nor shall any L/C Issuer be under any obligation to extend or amend existing Letters of Credit, unless such L/C Issuer has entered into arrangements, including reallocation of such Lender’s Applicable Percentage of the Reinsurer's applicable outstanding L/C Obligations exceed pursuant to Section 2.16 or the balance delivery of Cash Collateral, with the Borrower or such Lender to eliminate such L/C Issuer’s actual or potential L/C Exposure (after giving effect to Section 2.16) with respect to such Lender arising from either the Letter of Credit then proposed to be issued or such Letter of Credit and all other L/C Obligations as to which such L/C Issuer has actual or potential L/C Exposure; or
(F) the issuance of such Letter of Credit would violate any Laws binding upon such L/C Issuer or one or more policies of such L/C Issuer applicable to letters of credit as in general;
(G) such Letter of Credit is not a standby letter of credit; or
(H) such Letter of Credit is in an initial amount less than $10,000.
(iii) An L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the statement dateterms hereof, or (B) the Reinsurer shall, within thirty (30) days after receipt of notice beneficiary of such excess, secure delivery Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(iv) The aggregate L/C Commitments of all the Company of an amendment L/C Issuers shall be less than or equal to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditSublimit at all times.
Appears in 2 contracts
Samples: Credit Agreement (Wyndham Hotels & Resorts, Inc.), Credit Agreement (Wyndham Hotels & Resorts, Inc.)
Letters of Credit. As regards policies Subject to the terms and conditions set forth herein, (i) the Issuing Lender agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.4, (A) from time to time on any Business Day during the period from the Effective Date until the Termination Date, to issue Letters of Credit in Dollars for the account of either Borrower or bonds any Subsidiary of either Borrower, and to amend or extend Letters of Credit previously issued by it, in accordance with clause (b) below, and (B) to honor drawings under the Company within Letters of Credit; and (ii) the scope Revolving Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of either Borrower or any Subsidiary of either Borrower and any drawings thereunder; provided that when it shall file after giving effect to any LOC Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, (w) the aggregate amount of outstanding Letters of Credit issued by the Issuing Lender shall not exceed its LOC Commitment, (x) the aggregate Outstanding Amount of all Revolving Obligations shall not exceed the aggregate amount of all Revolving Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender’s Revolving Commitment Percentage of the Outstanding Amount of all LOC Obligations, plus such Lender’s Revolving Commitment Percentage of the Outstanding Amount of all Swingline Loans shall not exceed such Lender’s Revolving Commitment and (z) the Outstanding Amount of the LOC Obligations shall not exceed the LOC Sublimit. Each request by a bank, and containing provisions acceptable to Borrower for the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion issuance or amendment of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrowers that the LOC Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior subject to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not terms and conditions hereof, each Borrower’s ability to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the obtain Letters of Credit provided shall be fully revolving, and accordingly each Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Effective Date shall be subject to and governed by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, terms and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditconditions hereof.
Appears in 2 contracts
Samples: Credit Agreement (Speedway Motorsports LLC), Credit Agreement (Speedway Motorsports Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense (for which the L/C Issuer is not otherwise compensated hereunder) which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $100,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for Aafter any drawing thereunder; or
(F) or C)any Lender is at that time a Defaulting Lender, unless the Company shall promptly return L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrower or such Lender to eliminate the Company L/C Issuer’s actual or the disposition of funds withdrawn, except potential Fronting Exposure (after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30Section 2.16(a)(iv)) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows then proposed to be issued or that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which the amount L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment. Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the Revolving Credit Exposure of any Lender shall not exceed such Lender's Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(i) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration the requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Revolving Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date of the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider requested Letter of Credit would occur after the Letter of Credit extended for any additional period. The Reinsurer Expiration Date, unless (x) all the Revolving Credit Lenders and the Company agree L/C Issuer have approved such expiry date or (y) such Letter of Credit is cash collateralized on terms and pursuant to arrangements reasonably satisfactory to the L/C Issuer.
(ii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the Letters L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit provided in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which the L/C Issuer in good fxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Reinsurer pursuant to Administrative Agent and the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's ObligationsL/C Issuer, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess an initial stated amount less than $100,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) any Revolving Credit Lender is at that time a Defaulting Lender and there is any Fronting Exposure (after giving effect to any reallocation pursuant to Section 2.16(a)(iv)) with respect to such Defaulting Lender, unless the actual amount required for A) or C)L/C Issuer has entered into arrangements, including the Company shall promptly return delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrower or such Defaulting Lender to eliminate the Company or the disposition of funds withdrawn, except L/C Issuer's Fronting Exposure (after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30any reallocation pursuant to Section 2.16(a)(iv)) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the amount L/C Issuer has actual Fronting Exposure; or
(F) such Letter of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as Credit contains any provisions for automatic reinstatement of the statement datestated amount after any drawing thereunder.
(iii) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(iv) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the Company shall within thirty (30) days after receipt beneficiary of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing does not accept the amount proposed amendment to such Letter of credit available Credit.
(v) The L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article 9 with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term "Administrative Agent" as used in Article 9 included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars for the account of the Borrower or bonds any of its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, (y) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Revolving Commitment and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $500,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars; or
(E) any Lender is at that time a Defaulting Lender, unless the actual amount required for A) or C)L/C Issuer has entered into arrangements, including the Company shall promptly return delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrower or such Lender to eliminate the Company L/C Issuer’s actual or the disposition of funds withdrawn, except potential Fronting Exposure (after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30Section 2.15(a)(iv)) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the amount L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The L/C Issuer shall not amend any Letter of credit by Credit if the amount of L/C Issuer would not be permitted at such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing time to secure an amendment to issue the Letter of Credit reducing in its amended form under the amount terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of credit available Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” as used in Article X included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Fidelity National Financial, Inc.)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of any Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of any Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued (x) the Total Revolving Credit Outstandings shall not exceed the Aggregate Revolving Credit Commitments, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by a bank, and containing provisions acceptable to Borrower for the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion issuance or amendment of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The a Letter of Credit shall be deemed to be a representation by such Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, each Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly any Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. In no event shall the US Borrower be obligated or otherwise liable for any Letter of Credit issued for the account of the Cayman Borrower except in its capacity as a period Guarantor. In no event shall the Cayman Borrower be obligated or otherwise liable for any Letter Credit issued for the account of the US Borrower.
(ii) The L/C Issuer shall not less than one yearissue any Letter of Credit, and shall be automatically extended for one year from its if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration the requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Revolving Credit Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date of the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's ObligationsL/C Issuer, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual an initial stated amount required for Aless than $100,000;
(D) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of CreditCredit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, reasonably satisfactory to the L/C Issuer (in its sole discretion) with the following manner:Borrowers or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.16(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
A. (F) the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of Credit if the statement shows that L/C Issuer would not be permitted at such time to issue the Reinsurer's Obligations exceed Letter of Credit in its amended form under the balance terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of credit as Credit if (A) the L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the statement date, Letter of Credit does not accept the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an proposed amendment to the Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Credit increasing Lenders with respect to any Letters of Credit issued by it and the amount documents associated therewith, and the L/C Issuer shall have all of credit the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such difference;
B. Letters of Credit as fully as if howeverthe term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, the statement shows that the Reinsurer's Obligations are less than the balance of credit and (B) as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment additionally provided herein with respect to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies or bonds issued by Subject to the Company within terms and conditions set forth herein, during the scope of this AgreementRevolving Commitment Period, the Company agrees Issuing Bank agrees, in reliance on the agreements of the Lenders set forth herein, to issue and extend Letters of Credit in Dollars for the account of the Borrower; provided that when it shall file with (i) the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion Outstanding Amount of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit Obligations shall not exceed FIVE MILLION DOLLARS ($5,000,000) (the “Letter of Credit Sublimit”), (ii) the aggregate Outstanding Amount of Revolving Obligations shall not exceed the lesser of (A) the Aggregate Revolving Commitments and (B) the Borrowing Base, and (iii) each Lender’s share of Revolving Obligations shall not exceed the amount of its Revolving Commitment. Letters of Credit shall (1) be denominated in Dollars, (2) be in a minimum stated amount of $50,000 (or such lesser amount as the Issuing Bank may agree in its reasonable discretion), (3) not be issued for a period tenor of not less more than one year, and shall be automatically extended for one year from its the date of expiration issuance, amendment or any future extension, (4) not have an expiration date unless thirty extending beyond the date ten (3010) days prior to the Revolving Commitment Termination Date (the “Letter of Credit Outside Expiration Date”). The Issuing Bank may agree to issue “evergreen” standby Letters of Credit that are automatically extended for successive periods not more than one year in duration unless the Issuing Bank shall give notice of non-renewal or extension, provided that renewals and extensions shall be “Credit Extensions” hereunder subject to the provisions of Section 5.2 and shall not, in any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider event, extend beyond the Letter of Credit extended for any additional periodOutside Expiration Date. The Reinsurer obligation of the Issuing Bank to issue, amend and the Company agree that the extend Letters of Credit provided by hereunder is made in reliance on the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, agreements of the Company includingother Lenders set forth herein and in the event that any Lender hereunder shall be a Defaulting Lender, without limitationthe Issuing Bank shall not be obligated to issue or extend Letters of Credit unless and until arrangements shall have been made, any liquidatorreasonably satisfactory to it, rehabilitator, receiver eliminating or conservator mitigating the Fronting Exposure of the Company Defaulting Lender, whether by way of requirement for the following purposes, unless otherwise provided for in Cash Collateral therefor or otherwise. The Issuing Bank may send a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of or conduct any communication to or from the actual amount required beneficiary via the Society for AWorldwide Interbank Financial Telecommunication (“SWIFT”) message or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervalsovernight courier, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare any other commercially reasonable means of communicating with a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditbeneficiary.
Appears in 1 contract
Samples: Credit Agreement (Pfsweb Inc)
Letters of Credit. As regards policies or bonds issued by the Company within the scope (a) The Existing Letters of Credit described in Schedule 2.4 shall be Letters of Credit for all purposes under this Agreement, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance .
(to be calculated using the formula below1) covered hereunder which it shall be required by law to set up, it will forward Subject to the Reinsurer a statement showing terms and conditions hereof, at any time and from time to time from the proportion of such reserves which is Closing Date through the Revolving Loan Maturity Date applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply Issuing Lender, the Issuing Lender shall, in reliance upon the agreements of the Lenders set forth in this Section 2.4, issue such Letters of Credit under the Revolving Commitment as Borrower may request by a Request for and secure delivery Letter of Credit for the account of Borrower; provided that:
(i) after giving effect to the Company of a clean, irrevocable and unconditional Letter all such Letters of Credit, issued by a bankthe sum of:
(A) the Outstanding Amount of all Revolving Loans; plus
(B) the Outstanding Amount of all Swing Line Advances; plus
(C) the Outstanding Amount of all L/C Obligations, and containing provisions acceptable to does not exceed the insurance regulatory authorities having jurisdiction over then applicable Revolving Commitment; and
(ii) the Company's reserves in an amount equal to Outstanding Amount of all L/C Obligations does not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company Credit Sublimit;
(hereinafter referred to as "Reinsurer's Obligations"). The 2) Each Letter of Credit shall be issued for in a period form reasonably acceptable to the Issuing Lender.
(3) Unless all the Revolving Lenders otherwise consent in a writing delivered to the Agent, the term of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended (other than any Existing Letters of Credit) shall not exceed twenty four (24) months.
(4) The term of any Letter of Credit shall not extend beyond the latest Revolving Loan Maturity Date unless all Revolving Lenders and the Issuing Lender otherwise consent in a writing delivered to the Agent and as a condition thereto Borrower provides Cash Collateral to the Issuing Lender on or prior to the latest Revolving Loan Maturity Date.
(b) Each Request for any additional periodLetter of Credit shall be submitted to the Issuing Lender, with a copy to the Agent, at least two (2) Banking Days prior to the date upon which the related Letter of Credit is proposed to be issued. The Reinsurer Agent shall promptly notify the Issuing Lender whether such Request for Letter of Credit, and the Company agree that the Letters issuance of a Letter of Credit provided by the Reinsurer pursuant thereto, conforms to the provisions requirements of this Agreement may be drawn upon (including whether there exists sufficient availability under the Revolving Commitments). Unless the Agent provides written notice to the applicable Issuing Lender at any time, notwithstanding any other provision least one (1) Banking Day prior to the requested date of issuance that the issuance of such letter of credit does not conform to the requirements of this Agreement, and be utilized by the Company or any successorthen, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. subject to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assetsconditions hereof, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C)such Issuing Lender shall, the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement requested date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the issue a Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.of
Appears in 1 contract
Samples: Credit Agreement (Viasat Inc)
Letters of Credit. As regards policies (1) The Issuing Lender agrees, in reliance upon the terms and subject to the conditions of this Agreement (and in accordance with the standard terms and conditions represented by any agreement (including the Issuing Lender's standard Letter of Credit Application Form, as defined below) that may be entered into between the Borrower and the Issuing Lender from time to time, including the payment of administrative fees and costs), to issue Letters of Credit for the account of the Borrower from time to time on any Business Day prior to the eighth-to-last day of the Term of Facility A, which Letter of Credit shall expire on the earlier of (a) one year from issuance, or bonds issued (b) 7 days prior to the expiry of the Term of Facility A. The issuance of any such Letter of Credit shall require two (2) Business Days' prior notice to the Administrative Agent and the Issuing Lender, which notice shall be accompanied by the Company within Issuing Lender's standard Letter of Credit application form, duly completed and executed by the scope of this Agreement, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the ReinsurerBorrower. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company Borrower shall pay, in respect of a clean, irrevocable and unconditional any such Letter of Credit, issued fees equal to the aggregate of: (i) for the Facility A Lenders, the Applicable Margin multiplied by a bankthe Face Amount thereof (and taking into account the number of days until the expiry date thereof), and containing provisions acceptable (ii) for the Issuing Lender, 1/8% per annum of the Face Amount thereof (taking into account the number of days until the expiry date thereof), payable in advance on the date of issuance, or on such other date as the Administrative Agent and the Issuing Lender may determine from time to time.
(2) For greater certainty, the Issuing Lender shall not be obliged to issue any Letter of Credit if as a result (a) the Accommodations Outstanding under Facility A would exceed the Facility A Commitments, (b) the Issuing Lender's or any other Lender's Facility A Commitment would be exceeded, (c) the amount of Accommodations Outstanding by way of Letters of Credit would exceed Cdn. $2,000,000, (d) a Law or an order, judgment or decree of a Governmental Entity would be breached or would prohibit such issuance, (e) the Issuing Lender or other Facility A Lenders would incur increased costs of the nature referred to in Section 12.06 in respect of which they would not be indemnified by the Borrower, (f) the policies of the Issuing Lender would be breached.
(3) The Issuing Lender's Letter of Credit Application Form and any form pertaining to amendments of any Letter of Credit (collectively, the "LETTER OF CREDIT APPLICATION FORM") shall require, INTER ALIA, (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the Issuing Lender may require.
(4) Promptly after receipt of any Letter of Credit Application, the Issuing Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the Issuing Lender will provide the Administrative Agent with a copy thereof. Upon receipt by the Issuing Lender of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the insurance regulatory authorities having jurisdiction over terms and conditions hereof, the CompanyIssuing Lender shall, on the requested date, issue a Letter of Credit for the account of the Borrower in accordance with the Issuing Lender's reserves usual and customary business practices, and immediately thereupon, each Lender shall be deemed to, and irrevocably and unconditionally agrees to, purchase from the Issuing Lender a risk participation in such Letter of Credit in an amount equal to the Reinsurer's proportion its rateable share of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditsame.
Appears in 1 contract
Samples: Credit Agreement (Sun Media Corp)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars or bonds in an Alternative Currency for the account of the Borrower, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments and (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, and containing provisions acceptable to plus such Lender's Applicable Percentage of the insurance regulatory authorities having jurisdiction over Outstanding Amount of all L/C Obligations, plus such Lender's Applicable Percentage of the CompanyOutstanding Amount of all Swing Line Loans shall not exceed such Lender's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Commitment. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) No L/C Issuer shall issue any Letter of Credit, if the expiry date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider such requested Letter of Credit would occur after the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposesExpiration Date, unless otherwise provided for in a separate Trust Agreement:all the Lenders have approved such expiry date.
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit (iii) No L/C Issuer shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue under any obligation to the benefit of the Reinsurer. In the event the amount drawn by the Company on issue any Letter of Credit is in excess of the actual amount required for if:
(A) any order, judgment or C), decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The applicable L/C Issuer from issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, in or any Law applicable to the following manner:
A. if applicable L/C Issuer or any request or directive (whether or not having the statement shows force of law) from any Governmental Authority with jurisdiction over the applicable L/C Issuer shall prohibit, or request that the Reinsurer's Obligations exceed applicable L/C Issuer refrain from, the balance issuance of letters of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of generally or such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing in particular or shall impose upon the amount of credit by the amount of applicable L/C Issuer with respect to such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing any restriction, reserve or capital requirement (for which the amount applicable L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the applicable L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the applicable L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of credit available such Letter of Credit would violate one or more policies of the applicable L/C Issuer; or
(C) except as otherwise agreed by the amount Administrative Agent and the applicable L/C Issuer, such Letter of Credit is to be denominated in a currency other than Dollars or an Alternative Currency.
(iv) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) the applicable L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such excess creditLetter of Credit does not accept the proposed amendment to such Letter of Credit.
(v) Each L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term "Administrative Agent" as used in Article X included such L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to such L/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration the requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date of the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's ObligationsL/C Issuer, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess an initial stated amount less than $100,000, in the case of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the commercial Letter of Credit, or $500,000, in the following manner:case of a standby Letter of Credit;
A. (D) the Letter of Credit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.16(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
(F) the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of Credit if the statement shows that L/C Issuer would not be permitted at such time to issue the Reinsurer's Obligations exceed Letter of Credit in its amended form under the balance terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of credit as Credit if the beneficiary of the statement date, Letter of Credit does not accept the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an proposed amendment to the Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit increasing issued by it and the amount documents associated therewith, and the L/C Issuer shall have all of credit the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such difference;
B. Letters of Credit as fully as if howeverthe term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, the statement shows that the Reinsurer's Obligations are less than the balance of credit and (B) as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment additionally provided herein with respect to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies or bonds issued by the Company within the scope of this Agreement, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula belowa) covered hereunder which it shall be required by law to set up, it will forward Subject to the Reinsurer a statement showing terms and conditions hereof, each Issuing Lender, in reliance on the proportion agreements of such reserves which is applicable the Revolving Lenders set forth in this Section 2.3, agrees to issue standby Letters of Credit in an aggregate amount not to exceed its L/C Commitment for the Reinsurer. The Reinsurer hereby agrees account of any Borrower, in Dollars, from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date; provided that it will apply for and secure delivery after giving effect to the Company of a clean, irrevocable and unconditional any Issuance with respect to any Letter of Credit, (w) the Aggregate Revolving Credit Exposure shall not exceed the aggregate Revolving Commitments, (x) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Revolving Commitment, (y) the Outstanding Amount of L/C Obligations in respect of Letters of Credit issued by any Issuing Lender shall not exceed its L/C Commitment and (z) the Outstanding Amount of the aggregate L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by any Borrower for the Issuance of a bankLetter of Credit shall be deemed to be a representation by such Borrower that the Issuance so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and containing provisions acceptable subject to the insurance regulatory authorities terms and conditions hereof, each Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly each Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(b) Notwithstanding anything to the contrary contained herein,
(i) no Issuing Lender shall be under any obligation to Issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain the Issuance of such Letter of Credit or any Requirement of Law applicable to such Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over it shall prohibit, or request that it refrain from, the Company's reserves issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon it with respect to such Letter of Credit any restriction or reserve or capital or liquidity requirement (for which such Issuing Lender or any Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or any unreimbursed loss, cost or expense which was not applicable, in effect or known to it as of the Closing Date (for which such Issuing Lender or any Lender is not otherwise compensated hereunder);
(B) any Revolving Lender is at that time a Defaulting Lender, unless such Issuing Lender has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such Issuing Lender (in its sole discretion) with the Borrowers or such Lender to eliminate such Issuing Lender’s actual or potential Fronting Exposure (after giving effect to Section 2.15(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be Issued or that Letter of Credit and all other L/C Obligations as to which such Issuing Lender has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(ii) No Issuing Lender shall issue any Letter of Credit, if
(A) the expiry date of the requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.
(iii) No Issuing Lender shall be under any obligation to amend any Letter of Credit if (i) such Issuing Lender would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (ii) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(c) Any Borrower may from time to time request that any Issuing Lender Issue a Letter of Credit by delivering to such Issuing Lender at its applicable office (with a copy to the Administrative Agent) a Letter of Credit Application, completed to the satisfaction of such Issuing Lender, and such other certificates, documents and other papers and information as such Issuing Lender or the Administrative Agent may request. Upon receipt of any Letter of Credit Application, the applicable Issuing Lender shall, process such Letter of Credit Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall, subject to the terms and conditions hereof, promptly Issue the Letter of Credit requested thereby (but in no event shall such Issuing Lender be required to Issue any Letter of Credit earlier than three (3) Business Days after its receipt of a Letter of Credit Application and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or enter into the applicable amendment, as the case may be, in each case in accordance such Issuing Lender’s usual and customary business practices. The applicable Issuing Lender shall promptly furnish to the applicable Borrower and the Administrative Agent a copy of such Letter of Credit and the Administrative Agent shall promptly notify each Revolving Lender of the issuance thereof and upon request by any Revolver Lender, furnish to such Revolving Lender a copy of such Letter of Credit and the amount of such Revolving Lender’s participation therein.
(d) Each Letter of Credit shall expire at or prior to the earlier of (i) the close of business on the date one year after the date of the issuance of such Letter of Credit, or (ii) the Letter of Credit Expiration Date; provided, however, if any Borrower so requests in any applicable Letter of Credit Application, the applicable Issuing Lender may, in its sole discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Evergreen Letter of Credit”); provided that any such Evergreen Letter of Credit must permit such Issuing Lender to prevent any such extension at least once in each twelve-month period (commencing with the date of Issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the applicable Issuing Lender, the applicable Borrower shall not be required to make a specific request to the Issuing Lender for any such extension. Once an Evergreen Letter of Credit has been issued, the Revolving Lenders shall be deemed to have authorized (but may not require) the applicable Issuing Lender to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that such Issuing Lender shall not permit any such extension if (A) such Issuing Lender has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or any Borrower that one or more of the applicable conditions specified in Section 4.2 is not then satisfied, and in each such case directing such Issuing Lender not to permit such extension.
(e) By the Issuance of a Letter of Credit by the applicable Issuing Lender and without any further action on the part of such Issuing Lender, the applicable Issuing Lender hereby grants to each Revolving Lender in respect of such Letter of Credit, and each Revolving Lender hereby acquires from such Issuing Lender, a participation in such Letter of Credit, respectively, in an amount equal to such Lender’s Applicable Percentage of the Stated Amount of such Letter of Credit, and the Lender’s reimbursement obligations with respect thereto. Notwithstanding anything herein to the contrary, effective upon any Commitment Increase pursuant to Section 2.16, each Lender’s participation in any L/C Obligations on such date shall be automatically adjusted to reflect its Applicable Percentage after giving effect to such Commitment Increase.
(f) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable Issuing Lender shall notify the applicable Borrower and the Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by such Issuing Lender under a Letter of Credit (each such date, an “Honor Date”), the applicable Borrower shall reimburse such Issuing Lender through the Administrative Agent in an amount equal to the Reinsurer's proportion amount of reserves such drawing (such amount, the “Reimbursement Obligation”) in respect each case, with interest on the Reimbursement Obligation, to the extent not reimbursed on the Honor Date, from the Honor Date to the date such Issuing Lender is reimbursed therefor at a rate per annum which shall be the Adjusted Base Rate plus an additional 2% per annum, payable on demand. If such Borrower fails to so reimburse such Issuing Lender by such time, the Administrative Agent shall promptly notify each Revolving Lender of lossesthe Honor Date, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating theretothe amount of the unreimbursed drawing, and losses the amount of such Revolving Lender’s Applicable Percentage thereof. In such event, such Borrower shall be deemed to have requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Reimbursement Obligation, without regard to the minimum and allocated loss adjustment expense paid multiples specified in Section 2.2(b) for the principal amount of Base Rate Loans, but subject to the amount of the Unutilized Revolving Commitments and the conditions set forth in Section 4.2 (other than the delivery of a Notice of Borrowing). Any notice given by any Issuing Lender or the Administrative Agent pursuant to this Section 2.3(f) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice. Each Revolving Lender shall upon any notice pursuant to this Section 2.3(f) make funds available to the Administrative Agent in accordance with the Payment Instructions in an amount equal to its Applicable Percentage of the Reimbursement Obligation not later than 1:00 p.m. on the Business Day specified in such notice by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company Administrative Agent (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit Administrative Agent may apply Cash Collateral provided by the Reinsurer pursuant for this purpose), whereupon, subject to the provisions of this Agreement may Section 2.3(f), each Revolving Lender that so makes funds available shall be drawn upon at deemed to have made a Base Rate Loan to such Borrower in such amount. With respect to any time, notwithstanding Reimbursement Obligation that is not fully refinanced by a Borrowing of Base Rate Loans because the conditions set forth in Section 4.2 cannot be satisfied or for any other provision reason, in such event, each Revolving Lender’s payment to the Administrative Agent for the account of the applicable Issuing Lender pursuant to this Section 2.3(f) shall be deemed payment in respect of its participation obligation under Section 2.3(e). The Administrative Agent shall remit the funds so received to the applicable Issuing Lender.
(g) Each Revolving Lender’s obligation to make Base Rate Loans or fund its participation obligation to reimburse any Issuing Lender for amounts drawn under Letters of Credit issued by it shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right which such Revolving Lender may have against such Issuing Lender, any Borrower or any other Person for any reason whatsoever; (ii) the occurrence or continuance of any Default or Event or Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Base Rate Loans pursuant to Section 2.3(f) is subject to the conditions set forth in Section 4.2 other than delivery by the applicable Borrower of a Notice of Borrowing. No such making of a Base Rate Loan or funding of a participation interest by any Revolving Lender pursuant to Section 2.3(f) shall relieve or otherwise impair the obligation of the applicable Borrower to reimburse the applicable Issuing Lender for the amount of any payment made by such Issuing Lender under any Letter of Credit, together with interest as provided herein. If any Revolving Lender fails to make available to the Administrative Agent for the account of any Issuing Lender any amount required to be paid by such Revolving Lender pursuant to Section 2.3(f) by the time specified therein, then, without limiting the other provisions of this Agreement, and such Issuing Lender shall be utilized by entitled to recover from such Revolving Lender (acting through the Company or any successorAdministrative Agent), by operation of lawon demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such Issuing Lender at a rate per annum equal to the greater of the Company includingFederal Funds Rate and a rate determined by such Issuing Lender in accordance with banking industry rules on interbank compensation, without limitationplus any administrative, any liquidator, rehabilitator, receiver processing or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn similar fees customarily charged by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever such Issuing Lender in connection with the propriety of withdrawals made by foregoing. If such Revolving Lender pays such amount (with interest and fees as aforesaid), the Company amount so paid shall constitute such Lender’s Base Rate Loan included in the relevant Borrowing or funded participation interest, as the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives case may be. A certificate of the Companyapplicable Issuing Lender submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.3(g) shall be conclusive absent manifest error. At annual intervals, Until each Revolving Lender funds its Base Rate Loan or more frequently as agreed, but never more frequently than quarterly, participation interest pursuant to Section 2.3(f) to reimburse the Company shall prepare a specific statement of the Reinsurer's Obligations, applicable Issuing Lender for the sole purpose of amending the any amount drawn under any Letter of Credit, interest in respect of such Revolving Lender’s Applicable Percentage of such amount shall be solely for the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as account of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditapplicable Issuing Lender.
Appears in 1 contract
Letters of Credit. As regards policies (a) THE LETTER OF CREDIT COMMITMENT.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the other Banks set forth in this SECTION 2.04, (1) from time to time on any Business Day during the period from the Effective Date until the expiration of the Availability Period, to issue Letters of Credit for the account of the Borrower, and to amend or bonds renew Letters of Credit previously issued by it, in accordance with SUBSECTION (b) below, and (2) to honor drafts under the Company within Letters of Credit; and (B) the scope Banks severally agree to participate in Letters of this AgreementCredit issued for the account of the Borrower and fund Unreimbursed Drawings with respect thereto; PROVIDED that no L/C Issuer shall be obligated to make any L/C Credit Extension with respect to any Letter of Credit and no Bank shall be obligated to participate in any Letter of Credit if, as of the date of such L/C Credit Extension, (x) the Total Outstandings would exceed the Commitments, (y) the aggregate Outstanding Amount of the Loans of any Bank PLUS such Bank's Commitment Percentage of the Outstanding Amount of all L/C Obligations would exceed such Bank's Commitment or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (Borrower's ability to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter obtain Letters of Credit shall be issued for a period of not less than one yearfully revolving, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date accordingly the issuing bank shall notify Borrower may, during the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional foregoing period. The Reinsurer and the Company agree that the , obtain Letters of Credit provided by to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. The underlying documentation with respect to Existing Letters of Credit shall be deemed to be amended to the Reinsurer pursuant extent necessary to conform to the provisions set forth herein and thereafter all Existing Letters of this Agreement may Credit shall be drawn upon at any time, notwithstanding any other provision of this Agreementdeemed to have been issued pursuant hereto, and from and after the Effective Date shall be utilized subject to and governed by the Company or any successorterms and conditions hereof, by operation of law, of the Company including, without limitation, SECTION 2.04(k). The Borrower and each Person that becomes, in accordance with the terms hereof, an L/C Issuer agree that any liquidator, rehabilitator, receiver or conservator letter of credit issued by such Person for the account of the Company for Borrower that the following purposes, unless otherwise provided for in Borrower and such L/C Issuer agree shall be treated as a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment Letter of which is due Credit issued under the terms of this Agreement and that is identified to the Administrative Agent (including whether such letter of credit is a Performance L/C or Financial L/C) at the time such Person becomes an L/C Issuer or, in the case of Bank of America, promptly after the Effective Date shall, subject to the satisfaction of the conditions specified in SECTION 3.02 and the immediately preceding sentence, be deemed an Existing Letter of Credit hereunder. Each such Person that becomes an L/C Issuer shall confirm to the Administrative Agent on such date that it has received evidence satisfactory to it from the Borrower that each such Existing Letter of Credit is correctly identified to the Administrative Agent as a Performance L/C or Financial L/C, as the case may be.
(ii) No L/C Issuer shall be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any governmental authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any governmental authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which has such L/C Issuer is not been otherwise paidcompensated hereunder) not in effect on the Effective Date or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which such L/C Issuer in good faith deems material to it;
B. (B) subject to make refund SECTION 2.04(b)(xxx), xxx expiry date of any sum which is in excess such requested Letter of Credit would occur more than twelve months after the actual amount required to pay the Reinsurer's Obligations under this Agreementdate of issuance;
C. (C) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer generally applicable to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any parties;
(D) such Letter of Credit is in excess an initial amount greater than U.S.$50,000,000; or
(E) such Letter of Credit is to be used for a purpose other than supporting the actual amount required for performance of a Person under a contract or agreement in the ordinary course of business or is to be denominated in a currency other than U.S. dollars.
(iii) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall such L/C Issuer would have no responsibility whatsoever obligation at such time to issue such Letter of Credit in connection with its amended form under the propriety terms hereof or (B) the beneficiary of withdrawals made by such Letter of Credit does not accept the Company or the disposition of funds withdrawn, except proposed amendment to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 1 contract
Samples: 364 Day Revolving Credit Agreement (Tyco International LTD /Ber/)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.13, (1) from time to time on any Business Day during the period from the Second Amended and Restated Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds any of its Subsidiaries, and to amend or renew Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and its Subsidiaries; provided that when it the L/C Issuer shall file not be obligated to make any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bankand no Lender shall be obligated to participate in any Letter of Credit, if as of the date of such L/C Credit Extension, (w) the Outstanding Amount of all L/C Obligations and all Revolving Loans would exceed the Aggregate Revolving Commitment, (y) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations would exceed such Lender’s Revolving Commitment, or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and containing provisions acceptable subject to the insurance regulatory authorities terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. The Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Second Amended and Restated Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Company's reserves L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Second Amended and Restated Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Second Amended and Restated Closing Date and which the L/C Issuer in good fxxxx xxxxx material to it;
(B) subject to Section 2.13(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last renewal, unless the Required Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer generally applicable to all borrowers; or
(E) such Letter of Credit is in a face amount less than $100,000, or is to be used for a purpose other than as described in Section 6.12 or is denominated in a currency other than Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m., New York time, at least two Business Days (or such later date and time as the L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Upon receipt by the L/C Issuer of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a participation in such Letter of Credit in an amount equal to the Reinsurer's proportion product of reserves such Lender’s Pro Rata Share times the amount of such Letter of Credit.
(iii) If the Borrower so requests in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The any applicable Letter of Credit Application, the L/C Issuer may, in it sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an “Evergreen Letter of Credit”); provided that any such Evergreen Letter of Credit must permit the L/C Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Nonrenewal Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such renewal. Once an Evergreen Letter of Credit has been issued, the Lenders shall be issued for deemed to have authorized (but may not require) the L/C Issuer to permit the renewal of such Letter of Credit at any time to a period of date not less later than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree Expiration Date; provided, however, that the Letters L/C Issuer shall not permit any such renewal if it has received notice at least five Business Days immediately preceding the Nonrenewal Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such renewal or (2) from any Lender stating that one or more of the applicable conditions specified in Section 4.03 is not then satisfied and directing the L/C Issuer not to permit such renewal. Notwithstanding anything to the contrary contained herein, the L/C Issuer shall have no obligation to permit the renewal of any Evergreen Letter of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision .
(iv) Promptly after its delivery of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an any amendment to the a Letter of Credit increasing to an advising bank with respect thereto or to the amount of credit by beneficiary thereof, the amount L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditor amendment.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) No L/C Issuer shall issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Revolving Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended for Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.
(iii) No L/C Issuer shall be under any additional period. The Reinsurer and the Company agree that the Letters obligation to issue any Letter of Credit provided if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any directive from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or direct that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeAdministrative Agent and such L/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $50,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or
(F) any Revolving Credit Lender is at that time a Defaulting Lender, unless such L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, reasonably satisfactory to such L/C Issuer with the Borrower or such Defaulting Lender to eliminate such L/C Issuer’s actual amount required for or potential Fronting Exposure (after giving effect to Section 2.18(a)(iv)) with respect to the Defaulting Lender arising from such Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which any L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or C)(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) Each L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each L/C Issuer shall have all of the Company shall promptly return benefits and immunities (A) provided to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company Administrative Agent in Article IX with respect to any acts taken or the Reinsurer. The issuing bank shall have no responsibility whatsoever omissions suffered by such L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that the Reinsurer's Obligations exceed the balance of credit term “Administrative Agent” as of the statement dateused in Article IX included such L/C Issuer with respect to such acts or omissions, the Reinsurer shall, within thirty and (30B) days after receipt of notice of such excess, secure delivery as additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuers.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue standby Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve (12) months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $50,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for after any drawing thereunder; or
(F) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or C)(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Company L/C Issuer shall promptly return have all of the benefits and immunities (A) provided to the Reinsurer Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that term “Administrative Agent” as used in Article IX included the Reinsurer's Obligations exceed the balance of credit L/C Issuer with respect to such acts or omissions, and (B) as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies or bonds issued by (a) Subject to the Company within the scope of this Agreementterms and conditions hereof, the Company agrees that when it Issuing Lender agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.20, to issue Letters of Credit hereunder from time to time before the tenth day before the Termination Date upon the request of the Borrower; provided that, immediately after each Letter of Credit is issued, (i) the aggregate amount of the Letter of Credit Liabilities shall file with not exceed the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves Letter of Credit Commitment and loss development allowance (to be calculated using ii) the formula below) covered hereunder which it aggregate amount of the Letter of Credit Liabilities plus the aggregate outstanding principal amount of all Committed Loans and Swing Line Loans shall be required by law to set up, it will forward to not exceed the Reinsurer a statement showing aggregate Commitments. Upon the proportion date of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company issuance of a clean, irrevocable and unconditional Letter of Credit, issued the Issuing Lender shall be deemed, without further action by a bankany party hereto, to have sold to each Lender, and containing provisions acceptable each Lender shall be deemed, without further action by any party hereto, to have purchased from the Issuing Lender, a participation in such Letter of Credit and the related Letter of Credit Liabilities in the proportion their respective Commitments bear to the insurance regulatory authorities having jurisdiction over aggregate Commitments. As of the Company's reserves date hereof, the Borrower has requested that the Existing Letters of Credit be deemed issued hereunder effective as of the Effective Date. On the Effective Date, the Existing Letters of Credit shall be deemed issued hereunder as Letters of Credit hereunder, each “Issuing Lender” under the Existing Credit Facility shall be deemed to have released each lender under the Existing Credit Facility from their participations therein, and each Lender here under shall be deemed to have thereby purchased a ratable participation in an amount equal each Existing Letter of Credit in the manner set forth above in this Section.
(b) The Borrower shall give the Issuing Lender notice, with a copy to the Reinsurer's proportion Administrative Agent, at least five days prior to the requested issuance of reserves in respect a Letter of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating theretoCredit specifying the date such Letter of Credit is to be issued, and losses describing the terms of such Letter of Credit and allocated loss adjustment expense paid the nature of the transactions to be supported thereby (such notice, including any such notice given in connection with the extension of a Letter of Credit, a “Notice of Issuance”) and shall concurrently submit to the Issuing Lender a Letter of Credit Application. Upon receipt of a Notice of Issuance, the Issuing Lender shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Lender of the contents thereof and of the amount of such Lender’s participation in such Letter of Credit. The issuance by the Company but not recovered from Issuing Lender of each Letter of Credit shall, in addition to the Reinsurer as shown conditions precedent set forth in Article III, be subject to the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The conditions precedent that such Letter of Credit shall be issued in such form and contain such terms as shall be satisfactory to the Issuing Lender and that the Borrower shall have executed and delivered such other instruments and agreements relating to such Letter of Credit as the Issuing Lender shall have reasonably requested. The Borrower shall also pay to the Issuing Lender for its own account issuance, drawing, amendment and extension charges in the amounts and at the times as agreed between the Borrower and the Issuing Lender. The extension or renewal of any Letter of Credit shall be deemed to be an issuance of such Letter of Credit, provided that even if the Issuing Lender does not receive a Notice of Issuance, unless the Issuing Lender has notice of any Default or Event of Default, the Issuing Lender may (but shall not be required to) permit the automatic extension of such Letter of Credit without the requirement of such notice. No Letter of Credit shall have a term extending or be so extendible beyond the fifth Domestic Business Day preceding the Termination Date.
(c) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Issuing Lender shall notify the Administrative Agent and the Administrative Agent shall promptly notify the Borrower and each other Lender as to the amount to be paid as a result of such demand or drawing and the payment date. The Borrower shall be irrevocably and unconditionally obligated forthwith to reimburse the Issuing Lender for any amounts paid by the Issuing Lender upon any drawing under any Letter of Credit, without presentment, demand, protest or other formalities of any kind. All such amounts paid by the Issuing Lender and remaining unpaid by the Borrower shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day. In addition, each Lender will pay to the Administrative Agent, for the account of the Issuing Lender, immediately upon the Issuing Lender’s demand at any time during the period commencing after such drawing until reimbursement therefor in full by the Borrower, an amount equal to such Lender’s ratable share of not less than one yearsuch drawing (in proportion to its participation therein), together with interest on such amount for each day from the date of the Issuing Lender’s demand for such payment (or, if such demand is made after 9:00 A.M. (California local time) on such date, from the next succeeding Domestic Business Day) to the date of payment by such Lender of such amount at a rate of interest per annum equal to the Federal Funds Rate. The Issuing Lender will promptly pay to the Administrative Agent for the account of each Lender ratably all amounts received from the Borrower for application in payment of its reimbursement obligations in respect of any Letter of Credit, but only to the extent such Lender has made payment to the Issuing Lender in respect of such Letter of Credit pursuant hereto.
(d) The obligations of the Borrower and each Lender under subsection (c) above shall be absolute, unconditional and irrevocable, and shall be automatically extended for one year from its date performed strictly in accordance with the terms of expiration this Agreement, under all circumstances whatsoever, including without limitation the following circumstances:
(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any future expiration date unless thirty other Loan Document;
(30ii) days prior the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;
(iv) any payment by the Issuing Lender under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the Issuing Lender under such Letter of Credit to any expiration date Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the issuing bank benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;
(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any Subsidiary.
(e) The Borrower hereby indemnifies and holds harmless each Lender (including the Issuing Lender) and the Administrative Agent from and against any and all claims, damages, losses, liabilities, costs or expenses which such Lender or the Administrative Agent may incur (including, without limitation, any claims, damages, losses, liabilities, costs or expenses which the Issuing Lender may incur by reason of or in connection with the failure of any other Lender to fulfill or comply with its obligations to the Issuing Lender hereunder (but nothing herein contained shall notify affect any rights the Company Borrower may have against such defaulting Lender)), and none of the Lenders (including the Issuing Lender) nor the Administrative Agent nor any of their officers or directors or employees or agents shall be liable or responsible, by certified reason of or registered mail in connection with the execution and delivery or transfer of or payment or failure to pay under any Letter of Credit, including without limitation any of the circumstances enumerated in subsection (d) above, as well as (i) any error, omission, interruption or delay in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, (ii) any error in interpretation of technical terms, (iii) any loss or delay in the transmission of any document required in order to make a drawing under a Letter of Credit, (iv) any consequences arising from causes beyond the control of the Issuing Lender, including without limitation any government acts, or any other circumstances whatsoever in making or failing to make payment under such Letter of Credit; provided that the issuing bank elects Borrower shall not be required to consider indemnify the Issuing Lender for any claims, damages, losses, liabilities, costs or expenses, and the Borrower shall retain any claim for damages suffered by it, to the extent found by a court of competent jurisdiction to have been caused by (x) the willful misconduct or gross negligence of the Issuing Lender in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (y) the Issuing Lender’s failure to pay under any Letter of Credit after the presentation to it of a draft strictly complying with the terms and conditions of the Letter of Credit extended for any additional periodCredit. The Reinsurer and Nothing in this subsection (e) is intended to limit the Company agree that obligations of the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding Borrower under any other provision of this Agreement. To the extent the Borrower does not indemnify the Issuing Lender as required by this subsection, the Lenders agree to do so ratably in accordance with their Commitments.
(f) Unless otherwise expressly agreed by the Issuing Lender and the Borrower when a Letter of Credit is issued, (i) the rules of the ISP shall apply to each standby Letter of Credit, and be utilized (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the Company International Chamber of Commerce at the time of issuance shall apply to each commercial Letter of Credit.
(g) The Issuing Lender shall not be under any obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or any successor, by operation Law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Lender is not otherwise compensated hereunder) not in effect on the date hereof, or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the date hereof and which the Issuing Lender in good xxxxx xxxxx material to it; or
(ii) such Letter of Credit is to be denominated in a currency other than Dollars.
(h) Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the Issuing Lender shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Company includingPerson executing or delivering any such document. None of the Issuing Lender, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the Issuing Lender shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the Issuing Lender, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the Issuing Lender shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.20(d); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the Issuing Lender, and the Issuing Lender may be liable to the Borrower for damages suffered by the Borrower which were caused by the Issuing Lender’s willful misconduct or gross negligence or the Issuing Lender’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender may accept documents that appear on their face to be in order, without limitationresponsibility for further investigation, regardless of any liquidatornotice or information to the contrary, rehabilitator, receiver or conservator of and the Company Issuing Lender shall not be responsible for the following purposesvalidity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, unless otherwise provided in whole or in part, which may prove to be invalid or ineffective for any reason.
(i) Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a separate Trust Agreement:
A. Subsidiary, the Borrower shall be obligated to reimburse the Company Issuing Lender hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the Reinsurer's Obligations, the payment account of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue Subsidiaries inures to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C)Borrower, the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows and that the Reinsurer's Obligations exceed Borrower’s business derives substantial benefits from the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice businesses of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditSubsidiaries.
Appears in 1 contract
Letters of Credit. As regards policies or bonds issued by (a) Upon the Company within terms and subject to the scope of this Agreementconditions set forth herein, the Company agrees that when it US Borrower may request a Fronting Bank, at any time and from time to time after the date hereof and prior to the Termination Date, to issue, and, subject to the terms and conditions contained herein, such Fronting Bank shall file with issue, for the insurance regulatory authority account of the US Borrower one or set more Letters of Credit. At no time shall a Letter of Credit be issued if after giving effect to such issuance the aggregate LC Outstandings would exceed the lesser of (y) the aggregate US Commitments up on its books reserves for lossesto $50,000,000, unearned premium reserves as the same may be reduced from time to time pursuant to Sections 2.10 and loss development allowance 2.13 and (z) the amount permitted to be calculated using the formula below) covered outstanding hereunder which it shall be required by law to set up, it will forward pursuant to the Reinsurer a statement showing DIP Order and/or the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees Canadian Recognition Order; provided that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The no Letter of Credit shall be issued for a period if the Fronting Bank shall have received notice from the Agent or the Required Lenders that the conditions to such issuance hereunder have not been satisfied.
(b) Each party hereto agrees that, on and at all times after the Effective Date, (i) each of not less than one year, and the Existing Letters of Credit shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior deemed to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the be a Letter of Credit extended issued pursuant hereto by the Agent as the Fronting Bank with respect thereto for any additional period. The Reinsurer all purposes hereunder and under the Company agree that other Loan Documents and (ii) each of the Existing Letters of Credit provided by the Reinsurer shall be deemed to no longer be a Letter of Credit issued pursuant to the provisions of this Pre-Petition Credit Agreement may be drawn upon at any time, notwithstanding any other provision of this for all purposes thereunder and under the loan documents delivered pursuant to the Pre-Petition Credit Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, with respect to all fees payable in connection therewith; provided that nothing in this Section 2.2(b) shall extend, modify or otherwise affect the existing expiration date under any liquidatorsuch Existing Letter of Credit.
(c) To request the issuance of a Letter of Credit (or the amendment, rehabilitatorrenewal or extension of an outstanding Letter of Credit), receiver the US Borrower shall hand deliver or conservator telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Fronting Bank) to the Lender that is to be or that is the Fronting Bank with respect to such Letter of Credit and the Agent (at least two Business Days in advance of the Company requested date of issuance, amendment, renewal or extension), a notice (in the form of an Issuance Request) (i) requesting the issuance of such Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and (ii) specifying (A) the requested date of issuance, amendment, renewal or extension, (B) the date on which such Letter of Credit is to expire (which shall comply with paragraph (d)(iii) of this Section), (C) the face amount of such Letter of Credit (which shall comply with paragraph (d)(ii) of this Section), (D) the name and address of the beneficiary thereof, (E) a description of the transaction that is to be supported by such Letter of Credit, (F) the identity of the Fronting Bank for such Letter of Credit and (G) such other information as the US Borrower may specify, the Agent may reasonably require, or any of the Loan Documents may require, to prepare, amend, renew or extend such Letter of Credit. If requested by the Lender that is to be or that is the Fronting Bank with respect to such Letter of Credit, the US Borrower also shall submit a letter of credit application on the Fronting Bank's standard form in connection with any request for a Letter of Credit. Each Issuance Request shall be irrevocable unless modified or rescinded by the US Borrower prior to 10:00 a.m. (local time for the following purposesissuing local branch of the applicable Fronting Bank on the proposed date of issuance specified in such Issuance Request). Not later than the close of Business Day for the relevant Fronting Bank on the proposed date of issuance, and upon fulfillment of the applicable conditions precedent and the other requirements set forth herein and in such Fronting Bank's Letter of Credit application (if any), such Fronting Bank shall issue (or amend, renew or extend, as the case may be) such Letter of Credit and provide notice and a copy thereof to the Agent. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit, the US Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension the Total LC Exposure shall not exceed the aggregate US Commitments of the Lenders.
(d) Each Letter of Credit shall:
(i) be denominated in Dollars or an Alternative Currency and shall be a standby letter of credit issued to support obligations incurred in the ordinary course of business of the US Borrower or any Subsidiary of the US Borrower which is not a Foreign Subsidiary (it being understood that the Letter of Credit shall not be used to support ordinary trade credit);
(ii) have a face amount of not more than the amount that would, after giving effect to the issuance thereof, cause the Total LC Exposure to exceed the aggregate of the US Commitments of the Lenders or the LC Exposure of any Lender to exceed such Lender's US Commitment;
(iii) expire (A) no earlier than 30 days after its date of issuance and (B) no later than 365 days after its date of issuance, unless otherwise provided for consented to in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn writing by the Company on Fronting Bank; provided that any Letter of Credit with a one-year term may provide for an annual renewal if such renewal is consented to by the applicable Fronting Bank and all conditions precedent to the issuance of Letters of Credit are met at the time of such renewal. If (i) the Maturity Date or the Termination Date occurs prior to the expiration of any Letter of Credit and a credit facility satisfactory to the Agent and the Fronting Banks (in excess their sole discretion) that refinances or replaces this Agreement has not been agreed upon by the Agent and the US Borrower, such Letter of Credit shall be replaced and returned to the Fronting Bank undrawn and marked "cancelled" on or prior to the Maturity Date or the Termination Date, as the case may be, or (ii) if the US Borrower is unable to do so in whole or in part, the US Borrower shall (x) provide a "back-to-back" letter of credit to one or more Fronting Banks in a form satisfactory to such Fronting Banks, the Agent and the Lenders (in their reasonable discretion), issued by a bank reasonably satisfactory to such Fronting Banks and the Agent (in their reasonable discretion), and in an amount equal to 105% of the actual then undrawn stated amount required for Aof such outstanding Letters of Credit issued by such Fronting Banks and/or (y) or C), deposit cash in the Company shall promptly return Letter of Credit Account in an amount equal to the Reinsurer the excess amount so drawn. All 105% of the foregoing shall be applied without diminution because then undrawn stated amount of insolvency on any LC Outstandings applicable to such Letter of Credit as collateral security for the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever US Borrower's Obligations in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, in such cash to be promptly remitted to the following manner:
A. if US Borrower upon the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement dateexpiration, the Reinsurer shall, within thirty (30) days after receipt of notice cancellation or other termination or satisfaction of such excessObligations, secure delivery to the Company of an amendment to the and/or (z) roll over such then issued and outstanding Letter of Credit increasing the amount of to a new credit by the amount of facility so that such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing shall be deemed to have been issued thereunder; and
(iv) be subject to either the amount of credit available Uniform Customs or ISP 98, as specified by the Fronting Bank with respect to such Letter of Credit.
(e) If any Fronting Bank shall make any LC Disbursement in respect of a Letter of Credit, the US Borrower shall reimburse such LC Disbursement by paying directly to the Fronting Bank an amount in Dollars or, in the case of an Alternative Currency LC Disbursement, in the Dollar Equivalent thereof, equal to such excess creditLC Disbursement (plus any taxes, fees, charges or other costs or expenses incurred by the Fronting Bank in connection with such payment) no later than two (2) Business Days after the Fronting Bank shall have made demand for such LC Disbursement, and such LC Disbursement shall bear interest from the date of draw until the second Business Day following the date of draw at a rate per annum equal to the Alternate Base Rate plus 2.25% and thereafter at a rate per annum equal to the Alternate Base Rate plus 4.25%, in each case computed on the basis of the actual number of days elapsed over any year of 365- (or 366-, as the case may be) days. Promptly following receipt by the Fronting Bank of any payment from the US Borrower pursuant to this paragraph, the Fronting Bank shall, to the extent that any Lender has made any payment pursuant to Section 2.3 to reimburse the Fronting Bank, distribute such payments received from the US Borrower to such Lender as its interest may appear pursuant to Section 2.3 at its address for notices specified herein
(f) No Fronting Bank shall at any time be obligated to issue (or amend, renew or extend) any Letter of Credit hereunder if such issuance would conflict with, or cause such Fronting Bank or any Lender, to exceed any limits imposed by any applicable Requirement of Law.
Appears in 1 contract
Samples: Credit, Guarantee and Security Agreement (Gentek Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Restricted Subsidiaries, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Restricted Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) the expiry date of expiration or any future expiration such requested Letter of Credit would occur more than twelve months after the date of issuance, unless thirty the Required Lenders have approved such expiry date; or
(30B) days prior to any expiration the expiry date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of Law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good fxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $50,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless the actual amount required for A) or C)L/C Issuer has entered into arrangements, including the Company shall promptly return delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrower or such Lender to eliminate the Company L/C Issuer’s actual or the disposition of funds withdrawn, except potential Fronting Exposure (after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30Section 2.16(a)(iv)) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows then proposed to be issued or that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
(F) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess credit.Letters of Credit as fully as if the term “Administrative
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank, and containing provisions acceptable to (x) the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves Total Outstandings in respect of lossesthe Revolving Facility shall not exceed the Aggregate Revolving Commitments, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto(y) the aggregate Outstanding Amount of the Committed Revolving Loans of any Revolving Lender, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Commitment, and losses and allocated loss adjustment expense paid (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Revolving Lenders then having more than 50% of the Aggregate Revolving Commitments have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Revolving Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally; provided that another Revolving Lender reasonably acceptable to the Administrative Agent may, in its sole discretion, agree to issue such Letter of Credit subject to the other terms and conditions of this Section 2.03;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $50,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or
(F) any Revolving Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate the L/C Issuer’s actual amount required for or potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with respect to such Defaulting Lender arising from either such Letter of Credit then proposed to be issued or such Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or C)(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Company L/C Issuer shall promptly return have all of the benefits and immunities (A) provided to the Reinsurer Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that term “Administrative Agent” as used in Article IX included the Reinsurer's Obligations exceed the balance of credit L/C Issuer with respect to such acts or omissions, and (B) as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Coinstar Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein and as part of the Aggregate Commitments, (A) Agent agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.3: (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of Borrower, and to amend or bonds renew Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Company within Letters of Credit; and (B) Lenders severally agree to participate in Letters of Credit issued for the scope account of this Agreement, the Company agrees Borrower; provided that when it Agent shall file not be obligated to make any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bankand no Lender shall be obligated to participate in, any Letter of Credit if as of the date of such L/C Credit Extension, (x) the Total Outstandings would exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans would exceed such Lender's Commitment, or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and containing provisions acceptable subject to the insurance regulatory authorities having jurisdiction over the Companyterms and conditions hereof, Borrower's reserves in an amount equal ability to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter obtain Letters of Credit shall be issued for a period of not less than one yearfully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) Agent shall be automatically extended for one year from its date under no obligation to issue any Letter of expiration or any future expiration date unless thirty Credit if:
(30A) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider The beneficiary of the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is a Person incorporated or resident in excess Ireland;
(B) any order, judgment or decree of the actual amount required for A) any Governmental Authority or C), the Company arbitrator shall promptly return by its terms purport to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company enjoin or the Reinsurer. The restrain Agent from issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, in or any Law applicable to Agent or any request or directive (whether or not having the following manner:
A. if force of law) from any Governmental Authority with jurisdiction over Agent shall prohibit, or request that Agent refrain from, the statement shows that the Reinsurer's Obligations exceed the balance issuance of letters of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of generally or such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of in particular or shall impose upon Agent with respect to such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing any restriction, reserve or capital requirement (for which Agent is not otherwise compensated hereunder) not in effect on the amount of credit available by Closing Date, or shall impose upon Agent any unreimbursed loss, cost or expense which was not applicable on the amount of such excess credit.Closing Date and which Agent in good xxxxx xxxxx material to it;
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Available Loan Amount, (y) the aggregate Outstanding Amount of the Loans of any Lender plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the insurance regulatory authorities having jurisdiction over preceding sentence. Within the Company's reserves foregoing limits, and subject to the terms and conditions hereof, Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the initial stated expiry date of the requested Letter of Credit (notwithstanding “evergreen” renewal provisions) would occur more than twelve (12) months after the date of issuance or last extension, unless Required Lenders have approved such expiry date; or
(B) the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless (1) all the Lenders have approved such expiry date, or (2) the Borrower agrees to deliver to the Administrative Agent no later than sixty (60) days prior to the Letter of Credit Expiration Date Cash Collateral in an amount equal to the Reinsurer's proportion undrawn amount of reserves in respect such Letter of lossesCredit, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by with the Company but not recovered from the Reinsurer as shown Borrower hereby irrevocably requesting a Committed Borrowing of a Base Rate Loan to fund such Cash Collateral payment in the statement prepared by event the Company Borrower does not deliver such Cash Collateral to the Administrative Agent on the due date thereof.
(hereinafter referred iii) L/C Issuer shall not be under any obligation to as "Reinsurer's Obligations"). The issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall be issued for a period by its terms purport to enjoin or restrain L/C Issuer from issuing the Letter of not less than one yearCredit, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty Law applicable to L/C Issuer or any request or directive (30whether or not having the force of law) days prior to from any expiration date Governmental Authority with jurisdiction over L/C Issuer shall prohibit, or request that L/C Issuer refrain from, the issuing bank shall notify the Company by certified issuance of letters of credit generally or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and in particular or shall impose upon L/C Issuer with respect to the Company agree that the Letters Letter of Credit provided by any restriction, reserve or capital requirement (for which L/C Issuer is not otherwise compensated hereunder) not in effect on the Reinsurer pursuant Closing Date, or shall impose upon L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which L/C Issuer in good fxxxx xxxxx material to it;
(B) the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, issuance of the Company including, without limitation, any liquidator, rehabilitator, receiver Letter of Credit would violate one or conservator more policies of the Company for the following purposes, unless L/C Issuer applicable to letters of credit generally;
(C) except as otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligationsagreed by Administrative Agent and L/C Issuer, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual an initial stated amount required for Aless than $25,000;
(D) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of CreditCredit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless such Lender or Borrower delivers Cash Collateral or enters into other arrangements with L/C Issuer satisfactory to L/C Issuer (in its sole discretion) to eliminate L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with respect to the following manner:Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
A. if (F) the statement shows that the Reinsurer's Obligations exceed the balance Letter of credit as Credit contains any provisions for automatic reinstatement of the statement datestated amount after any drawing thereunder.
(iv) L/C Issuer shall not amend any Letter of Credit if L/C Issuer would not be permitted at such time to issue the Letter of Credit in its amended form under the terms hereof.
(v) L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the Reinsurer shall, within thirty (30) days after receipt beneficiary of notice the Letter of such excess, secure delivery to Credit does not accept the Company of an proposed amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;Credit.
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as (vi) L/C Issuer shall act on behalf of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing Lenders with respect to secure an amendment to the Letter any Letters of Credit reducing issued by it and the amount documents associated therewith, and L/C Issuer shall have all of credit available the benefits and immunities (A) provided to Administrative Agent in Article X with respect to any acts taken or omissions suffered by L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the amount of term “Administrative Agent” as used in Article X included L/C Issuer with respect to such excess creditacts or omissions, and (B) as additionally provided herein with respect to L/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (American Realty Capital Trust III, Inc.)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, the Lender agrees (A) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for the account of the Borrower or bonds any of its Subsidiaries, and to amend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (B) to honor drawings under the Company within the scope Letters of this Agreement, the Company agrees Credit; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued (x) the Total Revolving Outstandings shall not exceed the Revolving Commitment and (y) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a bankLetter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and containing provisions acceptable subject to the insurance regulatory authorities terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The Lender shall not be under any obligation to issue any Letter of Credit if:
(A) the expiry date of the requested Letter of Credit would occur more than twelve (12) months after the date of issuance, unless the Lender has approved such expiry date;
(B) the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless the Lender has approved such expiry date;
(C) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Lender from issuing the Letter of Credit, or any Law applicable to the Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Company's reserves Lender shall prohibit, or request that the Lender refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the Lender with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Lender in good xxxxx xxxxx material to it;
(D) the issuance of the Letter of Credit would violate one or more policies of the Lender applicable to letters of credit generally;
(E) except as otherwise agreed by the Lender, the Letter of Credit is in an initial stated amount equal less than $40,000;
(F) the Letter of Credit is to be denominated in a currency other than Dollars; or
(G) the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder;
(iii) The Lender shall be under no obligation to amend any Letter of Credit if (A) the Lender would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to the Reinsurer's proportion Letter of reserves in respect Credit.
(b) Procedures for Issuance and Amendment of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company Letters of Credit; Auto-Extension Letters of Credit.
(hereinafter referred to as "Reinsurer's Obligations"). The i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the Lender in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application may be sent by fax transmission, by United States mail, by overnight courier, by electronic transmission using the system provided by the Lender, by personal delivery or by any other means acceptable to the Lender. Such Letter of Credit Application must be received by the Lender not later than 11:00 a.m. at least two (2) Business Days (or such later date and time as the Lender may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a period Letter of not less than one yearCredit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the Lender: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day), (B) the amount thereof, (C) the expiry date thereof, (D) the name and address of the beneficiary thereof, (E) the documents to be presented by such beneficiary in case of any drawing thereunder, (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder, (G) the purpose and nature of the requested Letter of Credit, and (H) such other matters as the Lender may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty specify in form and detail reasonably satisfactory to the Lender (301) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional periodto be amended, (2) the proposed date of amendment thereof (which shall be a Business Day), (3) the nature of the proposed amendment; and (4) such other matters as the Lender may reasonably require. The Reinsurer Additionally, the Borrower shall furnish to the Lender such other documents and the Company agree that the Letters information pertaining to such requested Letter of Credit provided by issuance or amendment, including any Issuer Documents, as the Reinsurer pursuant to the provisions Lender may reasonably require.
(ii) Promptly after its delivery of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess or any amendment to a Letter of Credit to an advising bank with respect thereto or to the actual amount required for A) or C)beneficiary thereof, the Company shall promptly return Lender will also deliver to the Reinsurer Borrower a true and complete copy of such Letter of Credit or amendment.
(iii) If the excess amount Borrower so drawn. All requests in any applicable Letter of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterlyCredit Application, the Company shall prepare Lender may, in its reasonable discretion, agree to issue a specific statement Letter of the Reinsurer's ObligationsCredit that has automatic extension provisions (each, for the sole purpose of amending the an “Auto-Extension Letter of Credit”); provided, that, any such Auto-Extension Letter of Credit must permit the Lender to prevent any such extension at least once in each twelve (12) month period (commencing with the following manner:
A. if date of issuance of such Letter of Credit) by giving prior notice to the statement shows that beneficiary thereof not later than a day (the Reinsurer's Obligations exceed “Non-Extension Notice Date”) in each such twelve (12) month period to be agreed upon at the balance time such Letter of credit as of Credit is issued. Unless otherwise directed by the statement dateLender, the Reinsurer shallBorrower shall not be required to make a specific request to the Lender for any such extension. Once an Auto-Extension Letter of Credit has been issued, within thirty (30) days after receipt of notice the Lender shall permit the extension of such excess, secure delivery Letter of Credit at any time to the Company of an amendment to expiry date not later than the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if Expiration Date; provided, however, the statement shows that the Reinsurer's Obligations are less than Lender shall not permit any such extension if (A) the balance of credit as of the statement dateLender has determined that it would not be permitted, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release or would have no obligation at such excess credit by agreeing time to secure an amendment to the issue such Letter of Credit reducing in its revised form (as extended) under the amount terms hereof (by reason of credit available the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the amount day that is seven (7) Business Days before the Non-Extension Notice Date from the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and directing the Lender not to permit such excess creditextension. The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will immediately notify the Lender. The Borrower shall be conclusively deemed to have waived any such claim against the Lender and its correspondents unless such notice is given as aforesaid.
Appears in 1 contract
Samples: Credit Agreement
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each of the L/C Issuers agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the day that is seven days prior to the latest Maturity Date for the Revolving Credit Facility then in effect, to issue Letters of Credit for the account of the Borrower, and to amend or bonds extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, (v) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (w) the Total Revolving Credit Outstandings shall not exceed the Borrowing Base in effect at such time, (x) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans, shall not exceed such Lender’s Revolving Credit Commitment, (y) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit, (z) the Outstanding Amount of the L/C Obligations related to Letters of Credit issued by a bankXxxxx Fargo shall not exceed $50,000,000, and containing provisions acceptable (aa) the Outstanding Amount of the L/C Obligations related to Letters of Credit issued by Bank of America, N.A. shall not exceed $0. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the insurance regulatory authorities preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) No L/C Issuer shall issue any Letter of Credit, if, subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would (excluding automatic extensions in the applicable Letter of Credit, which extensions are subject to annual cancellation in accordance with the terms of an Auto-Extension Letter of Credit) occur after the Letter of Credit Expiration Date.
(iii) No L/C Issuer shall be under any obligation to issue, renew, extend, or increase any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the Company's reserves issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which an L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and the applicable L/C Issuer, such Letter of Credit is in an initial stated amount less than $500,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars; or
(E) any Lender is at such time a Defaulting Lender hereunder, unless either (1) the Borrower has delivered to the Administrative Agent Cash Collateral in an amount equal to each L/C Issuer’s Fronting Exposure (after giving effect to Section 2.16(a)(iv) and any other Cash Collateral then held) with respect to the Reinsurer's proportion of reserves Defaulting Lender or (2) such L/C Issuer has otherwise entered into arrangements satisfactory to such L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate such L/C Issuer’s Fronting Exposure (after giving effect to Section 2.16(a)(iv)) with respect of lossesto the Defaulting Lender, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating theretoin either case, and losses and allocated loss adjustment expense paid by the Company but not recovered arising from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider either the Letter of Credit extended for any additional period. The Reinsurer and the Company agree then proposed to be issued or that the Letters Letter of Credit provided by the Reinsurer pursuant and all other L/C Obligations as to the provisions of this Agreement which such L/C Issuer has Fronting Exposure, as it may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for elect in a separate Trust Agreement:its sole discretion.
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit (iv) No L/C Issuer shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on amend any Letter of Credit is if such L/C Issuer would not be permitted at such time to issue such Letter of Credit in excess its amended form under the terms hereof.
(v) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) Each L/C Issuer shall act on behalf of the actual amount required for Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and such L/C Issuer shall have all of the benefits and immunities (A) or C), the Company shall promptly return provided to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company Administrative Agent in Article IX with respect to any acts taken or the Reinsurer. The issuing bank shall have no responsibility whatsoever omissions suffered by such L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that the Reinsurer's Obligations exceed the balance of credit term “Administrative Agent” as of the statement dateused in Article IX included such L/C Issuer with respect to such acts or omissions, the Reinsurer shall, within thirty and (30B) days after receipt of notice of as additionally provided herein with respect to such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. 5.2.1 BroadVision previously delivered a letter of credit to PSI (which included a confirmation thereof) under the Master Lease in the amount of Fourteen Million Four Hundred Three Thousand Seven Hundred Seventy-Six and No/100 dollars ($14,403,776.00) (“Existing LC”). As regards policies consideration for PSI’s execution of this Agreement and PSI’s obligations hereunder, on or bonds issued before the Transfer Date, BroadVision shall cause the Existing LC to be modified by the Company within issuing and confirming banks to provide, in addition to any and all rights PSI has under the scope Master Lease with respect to the Existing LC, (i) that, if required by PSI’s lender(s), (a) PSI and PSI’s lender(s) shall be co-beneficiaries under the Existing LC or (b) PSI’s lender(s) shall the beneficiary(ies) under the Existing LC, (ii) that the beneficiary(ies) may draw on the Existing LC, in whole or in part, if (a) BroadVision fails to pay either the First Installment or the Second Installment, as provided for herein, or (b) a bankruptcy or other similar insolvency proceeding (e.g., an assignment for the benefit of creditors) under state law is commenced by or against BroadVision, (iii) that the beneficiary(ies) may draw on the Existing LC upon the presentment of the Existing LC to the issuing or confirming bank accompanied by a sight draft and letter from the beneficiary(ies) stating that it (they) is (are) entitled to draw on the Existing LC, and (iv) for a final expiry date no sooner than June 30, 2005. Such modification to the Existing LC shall be at the sole cost and expense of BroadVision.
5.2.2 As consideration for PSI’s execution of this Agreement and PSI’s obligations hereunder, on or before the Transfer Date, BroadVision shall deliver an unconditional, irrevocable, standby letter of credit, in the amount of Three Million Six Hundred Ninety-Six Thousand Two Hundred Twenty-Four and No/100 Dollars ($3,696,224.00), in a form and issued or confirmed by a commercial money center bank reasonably satisfactory to PSI with retail branches in San Francisco, California, designating either (1) PSI as beneficiary or (2) if required by PSI’s lender(s), (a) PSI and PSI’s lender(s) as co-beneficiaries, or (b) PSI’s lender(s) as beneficiary(ies) (“New LC”). The New LC shall further provide that the beneficiary(ies) may draw on the New LC, in whole or in part, if (a) BroadVision shall fail to pay either the First Installment or the Second Installment, as provided for in this Agreement, (b) a bankruptcy or other similar insolvency proceeding (e.g., an assignment for the benefit of creditors) under state law is commenced by or against BroadVision, (c) BroadVision shall fail to honor its indemnification obligations to PSI under Article 11 of this Agreement, or (d) BroadVision shall fail to pay the Company agrees that when it Termination Payment, as defined in the New Lease, in the event BroadVision shall file with have exercised its termination right under the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the ReinsurerNew Lease. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of New LC shall (1) have a cleanfinal expiry date no sooner than June 30, irrevocable and unconditional Letter of Credit, issued by a bank2005, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid (2) provide that is governed by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company Uniform Customs and Practice for Documentary Credits (hereinafter referred to as "Reinsurer's Obligations"1993 revisions) International Chamber of Commerce Publication 500 or International Standard Practice 1998 (ISP 98), International Chamber of Commerce Practice, Publication No. 590. The Letter beneficiary(ies) may draw on the New LC upon the presentment of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior the New LC to any expiration date the issuing bank accompanied by a sight draft and letter from the beneficiary(ies) stating that it (they) is (are) entitled to draw on the New LC.
5.2.3 The proceeds of any draw under the New LC or the Existing LC shall notify be for the Company by certified sole benefit and account of, and may be retained (unconditionally) by, PSI or registered mail that PSI’s lender(s).
5.2.4 Within one hundred (100) days following PSI’s receipt of both the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer First Installment and the Company agree that Second Installment, PSI shall return (1) the Letters New LC, less any amounts previously drawn under the New LC because of Credit provided by the Reinsurer pursuant BroadVision’s failure to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision honor its indemnification obligations to PSI under Article 11 of this Agreement, and be utilized by (2) the Company or any successorExisting LC, by operation of lawto BroadVision. Notwithstanding the foregoing, of if BroadVision elects to exercise its right to make the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise Termination Payment as provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms New Lease, then PSI or PSI’s lender(s) shall retain the New LC, less any amounts previously drawn under the New LC because of BroadVision’s failure to honor its indemnification obligations to PSI under Article 11 of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company as support for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assetssuch Termination Payment, and interest thereon not in excess of PSI shall return the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required same upon its expiration as provided for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditherein.
Appears in 1 contract
Samples: Assignment and Assumption of Master Lease (Broadvision Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the date that is five (5) Business Days prior to the Maturity Date, to issue Letters of Credit for the account of Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect Credit Sublimit. Each request by Borrower for the issuance or amendment of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) No L/C Issuer shall issue, increase or extend any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration the requested Letter of Credit would occur more than twenty-four (24) months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date of the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider requested Letter of Credit would occur after the Letter of Credit extended for Expiration Date, unless all the Lenders have approved such expiry date.
(iii) No L/C Issuer shall be under any additional period. The Reinsurer and the Company agree that the Letters obligation to issue any Letter of Credit provided if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by the Reinsurer pursuant its terms purport to the provisions enjoin or restrain such L/C Issuer from issuing such Letter of this Agreement may be drawn upon at any timeCredit, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligationsrequest that such L/C Issuer refrain from, the payment issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is due under not otherwise compensated hereunder) not in effect on the terms of this Agreement Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which has not been otherwise paidsuch L/C Issuer in good xxxxx xxxxx material to it;
B. (B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer applicable to make refund letters of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreementcredit generally;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets(C) except as otherwise agreed by such L/C Issuer, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $10,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars; or
(E) any Lender is at that time a Defaulting Lender, unless such L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such L/C Issuer (in its sole discretion) with Borrower or such Lender to eliminate such L/C Issuer’s actual amount required for Aor potential Fronting Exposure (after giving effect to Section 2.16(a)(iv)) or C), the Company shall promptly return with respect to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows then proposed to be issued or that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which such L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the amount terms hereof.
(v) No L/C Issuer shall be under any obligation to amend any Letter of credit available by Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the amount terms hereof, or (B) the beneficiary of such excess creditLetter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) Each L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each L/C Issuer shall have all of the benefits and immunities (A) provided to Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included such L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to such L/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Head Lessee shall provide on or bonds issued by before the Company within Closing Date and maintain so long as any Head Lessee Secured Obligations remain Outstanding, one or more Eligible Letters of Credit, for the scope benefit of this Agreementthe Indenture Trustee (as assignee of the Head Lessor) on behalf of the Noteholders and the other Entitled Parties, in an aggregate amount available thereunder on any date not less than the Company agrees that when it shall file amount applicable to such date on Schedule 10).
(b) If the amounts on deposit in the Rent Reserve Account on a Determination Date are less than the Aggregate Reserve Amount on such date, then the Indenture Trustee shall, in accordance with the insurance regulatory authority or set up on its books reserves for lossesManager Report (or, unearned premium reserves and loss development allowance (if the Manager fails to be calculated using deliver the formula below) covered hereunder which it shall be required by law Manager Report, pursuant to set upwritten instructions from the Control Party), it will forward submit to the Reinsurer Letter of Credit Bank a statement showing completed Drawing Certificate (as defined in the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by ) requesting a bank, and containing provisions acceptable to drawing under the insurance regulatory authorities having jurisdiction over the Company's reserves Letter of Credit in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company Available Drawing Amount (hereinafter referred to as a "Reinsurer's Obligations"). The Letter of Credit Drawing"); provided, however, that in no event shall the amount of any Letter of Credit Drawing exceed the Available Drawing Amount under such Letter of Credit.
(c) The Indenture Trustee shall receive Letter-of-Credit Drawings as attorney-in-fact of each for the Entitled Parties and upon receipt thereof shall immediately deposit such Letter-of-Credit Drawings into the Rent Reserve Account and any such Letter-of-Credit Drawings shall be issued used only for the purpose for which it was drawn to fund the Rent Reserve Account, to make Monthly Lease Payments and to pay the Operations Fee. The making of a period Letter-of-Credit Drawing does not relieve the Head Lessee of not less than one year, and shall be automatically extended for one year from its date of expiration any obligation under the Head Lease or any future expiration date unless thirty other Related Documents.
(30d) days prior to If at any expiration date time while the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider Head Lessee Secured Obligations remain unpaid the Letter of Credit extended for any additional period. The Reinsurer and Bank shall not be an Eligible Bank, the Company agree that Head Lessee shall (unless the Letters Control Party shall otherwise consent) within the time period required by Section 15 of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Reimbursement Agreement, and be utilized by replace the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any then existing Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the substitute Eligible Letter of Credit, in . If the following manner:
A. if Head Lessee shall fail to deliver a replacement Eligible Letter of Credit within the statement shows that the Reinsurer's Obligations exceed the balance of credit as time period required under Section 15 of the statement dateReimbursement Agreement, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment Indenture Trustee shall submit to the Letter of Credit increasing Bank a completed Drawing Certificate for the amount remaining Available Drawing Amount under such Letter of credit Credit. Any amounts received by the amount Indenture Trustee as a result of any such difference;
B. if however, drawing shall be deposited into the statement shows that Rent Reserve Account and disbursed in accordance with the Reinsurer's Obligations are less than provisions of Section 7.4 hereof. Upon receipt by the balance Indenture Trustee of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the a replacement Eligible Letter of Credit reducing in accordance with the amount provisions of credit available by this Section 7.5(d), the amount Indenture Trustee shall surrender the original of such excess creditthe replaced Letter of Credit to the issuer thereof.
Appears in 1 contract
Samples: Head Lessee Security Agreement (Universal Compression Inc)
Letters of Credit. As regards policies or bonds issued by Upon satisfaction of the Company within conditions set forth in Paragraph 1(b) above and in payment of the scope amounts due from Lessee to Lessor on account of this Agreementthe exercise of the Premises Reduction Option with respect to the Excluded Premises, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it Lessor shall be required entitled to draw down the Letters of Credit by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to (i) the Reinsurer's proportion quotient, expressed as a percentage, of reserves (x) the area of the Excluded Premises, expressed in respect number of lossesacres, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating theretodivided by (y) forty (40) acres, multiplied by (ii) $25,000,000, and losses any amount so drawn shall be deemed forfeited by Lessee and allocated loss adjustment expense paid by treated as Lessee's cost to exercise the Company but not recovered from Premises Reduction Option. Thereafter, the Reinsurer terms "LC Face Amount" and "Augmented LC Face Amount", as shown used in the statement prepared by Lease, shall mean the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that amount available under the Letters of Credit provided after the draw down by the Reinsurer Lessor pursuant to this Paragraph 3. From and after such draw upon the provisions Letters of this Agreement may be drawn upon at any timeCredit, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, Section 9.1(c) of the Company Lease shall be deemed to be deleted from the Lease. Lessor and Lessee hereby agree that Lessee shall, at its sole cost and expense, cause the Letters of Credit to be amended to permit a draw thereunder pursuant to this Paragraph. Lessee acknowledges and agrees that the value of the rights and benefits that will accrue hereunder to Lessee as a result of Lessee's valid exercise of the Premises Reduction Option (including, without limitation, any liquidator, rehabilitator, receiver or conservator the reduction of Annual Base Rent and Impositions pursuant to Paragraph 1(c)(i) above and the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. reduction of Lessee's development obligations pursuant to reimburse the Company for the Reinsurer's Obligations, the payment of which Paragraphs 7(a) and 7(b) below) is due under the terms of this Agreement fair and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue at least reasonably equivalent to the benefit costs that will be incurred by Lessee as a result of Lessor's draw upon the Reinsurer. In the event the amount drawn by the Company on any Letter Letters of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return pursuant to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditthis Paragraph 3.
Appears in 1 contract
Samples: Ground Lease (Equinix Inc)
Letters of Credit. As regards policies (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day ------------ during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries or, only with respect to the Cenveo Existing Letters of Credit for the account of Holdings, Holdings, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within --------------- Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this AgreementCredit issued for the account of the Borrower or its Subsidiaries or, the Company agrees that when it shall file only with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward respect to the Reinsurer a statement showing Cenveo Existing Letters of Credit for the proportion account of such reserves which is applicable Holdings, Holdings, and any drawings thereunder; provided that after giving effect to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery any L/C -------- Credit Extension with respect to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender plus such Lender's Applicable Revolving Credit ---- Percentage of the Outstanding Amount of all L/C Obligations plus such Lender's Applicable Revolving Credit Percentage of ---- the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. The Cenveo Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof. The Cadmus Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the First Amendment Effective Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the -------------------- expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the L/C Issuer has approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $500,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for after any drawing thereunder except in accordance with Section 2.03(b)(iii); or --------------------
(F) a default of any Lender's obligations to fund under Section 2.03(C) exists or any Lender --------------- is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer's risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or C)(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Company L/C Issuer shall promptly return have all of the benefits and immunities (A) provided to the Reinsurer Administrative Agent in Article IX with respect to any acts taken or omissions ---------- suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that term "Administrative Agent" as used in Article IX included the Reinsurer's Obligations exceed the balance of credit L/C Issuer with respect to such acts ---------- or omissions, and (B) as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Cenveo, Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for the account of the Borrower or bonds any Subsidiary, and to amend or extend Letters of Credit previously issued by it, in accordance with clause (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or any Subsidiary and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, (y) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Revolving Commitment and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued for a period of not less than one yearpursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof and shall be automatically extended for one year from its deemed to be a Letter of Credit hereunder.
(ii) The L/C Issuer shall not issue any Letter of Credit if: (A) subject to Section 2.03(b)(iii), the expiry date of expiration the requested Letter of Credit would occur more than twelve (12) months after the date of issuance or any future expiration date last extension, unless thirty the L/C Issuer and the Lenders (30other than Defaulting Lenders) days prior holding a majority of the Revolving Credit Exposure (other than the Revolving Credit Exposure with respect to any expiration Defaulting Lender) have approved such expiry date; or (B) the expiry date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposesExpiration Date, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for L/C Issuer and all the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall Lenders that have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement Revolving Commitments have approved such expiry date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 1 contract
Letters of Credit. As regards policies or bonds issued by (a) Subject to the Company within the scope terms and conditions of this AgreementSection 2.16, Borrower, by notice to Administrative Agent and the Company agrees Issuing Bank, may request, in lieu of advances of proceeds of the Ratable Loans, that when it the Issuing Bank issue unconditional, irrevocable standby letters of credit or direct-pay letters of credit (each, a “Letter of Credit”) for the account of Borrower or its Consolidated Businesses, payable by sight drafts, for such beneficiaries and with such other terms as Borrower shall file with specify and in such form as is acceptable to Issuing Bank in its reasonable discretion. Promptly upon receipt of notice from the insurance regulatory authority Issuing Bank of the issuance, amendment or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company extension of a clean, irrevocable and unconditional Letter of Credit, Administrative Agent shall notify each of the Banks. The letters of credit listed on Schedule 2.16 attached hereto that were issued or deemed issued under the 2019 Credit Agreement (the “Existing Letters of Credit”), shall be deemed to be Letters of Credit issued under this Agreement for all purposes, and each of the Borrower and the Banks confirms and agrees that its respective obligations with respect to the Existing Letters of Credit shall be governed by this Agreement. The Borrower unconditionally and irrevocably agrees that, in connection with any Letter of Credit issued for the account of any Consolidated Business as provided in the first sentence of this paragraph, it will be fully responsible for the reimbursement of drawings under such Letters of Credit, the payment of interest thereon and the payment of fees due under Section 2.07 to the same extent as if it were the sole account party in respect of such Letter of Credit.
(b) The amount of any Letter of Credit shall be limited to the lesser of (x) $125,000,000 less the aggregate amount of all Letters of Credit theretofore issued and outstanding or (y) the Available Total Loan Commitment, it being understood that the amount of each Letter of Credit issued and outstanding shall effect a reduction, by an equal amount, of the Available Total Loan Commitment (such reduction to be allocated to each Bank’s Loan Commitment ratably in accordance with the Banks’ respective Pro Rata Shares); provided that no Issuing Bank shall be obligated to issue, amend or extend any Letter of Credit that will cause (x) the aggregate amount of all Letters of Credit issued by such Issuing Bank plus the aggregate amount of all unreimbursed drawings owing to such Issuing Bank to exceed its Issuing Bank Commitment Amount or (y) the Revolving Credit Exposure of any Bank to exceed its Loan Commitment.
(c) The amount of each Letter of Credit shall be in minimum amounts of $10,000. Each Letter of Credit shall be issued or amended, as the case may be, upon the written request of the Borrower signed by a bankResponsible Officer of the Borrower and delivered to the Issuing Bank (with a copy to the Administrative Agent) (which may be transmitted by electronic communication if arrangements for doing so have been approved by such Issuing Bank). Such request must be received by the Issuing Bank and the Administrative Agent not later than 11:00 a.m. at least two Banking Days (or such later date and time as the Administrative Agent and the Issuing Bank may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such request shall specify in form and detail satisfactory to the Issuing Bank: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Banking Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; (H) the identity of the proposed Issuing Bank, it being agreed by the Borrower, the Administrative Agent and the Issuing Banks that the Letters of Credit will be issued by the Issuing Banks on a proportionate basis to the extent practicable and (I) such other matters as the Issuing Bank may require. In the case of a request for an amendment of any outstanding Letter of Credit, such request shall specify in form and detail satisfactory to the Issuing Bank (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Banking Day); (C) the nature of the proposed amendment; and (D) such other matters as the Issuing Bank may require. Unless the Issuing Bank has received written notice from any Bank, the Administrative Agent or the Borrower, at least one Banking Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue the requested Letter of Credit or the requested amendment, as the case may be, in each case in accordance with the Issuing Bank’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Bank shall be deemed to, and containing provisions acceptable to hereby irrevocably and unconditionally agrees to, purchase from the insurance regulatory authorities having jurisdiction over the Company's reserves Issuing Bank a risk participation in such Letter of Credit in an amount equal to the Reinsurer's proportion product of reserves in respect such Bank’s Pro Rata Share times the amount of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company such Letter of Credit.
(hereinafter referred to as "Reinsurer's Obligations"). The d) Each Letter of Credit shall be issued for a period of not less expire no later than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty fifteen (3015) days prior to any the Maturity Date, but may have an automatic extension clause (an “Auto-Extension Letter of Credit”) allowing for the extension of the expiration date thereof if a notice of non-extension is not given from the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not Issuing Bank to consider the Letter of Credit extended for any additional beneficiary by a specified date within a twelve-month period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding Notwithstanding any other provision of this Agreement, and be utilized if requested by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's ObligationsBorrower, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit Issuing Bank shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any issue a Letter of Credit with and/or not give notice of non-extension of an Auto-Extension Letter of Credit to Letter of Credit beneficiaries which would result in, an expiration date that is in excess of up to one (1) year after the actual amount required for AMaturity Date, provided that no later than forty-five (45) or C)days prior to the Maturity Date, the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare Borrower provides a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, cash deposit in the following manner:
A. if full amount available to be drawn under all Letters of Credit with expiration dates after the statement shows that Maturity Date and all Auto-Extension Letters of Credit for which the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of Issuing Bank has not given a notice of such excess, secure delivery to the Company of an amendment non-extension to the Letter of Credit increasing the amount of credit beneficiary. Any such additional Cash Collateral shall be held by the amount of such difference;
B. if howeverAdministrative Agent, for the statement shows that the Reinsurer's Obligations are less than the balance of credit as benefit of the statement dateBanks, in accordance with the Company terms of Section 2.16(h).
(e) In connection with, and as a further condition to the issuance of, each Letter of Credit, Bxxxxxxx shall within thirty execute and deliver to Administrative Agent and the Issuing Bank an application and reimbursement agreement (30if applicable) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to for the Letter of Credit reducing on the Issuing Bank’s standard form therefor, together with such other documents, opinions and assurances as Administrative Agent and the Issuing Bank shall reasonably require. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application and reimbursement agreement (if applicable) or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, as among the parties hereto, the terms and conditions of this Agreement shall control.
(f) In connection with each Letter of Credit, Borrower hereby covenants to pay to Administrative Agent the following fees: (1) a fee, payable quarterly in arrears (on the first Banking Day of each calendar quarter following the issuance of the Letter of Credit), for the account of the Banks, computed daily on the amount of the Letter of Credit issued and outstanding at a rate per annum equal to the “Banks’ L/C Fee Rate” (as hereinafter defined) (provided, however, any letter of credit available fees otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit as to which such Defaulting Lender has not provided Cash Collateral satisfactory to the Issuing Bank pursuant to this Section 2.16 shall be payable, to the maximum extent permitted by applicable Law, to the other Banks in accordance with the upward adjustments in their respective Pro Rata Shares allocable to such Letter of Credit pursuant to Section 2.20(a)(iv), with the balance of such fee, if any, payable to the Issuing Bank for its own account), and (2) a fronting fee, payable quarterly in arrears (on the last day of each calendar quarter following the issuance of the Letter of Credit), for the Issuing Bank’s account, computed daily on the amount of the Letter of Credit issued and outstanding, at a rate per annum equal to 0.125%. In addition to the fees described in the preceding sentence, the Borrower shall pay to the Issuing Bank such excess creditother customary letter of credit charges when incurred. For purposes of this Agreement, the “Banks’ L/C Fee Rate” shall mean, at any time, a rate per annum equal to the Applicable Margin for SOFR Loans (after giving effect to any then-applicable Sustainability Rate Adjustment) less 0.075% per annum. It is understood and agreed that (i) the amount of a Letter of Credit for purposes of calculating the fees in accordance with this Section 2.16(f) shall be deemed to be the stated amount of such Letter of Credit (without regard for any increases in the stated amount thereof), and (ii) the last installment of the fees provided for in this paragraph (f) with respect to any particular Letter of Credit shall be due and payable on the first day of the calendar quarter following the return, undrawn, or cancellation of such Letter of Credit to the Issuing Bank, who shall promptly provide notice to Administrative Agent of such return or cancellation, and Bxxxxxxx’s receipt of notice from Administrative Agent.
Appears in 1 contract
Samples: Revolving Loan Agreement (Avalonbay Communities Inc)
Letters of Credit. As regards policies or bonds issued by Subject to the Company within the scope of terms and conditions set forth in this Agreement, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves at any time and loss development allowance (from time to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered time from the Reinsurer as shown in Closing Date through the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless day that is thirty (30) days prior to any expiration date the issuing bank Revolving Credit Maturity Date, the applicable Issuing Lender shall notify issue such Letters of Credit as Borrower may request upon the Company by certified delivery of a written request in the form of Exhibit E hereto (a “Letter of Credit Request”), together with an executed Availability Certificate, to such Issuing Lender, provided that (i) no Default or registered mail that Event of Default shall have occurred and be continuing, (ii) upon issuance of such Letter of Credit, the issuing bank elects aggregate Letter of Credit Liabilities shall not to consider exceed the aggregate Letter of Credit Commitments and the Letter of Credit extended Liabilities of the applicable Issuing Lender shall not exceed such Issuing Lender’s Letter of Credit Commitment, which Letter of Credit Commitment shall be automatically increased on a pro rata basis with increases in the aggregate Revolving Credit Commitments, (iii) in no event shall the aggregate Exposure (after giving effect to all Letters of Credit requested) exceed the Total Commitment or the Facility Available Amount, (iv) the conditions set forth in §10 and §11 shall have been satisfied (or if such condition is required to have been satisfied only as of the Closing Date, that such condition was satisfied as of the Closing Date) or waived by Agent, (v) no Revolving Credit Lender is a Defaulting Lender (provided the applicable Issuing Lender may, in its sole discretion, be entitled to waive this condition), unless the applicable Issuing Lender has entered into arrangements, including the delivery of cash collateral, satisfactory to such Issuing Lender (in its sole discretion) with Borrower or such Defaulting Lender to eliminate such Issuing Lender’s actual or potential Fronting Exposure with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other Letter of Credit Liabilities as to which such Issuing Lender has actual or potential Fronting Exposure, as it may elect in its sole discretion, and (vi) in no event shall any amount drawn under a Letter of Credit be available for any additional periodreinstatement or a subsequent drawing under such Letter of Credit. The Reinsurer applicable Issuing Lender may assume that the conditions in §10 and §11 have been satisfied unless it receives written notice from a Revolving Credit Lender that such conditions have not been satisfied. Each Letter of Credit Request shall be executed on behalf of Borrower by an Authorized Officer of Borrower. The Issuing Lenders shall be entitled to conclusively rely on such Person’s authority to request a Letter of Credit on behalf of Borrower. The Issuing Lenders shall have no duty to verify the Company agree that authenticity of any signature appearing on a Letter of Credit Request. Borrower assumes all risks with respect to the use of the Letters of Credit provided by Credit. Unless the Reinsurer pursuant to applicable Issuing Lender and the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless Required Lenders otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligationsconsent, the payment term of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess shall not exceed a period of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency time commencing on the part issuance of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of CreditCredit and ending one year after the date of issuance thereof, subject to extension pursuant to an “evergreen” clause (as set forth below) reasonably acceptable to Agent and the applicable Issuing Lender (but in any event the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within term shall not extend beyond thirty (30) days after receipt of notice of such excess, secure delivery prior to the Company of Revolving Credit Maturity Date unless Borrower has provided to Agent cash collateral reasonably acceptable to Agent in an amendment amount equal to the Letter of Credit increasing the amount Liability with respect to any Letter of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within Credit which extends beyond thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment prior to the Revolving Credit Maturity Date). The amount available to be drawn under any Letter of Credit reducing shall reduce on a dollar-for-dollar basis the amount available to be drawn under the aggregate Revolving Credit Commitments as a Revolving Credit Loan. If the Borrower so requests in any applicable Letter of credit available Credit Request (or the amendment of an outstanding Letter of Credit), the applicable Issuing Lender may, in its sole discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit shall permit such Issuing Lender to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon by the amount Borrower and the applicable Issuing Lender at the time such Letter of Credit is issued. Unless otherwise directed by the applicable Issuing Lender, the Borrower shall not be required to make a specific request to such Issuing Lender for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Revolving Credit Lenders shall be deemed to have authorized (but may not require) the applicable Issuing Lender to permit the extension of such excess creditLetter of Credit at any time to an expiration date not later than the date permitted pursuant to the first paragraph of this Section 2.10(a); provided, that such Issuing Lender shall not (i) permit any such extension if (A) such Issuing Lender has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its extended form under the terms hereof (except that the expiration date may be extended to a date that is no more than one year from the then-current expiration date) or (B) it has received notice (which may be in writing or by telephone (if promptly confirmed in writing)) on or before the day that is seven Business Days before the Non-Extension Notice Date from the Agent that the Required Lenders have elected not to permit such extension or (ii) be obligated to permit such extension if it has received notice (which may be in writing or by telephone (if promptly confirmed in writing)) on or before the day that is seven Business Days before the Non-Extension Notice Date from the Agent, any Revolving Credit Lender or the Borrower that one or more of the applicable conditions set forth in §11 is not then satisfied, and in each such case directing such Issuing Lender not to permit such extension.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the MLP and any of its Restricted Subsidiaries and Affiliates in which it has an Equity Interest, and to amend or bonds extend Letters of Credit previously issued by it, in accordance with subsection (b) below, provided that after giving effect thereto (y) the Company within Outstanding Amount of all Loans and L/C Obligations attributable to WIC shall not exceed the scope WIC Sublimit, and (z) the Outstanding Amount of this Agreementall Loans and L/C Obligations attributable to each Additional Borrower shall not exceed the applicable Additional Borrower Sublimit, and (2) to honor drawings under the Company agrees Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued (y) the Total Outstandings shall not exceed the Aggregate Commitments, and (z) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment. Each request by a bank, and containing provisions acceptable to Borrower for the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion issuance or amendment of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by such Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, each Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly each Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than three years after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date;
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, or in the event that Opco has elected the Term-Out Option pursuant to Section 2.16, the expiry date of such requested Letter of Credit would occur after the Term Loan Maturity Date, unless in either case all the Lenders have approved such expiry date; or
(C) the expiry date of such requested Letter of Credit would occur after any Scheduled Maturity Date, unless the amount of such Letter of Credit together with all other L/C Obligations outstanding on the date of issuance of such Letter of Credit is equal to or less than the aggregate Commitments of all Lenders who shall remain party to this Agreement subsequent to such Scheduled Maturity Date; or
(D) such Letter of Credit is to be denominated in a currency other than Dollars.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good fxxxx xxxxx material to it;
(B) with respect to a commercial Letter of Credit, except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $500,000;
(C) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the applicable Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender; or
(D) the Outstanding Amount of the actual amount required for L/C Obligations under Letters of Credit issued by such L/C Issuer would exceed the L/C Issuer Commitment of such L/C Issuer.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or C)(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Company L/C Issuer shall promptly return have all of the benefits and immunities (A) provided to the Reinsurer Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that term “Administrative Agent” as used in Article IX included the Reinsurer's Obligations exceed the balance of credit L/C Issuer with respect to such acts or omissions, and (B) as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the Letter of Credit Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the earlier to occur of the Letter of Credit Expiration Date or bonds the termination of the Availability Period, to issue Letters of Credit at the request of the Borrower Agent for the account of a Borrower (or any other Loan Party or Domestic Subsidiary thereof as to which all “know your customer” or other similar requirements have been satisfied) so long as such Borrower is a joint and several co-applicant; references to a “Borrower” in this Section 2.03 shall be deemed to include reference to such other Loan Party and any applicable Domestic Subsidiary, as the case may be, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the a Borrower and any drawings thereunder; provided that when it the Letter of Credit Issuer shall file not be obligated to make any Letter of Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bankand no Revolving Credit Lender shall be obligated to participate in any Letter of Credit, and containing provisions acceptable to if as of the insurance regulatory authorities having jurisdiction over date of such Letter of Credit Extension, (A) the Company's reserves in an amount equal to Total Revolving Credit Outstandings would exceed the Reinsurer's proportion Maximum Borrowing Amount, (B) the Revolving Credit Exposure of reserves in respect any Revolving Credit Lender would exceed such Revolving Credit Lender’s Revolving Credit Commitment, or (C) the Outstanding Amount of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid all Letter of Credit Obligations would exceed the Letter of Credit Sublimit. Each request by the Company but not recovered from Borrower Agent for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date representation by the issuing bank shall notify the Company by certified or registered mail Borrower Agent that the issuing bank elects not to consider the Letter of Credit extended for any additional periodExtension so requested complies with the conditions set forth in the proviso to the preceding sentence. The Reinsurer Within the foregoing limits, and subject to the Company agree that terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit provided shall be fully revolving, and accordingly the 75 [Matrix] Credit Agreement #85638137 Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The Letter of Credit Issuer shall not issue any Letter of Credit, if: (A) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur (i) as to standby Letters of Credit, more than twelve months after the date of issuance or last renewal, and (ii) as to commercial Letters of Credit, later than the earlier of (1) 270 days after the date of issuance thereof and (2) 60 days before the Letter of Credit Expiration Date, unless in each case the Required Lenders have approved such expiry date; or (B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date; (iii) The Letter of Credit Issuer shall not be under any obligation to issue any Letter of Credit if: (A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Reinsurer pursuant Letter of Credit Issuer from issuing such Letter of Credit or any Law applicable to the provisions Letter of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company Credit Issuer or any successor, by operation request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Letter of Credit Issuer shall prohibit, or request that the Letter of Credit Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Letter of Credit Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Letter of Credit Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Letter of Credit Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Letter of Credit Issuer in good xxxxx xxxxx material to it; (B) the issuance of such Letter of Credit would violate one or more policies of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator Letter of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Credit Issuer; (C) such Letter of Credit is in excess an initial amount less than the Dollar Equivalent of the actual amount required for A$10,000; or (D) or C)any Lender is at that time a Defaulting Lender, the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending unless the Letter of CreditCredit Issuer has entered into arrangements, in including the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance delivery of credit as of the statement dateCash Collateral, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment satisfactory to the Letter of Credit increasing Issuer (in its sole discretion) with the amount of credit by the amount of Borrowers or such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing Lender to secure an amendment to eliminate the Letter of Credit reducing Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with respect to the amount Defaulting Lender arising from either the Letter of credit available by Credit then proposed to be issued or that Letter of Credit and all other Letter of Credit Obligations as to which the amount Letter of such excess creditCredit Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
Appears in 1 contract
Samples: Credit Agreement (Matrix Service Co)
Letters of Credit. As regards policies (a) The Letter of Credit Commitments.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.04, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds any of its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the insurance regulatory authorities having jurisdiction over preceding sentence. Within the Company's reserves foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) No L/C Issuer shall issue any Letter of Credit if the expiry date of the requested Letter of Credit would occur more than twelve months after the date Exhibit 10.3 of issuance or last extension, unless the Required Lenders have approved such expiry date. The stated expiration date of a Letter of Credit may be after the Letter of Credit Expiration Date; provided, however, that all of the Lenders approve such expiry date, and further provided, that for any Letter of Credit outstanding on the Letter of Credit Expiration Date, the Borrower must, on such date, Cash Collateralize such Letters of Credit in an amount equal to 102% of the Reinsurer's proportion aggregate stated amount of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the all Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreementoutstanding on such date, and be utilized by also provided that, on the Company or any successor, by operation Maturity Date all unreimbursed draws under all Letters of law, of Credit outstanding on the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit Maturity Date shall be held in an interest bearing account separate from the Company's other assets, immediately due and interest thereon not in excess of the prime rate payable.
(iii) No L/C Issuer shall accrue be under any obligation to the benefit of the Reinsurer. In the event the amount drawn by the Company on issue any Letter of Credit is in excess of the actual amount required for if:
(A) any order, judgment or C), the Company decree of any Governmental Authority or arbitrator shall promptly return by its terms purport to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company enjoin or the Reinsurer. The restrain such L/C Issuer from issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in or any Law applicable to such L/C Issuer or any request or directive (whether or not having the following manner:
A. if force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the statement shows that the Reinsurer's Obligations exceed the balance issuance of letters of credit as generally or the Letter of Credit in particular or shall impose upon such L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of the statement date, the Reinsurer shall, within thirty (30) days after receipt Letter of notice Credit would violate one or more policies of such excessL/C Issuer applicable to letters of credit generally;
(C) the Letter of Credit is to be denominated in a currency other than Dollars; or
(D) any Lender is at that time a Defaulting Lender, secure unless such L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate such L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.18(a)(iv)) with respect to the Company Defaulting Lender arising from either the Letter of an Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which such L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue the Letter of Credit in its amended form under the terms hereof. Exhibit 10.3
(v) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the Letter of Credit does not accept the proposed amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;Credit.
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as (vi) Each L/C Issuer shall act on behalf of the statement dateLenders with respect to any Letters of Credit issued by such L/C Issuer and the documents associated therewith, and such L/C Issuer shall have all of the Company shall within thirty benefits and immunities (30A) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment provided to the Letter Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit reducing issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the amount of credit available by the amount of term “Administrative Agent” as used in Article IX included such excess creditL/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to such L/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Ross Stores, Inc.)
Letters of Credit. As regards policies or bonds issued by the Company within the scope of this Agreement, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula belowa) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a Commitment.
(i) Subject to the terms and conditions set forth herein, (A) L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period of not less than one year, and shall be automatically extended for one year from its the Closing Date until the date of expiration or any future expiration date unless that is thirty (30) days prior to the Maturity Date then in effect for the Revolving Credit Facility, to issue Letters of Credit for the account of Borrower or its Subsidiaries, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Revolving Credit Lenders severally agree to participate in Letters of Credit issued for the account of Borrower or its Subsidiaries and any expiration date drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the issuing bank Total Revolving Credit Outstandings shall notify not exceed the Company by certified or registered mail that Revolving Credit Facility, (y) the issuing bank elects Revolving Credit Exposure of any Lender shall not to consider exceed such Lender’s Revolving Credit Commitment and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit extended Sublimit. Each request by Borrower for any additional period. The Reinsurer and the Company agree issuance or amendment of a Letter of Credit shall be deemed to be a representation by Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, Borrower’s ability to obtain Letters of Credit provided shall be fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the Reinsurer pursuant terms and conditions hereof.
(ii) L/C Issuer shall not issue any Letter of Credit, if:
(A) the expiry date of the requested Letter of Credit would occur more than twelve (12) months after the date of issuance, unless Required Revolving Lenders have approved such expiry date; or
(B) the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all Revolving Credit Lenders have approved such expiry date.
(iii) L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain L/C Issuer from issuing the Letter of Credit, or any Law applicable to L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over L/C Issuer shall prohibit, or request that L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon L/C Issuer with respect to the provisions Letter of this Agreement may be drawn Credit any restriction, reserve or capital requirement (for which L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon at L/C Issuer any timeunreimbursed loss, notwithstanding any other provision of this Agreement, cost or expense which was not applicable on the Closing Date and be utilized by which L/C Issuer in good xxxxx xxxxx material to it;
(B) the Company or any successor, by operation of law, issuance of the Company including, without limitation, any liquidator, rehabilitator, receiver Letter of Credit would violate one or conservator more policies of the Company for the following purposes, unless L/C Issuer applicable to letters of credit generally;
(C) except as otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligationsagreed by Administrative Agent and L/C Issuer, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual an initial stated amount required for Aless than $200,000;
(D) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of CreditCredit is to be denominated in a currency other than Dollars; or
(E) any Revolving Credit Lender is at that time a Defaulting Lender, unless L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to L/C Issuer (in its sole discretion) with Borrower or such Revolving Credit Lender to eliminate L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with respect to the following manner:Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
A. (iv) L/C Issuer shall not amend any Letter of Credit if L/C Issuer would not be permitted at such time to issue the statement shows that Letter of Credit in its amended form under the Reinsurer's Obligations exceed terms hereof.
(v) L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) L/C Issuer would have no obligation at such time to issue the balance Letter of credit as Credit in its amended form under the terms hereof, or (B) the beneficiary of the statement date, Letter of Credit does not accept the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an proposed amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;Credit.
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as (vi) L/C Issuer shall act on behalf of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing Revolving Credit Lenders with respect to secure an amendment to the Letter any Letters of Credit reducing issued by it and the amount documents associated therewith, and L/C Issuer shall have all of credit available the benefits and immunities (A) provided to Administrative Agent in Article X with respect to any acts taken or omissions suffered by L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the amount of term “Administrative Agent” as used in Article X included L/C Issuer with respect to such excess creditacts or omissions, and (B) as additionally provided herein with respect to L/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, and to amend or bonds extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve (12) months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date of the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or final arbitration award shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's ObligationsL/C Issuer, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual an initial stated amount required for Aless than $500,000;
(D) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of CreditCredit is to be denominated in a currency other than Dollars;
(E) any Revolving Credit Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements with the Borrower or such Revolving Credit Lender satisfactory to the L/C Issuer in its sole discretion, including the following manner:delivery of Cash Collateral, to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.16(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
A. (F) the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of Credit if the statement shows that L/C Issuer would not be permitted at such time to issue the Reinsurer's Obligations exceed Letter of Credit in its amended form under the balance terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of credit as Credit if (A) the L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the statement date, Letter of Credit does not accept the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an proposed amendment to the Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Credit increasing Lenders with respect to any Letters of Credit issued by it and the amount documents associated therewith, and the L/C Issuer shall have all of credit the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such difference;
B. Letters of Credit as fully as if howeverthe term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, the statement shows that the Reinsurer's Obligations are less than the balance of credit and (B) as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment additionally provided herein with respect to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the Issuing Bank agrees, in reliance upon the agreements of the Lenders set forth in this Section 3.01, (1) from time to time on any Business Day during the period from the Closing Date until the Termination Date, to issue Letters of Credit for the account of the Company, and to amend or bonds extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Company within the scope of this Agreementand any drawings thereunder; provided, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward after giving effect to the Reinsurer a statement showing the proportion issuance of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Effective Amount of all L/C Obligations plus the Effective Amount of all Revolving Loans plus the Effective Amount of all Swing Line Loans shall not exceed the lesser of (I) the combined Commitments and (II) the Borrowing Base, (y) the aggregate Effective Amount of the Revolving Loans of any Lender, plus such Lender's Pro Rata Share of the Effective Amount of all L/C Obligations, plus such Lender's Pro Rata Share of the Effective Amount of all Swing Line Loans shall not exceed such Lender's Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Effective Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid L/C Commitment. Each request by the Company but not recovered from for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Company that such issuance or amendment so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior subject to any expiration date the issuing bank shall notify terms and conditions hereof, the Company by certified or registered mail that the issuing bank elects not Company's ability to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the obtain Letters of Credit provided shall be fully revolving, and accordingly the Company may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, terms and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:conditions hereof.
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has (ii) The Issuing Bank shall not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on issue any Letter of Credit is in excess of the actual amount required for if:
(A) or Csubject to Section 3.01(b)(iii), the Company shall promptly return to expiry date of such requested Letter of Credit would occur more than twelve months after the Reinsurer date of issuance or last extension, unless the excess amount so drawn. All Majority Lenders have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit would occur after the foregoing shall be applied without diminution because of insolvency on the part of Termination Date, unless the Company has agreed to Cash Collateralize such Letter of Credit in accordance with Section 3.01(g). In no event will the expiry date of any Letter of Credit occur more than twelve months after the Termination Date.
(iii) The Issuing Bank shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Reinsurer. The Issuing Bank from issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, in or any law applicable to the following manner:
A. if Issuing Bank or any request or directive (whether or not having the statement shows force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Reinsurer's Obligations exceed Issuing Bank refrain from, the balance issuance of letters of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of generally or such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing in particular or shall impose upon the amount of credit by the amount of Issuing Bank with respect to such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Bank in good faith deems material to it;
(B) txx xxxxxxxx of such Letter of Credit would violate one or more policies of the Issuing Bank;
(C) such Letter of Credit is issued to support workman's compensation liabilities and the stated amount is more than $5,000,000;
(D) such Letter of credit available Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or
(F) a default of any Lender's obligations to fund under Section 3.01(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the Issuing Bank has entered into satisfactory arrangements with the Company or such Lender to eliminate the Issuing Bank's risk with respect to such Lender.
(iv) The Issuing Bank shall not amend any Letter of Credit if the Issuing Bank would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The Issuing Bank shall be under no obligation to amend any Letter of Credit if (A) the Issuing Bank would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The Issuing Bank shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Issuing Bank shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered by the amount Issuing Bank in connection with Letters of Credit issued by it or proposed to be issued by it and L/C-Related Documents pertaining to such excess creditLetters of Credit as fully as if the term "Administrative Agent" as used in Article X included the Issuing Bank with respect to such acts or omissions, and (B) as additionally provided herein with respect to the Issuing Bank.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Restatement Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars or bonds Euros for the account of the Borrower or its Subsidiaries that are Guarantors, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries that when it shall file are Guarantors and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Restatement Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Revolving Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Restatement Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Restatement Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $500,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars or Euros;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for Aafter any drawing thereunder; or
(F) or C)any Lender is at that time a Defaulting Lender, unless the Company shall promptly return L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrower or such Lender to eliminate the Company L/C Issuer’s actual or the disposition of funds withdrawn, except potential Fronting Exposure (after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30Section 2.18(a)(iv)) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows then proposed to be issued or that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which the amount L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Gsi Group Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) L/C Issuer agrees, in reliance upon the agreements of Lenders set forth in this Section 2.2, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of Borrower or bonds its Subsidiaries that are Guarantors, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) Lenders severally agree to participate in Letters of Credit issued for the scope account of this Agreement, the Company agrees Borrower or its Subsidiaries that when it shall file are Guarantors and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Revolving Credit Exposure of all Lenders shall not exceed the lesser of the aggregate amount of the Commitments of the Lenders and the Borrowing Base, (y) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect Credit Sublimit. Each request by Borrower for the issuance or amendment of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) L/C Issuer shall not issue any Letter of Credit, or permit the renewal of any Letter of Credit, if:
(A) the initial expiry date of expiration or any future expiration the requested Letter of Credit would occur more than twenty-four (24) months after the date of issuance, unless thirty Required Lenders have approved such expiry date; or
(30B) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended would automatically renew for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is period in excess of twelve (12) months, unless Required Lenders have approved such Letter of Credit; or
(C) the actual amount required Letter of Credit would automatically renew without providing L/C Issuer with an opportunity to pay prevent each and every renewal; or
(D) the Reinsurer's Obligations expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all Lenders have approved such expiry date.
(iii) L/C Issuer shall not be under this Agreementany obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain L/C Issuer from issuing the Letter of Credit, or any Law applicable to L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over L/C Issuer shall prohibit, or request that L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which L/C Issuer in good xxxxx xxxxx material to it;
C. to fund an account with (B) the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess issuance of the prime rate shall accrue Letter of Credit would violate one or more policies of L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by Administrative Agent and L/C Issuer, the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual an initial stated amount required for Aless than $25,000;
(D) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of CreditCredit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to L/C Issuer (in its sole discretion) with Borrower or such Lender to eliminate L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 12.22(a)(iv)) with respect to the following manner:Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
A. if (F) the statement shows that the Reinsurer's Obligations exceed the balance Letter of credit as Credit contains any provisions for automatic reinstatement of the statement datestated amount after any drawing thereunder.
(iv) L/C Issuer shall not amend any Letter of Credit if L/C Issuer would not be permitted at such time to issue the Letter of Credit in its amended form under the terms hereof.
(v) L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the Reinsurer shall, within thirty (30) days after receipt beneficiary of notice the Letter of such excess, secure delivery to Credit does not accept the Company of an proposed amendment to the Letter of Credit.
(vi) L/C Issuer shall act on behalf of Lenders with respect to any Letters of Credit increasing issued by it and the amount documents associated therewith, and L/C Issuer shall have all of credit the benefits and immunities (A) provided to Administrative Agent in Article 11 with respect to any acts taken or omissions suffered by L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the amount term “Administrative Agent” as used in Article 11 included L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to L/C Issuer.
(vii) Once a Letter of Credit has been issued, Lenders shall be deemed to have authorized (but may not require) L/C Issuer to permit the renewal of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less Letter of Credit at any time to an expiry date not later than the balance earlier of credit as of the statement date, the Company shall within thirty (30i) days after receipt of written request twelve (12) months from the Reinsurerdate of such renewal, release such excess credit by agreeing to secure an amendment to or (ii) the Letter of Credit reducing the amount of credit available by the amount of such excess creditExpiration Date.
Appears in 1 contract
Letters of Credit. As regards policies In order to assist the Companies in establishing or bonds issued opening documentary Letters of Credit with an Issuing Bank to cover i) the purchase and importation of inventory or ii) the purchase of imported inventory from agents and brokers, and the standby Letters of Credit with an Issuing Bank to cover such other matters as the Companies may so decide, other than for the purchase of Inventory, the Companies have requested CITBC to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts or acceptances thereunder through the issuance of the Letters of Credit Guaranty, thereby lending CITBC's credit to the Companies and CITBC has agreed to do so. These arrangements shall be handled by CITBC subject to the Company within terms and conditions set forth below.
1. Within the scope Revolving Line of Credit, CITBC shall assist the Companies in obtaining (a) standby Letters of Credit in an amount not to exceed $3,000,000.00 in the aggregate outstanding at any one time and to be used for any purpose other than the purchase of inventory and (b) documentary Letters of Credit in an amount not to exceed $12,000,000.00 in the aggregate outstanding at any one time and to be used solely for i) the purchase and importation of inventory or ii) the purchase of imported inventory from agents and brokers. CITBC's assistance with respect to Letters of Credit for amounts in excess of the limitations set forth herein shall at all times and in all respects be in CITBC's sole discretion. It is understood that the form and purpose of each Letter of Credit must be consistent with the current business practices of the Companies. Notwithstanding anything herein to the contrary, upon the occurrence of a Default and/or an Event of Default as defined in this Financing Agreement, CITBC's assistance with respect to any Letters of Credit shall be in CITBC's sole discretion unless such Default or Event of Default is waived by CITBC in writing, or such Default in cured to CITBC's satisfaction in the exercise of its reasonable business judgment during any applicable grace period.
2. CITBC shall have the right, without notice to any of the Companies, to charge the Collective Account with the amount of any and all indebtedness, liability or obligation of any kind paid or incurred by CITBC under the Letters of Credit Guaranty at the earlier of a) payment by CITBC under the Letters of Credit Guaranty, or b) termination of this Financing Agreement but only in accordance with Section 10 of this Financing Agreement, . Any amount so charged to the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it Collective Account shall be required by law to set upcharged against any credit balances when in the Collective Account, it will forward and if there are then insufficient credit balances then to the Reinsurer a statement showing the proportion extent of such reserves which is applicable insufficiency such amount shall be deemed a Revolving Loan hereunder and shall incur interest at the rate provided for in Section 7, Paragraph 1 of this Financing Agreement.
3. EACH OF THE COMPANIES UNCONDITIONALLY INDEMNIFIES CITBC AND HOLDS CITBC HARMLESS FROM ANY AND ALL LOSS, CLAIM OR LIABILITY INCURRED BY CITBC ARISING FROM ANY TRANSACTIONS OR OCCURRENCES RELATING TO LETTERS OF CREDIT ESTABLISHED OR OPENED FOR ANY OF THE COMPANIES' ACCOUNT, THE COLLATERAL RELATING THERETO AND ANY DRAFTS OR ACCEPTANCES THEREUNDER, AND ALL OBLIGATIONS THEREUNDER, INCLUDING ANY SUCH LOSS OR CLAIM DUE TO ANY ACTION TAKEN BY ANY ISSUING BANK, AND INCLUDING ANY SUCH LOSS, CLAIM OR LIABILITY ARISING OUT OF THE ORDINARY NEGLIGENCE OF CITBC BUT EXCLUDING ANY SUCH LOSS, CLAIM OR LIABILITY ARISING OUT OF THE ORDINARY NEGLIGENCE OF CITBC BUT EXCLUDING ANY LOSS, CLAIM OR LIABILITY ARISING OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF CITBC. The Companies' unconditional obligation to CITBC hereunder shall not be modified or diminished for any reason or in any manner whatsoever, other than as a result of CITBC's gross negligence or willful misconduct. The Companies agree that any charges of the Issuing Bank incurred by CITBC for each of the Companies accounts shall be conclusive on CITBC (until such time as the Issuing Bank has advised CITBC that a credit has been issued as to such Letter of Credit) and shall be charged to the ReinsurerCollective Account.
4. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional In connection with any Letter of Credit, issued CITBC, other than for its gross negligence or willful misconduct, shall not be responsible for: the existence, character, quality, quantity, condition, packing, value or delivery of the goods purporting to be represented by a bankany documents; any difference or variation in the character, and containing provisions acceptable 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 thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; the insurance regulatory authorities having jurisdiction over time, place, manner or order in which shipment is made; partial or incomplete shipment, or failure or omission to ship any or all of the Company's reserves goods referred to in an amount equal to the Reinsurer's proportion Letters of reserves in respect of lossesCredit or documents; any deviation from instructions; delay, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating theretodefault, and losses and allocated loss adjustment expense paid or fraud by the Company but not recovered from shipper and/or anyone else in connection with any Inventory which is the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The subject of any Letter of Credit or the shipping thereof; or any breach of contract between the shipper or vendors and the Companies. Furthermore, without being limited by the foregoing, CITBC shall not be responsible for any act or omission with respect to or in connection with any Inventory which is the subject of any Letter of Credit other than as a result of the gross negligence or willful misconduct of CITBC.
5. In connection with any Letter of Credit Guaranty: Each of the Companies agrees that any action taken by CITBC, if taken in good faith, or any action taken by any Issuing Bank, under or in connection with the Letters of Credit, the guarantees, the drafts or acceptances, or the Collateral, shall, as between the Companies and CITBC, be binding on the Companies and shall not put CITBC in any resulting liability to the Companies other than as a result of the gross negligence or willful misconduct of CITBC. After the occurrence of an Event of Default which is not waived, CITBC shall have the full right and authority to clear and resolve any questions of non-compliance of documents; to give any instructions as to acceptance or rejection of any documents or goods; to execute any and all steamship or airways guaranties (and applications therefor), indemnities or delivery orders; to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances, or documents; and to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or acceptances; all in CITBC's sole name, and the Issuing Bank shall be issued entitled to comply with and honor any and all such documents or instruments executed by or received solely from CITBC, all without any notice to or any consent from each of the Companies.
6. In connection with any Letter of Credit Guaranty, without CITBC's express consent and, where applicable, endorsement in writing each of the Companies agrees: a) not to i) execute any and all applications for a period steamship or airway guaranties, indemnities or delivery orders; ii) grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; or iii) agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the Letters of Credit, applications, drafts or acceptances; and b) after the occurrence of an Event of Default which is not less than one yearcured within any applicable grace period, if any, or waived by CITBC, not to i) clear and resolve any questions of non-compliance of documents, or ii) give any instructions as to acceptances or rejection of any documents or goods.
7. In connection with any Letter of Credit Guaranty: Each of the Companies agrees that any necessary import, export or other licenses or certificates for the import or handling of the Collateral will have been promptly procured, and all foreign and domestic governmental laws and regulations in regard to the shipment and importation of the Collateral, or the financing thereof will have been promptly and fully complied with, except to the extent that any such non-procurement or non-compliance will not have a material adverse effect on such Collateral; and any certificates in that regard that CITBC may at any time reasonably request will be promptly furnished. In this connection, each of the Companies warrant and represent that all shipments made under any of the Letters of Credit are in accordance with the laws and regulations of the countries in which the shipments originate and terminate, and are not prohibited by any such laws and regulations, except to the extent that any failure to so comply will not have a material adverse effect on such shipments. The Companies 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. Any embargo, restriction, laws, customs or regulations of any country, state, province, city, or other political subdivision, where the Collateral is or may be located, or wherein payments are to be made, or wherein drafts may be drawn, negotiated, accepted, or paid, shall be automatically extended for one year from its date of expiration or solely the Companies' risk, liability and responsibility.
8. Upon any future expiration date unless thirty (30) days prior payments made to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider Issuing Bank under the Letter of Credit extended Guaranty, CITBC shall acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by any of the Companies to the Issuing Bank in any application for Letters of Credit, any additional period. The Reinsurer and the Company agree that the standing agreement relating to Letters of Credit provided by the Reinsurer pursuant or otherwise, all of which shall be deemed to have been granted to CITBC and apply in all respects to CITBC and shall be in addition to any rights, remedies, duties or obligations contained herein; provided, however, that if any such application or agreement is inconsistent with this Financing Agreement, this Financing Agreement shall govern and control and such application or agreement shall not give CITBC any greater rights than CITBC would otherwise have under this Financing Agreement.
9. Notwithstanding anything in this Financing Agreement to the provisions of this Agreement may be drawn upon at any timecontrary, notwithstanding any other provision of this Agreementthe Companies, and be utilized by the Company or any successorone of them, by operation may obtain standby letters of law, credit without the benefit of a Letter of Credit Guaranty provided: a) the obligations of the Company includingto such letter of credit bank, without limitationif secured, are secured exclusively by cash, cash equivalents or the Permitted Investments; b) such letters of credit are used for purposes other than for the purchase of Inventory or for securing Trade Accounts Payable; and c) such letters of credit together with the standby Letters of Credit obtained with the assistance of CITBC do not exceed $3,000,000.00 in the aggregate outstanding at any liquidator, rehabilitator, receiver or conservator one time.
10. Nothing in this Section 4 of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. Financing Agreement is intended to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. relieve any Issuing Bank from any liability to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditPerson.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.3, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, the Parent or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this AgreementCredit issued for the account of the Borrower, the Company agrees Parent or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, and containing provisions acceptable to (y) the insurance regulatory authorities having jurisdiction over aggregate Outstanding Amount of the Company's reserves in an amount equal to Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Reinsurer's proportion Outstanding Amount of reserves in respect all L/C Obligations, plus such Lender’s Applicable Percentage of lossesthe Outstanding Amount of all Swing Line Loans, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid shall not exceed such Lender’s Commitment. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.3(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless such Letter of Credit is Cash Collateralized by the Borrower upon its issuance or last extension, or unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer that generally apply to all letters of credit issued by the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $10,000, in the case of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the commercial Letter of Credit, or $10,000, in the following manner:case of a standby Letter of Credit;
A. if (D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless the statement shows that L/C Issuer has entered into arrangements, including the Reinsurer's Obligations exceed the balance delivery of credit as of the statement dateCash Collateral, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery reasonably satisfactory to the Company of an amendment L/C Issuer with the Borrower or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.14(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows then proposed to be issued or that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which the amount of credit available L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
(F) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such excess creditLetter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the Letter of Credit Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the earlier to occur of the Letter of Credit Expiration Date or bonds the termination of the Availability Period, to issue Letters of Credit at the request of the Borrower Agent for the account of a Borrower (or any other Domestic Subsidiary thereof as to which all “know your customer” or other similar requirements have been satisfied) so long as such Borrower is a joint and several co-applicant; references to a “Borrower” in this Section 2.03 shall be deemed to include reference to such other Loan Party and any applicable Domestic Subsidiary, as the case may be, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company account of a clean, irrevocable Borrower and unconditional any drawings thereunder; provided that the Letter of Credit Issuer shall not be obligated to make any Letter of Credit Extension with respect to any Letter of Credit, issued by a bankand no Revolving Credit Lender shall be obligated to participate in any Letter of Credit, and containing provisions acceptable to if as of the insurance regulatory authorities having jurisdiction over date of such Letter of Credit Extension, (A) the Company's reserves in an amount equal to Total Revolving Credit Outstandings would exceed the Reinsurer's proportion Maximum Borrowing Amount, (B) the Revolving Credit Exposure of reserves in respect any Revolving Credit Lender would exceed such Revolving Credit Lender’s Revolving Credit Commitment, or (C) the Outstanding Amount of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid all Letter of Credit Obligations would exceed the Letter of Credit Sublimit. Each request by the Company but not recovered from Borrower Agent for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date representation by the issuing bank shall notify the Company by certified or registered mail Borrower Agent that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and Extension so requested complies with the Company agree that conditions set forth in the Letters of Credit provided by the Reinsurer pursuant proviso to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreementpreceding sentence. Within the foregoing limits, and be utilized by subject to the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligationsterms and conditions hereof, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.Borrowers’
Appears in 1 contract
Samples: Credit Agreement (Roadrunner Transportation Systems, Inc.)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the L/C Expiration Date, to issue Letters of Credit for the account of Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued (x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, or (z) the Outstanding Amount of the L/C Obligations shall not exceed the L/C Sublimit. Each request by Borrower for the issuance or amendment of a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iv), the expiry date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the such requested Letter of Credit extended for any additional period. The Reinsurer and would occur more than twelve months after the Company agree that date of issuance or last extension, unless the Letters Required Lenders have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit provided by would occur after the Reinsurer L/C Expiration Date, unless all the Lenders have approved such expiry date; or
(C) such Letter of Credit is to be used for a purpose other than in the ordinary course of the Borrower’s or a Subsidiary’s business, which ordinary course of business shall be deemed to include letters of credit issued in support of trade arrangements (including product warranties), to support commercial insurance programs, to fund Borrower’s indemnification obligations to its directors and officers or as required pursuant to the provisions terms of this Agreement may the confirmed plan of reorganization in the Met-Coil Bankruptcy, unless the Required Lenders have consented thereto.
(iii) The L/C Issuer shall be drawn upon at under no obligation to issue any timeLetter of Credit if:
(A) any order, notwithstanding judgment or decree of any other provision Governmental Authority shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of this AgreementCredit, and be utilized by the Company or any successor, by operation Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;
(B) the issuance of such Letter of Credit xxxxx xxxxxte any Laws or one or more policies of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paidL/C Issuer;
B. to make refund of any sum which is in excess of (C) except as otherwise agreed by Agent and the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assetsL/C Issuer, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial face amount less than $100,000, in the case of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the commercial Letter of Credit, or $200,000, in the following manner:case of a standby Letter of Credit;
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30D) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such differenceis to be denominated in a currency other than Dollars;
B. if however(E) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the statement shows that L/C Issuer has entered into satisfactory arrangements with Borrower or such Lender to eliminate the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty L/C Issuer’s risk with respect to such Lender; or
(30F) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of credit available by Credit if the amount L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such excess creditLetter of Credit does not accept the proposed amendment to such Letter of Credit.
Appears in 1 contract
Samples: Credit Agreement (Mestek Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Lenders set forth in this Section 2.05, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of Borrower or bonds its Subsidiaries (other than Inactive Subsidiaries), and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of Borrower or its Subsidiaries (other than Inactive Subsidiaries) and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Loan Outstandings shall not exceed the Aggregate Revolving Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any Revolving Lender, plus such Revolving Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations shall not exceed such Revolving Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect Credit Sublimit. Each request by Borrower for the issuance or amendment of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) Borrower agrees that the L/C Issuer shall not issue any Letter of Credit, if subject to Section 2.05(b)(iii), the expiry date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the requested Letter of Credit extended for any additional period. The Reinsurer and would occur more than twelve months after the Company agree that date of issuance or the Letters of Credit provided by last extension, unless the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeRequired Revolving Lenders have approved such expiry date; provided, that, notwithstanding any other provision of this AgreementAgreement or the other Loan Documents, any Letter of Credit that has an expiry date after the Revolving Loan Maturity Date shall be Cash Collateralized by Borrower no later than the Revolving Loan Maturity Date; provided further, that the expiry date of any Letter of Credit shall not occur more than twelve months after the Letter of Credit Expiration Date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(1) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and be utilized which the L/C Issuer in good xxxxx xxxxx material to it;
(2) the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(3) except as otherwise agreed by the Company or any successor, by operation of law, of Administrative Agent and the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's ObligationsL/C Issuer, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess an initial stated amount less than $50,000, in the case of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the commercial Letter of Credit, or $50,000, in the following manner:case of a standby Letter of Credit;
A. (4) the Letter of Credit is to be denominated in a currency other than Dollars; or
(5) any Revolving Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with Borrower or such Revolving Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.16(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The L/C Issuer shall not amend any Letter of Credit if the statement shows that L/C Issuer would not be permitted at such time to issue the Reinsurer's Obligations exceed Letter of Credit in its amended form under the balance terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of credit as Credit if (A) the L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the statement date, Letter of Credit does not accept the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an proposed amendment to the Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Lenders with respect to any Letters of Credit increasing issued by it and the amount documents associated therewith, and the L/C Issuer shall have all of credit the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such difference;
B. Letters of Credit as fully as if howeverthe term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, the statement shows that the Reinsurer's Obligations are less than the balance of credit and (B) as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment additionally provided herein with respect to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (RealD Inc.)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Domestic Subsidiaries (other than Inactive Subsidiaries), and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Domestic Subsidiaries (other than Inactive Subsidiaries) and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Revolving Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $100,000 (other than the Letters of Credit listed on Schedule 2.03);
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless the actual amount required for A) or C)L/C Issuer has entered into arrangements, including the Company shall promptly return delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrower or such Lender to eliminate the Company L/C Issuer’s actual or the disposition of funds withdrawn, except potential Fronting Exposure (after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30Section 2.15(a)(iv)) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows then proposed to be issued or that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
(F) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Einstein Noah Restaurant Group Inc)
Letters of Credit. As regards policies (a) Subject to the terms and conditions hereof, the Working Capital Commitments may, in addition to the Loans provided for in Section 2.01 hereof, be utilized, upon the request of the Company, by the issuance of letters of credit (i) by Chase for so long as it is Administrative Agent hereunder if the Company shall so request in the notice referred to in Section 2.02(b) and Chase shall agree that such letter of credit shall be issued by Chase rather than by each of the Lenders (such letters of credit issued by Chase being hereinafter referred to as the "Participation Letters of Credit"), or bonds (ii) by the Lenders pursuant to which each Lender shall be severally obligated to pay its Working Capital Commitment Percentage of any drawing made thereunder (such letters of credit issued by the Company within Lenders being hereafter referred to as the scope "Syndicated Letters of this AgreementCredit", and the Company agrees that when it shall file with Syndicated Letters of Credit and Participation Letters of Credit being collectively referred to as the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using "Letters of Credit"). Upon the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion date of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company issuance of a clean, irrevocable and unconditional Participation Letter of Credit, issued Chase shall be deemed, without further action by a bankany party hereto, to have sold to each Lender, and containing provisions acceptable each Lender shall be deemed, without further action by any party hereto, to have purchased from Chase, a participation to the insurance regulatory authorities having jurisdiction over extent of such Lender's Working Capital Commitment Percentage in such Participation Letter of Credit and the Company's reserves in related Letter of Credit Liabilities. The aggregate amount of all Working Capital Obligations shall not at any time exceed the lesser of (i) the aggregate of the Working Capital Commitments as reduced from time to time pursuant to Section 2.03 hereof and (ii) the Borrowing Base. The aggregate amount of all Letter of Credit Liabilities shall not at any time exceed an amount equal to the Reinsurer's proportion lesser of reserves in respect (i) the aggregate amount of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered Working Capital Commitments as reduced from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred time to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer time pursuant to Section 2.03 hereof and (ii) the provisions sum of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A(x) or C$5,000,000 plus (y), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 1 contract
Samples: Credit Agreement (Applied Extrusion Technologies Inc /De)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Dollar denominated Letters of Credit for the account of the Borrower or bonds its Restricted Subsidiaries and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Outstandings of any Class shall not exceed the Aggregate Revolving Commitments of such Class, (y) the Revolving Exposure of any Revolving Lender shall not exceed such Lender’s Revolving Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion applicable Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof; provided that, notwithstanding anything in this Agreement to the contrary, SunTrust Bank shall have no obligation to renew or extend the Existing Letters of Credit beyond their respective expiration dates in effect on the Closing Date.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) the expiry date of expiration or any future expiration such requested Letter of Credit would occur more than twelve months after the date of issuance, unless thirty the Required Revolving Lenders have approved such expiry date; or
(30B) days prior to any expiration the expiry date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Revolving Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate any Laws or one or more generally applicable policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial face amount less than $500,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for Aafter any drawing thereunder; or
(F) a default of any Revolving Lender’s obligations to fund under Section 2.03(c) exists or C)any Revolving Lender is at such time a Defaulting Lender hereunder, unless the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall L/C Issuer is satisfied that it will have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except Fronting Exposure after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, in the following manner:.
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30iv) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the The L/C Issuer shall not amend any Letter of Credit increasing if the amount of credit by the amount of L/C Issuer would not be permitted at such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release time to issue such excess credit by agreeing to secure an amendment to the Letter of Credit reducing in its amended form under the amount terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of credit available by Credit if (A) the amount L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such excess creditLetter of Credit does not accept the proposed amendment to such Letter of Credit.
Appears in 1 contract
Samples: Credit Agreement (Health Management Associates Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.04, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, and to amend or bonds extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender's Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender's Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) Subject to Section 2.04(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense that was not applicable on the Closing Date and that the L/C Issuer in good faith deems material to it;
(B) xxxxxx xx xtherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $100,000;
(C) such Letter of Credit is to be denominated in a currency other than Dollars;
(D) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for after any drawing thereunder; or
(E) a default of any Lender's obligations to fund under Section 2.04(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer's risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or C)(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Company L/C Issuer shall promptly return have all of the benefits and immunities (A) provided to the Reinsurer Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that term "Administrative Agent" as used in Article IX included the Reinsurer's Obligations exceed the balance of credit L/C Issuer with respect to such acts or omissions, and (B) as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Bright Horizons Family Solutions Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars for the account of the Company or bonds any Designated Borrower, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit issued by it; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Company within the scope of this Agreement, the Company agrees or any Designated Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Company that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Company’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Company may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date;
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date; or
(C) such Letter of Credit is to be denominated in a currency other than Dollars.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial face amount less than $500,000;
(D) such Letter of Credit contains any provisions for automatic reinstatement of the actual face amount required for Aafter any drawing thereunder (an “Auto-Reinstatement Letter of Credit”); or
(E) or C)any Lender is at that time a Defaulting Lender, unless the Company shall promptly return L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of L/C Issuer (in its sole discretion) with the Company or such Lender to eliminate the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows then proposed to be issued or that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which the amount L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit issued by it if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Avnet Inc)
Letters of Credit. As regards policies or bonds issued by In addition to Borrowers requesting that Lenders make DIP/Bridge Loans pursuant to subsection 2.1A(i)(a) and that DIP Swing Line Lender makes DIP Swing Line Loans pursuant to subsection 2.1A(ii), Borrowers may request, in accordance with the Company within the scope provisions of this Agreementsubsection 3.1, from time to time during the Company agrees period from the Closing Date to but excluding the date which is (x) the fifth Business Day prior to the Commitment Termination Date (in the case of Standby Letters of Credit) and (y) the thirtieth Business Day prior to the Commitment Termination Date (in the case of Commercial Letters of Credit), that when it one or more Lenders issue Letters of Credit payable on a sight basis for the account of such Borrower for the purposes specified in the definitions of Commercial Letters of Credit and Standby Letters of Credit. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Borrowers set forth herein, any one or more Lenders may, but (except as provided in subsection 3.1B(ii)) shall file not be obligated to, issue such Letters of Credit in accordance with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves provisions of this subsection 3.1; PROVIDED that Borrowers shall not request that any Lenders issue (and loss development allowance no Lender shall issue):
(to be calculated using the formula belowi) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The any Letter of Credit shall be issued if, after giving effect to such issuance, (1) the Total Utilization of Commitments for a period all Borrowers would exceed (x) the Maximum DIP/Bridge Loan Commitments for all Borrowers then in effect or (y) the Borrowing Base for all Borrowers then in effect, or (2) the Total Utilization of not less than one yearCommitments for any Borrower would exceed the Maximum DIP/Bridge Loan Commitments for such Borrower then in effect;
(ii) any Letter of Credit if, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty after giving effect to such issuance, (301) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for Usage of any additional period. The Reinsurer and the Company agree that Borrower would exceed the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this AgreementSuballocation for such Borrower then in effect, and be utilized by (2) the Company or any successor, by operation Letter of law, Credit Usage for all Borrowers would exceed the lesser of (x) $20,000,000 and (y) the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paidMaximum DIP/Bridge Loan Commitment then effect;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on (iii) any Letter of Credit is in excess of the actual amount required for A) or C)to Company if, the Company shall promptly return after giving effect to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawnsuch issuance, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount Usage of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty would exceed (30x) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to $20,000,000 LESS (y) the Letter of Credit reducing Usage of Xxxx UK, Xxxx France and Xxxx Japan;
(iv) any Standby Letter of Credit having an expiration date later than the amount earlier of credit available by (a) the amount date which is five Business Days prior to the Commitment Termination Date and (b) the date which is one year from the date of issuance of such excess creditStandby Letter of Credit; PROVIDED that the immediately preceding clause (b) shall not prevent any Issuing Lender from agreeing that a Standby Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each unless such Issuing Lender elects not to extend for any such additional period; and PROVIDED FURTHER that such Issuing Lender shall elect not to extend such Standby Letter of Credit if it has knowledge that an Event of Default has occurred and is continuing (and has not been waived in accordance with subsection 10.6) at the time such Issuing Lender must elect whether or not to allow such extension; or
(v) any Commercial Letter of Credit having an expiration date (a) later than the earlier of (X) the date which is thirty Business Days prior to the Revolving Commitment Termination Date and (Y) the date which is 180 days from the date of issuance of such Commercial Letter of Credit or (b) that is otherwise unacceptable to the applicable Issuing Lender in its reasonable discretion.
Appears in 1 contract
Samples: Multicurrency Credit Agreement (Goss Graphic Systems Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings properly drawn under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(y) the Total Outstandings shall not exceed the Aggregate Commitments and (z) the aggregate Outstanding Amount of the Committed Loans of any Lender, and containing provisions acceptable to plus such Lender’s Applicable Percentage of the insurance regulatory authorities having jurisdiction over Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Company's reserves in an amount equal to the Reinsurer's proportion Outstanding Amount of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid all Swing Line Loans shall not exceed such Lender’s Commitment. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior subject to any expiration date the issuing bank shall notify terms and conditions hereof, the Company by certified or registered mail that the issuing bank elects not Borrower’s ability to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the obtain Letters of Credit provided shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the Reinsurer pursuant terms and conditions hereof. The Borrower agrees to promptly notify the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, Administrative Agent of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund designation of any sum which is in excess Lender or Affiliate of the actual amount required to pay the Reinsurer's Obligations under this Agreement;a Lender as an L/C Issuer.
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit (ii) No L/C Issuer shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on issue any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following mannerif:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Restatement Effective Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Restatement Effective Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Revolving Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Restatement Effective Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer 509265-1512-15059-Active.17708695.1 38 unreimbursed loss, cost or expense which was not applicable on the Restatement Effective Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $50,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for Aafter any drawing thereunder;
(F) or C)any Lender is at that time a Defaulting Lender, unless the Company shall promptly return L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrower or such Lender to eliminate the Company L/C Issuer’s actual or the disposition of funds withdrawn, except potential Fronting Exposure (after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30Section 2.14(a)(iv)) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the amount of credit by the amount of such difference;L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30G) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment. -------------------------------
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, (1) from time to time ------------ on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, and to amend or bonds renew Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower; provided that when it the L/C -------- Issuer shall file not be obligated to make any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bankand no Lender shall be obligated to participate in any Letter of Credit if as of the date of such L/C Credit Extension, (x) the Total Outstandings would exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender's Pro Rata Share of ---- the Outstanding Amount of all L/C Obligations, plus such Lender's ---- Pro Rata Share of the Outstanding Amount of all Swing Line Loans would exceed such Lender's Commitment, or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and containing provisions acceptable subject to the insurance regulatory authorities having jurisdiction over terms and conditions hereof, the CompanyBorrower's reserves in an amount equal ability to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter obtain Letters of Credit shall be issued for a period of not less than one yearfully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be automatically extended deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for one year from its which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last renewal, unless the Required Lenders have approved such expiry date;
(C) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended for any additional period. The Reinsurer and Expiration Date, unless all the Company agree that Lenders have approved such expiry date; or
(D) the Letters issuance of such Letter of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company would violate one or any successor, by operation of law, more policies of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:L/C Issuer.
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit (iii) The L/C Issuer shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue under no obligation to the benefit of the Reinsurer. In the event the amount drawn by the Company on amend any Letter of Credit is in excess of the actual amount required for if (A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall L/C Issuer would have no responsibility whatsoever obligation at such time to issue such Letter of Credit in connection with its amended form under the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervalsterms hereof, or more frequently as agreed, but never more frequently than quarterly, (B) the Company shall prepare a specific statement beneficiary of such Letter of Credit does not accept the Reinsurer's Obligations, for the sole purpose of amending the proposed amendment to such Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars, Canadian Dollars, or bonds in one or more Alternative Currencies for the account of the Company or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Company or its Subsidiaries and any drawings thereunder, except for Letters of Credit issued under the Canadian Revolving Credit Facility which shall be issued by the Company within Canadian Lender without the scope participation of this Agreement, the Company agrees other Lenders; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings under the U.S. Revolving Credit Facility or the Canadian Revolving Credit Facility shall not exceed the U.S. Revolver Ceiling or the Canadian Revolver Ceiling, respectively, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender's Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender's Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's Commitment, and containing provisions acceptable (z) the Outstanding Amount of the L/C Obligations shall not exceed the U.S. Letter of Credit Sublimit or the Canadian Letter of Credit Sublimit, as appropriate. Each request by the Company for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Company that the L/C Credit Extension so requested complies with the conditions set forth in the proviso[s] to the insurance regulatory authorities preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Company's ability to obtain Letters of Credit shall be fully revolving, and accordingly the Company may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;
(B) the issuance of such Xxxxxx xx Xredit would violate one or more policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than $100,000, in the case of a commercial Letter of Credit, or $250,000, in the case of a standby Letter of Credit; or CDN $100,000 and CDN $250,000, respectively, with regard to such Letters of Credit based under the Canadian Revolving Credit Facility;
(D) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is to be denominated in a currency other than Dollars or an Alternative Currency;
(E) the L/C Issuer does not as of the issuance date of such requested Letter of Credit issue Letters of Credit in the requested currency;
(F) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or
(G) a default of any Lender's obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Company or such Lender to eliminate the L/C Issuer's risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term "Administrative Agent" as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Company delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Company. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 10:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount and currency thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require. Additionally, the Company shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Company and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Company (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer's reserves usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the Reinsurerproduct of such Lender's proportion Applicable Percentage times the amount of reserves in respect such Letter of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by Credit.
(iii) If the Company but not recovered from the Reinsurer as shown or TWI so requests in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an "Auto-Extension Letter of Credit"); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "Non-Extension Notice Date") in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Company shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be issued for a period deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not less later than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree Expiration Date; provided, however, that the Letters L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit provided in its revised form (as extended) under the terms hereof (by the Reinsurer pursuant to reason of the provisions of this Agreement clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be drawn upon at by telephone or in writing) on or before the day that is five Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any time, notwithstanding any other provision Lender or the Company that one or more of this Agreementthe applicable conditions specified in Section 4.02 is not then satisfied, and be utilized by in each such case directing the Company or any successor, by operation L/C Issuer not to permit such extension.
(iv) Promptly after its delivery of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess or any amendment to a Letter of Credit to an advising bank with respect thereto or to the actual amount required for A) or C)beneficiary thereof, the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery L/C Issuer will also deliver to the Company and the Administrative Agent a true and complete copy of an amendment to the such Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditor amendment.
Appears in 1 contract
Letters of Credit. As regards policies or bonds issued by (a) Upon the Company within terms and subject to the scope of this Agreementconditions herein set forth, the Company agrees that when it shall file with Borrower may request a Fronting Bank, at any time and from time to time after the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves date hereof and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward prior to the Reinsurer a statement showing the proportion of such reserves which is applicable Termination Date, to issue, and, subject to the Reinsurer. The Reinsurer hereby agrees that it will apply terms and conditions contained herein, such Fronting Bank shall issue, for and secure delivery to the Company account of the Borrower or a clean, irrevocable and unconditional Letter Guarantor one or more Letters of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The provided that no Letter of Credit shall be issued for a period if after giving effect to such issuance (i) the aggregate Letter of not less than one yearCredit Outstandings shall exceed $15,000,000 or (ii) the aggregate Letter of Credit Outstandings, and when added to the aggregate outstanding principal amount of the Loans, would exceed the Total Commitment and, provided further, that no Letter of Credit shall be automatically extended for one year issued if the Fronting -------- ------- Bank shall have received notice from its date of expiration the Agent or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail Required Banks that the issuing bank elects conditions to such issuance set forth herein and any other documentation relating to such Letter of Credit have not to consider been met.
(b) deposit in the Letter of Credit extended Account) as collateral security for any additional period. the Borrower's reimbursement obligations in connection therewith, such cash to be promptly remitted to the Borrower upon the expiration, cancellation or other termination or satisfaction of such reimbursement obligations.
(c) The Reinsurer Borrower shall pay to each Fronting Bank, in addition to such other fees and charges as are specifically provided for in Section 2.21 hereof, such fees and charges in connection with the Company agree that issuance and processing of the Letters of Credit provided issued by such Fronting Bank as are customarily imposed by such Fronting Bank from time to time in connection with letter of credit transactions.
(d) Drafts drawn under each Letter of Credit shall be reimbursed by the Reinsurer pursuant Borrower in Dollars not later than the first Business Day following the date of draw and shall bear interest from the date of draw until the first Business Day following the date of draw at a rate per annum equal to the Alternate Base Rate plus 2.0% and thereafter on the unreimbursed portion until reimbursed in ---- full at a rate per annum equal to the Alternate Base Rate plus 4.0% (computed on ---- the basis of the actual number of days elapsed over a year of 365 days or 366 days in a leap year). The Borrower shall effect such reimbursement (x) if such draw occurs prior to the Termination Date, in cash or through a Borrowing without the satisfaction of the conditions precedent set forth in Section 4.02 or (y) if such draw occurs on or after the Termination Date, in cash. Each Bank agrees to make the Loans described in clause (x) of the preceding sentence notwithstanding a failure to satisfy the applicable lending conditions thereto or the provisions of this Agreement may be drawn Sections 2.02 or 2.28.
(e) Immediately upon at any time, notwithstanding any other provision the issuance of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) by any Fronting Bank, such Fronting Bank shall be deemed to have sold to each Bank other than such Fronting Bank and each such other Bank shall be deemed unconditionally and irrevocably to have purchased from such Fronting Bank, without recourse or C)warranty, the Company shall promptly return an undivided interest and participation, to the Reinsurer the excess amount so drawn. All extent of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever such Bank's Commitment Percentage, in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, each drawing thereunder and the obligations of the Borrower and the Guarantors under this Agreement with respect thereto. Upon any change in the following manner:
A. if the statement shows Commitments pursuant to Section 10.03, it is hereby agreed that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to the all Letter of Credit increasing Outstandings, there shall be an automatic adjustment to the participations hereby created to reflect the new Commitment Percentages of the assigning and assignee Banks. Any action taken or omitted by a Fronting Bank under or in connection with a Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create for such Fronting Bank any resulting liability to any other Bank.
(f) In the event that a Fronting Bank makes any payment under any Letter of Credit and the Borrower shall not have reimbursed such amount in full to such Fronting Bank pursuant to this Section, the Fronting Bank shall promptly notify the Agent, which shall promptly notify each Bank of credit by such failure, and each Bank shall promptly and unconditionally pay to the Agent for the account of the Fronting Bank the amount of such difference;
B. if howeverBank's Commitment Percentage of such unreimbursed payment in Dollars and in same day funds. If the Fronting Bank so notifies the Agent, and the statement shows that Agent so notifies the Reinsurer's Obligations are less than the balance of credit as of the statement dateBanks prior to 11:00 a.m. (Charlotte, the Company North Carolina) on any Business Day, such Banks shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment make available to the Letter Fronting Bank such Bank's Commitment Percentage of Credit reducing the amount of credit available by the amount of such excess creditpayment on such Business Day in same day funds. If and to the extent such Bank shall not have so made its Commitment Percentage of the amount of such payment available to the Fronting Bank, such Bank agrees to pay to such Fronting Bank, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Agent for the account of such Fronting Bank at the Federal Funds Effective Rate. The failure of any Bank to make available to the Fronting Bank its Commitment Percentage of any payment under any Letter of Credit shall not relieve any other Bank of its obligation hereunder to make available to the Fronting Bank its Commitment Percentage of any payment under any Letter of Credit on the date required, as specified above, but no Bank shall be responsible for the failure of any other Bank to make available to such Fronting Bank such other Bank's Commitment Percentage of any such payment. Whenever a Fronting Bank receives a payment of a reimbursement obligation as to which it has received any payments from the Banks pursuant to this paragraph, such Fronting Bank shall pay to each Bank which has paid its Commitment Percentage thereof, in Dollars and in same day funds, an amount equal to such Bank's Commitment Percentage thereof.
Appears in 1 contract
Samples: Revolving Credit and Guaranty Agreement (Galey & Lord Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the insurance regulatory authorities preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Company's reserves L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good fxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than $100,000, in the case of a commercial Letter of Credit, or $500,000, in the case of a standby Letter of Credit;
(D) such Letter of Credit is to be denominated in a currency other than Dollars; or
(E) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into reasonably satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may reasonably require. Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may reasonably require.
(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the Reinsurer's proportion product of reserves such Lender’s Applicable Percentage times the amount of such Letter of Credit.
(iii) If the Borrower so requests in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be issued for a period deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not less later than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree Expiration Date; provided, however, that the Letters L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit provided in its revised form (as extended) under the terms hereof (by the Reinsurer pursuant to reason of the provisions of this Agreement clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be drawn upon at by telephone or in writing) on or before the day that is five Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any time, notwithstanding any other provision Lender or the Borrower that one or more of this Agreementthe applicable conditions specified in Section 4.02 is not then satisfied, and be utilized by in each such case directing the Company or any successor, by operation L/C Issuer not to permit such extension.
(iv) Promptly after its delivery of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an any amendment to the a Letter of Credit increasing to an advising bank with respect thereto or to the amount of credit by beneficiary thereof, the amount L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditor amendment.
Appears in 1 contract
Letters of Credit. As regards policies or bonds issued by During the Company within the scope of this AgreementRevolving Commitment Period, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula belowi) covered hereunder which it shall be required by law to set up, it will forward subject to the Reinsurer a statement showing terms and conditions set forth herein, (A) the proportion L/C Issuer agrees, in reliance upon the agreements of such reserves which is applicable the Revolving Lenders set forth in this Section 2.01(b) and Section 2.03 (A) to issue Letters of Credit for the Reinsurer. The Reinsurer hereby agrees that it will apply for account of the Borrower on any Business Day, (B) to amend or extend Letters of Credit previously issued hereunder, and secure delivery (C) to the Company of a clean, irrevocable and unconditional Letter honor drafts under Letters of Credit, ; and (ii) the Revolving Lenders severally agree to purchase from the L/C Issuer a participation interest in the Letters of Credit issued by a bank, hereunder and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves any drawings thereunder in an amount equal to such Lender’s Revolving Commitment Percentage thereof; provided that (A) the Reinsurer's proportion aggregate principal amount of reserves in respect L/C Obligations shall not exceed THIRTY MILLION DOLLARS ($30,000,000) (the “L/C Committed Amount”), (B) with regard to the Revolving Lenders collectively, the aggregate principal amount of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating theretoRevolving Obligations shall not exceed the Aggregate Revolving Commitments, and losses and allocated loss adjustment expense paid (C) with regard to each Revolving Lender individually, such Revolving Lender’s Revolving Commitment Percentage of Revolving Obligations shall not exceed its respective Revolving Committed Amount. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date representation by the issuing bank shall notify the Company by certified or registered mail Borrower that the issuing bank elects not to consider the Letter of Credit extended for any additional periodso requested complies with the conditions set forth in clauses (A) and (B) in the proviso to the preceding sentence. The Reinsurer Within the foregoing limits, and subject to the Company agree that terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit provided by shall be fully revolving, and accordingly the Reinsurer pursuant Borrower may, during the Revolving Commitment Period, obtain Letters of Credit to the provisions replace Letters of this Agreement may be Credit that have expired or that have been drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditreimbursed.
Appears in 1 contract
Letters of Credit. As regards policies (a) LETTER OF CREDIT COMMITMENT.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this SECTION 2.04, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower and to amend or bonds renew Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower; PROVIDED that when it the L/C Issuer shall file not be obligated to make any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bankand no Lender shall be obligated to participate in any Letter of Credit if as of the date of such L/C Credit Extension, (x) the Revolving Credit Outstandings would exceed the Borrowing Limit, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, PLUS such Lender's Revolving Credit Commitment Percentage of the Outstanding Amount of all L/C Obligations, PLUS such Lender's Revolving Credit Commitment Percentage of the Outstanding Amount of all Swing Line Loans would exceed such Lender's Revolving Credit Commitment, or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and containing provisions acceptable subject to the insurance regulatory authorities having jurisdiction over terms and conditions hereof, the CompanyBorrower's reserves in an amount equal ability to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter obtain Letters of Credit shall be issued for a period of not less than one yearfully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall be automatically extended under no obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for one year from its which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) subject to SECTION 2.04(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last renewal, unless the Required Lenders have approved such expiry date;
(C) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended for any additional period. The Reinsurer and Expiration Date, unless all the Company agree that Lenders have approved such expiry date;
(D) the Letters issuance of such Letter of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company would violate one or any successor, by operation of law, more policies of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator L/C Issuer as such policies are consistently applied to all similarly situated customers of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:L/C Issuer; or
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any (E) such Letter of Credit is in excess an initial amount less than $100,000, in the case of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the commercial Letter of Credit, or $500,000, in the following manner:case of a standby Letter of Credit.
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30iii) days after receipt of notice of such excess, secure delivery The L/C Issuer shall be under no obligation to the Company of an amendment to the amend any Letter of Credit increasing if (A) the amount of credit by the amount of L/C Issuer would have no obligation at such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release time to issue such excess credit by agreeing to secure an amendment to the Letter of Credit reducing in its amended form under the amount of credit available by terms hereof, or (B) the amount beneficiary of such excess creditLetter of Credit does not accept the proposed amendment to such Letter of Credit.
Appears in 1 contract
Letters of Credit. As regards policies (i) Subject to the terms and conditions set forth herein, (A) the Issuing Bank agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.20, (i) from time to time on any Business Day during the period from the Effective Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds certain Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.20(b), and (ii) to honor drawings under the Company within Letters of Credit; and (B) the scope Standby Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Total Commitment, (y) the aggregate Outstanding Amount of the Standby Loans of any Lender, plus such Lender's Ratable Share of the Outstanding Amount of all L/C Obligations, shall not exceed such Lender's Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The Issuing Bank shall not issue any Letter of Credit if:
(A) subject to Section 2.20(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The Issuing Bank shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any Law applicable to the Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon the Issuing Bank any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Effective Date and which the Issuing Bank in good faith deems material to it;
(B) the issuxxxx xx xxxh Letter of Credit would violate any Laws or one or more policies of the Issuing Bank;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeIssuing Bank, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $100,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for after any drawing thereunder; or
(F) a default of any Lender's obligations to fund under Section 2.20(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the Issuing Bank has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the Issuing Bank's risk with respect to such Lender.
(iv) The Issuing Bank shall not amend any Letter of Credit if the Issuing Bank would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The Issuing Bank shall be under no obligation to amend any Letter of Credit if (A) the Issuing Bank would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or C)(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The Issuing Bank shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Company Issuing Bank shall promptly return have all of the benefits and immunities (A) provided to the Reinsurer Administrative Agent in Article VIII with respect to any acts taken or omissions suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever Issuing Bank in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the propriety term "Administrative Agent" as used in Article VIII included the Issuing Bank with respect to such acts or omissions, and (B) as additionally provided herein with respect to the Issuing Bank
(b) Procedures for Issuance and Amendment of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter Letters of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.; Auto-
Appears in 1 contract
Samples: Competitive Advance and Revolving Credit Facility Agreement (Citizens Communications Co)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Restricted Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Restricted Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank, (x) the Total Outstandings shall not exceed the lesser of (i) the Borrowing Base and containing provisions acceptable to (ii) the insurance regulatory authorities having jurisdiction over Aggregate Commitments and (y) the Company's reserves in an amount equal to aggregate Outstanding Amount of the Reinsurer's proportion Loans of reserves in respect any Lender plus such Lender’s Pro Rata Share of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid the Outstanding Amount of all L/C Obligations shall not exceed such Lender’s Commitment. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date;
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date; or
(C) after giving effect to such issuance, the Total Outstandings shall exceed the lesser of (x) the Borrowing Base and (y) the Aggregate Commitments.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good fxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate any Laws or one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial face amount less than $100,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for after any drawing thereunder; or
(F) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall L/C Issuer would have no responsibility whatsoever obligation at such time to issue such Letter of Credit in connection with its amended form under the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervalsterms hereof, or more frequently as agreed, but never more frequently than quarterly, (B) the Company shall prepare a specific statement beneficiary of such Letter of Credit does not accept the Reinsurer's Obligations, for the sole purpose of amending the proposed amendment to such Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 1 contract
Samples: Credit Agreement (Holly Corp)
Letters of Credit. As regards policies (a) The Issuing Lender will, from time to time until the Revolving Credit Termination Date, upon receipt of duly executed Applications and such other documents, instruments and/or agreements as the Issuing Lender may require, issue or bonds issued by the Company within the scope amend Letters of this Agreement, the Company agrees that when it shall file with the insurance regulatory authority or set up Credit on its books reserves for losses, unearned premium reserves and loss development allowance (to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward such terms as are satisfactory to the Reinsurer a statement showing Issuing Lender, provided, however that the proportion Issuing Lender shall not issue any Letter of Credit (A) at any time if, after giving effect to such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bankthe Letter of Credit Obligations would exceed the lesser of (i) $5,000,000 or (ii) the aggregate amount of Revolving Credit Commitments minus the sum of (w) the Letter of Credit Obligations, (x) the outstanding principal balance of the Revolving Credit Loans and (y) the outstanding principal balance of the Swing Line Loans, and containing provisions acceptable (B) with an expiry date (i) more than one year from its issuance or (ii) subsequent to a date 30 days prior to the insurance regulatory authorities having jurisdiction over Revolving Credit Termination Date.
(b) OpCo agrees to reimburse the Company's reserves in an amount equal Administrative Agent for the account of the Issuing Lender, on demand, for each such payment made by the Issuing Lender under or pursuant to any Letter of Credit or L/C Draft. OpCo further agrees to pay to the Reinsurer's proportion Administrative Agent for the account of reserves the Issuing Lender, on demand, interest at the rate set forth in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense Section 2.13 applicable to Base Rate Loans on any amount paid by the Company but not recovered Issuing Lender under or pursuant to any Letter of Credit or L/C Draft from the Reinsurer as shown in date of payment until the statement prepared date of reimbursement to the Issuing Lender.
(c) OpCo's obligation to reimburse the Administrative Agent for the account of the Issuing Lender for payments and disbursements made by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Issuing Lender under any Letter of Credit shall be issued for a period absolute and unconditional under any and all circumstances and irrespective of not less than one yearany setoff, and shall be automatically extended for one year from its date of expiration counterclaim or defense to payment which OpCo may have or have had against the Issuing Lender (or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeother Lender), notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator defense based on the failure of the Company demand for payment under such Letter of Credit to conform to the following purposesterms of such Letter of Credit, unless otherwise provided for in a separate Trust Agreement:
A. the legality, validity, regularity or enforceability of such Letter of Credit, or the identity of the transferee of such Letter of Credit or the sufficiency of any transfer of such Letter of Credit is transferable; provided, however, that OpCo shall not be obligated to reimburse the Company Administrative Agent for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess account of the actual amount required to pay the Reinsurer's Obligations Issuing Lender for any wrongful payment or disbursement made under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess as a result of the actual amount required for A) acts or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency omissions constituting gross negligence or willful misconduct on the part of the Company Issuing Lender or any of its officers, employees or agents.
(d) Notwithstanding anything to the Reinsurer. The issuing bank shall contrary herein or in any Application, upon the occurrence of an Event of Default, an amount equal to the aggregate amount of the outstanding Letter of Credit Obligations shall, without demand upon or further notice to OpCo, be deemed (as between the Issuing Lender and OpCo) to have no responsibility whatsoever in connection with the propriety of withdrawals made been paid or disbursed by the Company Issuing Lender under the Letters of Credit issued and L/C Drafts accepted by the Issuing Lender (notwithstanding that such amounts may not in fact have been so paid or disbursed), and a Revolving Credit Loan, which shall be a Base Rate Loan, to OpCo in the disposition amount of funds withdrawnsuch Letter of Credit Obligations to have been made and accepted by OpCo, except which Loan shall be immediately due and payable.
(e) With respect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the each Letter of Credit, each Lender (other than the Issuing Lender) hereby irrevocably and unconditionally agrees that it shall be deemed to have purchased and received from the Issuing Lender, without recourse or warranty an undivided interest in such Letter of Credit, effective simultaneously with the following manner:
A. if issuance thereof, in an amount equal to such Lender's Commitment Percentage of such Letter of Credit. For the statement shows that the Reinsurer's Obligations exceed the balance purposes of credit as of the statement datethis Agreement, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to proportionate interest which the Company of an amendment to the Issuing Lender retains in each Letter of Credit increasing shall be referred to as its "participation" in such Letter of Credit.
(f) If the Issuing Lender shall fail to be reimbursed pursuant to subsections (b) or (d) above by OpCo for any payment or disbursement under a Letter of Credit or L/C Draft, each other Lender shall, promptly upon request of the Issuing Lender, make a Revolving Credit Loan, which shall be a Base Rate Loan in an amount equal to such Lender's Commitment Percentage of such payment or disbursement. If the Administrative Agent or the Issuing Lender subsequently receives from OpCo any reimbursement of such payment or disbursement, the Administrative Agent or the Issuing Lender, as the case may be, shall promptly remit to each Lender its Commitment Percentage of such reimbursement. All interest payments received by the Issuing Lender or the Administrative Agent on account of reimbursements under this Agreement shall be promptly distributed by the Issuing Lender or the Administrative Agent, as the case may be, to the other Lenders pro rata according to their respective Commitment Percentages (except to the extent that the Issuing Lender was not promptly reimbursed by any such Lender).
(g) The obligation of each Lender to provide the Administrative Agent with such Lender's pro rata share of the amount of credit any payment or disbursement made by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Issuing Lender under any outstanding Letter of Credit reducing or L/C Draft shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which such Lender may have or have had against the amount Issuing Lender (or any other Lender), including, without limitation, any defense based on the failure of credit available the demand for payment under such Letter of Credit to conform to the terms of such Letter of Credit, the legality, validity, regularity or enforceability of such Letter of Credit, or the identity of the transferee of such Letter of Credit or the sufficiency of any transfer if such Letter of Credit is transferable; provided, however, that the Lenders shall not be obligated to reimburse the Issuing Lender for any wrongful payment or disbursement made under any Letter of Credit as a result of acts or omissions constituting gross negligence or willful misconduct on the part of the Issuing Lender or any of its officers, employees or agents.
(h) In determining whether to make any payment under or pursuant to any Letter of Credit or any related L/C Draft, the Issuing Lender shall have no obligation to OpCo, any Lender or any other Person other than to confirm that any documents required to be delivered have been delivered and that such documents comply on their face with the requirements of such Letter of Credit. No action taken or omitted by the amount Issuing Lender under or in connection with any Letter of such excess creditCredit or L/C Draft, if taken or omitted in the absence of gross negligence or willful misconduct, shall put the Issuing Lender under any resulting liability to OpCo or any Lender.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders under the applicable Revolving Credit Facility set forth in this Section 2.03, to honor drawings, payments or bonds disbursements, as applicable, under the Letters of Credit issued under such Revolving Credit Facility; and (B) (i) with respect to a request for a Letter of Credit (which may include bank guarantees issued in connection with transactions outside of the United States) by the Company within US Borrower or the scope European Borrower in respect of this Agreementthe Multicurrency RCF Commitments (each such letter of credit, a “Multicurrency RCF Letter of Credit”), the Company agrees that when it shall file Multicurrency RCF Lenders severally agree to participate in Multicurrency RCF Letters of Credit issued for the account of the US Borrower and for the account of the European Borrower, and any drawings, payments or disbursements, as applicable, thereunder and (ii) with respect to a request for a Letter of Credit by the US Borrower in respect of the US Dollar RCF Commitments (each such letter of credit, a “US Dollar RCF Letter of Credit” and, together with the insurance regulatory authority Multicurrency RCF Letters of Credit, the “Letters of Credit”), the US Dollar RCF Lenders severally agree to participate in US Dollar RCF Letters of Credit issued for the account of the US Borrower, and any drawings, payments or set up on its books reserves for lossesdisbursements, unearned premium reserves and loss development allowance (as applicable, thereunder; provided that after giving effect to be calculated using the formula below) covered hereunder which it shall be required by law any L/C Credit Extension with respect to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued (i) the Total Multicurrency RCF Outstandings shall not exceed the Multicurrency Revolving Credit Facility, (ii) the Total US Dollar RCF Outstandings shall not exceed the US Dollar Revolving Credit Facility, (iii) the aggregate Outstanding Amount of the Multicurrency RCF Loans of any Multicurrency RCF Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Multicurrency RCF L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Multicurrency RCF Swing Line Loans shall not exceed such Xxxxxx’s Multicurrency RCF Commitment, (iv) the aggregate Outstanding Amount of the US Dollar RCF Loans of any US Dollar RCF Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all US Dollar RCF L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all US Dollar RCF Swing Line Loans shall not exceed such Lender’s US Dollar RCF Commitment and (v) the Outstanding Amount of the sum of (x) the Multicurrency RCF L/C Obligations and (y) the US Dollar RCF L/C Obligations, shall not exceed the Letter of Credit Sublimit. Each request by a bank, and containing provisions acceptable to Borrower for the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion issuance or amendment of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by such Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrowers may, during the Availability Period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon or payments or disbursements made in respect of, as applicable, and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) the expiry date of expiration or any future expiration date unless such requested Letter of Credit would occur more than thirty (30) days prior months after the date of issuance or last extension, unless (x) with respect to any expiration Multicurrency RCF Letters of Credit, the Required Multicurrency Revolving Lenders have approved such expiry date and (y) with respect to US Dollar RCF Letters of Credit, the issuing bank shall notify Required US Dollar Revolving Lenders have approved such expiry date; or
(B) the Company by certified or registered mail that the issuing bank elects not to consider expiry date of such requested Letter of Credit would occur after the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters Expiration Date; or
(C) such requested Letter of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company is for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of (x) in the Reinsurer. In case of a commercial Letter of Credit, sellers of goods to Parent or any of its Subsidiaries, or (y) in the event case of any other Letters of Credit, any holder (or any trustee, agent or other similar representative for any such holders) of L/C Supportable Obligations.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the amount drawn L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally (and, if any requested Letter of Credit would violate such policies and the L/C Issuer refuses to issue such Letter of Credit on the basis thereof, the L/C Issuer shall promptly notify the applicable Borrower of the details thereof);
(C) except as otherwise agreed by the Company on any Administrative Agent and the L/C Issuer, such Letter of Credit is in excess an initial stated amount less than $100,000, in the case of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the commercial Letter of Credit, or $500,000, in the following manner:case of a standby Letter of Credit or Bank Guarantee;
A. if (D) (x) in the statement shows case of Multicurrency RCF Letters of Credit, such Letter of Credit is to be denominated in a currency other than Dollars or an Alternative Currency and (y) in the case of US Dollar RCF Letters of Credit, such Letter of Credit is to be denominated in a currency other than Dollars; or
(E) (x) with respect to Multicurrency RCF Letters of Credit, any Multicurrency RCF Lender is at that the Reinsurer's Obligations exceed the balance time a Defaulting Lender hereunder and (y) with respect to US Dollar RCF Letters of credit as of the statement dateCredit, any US Dollar RCF Lender is at that time a Defaulting Lender hereunder, unless, in any such case, the Reinsurer shallL/C Issuer has entered into arrangements, within thirty (30) days after receipt including the delivery of notice of such excessCash Collateral, secure delivery satisfactory to the Company of an amendment L/C Issuer (in its sole discretion) with the Borrowers or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.16(a)(iv) and (v)) with respect to the Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows then proposed to be issued or that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which the amount L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Credit Lenders of the relevant Revolving Credit Facility with respect to any Letters of Credit issued by it under such Revolving Credit Facility and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it under such excess creditRevolving Credit Facility and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
(vii) It is understood and agreed that in respect of any bank guarantee (x) the form of bank guarantees shall be subject to the respective L/C Issuer’s internal policies and procedures for the issuance of bank guarantees and to applicable local law restrictions and regulations and (y) the L/C Issuer issuing a bank guarantee may require the Borrower requesting such bank guarantee to accept such L/C Issuer’s general business conditions specifically applicable to its bank guarantee business prior to the issuance of any bank guarantee.
Appears in 1 contract
Samples: Credit Agreement
Letters of Credit. As regards policies During the Commitment Period, (i) the L/C Issuer agrees (A) to issue Letters of Credit denominated in Dollars or bonds in one or more Alternative Currencies for the account of the Borrower or any of its Restricted Subsidiaries on any Business Day, (B) to amend or extend Letters of Credit previously issued by the Company within the scope of this Agreementhereunder, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (C) to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter honor drawings under Letters of Credit, ; and (ii) the Revolving Credit Lenders severally agree to purchase from the L/C Issuer a participation interest in the Existing Letters of Credit and Letters of Credit issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves hereunder in an amount equal to such Revolving Credit Lender’s Aggregate Commitment Percentage thereof; provided that (x) the Reinsurer's proportion Outstanding Amount of reserves L/C Obligations shall not exceed $50,000,000 (as such amount may be decreased in respect accordance with the provisions hereof, the “L/C Sublimit”), (y) the Outstanding Amount of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating theretoRevolving Credit Obligations shall not exceed the Aggregate Revolving Credit Committed Amount, and losses (z) with regard to each Revolving Credit Lender individually, such Revolving Credit Lender’s Aggregate Commitment Percentage of the Outstanding Amount of Revolving Credit Obligations shall not exceed its Revolving Credit Commitment. Subject to the terms and allocated loss adjustment expense paid by conditions hereof, the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred Borrower’s ability to as "Reinsurer's Obligations"). The Letter obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. Existing Letters of Credit shall be deemed to have been issued for a period of not less than one year, hereunder and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior subject to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided governed by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, terms and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditconditions hereof.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.04, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, and to amend or bonds extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the insurance regulatory authorities preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. The Existing Letter of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.04(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Company's reserves L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to such L/C Issuer’s letter of credit applicants generally;
(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than $100,000, in the case of a commercial Letter of Credit, or $500,000, in the case of a standby Letter of Credit;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) a default of any Lender’s obligations to fund under Section 2.04(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article X included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require. Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the Reinsurer's proportion product of reserves such Lender’s Applicable Percentage times the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.04(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.
(iv) Any Lender with a Commitment (in such capacity, a “Discretionary L/C Issuer”) may from time to time, at the written request of the Borrower (with a copy to the Administrative Agent) and with the consent of the Administrative Agent (such consent not to be unreasonably withheld), and in such Lender’s sole discretion, agree to issue one or more Letters of Credit for the account of the Borrower on the same terms and conditions in all respects as are applicable to the Letters of Credit issued by the L/C Issuer hereunder by executing and delivering to the Administrative Agent a written agreement to such effect, among (and in form and substance satisfactory to) the Borrower, the Administrative Agent and such Discretionary L/C Issuer. With respect to each of the Letters of Credit issued (or to be issued) thereby, each of the Discretionary L/C Issuers shall have all of the same rights and obligations under and in respect of losses, unearned premium reserves this Agreement and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one yearother Loan Documents, and shall be automatically extended for one year from its date entitled to all of expiration or the same benefits (including the rights, obligations and benefits set forth in Sections 2.04, 10.07 and 11.04), as are afforded to the L/C Issuer hereunder and thereunder. The Administrative Agent shall promptly notify each of the Lenders with a Commitment of the appointment of any future expiration date unless thirty (30) days prior Discretionary L/C Issuer. Each Discretionary L/C Issuer shall provide to any expiration date the issuing bank shall notify Administrative Agent, on a monthly basis, a report that details the Company by certified or registered mail that the issuing bank elects not activity with respect to consider the each Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided issued by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, such Discretionary L/C Issuer (including an indication of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator maximum amount then in effect with respect to each such Letter of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:Credit).
A. to reimburse the Company for the Reinsurer's Obligations, the payment (v) Promptly after its delivery of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an any amendment to the a Letter of Credit increasing to an advising bank with respect thereto or to the amount of credit by beneficiary thereof, the amount L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditor amendment.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Amendment and Restatement Effective Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries (other than a Special Purpose Finance Subsidiary), and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans, shall not exceed such Lender’s Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s and its Subsidiaries’ ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower and its Subsidiaries may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. After the Funding Date, all Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Funding Date shall be subject to and governed by the terms and conditions hereof.
(ii) No L/C Issuer shall issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless a Majority in Interest of the Revolving Credit Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended for Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.
(iii) No L/C Issuer shall be under any additional period. The Reinsurer and the Company agree that the Letters obligation to issue any Letter of Credit provided if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which such L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate in any material respect one or more policies of such L/C Issuer applicable to letters of credit generally and customary for issuers of letters of credit;
(C) except as otherwise agreed by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeAdministrative Agent and such L/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $10,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or
(F) (x) a default of any Lender’s obligations to fund under Section 2.03(c) exists or (y) any Revolving Credit Lender is at such time a Defaulting Lender hereunder, in each case unless such L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate such L/C Issuer’s actual amount required for Aor reasonably determined potential Fronting Exposure (after giving effect to Sections 2.15(a)(iv) or Cand 2.15(a)(v), the Company shall promptly return ) with respect to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing the amount of credit by the amount of then proposed to be issued or such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing and all other L/C Obligations as to which such L/C Issuer has actual or reasonably determined potential Fronting Exposure.
(iv) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the amount of credit available by terms hereof, or (B) the amount beneficiary of such excess creditLetter of Credit does not accept the proposed amendment to such Letter of Credit.
(v) Each L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included such L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to such L/C Issuer.
Appears in 1 contract
Samples: Amendment and Restatement Agreement (Valvoline Inc)
Letters of Credit. As regards policies or bonds (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the L/C Expiration Date, to issue Letters of Credit for the account of Borrower, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the lesser of (1) the Aggregate Commitments, (2) the Unencumbered Pool Value, and containing provisions acceptable to (3) the insurance regulatory authorities having jurisdiction over sum of (A) the Company's reserves in an amount equal to Term Loan Commitment Amount plus (B) the Reinsurer's proportion Revolving Commitment Amount, (y) the aggregate Outstanding Amount of reserves in respect the Committed Loans of lossesany Lender, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating theretoplus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations shall not exceed such Lender’s Commitment, and losses and allocated loss adjustment expense paid or (z) the Outstanding Amount of the L/C Obligations shall not exceed the L/C Sublimit. Each request by Borrower for the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) the expiry date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the such requested Letter of Credit extended for any additional period. The Reinsurer and would occur more than twelve months after the Company agree that date of issuance or last extension, unless the Letters Required Lenders have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit provided by would occur after the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposesL/C Expiration Date, unless otherwise provided for in a separate Trust Agreement:
A. the Required Lenders have approved such expiry date and subject to reimburse the Company for the Reinsurer's ObligationsSection 2.03(g) below; provided, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assetshowever, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on that any Letter of Credit may contain customary automatic renewal provisions agreed upon by Borrower and the L/C Issuer pursuant to which the expiration date of such Letter of Credit shall automatically be extended for consecutive periods of up to twelve (12) months (but not to a date later than the date that is in excess one year after the Revolving Credit Maturity Date.
(iii) The L/C Issuer shall be under no obligation to issue any Letter of the actual amount required for Credit if:
(A) any order, judgment or C), decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The L/C Issuer from issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, in or any Law applicable to the following manner:
A. if L/C Issuer or any request or directive (whether or not having the statement shows force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the Reinsurer's Obligations exceed L/C Issuer refrain from, the balance issuance of letters of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of generally or such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing in particular or shall impose upon the amount of credit by the amount of L/C Issuer with respect to such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing any restriction, reserve or capital requirement (for which the amount L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit available generally;
(C) such Letter of Credit is to be denominated in a currency other than Dollars;
(D) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender; or
(E) UNLESS SPECIFICALLY PROVIDED FOR IN THIS AGREEMENT, SUCH LETTER OF CREDIT CONTAINS ANY PROVISIONS FOR AUTOMATIC REINSTATEMENT OF THE STATED AMOUNT AFTER ANY DRAWING THEREUNDER.
(iv) THE L/C ISSUER SHALL NOT AMEND ANY LETTER OF CREDIT IF THE L/C ISSUER WOULD NOT BE PERMITTED AT SUCH TIME TO ISSUE SUCH LETTER OF CREDIT IN ITS AMENDED FORM UNDER THE TERMS HEREOF.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” or “Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, and to amend or bonds extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii) and the inclusion of automatic extension provisions referenced therein, the expiry date of the requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good fxxxx xxxxx material to it;
(B) the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, the Letter of Credit is in an initial stated amount less than $100,000;
(D) the Letter of Credit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.16(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
(F) the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue the Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the Letter of Credit does not accept the proposed amendment to the Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by a bankit and the documents associated therewith, and containing provisions the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission using the system provided by the L/C Issuer, by personal delivery or by any other means acceptable to the insurance regulatory authorities having jurisdiction over L/C Issuer. Such Letter of Credit Application must be received by the Company's reserves L/C Issuer and the Administrative Agent not later than 1:00 p.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require. Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or the Borrower, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the Reinsurer's proportion product of reserves such Lender’s Applicable Percentage times the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(v) Any Lender with a Commitment (in such capacity, a “Discretionary L/C Issuer”) may from time to time, at the written request of the Borrower (with a copy to the Administrative Agent) and with the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed), and in such Lender’s sole discretion, agree to issue one or more Letters of Credit for the account of the Borrower on the same terms and conditions in all respects as are applicable to the Letters of Credit issued by the L/C Issuer hereunder by executing and delivering to the Administrative Agent a written agreement to such effect, among (and in form and substance satisfactory to) the Borrower, the Administrative Agent and such Discretionary L/C Issuer. With respect to each of the Letters of Credit issued (or to be issued) thereby, each of the Discretionary L/C Issuers shall have all of the same rights and obligations under and in respect of losses, unearned premium reserves this Agreement and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one yearother Loan Documents, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior entitled to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, all of the Company same benefits (including, without limitation, any liquidatorthe rights, rehabilitatorobligations and benefits set forth in Sections 2.03, receiver or conservator 9.07 and 10.01), as are afforded to the L/C Issuer hereunder and thereunder. The Administrative Agent shall promptly notify each of the Company for Lenders with a Commitment of the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund appointment of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's ObligationsDiscretionary L/C Issuer. Such cash deposit Each Discretionary L/C Issuer shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue provide to the benefit of Administrative Agent, on a monthly basis, a report that details the Reinsurer. In the event the amount drawn by the Company on any activity with respect to each Letter of Credit is in excess issued by such Discretionary L/C Issuer (including an indication of the actual maximum amount required for A) or C), the Company shall promptly return then in effect with respect to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the each such Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit).
Appears in 1 contract
Samples: Credit Agreement (DST Systems Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for the account of the Borrower or bonds any of its Restricted Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or any of its Restricted Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, (y) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Revolving Commitment and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto and deemed L/C Obligations, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration the requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Lenders (other than Defaulting Lenders) holding a majority of the Revolving Credit Exposure have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders that have Revolving Commitments have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of Law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $250,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless the actual amount required for A) or C)L/C Issuer has entered into arrangements, including the Company shall promptly return delivery of Cash Collateral, satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrower or such Defaulting Lender to eliminate the Company L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.15(b)) with respect to the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending Defaulting Lender arising from either the Letter of CreditCredit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
(F) such Letter of Credit contains any provisions for automatic reinstatement of the following manner:stated amount after any drawing thereunder.
A. (iv) The L/C Issuer shall not amend any Letter of Credit if the statement shows that L/C Issuer would not be permitted at such time to issue the Reinsurer's Obligations exceed Letter of Credit in its amended form under the balance terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of credit as Credit if (A) the L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the statement date, Letter of Credit does not accept the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an proposed amendment to the Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit increasing issued by it and the amount documents associated therewith, and the L/C Issuer shall have all of credit the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such difference;
B. Letters of Credit as fully as if howeverthe term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, the statement shows that the Reinsurer's Obligations are less than the balance of credit and (B) as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment additionally provided herein with respect to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies or bonds (a) On the Closing Date, each of the Continuing Letters of Credit shall be deemed to have been issued by the Company within the scope of and to be outstanding under this Agreement, and each issuer of a Continuing Letter of Credit hereby consents to the Company agrees that when it shall file termination, concurrently with the insurance regulatory authority Closing Date, of the participation therein of the lenders under the Existing Xxxxxx'x Credit Agreements.
(b) Subject to the terms and conditions hereof, at any time and from time to time from the Closing Date through the day prior to the Maturity Date, any one or set up on its books reserves more of the Borrowers may request that any one or more of the Revolving Lenders issue, as Issuing Lender, additional Letters of Credit under the Revolving Loan Commitment (each of which shall be denominated in Dollars) by submission of a Request for lossesLetter of Credit to such Revolving Lender (with a copy to the Administrative Agent); PROVIDED that giving effect to all such Letters of Credit, unearned premium reserves (i) the Outstanding Revolving Obligations shall not exceed the Revolving Loan Commitment at any time, (ii) without the consent of all of the Revolving Lenders, the aggregate principal amount of the Outstanding Revolving Obligations of each Borrower hereafter designated as such pursuant to Section 2.9 shall not exceed that Borrower's Aggregate Sublimit at any time, and loss development allowance (iii) the Aggregate Effective Amount under all outstanding Letters of Credit shall not exceed $200,000,000. Each Letter of Credit shall be in a form reasonably acceptable to the relevant Issuing Lender. Unless all the Revolving Lenders otherwise consent in a writing delivered to the Administrative Agent, no Letter of Credit shall have a term which extends beyond the Maturity Date.
(c) Each Request for Letter of Credit shall be submitted to the relevant Issuing Lender, with a copy to the Administrative Agent, at least five Business Days prior to the date upon which the related Letter of Credit is proposed to be calculated using issued (or such shorter period as may be acceptable to both the formula below) covered hereunder which it shall be required by law to set up, it will forward to relevant Issuing Lender and the Reinsurer a statement showing the proportion of such reserves which is applicable to the ReinsurerAdministrative Agent). The Reinsurer hereby agrees that it will apply Administrative Agent shall promptly notify the relevant Issuing Lender whether such Request for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by and the issuance of a bankLetter of Credit pursuant thereto, conforms to the requirements of this Agreement. Upon issuance, amendment to or extension of a Letter of Credit, the relevant Issuing Lender shall promptly notify the Administrative Agent, and containing provisions acceptable the Administrative Agent shall promptly notify the Revolving Lenders, of the amount and terms thereof.
(d) On the Closing Date, each Revolving Lender shall be deemed to have purchased a pro rata participation in each Continuing Letter of Credit from the insurance regulatory authorities having jurisdiction over the Company's reserves relevant Issuing Lender in an amount equal to that Lender's Revolving Pro Rata share. Upon the Reinsurerissuance of each other Letter of Credit, each Revolving Lender shall be deemed to have purchased a pro rata participation in such Letter of Credit from the relevant Issuing Lender in an amount equal to that Lender's proportion Revolving Pro Rata Share. Without limiting the scope and nature of reserves each Revolving Lender's participation in any Letter of Credit, to the extent that the relevant Issuing Lender has not been reimbursed by the Borrower which is the account party for any Letter of Credit for any payment required to be made by the relevant Issuing Lender thereunder, each Revolving Lender shall, pro rata according to its Revolving Pro Rata Share, reimburse the relevant Issuing Lender promptly upon demand for the amount of such payment. The obligation of each Revolving Lender to so reimburse the relevant Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrowers to reimburse the relevant Issuing Lender for the amount of any payment made by the relevant Issuing Lender under any Letter of Credit together with interest as hereinafter provided.
(e) Promptly and in any event within one Business Day following any drawing upon a Letter of Credit, the amendment or extension thereof, the Issuing Bank for that Letter of Credit shall provide notice thereof to the Administrative Agent. Each Borrower agrees to pay to the relevant Issuing Lender an amount equal to any payment made by the relevant Issuing Lender with respect to each Letter of lossesCredit within one Business Day after demand made by the relevant Issuing Lender therefor (which demand the relevant Issuing Lender shall make promptly and in any event shall make upon the request of the Requisite Revolving Lenders), unearned premium reserves together with interest on such amount from the date of any payment made by the relevant Issuing Lender at the rate applicable to Base Rate Loans for three Business Days and loss development allowances thereafter at the Default Rate. The principal amount of any such payment shall be used to reimburse the relevant Issuing Lender for the payment made by it under the Letter of Credit and, to the extent that the Revolving Lenders have not reimbursed the relevant Issuing Lender pursuant to Section 2.4(d), the interest amount of any such payment shall be for the account of the relevant Issuing Lender. Each Revolving Lender that has reimbursed the relevant Issuing Lender pursuant to Section 2.4(d) for its Revolving Pro Rata Share of any payment made by the relevant Issuing Lender under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of such reimbursement, in the claim of the relevant Issuing Lender against Borrowers for reimbursement of principal and allocated loss adjustment expense relating theretointerest under this Section 2.4(e) and shall share, in accordance with that pro rata participation, in any principal payment made by Borrowers with respect to such claim and losses and allocated loss adjustment expense in any interest payment made by Borrowers (but only with respect to periods subsequent to the date such Revolving Lender reimbursed the relevant Issuing Lender) with respect to such claim. The relevant Issuing Lender shall promptly make available to the Administrative Agent, which will thereupon remit to the appropriate Revolving Lenders, in immediately available funds, any amounts due to the Revolving Lenders under this Section.
(f) Each Borrower may, pursuant to a Request for Loan, request that Advances be made pursuant to Section 2.1(b) to provide funds for the payment required by Section 2.4(e) and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid directly by the Administrative Agent to the relevant Issuing Lender to reimburse it for the payment made by it under the Letter of Credit.
(g) If Borrowers fail to make the payment required by Section 2.4(e) within the time period therein set forth, in lieu of the reimbursement to the relevant Issuing Lender under Section 2.4(d) the relevant Issuing Lender may (but is not required to), without notice to or the consent of Borrowers, require that the Administrative Agent request that the Revolving Lenders make Advances under the Revolving Loan Commitment in an aggregate amount equal to the amount paid by that Issuing Lender with respect to that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid by the Company but not recovered from Administrative Agent directly to the Reinsurer as shown in relevant Issuing Lender to reimburse it for the statement prepared payment made by it under the Company Letter of Credit.
(hereinafter referred h) The issuance of any supplement, modification, amendment, renewal, or extension to as "Reinsurer's Obligations"). The or of any Letter of Credit shall be issued for treated in all respects the same as the issuance of a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the new Letter of Credit extended for any additional period. Credit.
(i) The Reinsurer and obligation of Borrowers to pay to each Issuing Lender the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund amount of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations payment made by that Issuing Lender under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess shall be absolute, unconditional, and irrevocable. Without limiting the foregoing, Borrowers' obligations shall not be affected by any of the actual amount required for Afollowing circumstances:
(i) any lack of validity or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All enforceability of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from the following manner:Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
A. if (iii) the statement shows that the Reinsurer's Obligations exceed the balance existence of credit as any claim, setoff, defense, or other rights which any Borrower may have at any time against any Issuing Lender or any other Creditor, any beneficiary of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with the amount Letter of credit by the amount of such differenceCredit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;
B. if however(iv) any demand, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement datestatement, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to or any other document presented under the Letter of Credit reducing the amount of credit available proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;
(v) payment by the amount relevant Issuing Lender under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the Letter of Credit;
(vi) the existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or any difference between any such Property and the character, quality, quantity, condition, or value of such excess creditProperty as described in such documents;
(vii) the time, place, manner, order or contents of shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the existence, nature and extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any Property;
(x) any error in the transmission of any message relating to a Letter of Credit not caused by the relevant Issuing Lender, or any delay or interruption in any such message;
(xi) any consequence arising from acts of God, war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the relevant Issuing Lender;
(xii) so long as the relevant Issuing Lender in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the relevant Issuing Lender in connection with a Letter of Credit; and
(xiii) where the relevant Issuing Lender has acted in good faith and observed general banking usage, any other circumstances whatsoever.
(j) Each Issuing Lender shall be entitled to the protection accorded to the Administrative Agent pursuant to Section 10.3, MUTATIS MUTANDIS.
(k) Unless otherwise expressly agreed by an Issuing Lender and a Borrower when a Letter of Credit is issued (including any such agreement applicable to a Continuing Letter of Credit), such Letter of Credit shall provide that (i) the rules of the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to it if it is a standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the "ICC") at the time of issuance (including the ICC decision published by the Commission on Banking Technique and Practice on April 6, 1998 regarding the European single currency (euro)) shall apply to it if it is a commercial Letter of Credit.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the Letter of Credit Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the earlier to occur of the Letter of Credit Expiration Date or bonds the termination of the Availability Period, to issue Letters of Credit at the request of the Borrower Agent for the account of a Borrower (or any other Loan Party or Domestic Subsidiary thereof as to which all “know your customer” or other similar requirements have been satisfied) so long as such Borrower is a joint and several co-applicant; references to a “Borrower” in this Section 2.03 shall be deemed to include reference to such other Loan Party and any applicable Domestic Subsidiary, as the case may be, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the a Borrower and any drawings thereunder; provided that when it the Letter of Credit Issuer shall file not be obligated to make any Letter of Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bankand no Revolving Credit Lender shall be obligated to participate in any Letter of Credit, and containing provisions acceptable to if as of the insurance regulatory authorities having jurisdiction over date of such Letter of Credit Extension, (A) the Company's reserves in an amount equal to Total Revolving Credit Outstandings would exceed the Reinsurer's proportion Maximum Borrowing Amount, (B) the Revolving Credit Exposure of reserves in respect any Revolving Credit Lender would exceed such Revolving Credit Lender’s Revolving Credit Commitment, or (C) the Outstanding Amount of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid all Letter of Credit Obligations would exceed the Letter of Credit Sublimit. Each request by the Company but not recovered from Borrower Agent for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date representation by the issuing bank shall notify the Company by certified or registered mail Borrower Agent that the issuing bank elects not to consider the Letter of Credit extended for any additional periodExtension so requested complies with the conditions set forth in the proviso to the preceding sentence. The Reinsurer Within the foregoing limits, and subject to the Company agree that terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit provided shall be fully revolving, and accordingly the 76 [Matrix] Credit Agreement #85638137 Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The Letter of Credit Issuer shall not issue any Letter of Credit, if: (A) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur (i) as to standby Letters of Credit, more than twelve months after the date of issuance or last renewal, and (ii) as to commercial Letters of Credit, later than the earlier of (1) 270 days after the date of issuance thereof and (2) 60 days before the Letter of Credit Expiration Date, unless in each case the Required Lenders have approved such expiry date; or (B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date; (iii) The Letter of Credit Issuer shall not be under any obligation to issue any Letter of Credit if: (A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Reinsurer pursuant Letter of Credit Issuer from issuing such Letter of Credit or any Law applicable to the provisions Letter of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company Credit Issuer or any successor, by operation request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Letter of Credit Issuer shall prohibit, or request that the Letter of Credit Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Letter of Credit Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Letter of Credit Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Letter of Credit Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Letter of Credit Issuer in good xxxxx xxxxx material to it; (B) the issuance of such Letter of Credit would violate one or more policies of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator Letter of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Credit Issuer; (C) such Letter of Credit is in excess an initial amount less than the Dollar Equivalent of the actual amount required for A$10,000; or (D) or C)any Lender is at that time a Defaulting Lender, the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending unless the Letter of CreditCredit Issuer has entered into arrangements, in including the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance delivery of credit as of the statement dateCash Collateral, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment satisfactory to the Letter of Credit increasing Issuer (in its sole discretion) with the amount of credit by the amount of Borrowers or such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing Lender to secure an amendment to eliminate the Letter of Credit reducing Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with respect to the amount Defaulting Lender arising from either the Letter of credit available by Credit then proposed to be issued or that Letter of Credit and all other Letter of Credit Obligations as to which the amount Letter of such excess creditCredit Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
Appears in 1 contract
Samples: Credit Agreement (Matrix Service Co)
Letters of Credit. As regards policies or bonds (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for the account of the Borrower, and to amend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Facility, (y) the Exposure of any Lender shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit if :
(A) the expiry date of expiration or any future expiration the requested Letter of Credit would occur more than twelve (12) months after the date of issuance, unless thirty the Required Lenders have approved such expiry date; or
(30B) days prior to any expiration the expiry date of the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider requested Letter of Credit would occur beyond the Letter of Credit extended Expiration Date, unless all Lenders have approved such expiry date and Borrower has complied with the requirements to Cash Collateralize such L/C Obligations pursuant to Section 2.14.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's ObligationsL/C Issuer, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual an initial stated amount required for Aless than $50,000;
(D) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of CreditCredit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the following manner:Borrower or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.15(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
A. (F) the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of Credit if the statement shows that L/C Issuer would not be permitted at such time to issue the Reinsurer's Obligations exceed Letter of Credit in its amended form under the balance terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of credit as Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the statement dateterms hereof, or (B) the Reinsurer shall, within thirty (30) days after receipt of notice beneficiary of such excess, secure delivery to Letter of Credit does not accept the Company of an proposed amendment to the Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit increasing issued by it and the amount documents associated therewith, and the L/C Issuer shall have all of credit the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such difference;
B. Letters of Credit as fully as if howeverthe term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, the statement shows that the Reinsurer's Obligations are less than the balance of credit and (B) as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment additionally provided herein with respect to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration the requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date of the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's ObligationsL/C Issuer, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual an initial stated amount required for Aless than $500,000;
(D) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of CreditCredit is to be denominated in a currency other than Dollars;
(E) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the following manner:Borrower or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.16(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion; or
A. (F) the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iv) The L/C Issuer shall not amend any Letter of Credit if the statement shows that L/C Issuer would not be permitted at such time to issue the Reinsurer's Obligations exceed Letter of Credit in its amended form under the balance terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of credit as Credit if (A) the L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the statement date, Letter of Credit does not accept the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an proposed amendment to the Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit increasing issued by it and the amount documents associated therewith, and the L/C Issuer shall have all of credit the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such difference;
B. Letters of Credit as fully as if howeverthe term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, the statement shows that the Reinsurer's Obligations are less than the balance of credit and (B) as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment additionally provided herein with respect to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for the account of the Borrower or bonds a Restricted Subsidiary, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope applicable Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or Restricted Subsidiary and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Loan Cap, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion applicable Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued for a pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of such requested Standby Letter of Credit would occur more than twelve months after the date of issuance or last extension (or such other period as may be acceptable to the Agent and the L/C Issuer), unless the Required Lenders have approved such expiry date; or
(B) the expiry date of not less such requested Commercial Letter of Credit would occur more than one year, and shall be automatically extended for one (1) year from its after the date of expiration issuance (or any future expiration such other period as may be acceptable to the Agent and the Issuer), unless the Required Lenders have approved such expiry date; or
(C) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless either such Letter of Credit is Cash Collateralized on or prior to the date of issuance of such Letter of Credit or, with respect to an Auto-Extension Letter of Credit, on or prior to the date of any extension of such Letter of Credit which would extend the expiry date thereof to a date beyond the Letter of Credit Expiration Date (or, in each case, such later date as to which the Agent may agree) or all the Lenders have approved such expiry date; or
(D) any order, judgment or decree of any Governmental Authority or arbitrator having binding powers shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Requirement of Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good fxxxx xxxxx material to it (for which the L/C Issuer is not otherwise compensated);
(E) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally or any Requirement of Law binding upon the L/C Issuer;
(F) such Letter of Credit is to be denominated in a currency other than Dollars, except as may be approved by the Agent and the Company agree that L/C Issuer, each in their sole discretion;
(G) the L/C Issuer does not as of the issuance date of such requested Letter of Credit issue Letters of Credit provided by in the Reinsurer pursuant requested currency;
(H) such Letter of Credit contains any provisions for automatic reinstatement of the Stated Amount after any drawing thereunder; or
(I) any Lender is at that time a Defaulting Lender, unless (i) after giving effect to the provisions of this Agreement may be drawn upon at any timerequested issuance, notwithstanding any other provision of this Agreement, and be utilized by there would exist no Fronting Exposure (in the Company or any successor, by operation of law, good faith determination of the Company includingL/C Issuer) or (ii) the L/C Issuer has entered into arrangements, without limitationincluding the delivery of Cash Collateral, any liquidator, rehabilitator, receiver or conservator of satisfactory to the Company for the following purposes, unless otherwise provided for L/C Issuer (in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account its good faith determination) with the Company for Borrower or such Lender to eliminate the Reinsurer's Obligations. Such cash deposit L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.16(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iii) The L/C Issuer shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue under no obligation to the benefit of the Reinsurer. In the event the amount drawn by the Company on amend any Letter of Credit is if the L/C Issuer would have no obligation at such time to issue such Letter of Credit in excess its amended form under the terms hereof or if the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(iv) The L/C Issuer shall act on behalf of the actual amount required for Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) or C), the Company shall promptly return provided to the Reinsurer Agent in Article IX with respect to any acts taken or omissions suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that term “Agent” as used in Article IX included the Reinsurer's Obligations exceed the balance of credit L/C Issuer with respect to such acts or omissions, and (B) as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitments.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of Pacer or bonds its Subsidiaries, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of Pacer or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Borrowing Base, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s pro rata share of the Borrowing Base, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower Agent on behalf of a Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by such Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its date of expiration or and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) No L/C Issuer shall issue any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for if such L/C Issuer receives written notice from a Lender, the Administrative Agent or any additional period. The Reinsurer and the Company agree that the Letters Borrower at least one Business Day before issuance of a Letter of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company that one or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which more L/C Conditions has not been satisfied. Upon receipt of such notice, no L/C Issuer shall issue any Letter of Credit until such notice is withdrawn in writing by that Lender, the Administrative Agent or that Borrower or until Required Lenders have waived such condition in accordance with this Agreement.
(iii) No L/C Issuer shall be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise paidcompensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good xxxxx xxxxx material to it;
B. (B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer applicable to make refund letters of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreementcredit generally;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn (C) except as otherwise agreed by the Company on any Administrative Agent and such L/C Issuer, such Letter of Credit is in excess an initial stated amount less than $500,000;
(D) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any such Lender is at such time a Defaulting Lender hereunder, unless Cash Collateral or other credit support satisfactory to such L/C Issuer has been pledged or otherwise provided to such L/C Issuer in respect of such Defaulting Lender’s participation in such Letter of Credit or such L/C Issuer has otherwise entered into arrangements satisfactory to such L/C Issuer to eliminate such L/C Issuer’s risk with respect to such Defaulting Lender; or
(E) any Lender is at such time an Impacted Lender hereunder, unless Cash Collateral or other credit support satisfactory to such L/C Issuer has been pledged or otherwise provided to such L/C Issuer in respect of such Impacted Lender’s participation in such Letter of Credit or such L/C Issuer has otherwise entered into arrangements satisfactory to such L/C Issuer to eliminate such L/C Issuer’s risk with respect to such Impacted Lender.
(iv) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) Each L/C Issuer shall act on behalf of the actual amount required for Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each L/C Issuer shall have all of the benefits and immunities (A) or C), the Company shall promptly return provided to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company Administrative Agent in Article X with respect to any acts taken or the Reinsurer. The issuing bank shall have no responsibility whatsoever omissions suffered by such L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that the Reinsurer's Obligations exceed the balance of credit term “Administrative Agent” as of the statement dateused in Article X included such L/C Issuer with respect to such acts or omissions, the Reinsurer shall, within thirty and (30B) days after receipt of notice of as additionally provided herein with respect to such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, (w) the Total Revolving Credit Outstandings shall not exceed the Aggregate Revolving Credit Commitments, (x) the Revolving Credit Exposure of any Revolving Credit Lender shall not exceed such Lender’s Revolving Credit Commitment, (y) the Outstanding Amount of the L/C Obligations issued by a bank, an L/C Issuer shall not exceed such L/C Issuer’s Letter of Credit Sublimit and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. The Existing Letters of Credit shall be deemed to have been issued pursuant to this Agreement, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) Subject to Section 2.03(b)(iii), the expiry date of expiration the requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date of the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider requested Letter of Credit would occur after the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposesExpiration Date, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse all the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Revolving Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall Lenders have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement approved such expiry date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 1 contract
Letters of Credit. As regards policies or bonds issued From time to time during the Commitment Period, Borrower may request through Agent an Issuing Bank to issue, in reliance on the agreements of Lenders set forth in Section 2A.2(b), letters of credit (each herein called a "LETTER OF CREDIT") by means of an application in the Company within the scope form of this AgreementEXHIBIT E, the Company agrees that when it appropriately completed and with a proposed form of Letter of Credit attached. No Issuing Bank shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (have any obligation whatsoever to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of issue any such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional requested Letter of Credit, issued by a bankbut any terms and provisions hereof relating to Letters of Credit, and containing provisions acceptable shall be subject to the insurance regulatory authorities having jurisdiction over following restrictions: (a) no Letter of Credit issued hereunder shall have an expiration date later than the Company's reserves earlier of one year after the date of issuance thereof or the end of the Commitment Period; (b) no Letter of Credit issued hereunder shall be issued in an amount equal to greater than $5,000,000 without the Reinsurer's proportion prior written consent of reserves Majority Lenders; (c) the LC Obligations shall never exceed $20,000,000 in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating theretothe aggregate outstanding at any one time; (d) Back-to-Back LC Obligations shall never exceed $5,000,000 in the aggregate outstanding at any one time, and losses and allocated loss adjustment expense paid by (e) the Company but not recovered from sum of (i) the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior LC Obligations after giving effect to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company request for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment issuance of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess plus (ii) the aggregate amount of the actual amount required Loans then outstanding shall not exceed the Borrowing Base. Neither Agent, Issuing Banks, Lenders nor Borrower presently expect Letters of Credit to be applied for A) or C)issued hereunder on a regular basis, and this section is included in this Agreement solely to facilitate the Company application and issuance of any letter of credit which Borrower hereafter, in its sole and absolute discretion, chooses to request and which each Issuing Bank hereafter, in its sole and absolute discretion, chooses to issue. Each Issuing Bank shall promptly return to the Reinsurer the excess amount so drawn. All notify Agent and each Lender of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made any request by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, Borrower for the sole purpose issuance of amending the a Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 1 contract
Samples: Credit Agreement (Forcenergy Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Dollar Tranche Lenders set forth in this Section 2.04, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars, and, solely in the case of the Alternative Currency L/C Issuer, in one or bonds more Alternative Currencies, in each case, for the account of the Parent Borrower or a Subsidiary thereof, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.04(b), and (2) to honor compliant drawings under the Company within Letters of Credit; and (B) the scope Dollar Tranche Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Parent Borrower or a Subsidiary thereof and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(v) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility at such time, (w) the Outstanding Amount of Dollar Tranche Loans plus the Outstanding Amount of all L/C Obligations, plus the Outstanding Amount of all Swing Line Loans shall not exceed the Aggregate Dollar Tranche Commitments, (x) the Outstanding Amount of the Dollar Tranche Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Dollar Tranche Commitment, (y) the Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Dollar Tranche Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Dollar Tranche Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Parent Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Parent Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Parent Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Parent Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) No L/C Issuer shall issue any Letter of Credit if:
(A) subject to Section 2.04(b)(iii) the expiry date of expiration the requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Administrative Agent and such L/C Issuer have approved such expiry date; provided that in no event will any future expiration Letter of Credit have an expiry date unless thirty that is later than the first anniversary of the Maturity Date; or
(30B) days prior to any expiration the expiry date of the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider requested Letter of Credit would occur after the Letter of Credit extended for Expiration Date, unless the Administrative Agent and such L/C Issuer have approved such expiry date.
(iii) No L/C Issuer shall be under any additional period. The Reinsurer and the Company agree that the Letters obligation to issue any Letter of Credit provided if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing that Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or that Letter of Credit in particular or shall impose upon such L/C Issuer with respect to that Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeAdministrative Agent and such L/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $500,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars or, in the case of the Alternative Currency L/C Issuer, an Alternative Currency;
(E) such L/C Issuer does not as of the issuance date of such requested Letter of Credit issue Letters of Credit in the requested currency;
(F) any Lender is at that time a Defaulting Lender, unless such L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such L/C Issuer (in its sole discretion) with the Parent Borrower or such Lender to eliminate such L/C Issuer’s actual amount required for Aor potential Fronting Exposure (after giving effect to Section 2.18(a)(iv)) or C), the Company shall promptly return with respect to the Reinsurer the excess amount so drawn. All Defaulting Lender arising from that Letter of the foregoing shall be applied without diminution because of insolvency on the part of the Company Credit and all other L/C Obligations as to which such L/C Issuer has actual or the Reinsurer. The issuing bank shall have no responsibility whatsoever potential Fronting Exposure with respect to such Defaulting Lender, as it may elect in connection its sole discretion; or
(G) after giving effect to any L/C Credit Extension with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except respect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's L/C Obligations with respect to all Letters of Credit issued by such L/C Issuer would exceed the balance one-third of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing Sublimit (the amount “L/C Commitment Amount”); provided that, subject to the limitations set forth in the proviso to Section 2.04(a)(i), any L/C Issuer may issue Letters of credit by the amount Credit in excess of such difference;L/C Issuer’s L/C Commitment Amount.
B. if however, the statement shows that the Reinsurer's Obligations are less (iv) No L/C Issuer other than the balance of credit as of the statement date, the Company Alternative Currency L/C Issuer shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the issue a Letter of Credit reducing denominated in a currency other than Dollars.
(v) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue that Letter of Credit in its amended form under the amount terms hereof.
(vi) No L/C Issuer shall be under any obligation to amend any Letter of credit available Credit if (A) such L/C Issuer would have no obligation at such time to issue that Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of that Letter of Credit does not accept the proposed amendment to that Letter of Credit.
(vii) Each L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the amount documents associated therewith, and each L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such excess creditL/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuers with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuers.
Appears in 1 contract
Samples: Credit Agreement (W. P. Carey Inc.)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Revolving Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Effective Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, MDDC or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Lenders severally agree to participate in Letters of this AgreementCredit issued for the account of the Borrower, the Company agrees MDDC or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Outstandings shall not exceed the Revolving Credit Facility, (y) the Pro Rata Share of any Revolving Lender of the Outstanding Amount of all Revolving Loans, plus such Revolving Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Lender’s Revolving Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Effective Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if the expiry date of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all of the Revolving Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Effective Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate any Laws or one or more policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial face amount less than $25,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for after any drawing thereunder; or
(F) a default of any Revolving Lender’s obligations to fund under Section 2.03(c) exists or any Revolving Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into arrangements satisfactory to the L/C Issuer with the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall L/C Issuer would have no responsibility whatsoever obligation at such time to issue such Letter of Credit in connection with its amended form under the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervalsterms hereof, or more frequently as agreed, but never more frequently than quarterly, (B) the Company shall prepare a specific statement beneficiary of such Letter of Credit does not accept the Reinsurer's Obligations, for the sole purpose of amending the proposed amendment to such Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 1 contract
Samples: Credit Agreement (Marina District Finance Company, Inc.)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars or bonds in one or more Alternative Currencies for the account of the Company or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Letters of Credit; and (B) the Revolving Credit Lenders severally agree to participate in Letters of Credit issued for the account of the Company within the scope of this Agreement, the Company agrees or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Company that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Company’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Company may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Revolving Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended for any additional period. The Reinsurer Expiration Date, unless the Administrative Agent and the L/C Issuer have approved such expiry date (it being understood that in the event the expiry date of any requested Letter of Credit would occur after the Letter of Credit Expiration Date, from and after the Letter of Credit Expiration Date, the Company agree that shall immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations in respect of such Letters of Credit provided in accordance with Section 2.14).
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Reinsurer pursuant to Administrative Agent and the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $500,000;
(D) any Revolving Credit Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of the actual amount required for A) or C)Cash Collateral, the Company shall promptly return satisfactory to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer (in connection its sole discretion) with the propriety of withdrawals made by Borrowers or such Revolving Credit Lender to eliminate the Company L/C Issuer’s actual or the disposition of funds withdrawn, except potential Fronting Exposure (after giving effect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30Section 2.15(a)(iv)) days after receipt of notice of such excess, secure delivery with respect to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the amount of credit L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion;
(E) except as otherwise agreed by the amount Administrative Agent and the L/C Issuer, such Letter of such difference;Credit is to be denominated in a currency other than Dollars or an Alternative Currency; or
B. if however(F) other than with respect to Euro, Sterling and Yen, the statement shows that the Reinsurer's Obligations are less than the balance of credit L/C Issuer does not as of the statement date, the Company shall within thirty (30) days after receipt issuance date of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the requested Letter of Credit reducing issue Letters of Credit in the amount requested currency.
(iv) The L/C Issuer shall not amend any Letter of credit available Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the amount L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such excess creditLetters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of Holdings, the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this AgreementCredit issued for the account of Holdings, the Company agrees Borrower or its Subsidiaries, and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. The Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the L/C Issuer has approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Amended and Restatement Effective Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Amendment and Restatement Effective Date and which the L/C Issuer in good fxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $500,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required after any drawing thereunder except in accordance with Section 2.03(b)(iii); or
(F) a default of any Lender’s obligation to fund under Section 2.03(c) exists or otherwise during any Default Period with respect to a Defaulting Lender or an Impacted Lender, unless the L/C Issuer (or the Administrative Agent, for the benefit of the L/C Issuer) has been provided Cash Collateral or otherwise entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender or such Lender otherwise has provided satisfactory assurance to the L/C Issuer that such Lender will satisfy all of its obligations under Section 2.03.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or C)(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Company L/C Issuer shall promptly return have all of the benefits and immunities (A) provided to the Reinsurer Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that term “Administrative Agent” as used in Article IX included the Reinsurer's Obligations exceed the balance of credit L/C Issuer with respect to such acts or omissions, and (B) as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Cenveo, Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, Holdings or bonds any of their respective Subsidiaries and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(w) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (x) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment, (y) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to the Reinsurer's proportion of reserves L/C Obligations in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Letters of Credit issued by any given L/C Issuer shall not exceed such L/C Issuer’s L/C Commitment. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year from its fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) No L/C Issuer shall issue any Letter of Credit if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended for Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.
(iii) No L/C Issuer shall be under any additional period. The Reinsurer and the Company agree that the Letters obligation to issue any Letter of Credit provided if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular;
(B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeAdministrative Agent and such L/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $500,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for after any drawing thereunder; or
(F) a default of any Revolving Credit Lender’s obligations to fund under Section 2.03(c) exists or any Revolving Credit Lender is at such time a Defaulting Lender hereunder, unless such L/C Issuer has entered into reasonably satisfactory arrangements with the Borrower or such Revolving Credit Lender to eliminate such L/C Issuer’s risk with respect to such Revolving Credit Lender.
(iv) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall such L/C Issuer would have no responsibility whatsoever obligation at such time to issue such Letter of Credit in connection with its amended form under the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervalsterms hereof, or more frequently as agreed, but never more frequently than quarterly, (B) the Company shall prepare a specific statement beneficiary of such Letter of Credit does not accept the Reinsurer's Obligations, for the sole purpose of amending the proposed amendment to such Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.
Appears in 1 contract
Samples: Credit Agreement (NRG Yield, Inc.)
Letters of Credit. As regards policies On the terms and conditions hereinafter set forth, (i) the Issuing Lender hereby agrees (A) from time to time on any Business Day during the period from the Amendment Closing Date to the Revolving Expiry Date to issue Letters of Credit for the account of the Borrower in accordance with Section 3.02(a), and to amend or bonds renew Letters of Credit previously issued by it, in accordance with subsections 3.02(c) and 3.02(d), in an aggregate amount not to exceed at any time $5,000,000 (the Company within “L/C Commitment”), and (B) to honor drafts under the scope Letters of this AgreementCredit; and (ii) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower; provided, that the Issuing Lender shall not be obligated to issue any Letter of Credit if (1) the Effective Amount of all L/C Obligations plus the Effective Amount of all Revolving Loans plus the Effective Amount of all Swingline Loans shall exceed the aggregate Revolving Commitments, (2) the participation of any Lender in the Effective Amount of all L/C Obligations plus the participation of such Lender in the Effective Amount of all Swingline Loans plus the Effective Amount of the Revolving Loans of such Lender shall exceed such Lender’s Revolving Commitment, (3) the Effective Amount of L/C Obligations shall exceed the L/C Commitment or (4) the Effective Amount of all L/C Obligations plus the Effective Amount of all Revolving Loans plus the Effective Amount of all Swingline Loans shall exceed the Borrowing Base then in effect. Within the foregoing limits, and subject to the other terms and conditions hereof, the Company agrees that when it shall file with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (Borrower’s ability to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter obtain Letters of Credit shall be issued for a period of not less than one yearfully revolving, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior to any expiration date and, accordingly, the issuing bank shall notify Borrower may, during the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional foregoing period. The Reinsurer and the Company agree that the , obtain Letters of Credit provided by the Reinsurer pursuant to the provisions replace Letters of this Agreement may be Credit which have expired or which have been drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditreimbursed.
Appears in 1 contract
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars for the account of either L/C Party, and to amend or bonds extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of either L/C Party and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by an amount equal to L/C Party for the Reinsurer's proportion issuance or amendment of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by such L/C Party that the L/C Credit Extension so requested complies with the conditions set forth in the provisos to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, each L/C Party’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly each L/C Party may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial amount less than $1,000,000;
(D) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is to be denominated in a currency other than Dollars; or
(E) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the applicable L/C Party with respect to such Letter of Credit or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the actual amount required for Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) or C), the Company shall promptly return provided to the Reinsurer Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that term “Administrative Agent” as used in Article IX included the Reinsurer's Obligations exceed the balance of credit L/C Issuer with respect to such acts or omissions, and (B) as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Toro Co)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) any L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders holding Revolving Commitments and Revolving Loans severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder (based on their respective Applicable Percentages of the Aggregate Revolving Commitments); provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(w) the Total Facility Outstandings shall not exceed the Borrowing Base, (x) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) An L/C Issuer shall not issue any Letter of Credit if, subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve (12) months after the date of issuance or any future expiration last extension, unless the Required Revolver Lenders have approved such expiry date; or the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended for Expiration Date, unless all the Lenders holding Revolving Commitments have approved such expiry date.
(iii) No L/C Issuer shall be under any additional period. The Reinsurer and the Company agree that the Letters obligation to issue any Letter of Credit provided if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer;
(C) except as otherwise agreed by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeAdministrative Agent and such L/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $250,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provision for automatic reinstatement of the stated amount after any drawing thereunder; or
(F) any Lender is at that time a Defaulting Lender, unless such L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate such L/C Issuer’s actual amount required for Aor potential Fronting Exposure (after giving effect to Section 2.15(a)(iv)) or C), the Company shall promptly return with respect to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to Defaulting Lender arising from either the Letter of Credit increasing then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which such L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.
(iv) An L/C Issuer shall not amend any Letter of Credit if any L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) An L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) An L/C Issuer shall act on behalf of the Lenders holding Revolving Commitments with respect to any Letters of Credit issued by it and the documents associated therewith, and such L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered by any L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article X included any L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to any L/C Issuer.
(vii) No L/C Issuer shall be under any obligation to issue any Letter of Credit if the issuance of such Letter of Credit would cause (A) the aggregate amount of credit Letters of Credit issued by the amount such L/C Issuer to exceed twenty percent (20%) of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing Sublimit or (B) the amount aggregate Outstanding Amount of credit available by the amount Revolving Loans of such excess creditLender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations issued by another L/C Issuer, plus 100% of the Outstanding Amount of all L/C Obligations issued by such L/C Issuer, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans made by another Lender, plus 100% of the Swing Line Loans, if any, outstanding from such L/C Issuer, to exceed such L/C Issuer’s Revolving Commitment.
Appears in 1 contract
Samples: Credit Agreement (Ryman Hospitality Properties, Inc.)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the Availability Period, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Revolving Credit Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the Revolving Credit Exposure of any Revolving Credit Lender shall not exceed such Xxxxxx’s Revolving Credit Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Subfacility. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued by the applicable L/C Issuer pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) No L/C Issuer shall issue any Letter of Credit, if, subject to Section 2.03(b)(iii), the expiry date of expiration the requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless, subject to Section 2.03(b)(v), the Administrative Agent and the applicable L/C Issuer have approved such expiry date; provided that in no event will any Letter of Credit have an expiry date that is later than the first anniversary of the Maturity Date for the Revolving Credit Facility.
(iii) No L/C Issuer shall be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing the Letter of Credit, or any future expiration date unless thirty Law applicable to such L/C Issuer or any request or directive (30whether or not having the force of law) days prior to from any expiration date Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuing bank shall notify the Company by certified issuance of letters of credit generally or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. The Reinsurer and in particular or shall impose upon such L/C Issuer with respect to the Company agree that the Letters Letter of Credit provided any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was 54 not applicable on the Closing Date and which such L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of the Letter of Credit would violate one or more policies of such L/C Issuer applicable to letters of credit generally;
(C) except as otherwise agreed by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, Administrative Agent and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligationssuch L/C Issuer, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess an initial stated amount less than $500,000;
(D) the Letter of Credit is to be denominated in a currency other than Dollars;
(E) any Revolving Credit Lender is at that time a Defaulting Lender, unless such L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate such L/C Issuer’s actual amount required for Aor potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) or C), the Company shall promptly return with respect to the Reinsurer Defaulting Lender arising from either the excess amount so drawn. All Letter of the foregoing shall Credit then proposed to be applied without diminution because issued or that Letter of insolvency on the part of the Company Credit and all other L/C Obligations as to which such L/C Issuer has actual or the Reinsurer. The issuing bank shall have no responsibility whatsoever potential Fronting Exposure, as it may elect in connection its sole discretion; or
(F) after giving effect to any L/C Credit Extension with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except respect to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the such Letter of Credit, the L/C Obligations with respect to all Letters of Credit issued by such L/C Issuer would exceed such L/C Issuer’s Letter of Credit Sublimit; provided that, subject to the limitations set forth in the following manner:proviso to the first sentence of Section 2.03(a)(i), any L/C Issuer in its sole discretion may issue Letters of Credit in excess of its Letter of Credit Sublimit.
A. (iv) No L/C Issuer shall amend or extend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue the statement shows that Letter of Credit in its amended form under the Reinsurer's Obligations exceed terms hereof.
(v) No L/C Issuer shall be under no obligation to amend or extend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue the balance Letter of credit as Credit in its amended form under the terms hereof, or (B) the beneficiary of the statement date, Letter of Credit does not accept the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an proposed amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;Credit.
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as (vi) Each L/C Issuer shall act on behalf of the statement dateRevolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and such L/C Issuer shall have all of the Company shall within thirty benefits and immunities (30A) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment provided to the Letter Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit reducing issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the amount of credit available by the amount of term “Administrative Agent” as used in Article IX included such excess creditL/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to each L/C Issuer.
Appears in 1 contract
Letters of Credit. As regards policies or bonds (a) Prior to the Effective Date, upon the request of the Borrower, the LC Bank has issued by "Letters of Credit" pursuant to the Company within Original Credit Agreement and "Bridge Letters of Credit" pursuant to the scope Bridge Credit Agreement. On the Effective Date, all of this such "Letters of Credit" and "Bridge Letters of Credit" shall be deemed to be Letters of Credit hereunder. Subject to the terms and conditions hereof, the LC Bank agrees to issue letters of credit hereunder from time to time before the Termination Date upon the request of the Borrower (such letters of credit issued, collectively with the "Letters of Credit" issued pursuant to the Original Credit Agreement and the "Bridge Letters of Credit" issued pursuant to the Bridge Credit Agreement, the Company agrees that when it "Letters of Credit"); provided that, immediately after each such Letter of Credit is issued, (i) the aggregate amount of the Letter of Credit Liabilities for all Letters of Credit shall file not exceed the Available LC Amount and (ii) the aggregate amount of the Letter of Credit Liabilities for all Performance Letters of Credit shall not exceed the greater of (x) $5,000,000 and (y) the sum of $3,000,000 plus the amount of Letter of Credit Liabilities (not to exceed $4,650,000) in respect of the Harrah's LC. Upon the date of issuance by the LC Bank of a Letter xx Xxxxxx in accordance with this Section 2.16, the insurance regulatory authority or set up on LC Bank shall be deemed, without further action by any party hereto, to have sold to each Bank, and each Bank shall be deemed, without further action by any party hereto, to have purchased from the LC Bank, a participation in such Letter of Credit and the related Letter of Credit Liabilities in proportion to its books reserves for losses, unearned premium reserves and loss development allowance Tranche A Commitment Percentage.
(b) The Borrower shall give the LC Bank at least three Domestic Business Days' prior notice (effective upon receipt) specifying the date each Letter of Credit is to be calculated using issued, and describing the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion proposed terms of such reserves which is applicable Letter of Credit and the nature of the transactions proposed to be supported thereby. Upon receipt of such notice the Reinsurer. The Reinsurer hereby agrees that it will apply for LC Bank shall promptly notify the Agent, and secure delivery to the Company Agent shall promptly notify each Bank, of a clean, irrevocable the contents thereof and unconditional of the amount of such Bank's participation in such proposed Letter of Credit. The issuance by the LC Bank of any Letter of Credit shall, issued by a bank, and containing provisions acceptable in addition to the insurance regulatory authorities having jurisdiction over conditions precedent set forth in Article III (the Company's reserves in an amount equal satisfaction of which the LC Bank shall have no duty to ascertain), be subject to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The conditions precedent that such Letter of Credit shall be issued for a period satisfactory to the LC Bank and that the Borrower shall have executed and delivered such other instruments and agreements relating to such Letter of Credit as the LC Bank shall have reasonably requested. Each Letter of Credit shall have an expiry date not less later than one yearyear after its date of issue; provided that no Letter of Credit shall have a term extending beyond the Termination Date; and provided further that any such Letter of Credit may include an evergreen or renewal option, pursuant to which the expiry date of such Letter of Credit will be automatically extended unless notice of non-renewal is given by the LC Bank (provided that such Letter of Credit has an absolute expiry date not later than the Termination Date); and provided further that the LC Bank shall deliver notice of non-renewal at the time such notice is required to be given unless requested not to by the Borrower, which request will be treated in the same manner as a request for issuance of a new Letter of Credit on the same terms (any such Letter of Credit, an "Evergreen Letter of Credit").
(c) The Borrower shall pay to the Agent a letter of credit fee at a rate equal to 2.75% per annum on the aggregate amount available for drawings under each Letter of Credit issued from time to time, any such fee to be payable for the account of the Banks ratably in proportion to their Tranche A Commitment Percentages. Such fee shall be payable in arrears on the last day of each fiscal quarter of the Borrower for so long as such Letter of Credit is outstanding and on the date of termination thereof. The Borrower shall pay to the LC Bank additional fees and expenses in the amounts and at the times as agreed between the Borrower and the LC Bank.
(d) Upon receipt from the beneficiary of any Letter of Credit of any demand for payment or other drawing under such Letter of Credit, the LC Bank shall notify the Agent and the Agent shall promptly notify the Borrower and each other Bank as to the amount to be paid as a result of such demand or drawing and the respective payment date. The responsibility of the LC Bank to the Borrower and each Bank shall be only to determine that the documents (including each demand for payment or other drawing) delivered under each Letter of Credit issued by it in connection with such presentment shall be in conformity in all material respects with such Letter of Credit. The LC Bank shall endeavor to exercise the same care in the issuance and administration of the Letters of Credit as it does with respect to letters of credit in which no participations are granted, it being understood that in the absence of any gross negligence or willful misconduct by the LC Bank, each Bank severally agrees that it shall be unconditionally and irrevocably liable without regard to the occurrence of any Event of Default or any condition precedent whatsoever, pro rata to the extent of such Bank's Tranche A Commitment Percentage, to reimburse the LC Bank on demand for the amount of each payment made by the LC Bank under each Letter of Credit issued by the LC Bank to the extent such amount is not reimbursed by the Borrower pursuant to clause (e) below together with interest on such amount for each day from the date of the LC Bank's demand for such payment (or, if such demand is made after 11:00 A.M. (New York City time) on such date, from the next succeeding Domestic Business Day) to the date of payment by such Bank of such amount at a rate of interest per annum equal to the Federal Funds Rate for such day.
(e) The Borrower shall be irrevocably and unconditionally obligated forthwith to reimburse the LC Bank for any amounts paid by the LC Bank upon any drawing under any Letter of Credit, without presentment, demand, protest or other formalities of any kind; provided that neither the Borrower nor any Bank shall hereby be precluded from asserting any claim for direct (but not consequential) damages suffered by the Borrower or such Bank to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of the LC Bank in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (ii) such Bank's failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of the Letter of Credit. All such amounts paid by the LC Bank and remaining unpaid by the Borrower shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the rate applicable to Tranche A Base Rate Loans for such day. The LC Bank will pay to each Bank, ratably in accordance with its Tranche A Commitment Percentage, all amounts received from the Borrower for application in payment, in whole or in part, of the Reimbursement Obligation in respect of any Letter of Credit, but only to the extent such Bank has made payment to the LC Bank in respect of such Letter of Credit pursuant to Section 2.16(d).
(f) If after the date hereof, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose, modify or deem applicable any tax, reserve, special deposit or similar requirement against or with respect to or measured by reference to Letters of Credit issued or to be issued hereunder or participations therein, and the result shall be to increase the cost to any Bank of issuing or maintaining any Letter of Credit or any participation therein, or reduce any amount receivable by any Bank hereunder in respect of any Letter of Credit (which increase in cost, or reduction in amount receivable, shall be the result of such Bank's reasonable allocation of the aggregate of such increases or reductions resulting from such event), then, upon demand by such Bank (which demand shall not be unreasonably delayed, provided that a demand within six months of the accrual of such increased cost or reduction in amount receivable will not be deemed to be unreasonably delayed), the Borrower agrees to pay to such Bank, from time to time as specified by such Bank, such additional amounts as shall be sufficient to compensate such Bank for such increased costs or reductions in amount incurred by such Bank. A certificate of such Bank submitted by such Bank to the Borrower shall be conclusive as to the amount thereof in the absence of manifest error.
(g) The Borrower's obligations under this Section 2.16 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower may have or have had against the LC Bank, any Bank or any beneficiary of a Letter of Credit. The Borrower further agrees with the LC Bank and the Banks that the LC Bank and the Banks shall not be responsible for, and the Borrower's Reimbursement Obligation in respect of any Letter of Credit shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrower, any of its Subsidiaries, the beneficiary of any Letter of Credit or any financing institution or other party to whom any Letter of Credit may be transferred or any claims or defenses whatsoever of the Borrower or any of its Subsidiaries against the beneficiary of any Letter of Credit or any such transferee. The LC Bank shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit issued, extended or renewed by it. The Borrower agrees that any action taken or omitted by the LC Bank or any Bank under or in connection with each Letter of Credit and the related drafts and documents, if done in good faith and without gross negligence, shall be binding upon the Borrower and shall not put the LC Bank or any Bank under any liability to the Borrower.
(h) To the extent not inconsistent with clause (g) above, the LC Bank shall be entitled to rely, and shall be automatically extended for one year fully protected in relying upon, any Letter of Credit, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel, independent accountants and other experts selected by the LC Bank. The LC Bank shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first have received such advice or concurrence of the Required Banks as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Notwithstanding any other provision of this Section 2.16, the LC Bank shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Required Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Banks and all future holders of participations in any Letters of Credit.
(i) The Borrower hereby indemnifies and holds harmless each Bank and the Agent from and against any and all claims and damages, losses, liabilities, costs or expenses which such Bank or the Agent may incur (or which may be claimed against such Bank or the Agent by any Person whatsoever) by reason of or in connection with the execution and delivery or transfer of or payment or failure to pay under any Letter of Credit, including, without limitation, any claims, damages, losses, liabilities, costs or expenses which the LC Bank may incur by reason of or in connection with the failure of any other Bank to fulfill or comply with its date of expiration or obligations to the LC Bank hereunder (but nothing herein contained shall affect any future expiration date unless thirty (30) days prior to any expiration date rights the issuing bank shall notify the Company by certified or registered mail Borrower may have against such defaulting Bank); provided that the issuing bank elects Borrower shall not be required to consider indemnify any Bank or the Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of the LC Bank in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (ii) the LC Bank's failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of the Letter of Credit extended for any additional periodCredit. The Reinsurer and Nothing in this Section 2.16(i) is intended to limit the Company agree that obligations of the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding Borrower under any other provision of this Agreement.
(j) Each Bank shall, ratably in accordance with its Tranche A Commitment Percentage, indemnify the LC Bank, its affiliates and be utilized their respective directors, officers, agents and employees (to the extent not reimbursed by the Company Borrower) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or any successor, by operation of law, of liability (except such as result from such indemnitees' gross negligence or willful misconduct or the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the ReinsurerLC Bank's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required failure to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess after the presentation to it of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection a request strictly complying with the propriety terms and conditions of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, ) that such indemnitees may suffer or incur in connection with this Section 2.16 or any action taken or omitted by such indemnitees hereunder.
(k) In its capacity as a Bank the following manner:
A. if LC Bank shall have the statement shows that the Reinsurer's Obligations exceed the balance of credit same rights and obligations as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditany other Bank.
Appears in 1 contract
Samples: Credit Agreement (Perini Corp)
Letters of Credit. As regards policies (i) Subject to the terms and conditions hereof and of Applicable Law, the Lender agrees to issue Letters of Credit payable in Dollars from time to time after the Closing Date and prior to the Commitment Termination Date upon the request of the Borrower, PROVIDED, HOWEVER, that (A) the Borrower shall not request that any Letter of Credit be issued if, after giving effect thereto, the sum of the then current L/C Exposure, plus the aggregate Loans then outstanding, would exceed the lesser of (x) the sum of (I) the Maximum Guaranty Amount, (II) the then current amount of the Borrowing Base and (III) the then current amount held in the Collection Account or bonds issued (y) the Commitment and (B) in no event shall the Lender issue any Letter of Credit having an expiration date after the Commitment Termination Date or pursuant to which drafts drawn thereunder would be payable after the Commitment Termination Date.
(ii) Each Letter of Credit may, at the option of the Lender, provide that the Lender may (but shall not be required to) pay all or any part of the maximum amount which may at any time be available for drawing thereunder to the beneficiary thereof upon the occurrence and continuation of an Event of Default and the acceleration of the maturity of the Loans, provided that, if payment is not then due to the beneficiary, the Lender may deposit the funds in question in a segregated account with the Lender to secure payment to the beneficiary and any funds so deposited shall be paid to the beneficiary of the Letter of Credit if conditions to such payment are satisfied or returned to the Lender (or, if all Obligations shall have been paid in full in cash, to the Borrower) if no payment to the beneficiary has been made and the final date available for drawings under the Letter of Credit has passed. Each payment or deposit of funds by the Company within the scope Lender as provided in this paragraph shall be treated for all purposes of this Agreement, Credit Agreement as a drawing duly honored by the Company agrees that when it shall file with Lender under the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance related Letter of Credit.
(to be calculated using b) Whenever the formula below) covered hereunder which it shall be required by law to set up, it will forward to Borrower desires the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company issuance of a clean, irrevocable and unconditional Letter of Credit, it shall deliver to the Lender a written notice no later than 2:00 p.m., New York City time, at least five Business Days prior to the proposed date of issuance. Such notice shall specify (i) the proposed date of issuance (which shall be a Business Day), (ii) the face amount of the Letter of Credit, (iii) the expiration date of the Letter of Credit and (iv) the name and address of the beneficiary. Such notice shall be accompanied by a brief description of the underlying transaction and upon request of the Lender, the Borrower shall provide additional details regarding the underlying transaction. Concurrently with the giving of written notice of a request for the issuance of a Letter of Credit, the Borrower shall specify a precise description of the documents and the verbatim text of any certificate to be presented by the beneficiary of such Letter of Credit which, if presented by such beneficiary prior to the expiration date of the Letter of Credit, would require the Lender to make payment under the Letter of Credit; PROVIDED, HOWEVER, that the Lender, in its reasonable discretion, may require customary changes in any such documents and certificates.
(c) The payment of drafts under any Letter of Credit shall be made in accordance with the terms of such Letter of Credit and the Uniform Customs and Practice for documentary Credits of the International Chamber of Commerce No. 500, as adopted or amended from time to time. The Lender shall be entitled to honor any drafts and accept any documents presented to it by the beneficiary of such Letter of Credit in accordance with the terms of such Letter of Credit and believed by the Lender in good faith to be genuine. The Lender shall not have any duty to inquire as to the accuracy or authenticity of any draft or other drawing documents which may be presented to it, but shall be responsible only to determine in accordance with customary commercial practices that the documents which are required to be presented before payment or acceptance of a draft under any Letter of Credit have been delivered and that they comply on their face with the requirements of that Letter of Credit.
(d) Subject to provisions of Section 2.14(c), the Borrower is absolutely, unconditionally and irrevocably obligated to reimburse all amounts drawn under each Letter of Credit. If any draft is presented under a Letter of Credit, payment of which is required to be made after the Commitment Termination Date (it being understood that no Letter of Credit shall be issued which would expire after the Commitment Termination Date), then the Borrower will, upon demand by the Lender, pay to the Lender, in immediately available funds, the full amount of such draft.
(i) The Borrower agrees to pay to the Lender with respect to Letters of Credit issued by it hereunder in connection with the issuance, amendment, transfer or any other transaction related to each Letter of Credit and each drawing made thereunder, documentary and processing charges in accordance with the Lender's standard schedule for such charges in effect at the time of such issuance, amendment, transfer or drawing, as the case may be.
(ii) The Borrower agrees to pay to the Lender a bankcommission calculated at a rate per annum equal to the Applicable Margin for Eurodollar Loans (calculated in the same manner as interest) of the daily average L/C Exposure. Such commission shall be payable in arrears on and through the last Business Day of each fiscal quarter prior to the Commitment Termination Date and on the Commitment Termination Date.
(f) If by reason of (i) any change in Applicable Law after the Closing Date, or in the interpretation or administration thereof (including, without limitation, any request, guideline or policy not having the force of law) by any Governmental Authority charged with the administration or interpretation thereof, or (ii) compliance by the Lender with any direction, request or requirement (whether or not having the force of law) issued after the Closing Date by any Governmental Authority or monetary authority (including any change whether or not proposed or published prior to the Closing Date), including, without limitation, any modifications to Regulation D occurring after the Closing Date:
(A) the Lender shall be subject to an increase in any tax, levy, impost, duty, charge, fee, deduction or withholding with respect to any Letter of Credit (other than withholding tax imposed by the United States of America or any political subdivision or taxing authority thereof or any other tax, levy, impost, duty, charge, fee, deduction or withholding (I) that is measured with respect to the overall net income of the Lender or of a Lending Office of the Lender, and containing provisions acceptable that is imposed by the United States of America, or by the jurisdiction in which the Lender or Lending Office is incorporated, or in which such Lending Office is located, managed or controlled or in which the Lender has its principal office (or any political subdivision or taxing authority thereof or therein) or (II) that is imposed solely by reason of the Lender failing to make a declaration of, or otherwise to establish, non-residence or to make any other claim for exemption, or otherwise to comply with any certification, identification, information, documentation or reporting requirements prescribed under the laws of the relevant jurisdiction, in those cases where the Lender may properly make such declaration or claim or so establish non-residence or otherwise comply);
(B) the basis of taxation of any fee or amount payable hereunder with respect to any Letter of Credit shall be changed (except as described in clause (A) above);
(C) any reserve, deposit or similar requirement is or shall be applicable, imposed or modified in respect of any Letter of Credit issued by the Lender; or
(D) there shall be imposed on the Lender any other condition regarding this Section 2.14 or any Letter of Credit; and the result of the foregoing is to increase from the conditions that exist on the Closing Date the actual cost to the insurance regulatory authorities having jurisdiction over Lender of issuing, making or maintaining any Letter of Credit or to reduce the Company's reserves amount receivable in respect thereof by the Lender, in each case by or in an amount which the Lender shall reasonably deem material, then and in any such case the Lender may, at any time, notify the Borrower, and the Borrower shall pay on demand such amounts as the Lender may specify to be necessary to compensate the Lender for such additional cost or reduced receipt. Section 2.10(b), (c), (d) and Section 2.11 shall in all instances apply to the Lender with respect to Letters of Credit issued hereunder. The determination by the Lender of any amount due pursuant to this Section 2.14 as set forth in a certificate setting forth the calculation thereof in reasonable detail shall, in the absence of manifest error, be final, conclusive and binding on all of the parties hereto.
(g) If at any time when an Event of Default shall have occurred and be continuing, any Letters of Credit shall remain outstanding, then the Lender may, at its option, require the Borrower to deliver to the Lender cash or Cash Equivalents in an amount equal to the Reinsurer's proportion full amount of reserves the L/C Exposure or to furnish other security acceptable to the Lender. Any amounts so delivered pursuant to the preceding sentence shall be applied to reimburse the Lender for the amount of any drawings honored under Letters of Credit; provided, however, that if prior to the Commitment Termination Date, no Default or Event of Default is then continuing, the Lender shall return all of such collateral relating to such deposit to the Borrower upon request.
(h) If at any time that any Letter of Credit is outstanding, the L/C Exposure, plus Loans outstanding, exceeds the sum of (i) the Maximum Guaranty Amount, plus (ii) the Borrowing Base, plus (iii) the amount of cash and Cash Equivalents currently held in respect the Collection Account, then the Lender may, at its option, require (x) a prepayment of lossesthe Loans in accordance with Section 2.9(d) or (y) the Borrower to deliver cash or Cash Equivalents to the Lender in an amount sufficient to eliminate such excess or to furnish other security for such excess acceptable to the Lender. Any amounts so delivered pursuant to the preceding sentence shall be applied to reimburse the Lender for the amount of any drawings honored under Letters of Credit; PROVIDED, unearned premium reserves HOWEVER, that if subsequent to any such deposit such excess is reduced to an amount less than the amount of such deposited amounts and loss development allowances no Default or Event of Default is then continuing, the Borrower shall be entitled to receive such excess collateral if requested by it.
(i) Notwithstanding the termination of the Commitment and allocated loss adjustment expense relating theretothe payment of the Loans, the obligations of the Borrower under this Section 2.14 shall remain in full force and effect until the Lender shall have been irrevocably released from its obligations with regard to any and all Letters of Credit.
(j) The parties hereto agree that the certain Irrevocable Letter of Credit, L/C No. 5-364581, issued by the Lender on May 6, 1998 at the request of the Borrower for the benefit of Amwest Surety Insurance Company in the face amount of $286,649, shall be deemed to have been issued under this Credit Agreement, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The such Letter of Credit shall be issued for a period subject to and governed by the terms and conditions set forth herein and that certain letter agreement dated as of not less than one yearJuly 1, 1998 among the Lender, the Credit Parties, the Individual Guarantors and shall be automatically extended for one year from its date MEI. For the avoidance of expiration or any future expiration date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail doubt, until such time that the issuing bank elects not to consider the such Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by expired the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing shall be included in the amount calculation of credit available by the amount of such excess creditL/C Exposure hereunder.
Appears in 1 contract
Samples: Credit Agreement (Newstar Media Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or bonds its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower or its Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bank(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to L/C Obligations shall not exceed the Reinsurer's proportion Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last extension, unless the Required Lenders have approved such expiry date; or
(B) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended Expiration Date, unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any additional period. The Reinsurer unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally; provided that another Lender reasonably acceptable to the Administrative Agent may, in its sole discretion, agree to issue such Letter of Credit subject to the other terms and conditions of this Section 2.03;
(C) except as otherwise agreed by the Administrative Agent and the Company agree that the Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any timeL/C Issuer, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any such Letter of Credit is in excess an initial stated amount less than $50,000;
(D) such Letter of Credit is to be denominated in a currency other than Dollars;
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for after any drawing thereunder; or
(F) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or C)(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Company L/C Issuer shall promptly return have all of the benefits and immunities (A) provided to the Reinsurer Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that term “Administrative Agent” as used in Article IX included the Reinsurer's Obligations exceed the balance of credit L/C Issuer with respect to such acts or omissions, and (B) as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
Appears in 1 contract
Samples: Credit Agreement (Coinstar Inc)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars or bonds one or more Alternative Currencies for the account of the Borrower, and to amend or renew Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Company within Letters of Credit; and (B) the scope Lenders severally agree to participate in Letters of this Agreement, Credit issued for the Company agrees account of the Borrower; provided that when it the L/C Issuer shall file not be obligated to make any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued by a bankand no Lender shall be obligated to participate in any Letter of Credit if as of the date of such L/C Credit Extension, (x) the Total Outstandings would exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans would exceed such Lender's Commitment, or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and containing provisions acceptable subject to the insurance regulatory authorities having jurisdiction over terms and conditions hereof, the CompanyBorrower's reserves in an amount equal ability to the Reinsurer's proportion of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The Letter obtain Letters of Credit shall be issued for a period of not less than one yearfully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be automatically extended deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for one year from its which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) subject to Section 2.03(b)(iii), the expiry date of expiration such requested Letter of Credit would occur more than twelve months after the date of issuance or any future expiration last renewal, unless the Required Lenders have approved such expiry date;
(C) the expiry date unless thirty (30) days prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider of such requested Letter of Credit would occur after the Letter of Credit extended for any additional period. The Reinsurer and Expiration Date, unless all the Company agree that Lenders have approved such expiry date;
(D) the Letters issuance of such Letter of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company would violate one or any successor, by operation of law, more policies of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:L/C Issuer; or
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurer. In the event the amount drawn by the Company on any (E) such Letter of Credit is in excess an initial Dollar Equivalent amount less than $100,000, or is to be denominated in a currency other than Dollars or an Alternative Currency.
(iii) The L/C Issuer shall be under no obligation to amend any Letter of the actual amount required for Credit if (A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall L/C Issuer would have no responsibility whatsoever obligation at such time to issue such Letter of Credit in connection with its amended form under the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervalsterms hereof, or more frequently as agreed, but never more frequently than quarterly, (B) the Company shall prepare a specific statement beneficiary of such Letter of Credit does not accept the Reinsurer's Obligations, for the sole purpose of amending the proposed amendment to such Letter of Credit, in the following manner:.
A. if the statement shows that the Reinsurer's Obligations exceed the balance (b) Procedures for Issuance and Amendment of credit as Letters of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.Credit; Auto-
Appears in 1 contract
Samples: Credit Agreement (Tech Data Corp)
Letters of Credit. As regards policies (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the US L/C Issuer agrees, in reliance upon the agreements of the US Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue US Letters of Credit for the account of the US Borrower or bonds any of its Restricted Subsidiaries, and to amend US Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within US Letters of Credit; and (B) the scope US Lenders severally agree to participate in US Letters of this Agreement, Credit issued for the Company agrees account of the US Borrower or its Restricted Subsidiaries and any drawings thereunder; provided that when it shall file after giving effect to any L/C Credit Extension with the insurance regulatory authority or set up on its books reserves for losses, unearned premium reserves and loss development allowance (respect to be calculated using the formula below) covered hereunder which it shall be required by law to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any US Letter of Credit, issued by a bank(x) the US Total Outstandings shall not exceed the US Aggregate Commitment, (y) the aggregate Outstanding Amount of the US Committed Loans of any Lender, plus such Lender’s US Applicable Percentage of the Outstanding Amount of all US L/C Obligations, plus such Lender’s US Applicable Percentage of the Outstanding Amount of all US Swing Line Loans shall not exceed such Lender’s US Commitment, and containing provisions acceptable to (z) the insurance regulatory authorities having jurisdiction over Outstanding Amount of the Company's reserves in an amount equal to US L/C Obligations shall not exceed the Reinsurer's proportion US Letter of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid Credit Sublimit. Each request by the Company but not recovered from US Borrower for the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The issuance or amendment of a US Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by the US Borrowers that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the US Borrower’s ability to obtain US Letters of Credit shall be automatically extended for one year fully revolving, and accordingly the US Borrower may, during the foregoing period, obtain US Letters of Credit to replace US Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from its date and after the Closing Date shall be subject to and governed by the terms and conditions hereof; provided that Existing Letters of expiration or Credit will not be subject to new administrative issuance fees, as referred to in the last sentence of Section 2.03(j), on the deemed issuance hereunder.
(ii) Subject to the terms and conditions set forth herein, (A) the Canadian L/C Issuer agrees, in reliance upon the agreements of the Canadian Lenders set forth in this Section 2.03, (1) from time to time on any future expiration date unless thirty (30) days prior to any expiration date Business Day during the issuing bank shall notify period from the Company by certified or registered mail that the issuing bank elects not to consider Closing Date until the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the Expiration Date, to issue Canadian Letters of Credit provided by the Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time, notwithstanding any other provision of this Agreement, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligations, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the ReinsurerCanadian Borrower or any Restricted Subsidiaries that are organized under the laws of Canada or a province thereof, and to amend Canadian Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Canadian Letters of Credit; and (B) the Canadian Lenders severally agree to participate in Canadian Letters of Credit issued for the benefit of the Canadian Borrower or any such Restricted Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Canadian Letter of Credit, (x) the Canadian Total Outstandings do not exceed the Canadian Allocated Aggregate Commitments determined as of the date on which the requested L/C Credit Extensions are to be made, and (y) after giving effect to such L/C Credit Extension the Outstanding Amount of the Canadian Committed Advances by each Canadian Lender plus such Canadian Lender’s Canadian Applicable Percentage of the Outstanding Amount of Canadian L/C Obligations plus such Canadian Lender’s Canadian Applicable Percentage of the Outstanding Amount of all Canadian Swing Line Loans shall not exceed such Canadian Lender’s Canadian Commitment, and (z) the Outstanding Amount of the Canadian L/C Obligations shall not exceed the Canadian Letter of Credit Sublimit. In the event the amount drawn Each request by the Company Canadian Borrower for the issuance or amendment of a Canadian Letter of Credit shall be deemed to be a representation by the Canadian Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Canadian Borrower’s ability to obtain Canadian Letters of Credit shall be fully revolving, and accordingly the Canadian Borrower may, during the foregoing period, obtain Canadian Letters of Credit to replace Canadian Letters of Credit that have expired or that have been drawn upon and reimbursed.
(iii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance, unless the Required Lenders have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.
(iv) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in excess an initial stated amount less than $500,000 (or, if denominated in Canadian Dollars, C$500,000);
(D) such Letter of Credit is to be denominated in a currency other than Dollars, in the case of US Letters of Credit or is to be denominated in a currency other than Dollars or Canadian Dollars, in the case of Canadian Letters of Credit,
(E) such Letter of Credit contains any provisions for automatic reinstatement of the actual stated amount required for after any drawing thereunder;
(F) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender; or
(G) such Letter of Credit is a commercial letter of credit.
(v) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(vi) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or C)(B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vii) The US L/C Issuer shall act on behalf of the US Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, the Company Canadian L/C Issuer shall promptly return act on behalf of the Canadian Lenders with respect to any Letters of Credit issued by it and the documents associated therewith and each L/C Issuer shall have all of the benefits and immunities (A) provided to the Reinsurer Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever L/C Issuer in connection with the propriety Letters of withdrawals made Credit issued by the Company it or the disposition proposed to be issued by it and Issuer Documents pertaining to such Letters of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently Credit as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. fully as if the statement shows that the Reinsurer's Obligations exceed the balance of credit term “Administrative Agent” as of the statement dateused in Article IX included each L/C Issuer with respect to such acts or omissions, the Reinsurer shall, within thirty and (30B) days after receipt of notice of such excess, secure delivery as additionally provided herein with respect to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditL/C Issuer.
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Letters of Credit. As regards policies or bonds (a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the Availability Period, to issue Letters of Credit in Dollars for the account of SALIC, Scottish UK and Scottish US, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Company within the scope Letters of Credit (for purposes of this AgreementSection 2.03, the Company agrees that when it "Borrowers" shall file with the insurance regulatory authority or set up on its books reserves for lossesmean SALIC, unearned premium reserves Scottish US and loss development allowance (to be calculated using the formula below) covered hereunder which it Scottish UK collectively and a "Borrower" shall be required by law any one of them); and (B) the Lenders severally agree to set up, it will forward participate in Letters of Credit issued for the account of the Borrowers and any drawings thereunder; provided that after giving effect to the Reinsurer a statement showing the proportion of such reserves which is applicable any L/C Credit Extension with respect to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the Company of a clean, irrevocable and unconditional any Letter of Credit, issued (x) the Total Outstandings shall not exceed the Aggregate Commitments and (y) the aggregate Outstanding Amount of the Loans of any Lender, plus such Lender's Applicable Percentage of the Outstanding Amount of all L/C Obligations shall not exceed such Lender's Commitment. Each request by a bank, and containing provisions acceptable to Borrower for the insurance regulatory authorities having jurisdiction over the Company's reserves in an amount equal to the Reinsurer's proportion issuance or amendment of reserves in respect of losses, unearned premium reserves and loss development allowances and allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment expense paid by the Company but not recovered from the Reinsurer as shown in the statement prepared by the Company (hereinafter referred to as "Reinsurer's Obligations"). The a Letter of Credit shall be issued for deemed to be a period of not less than one yearrepresentation by such Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and shall be automatically extended for one year from its date of expiration or any future expiration date unless thirty (30) days prior subject to any expiration date the issuing bank shall notify terms and conditions hereof, the Company by certified or registered mail that the issuing bank elects not Borrowers' ability to consider the Letter of Credit extended for any additional period. The Reinsurer and the Company agree that the obtain Letters of Credit provided by shall be fully revolving, and accordingly the Reinsurer pursuant Borrowers may, during the foregoing period, obtain Letters of Credit to the provisions replace Letters of this Agreement may be Credit that have expired or that have been drawn upon at any time, notwithstanding any other provision and reimbursed. All Existing Letters of this AgreementCredit shall be deemed to have been issued pursuant hereto and from and after the Amendment Effective Date shall be subject to, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for the following purposes, unless otherwise provided for in a separate Trust Agreement:
A. to reimburse the Company for the Reinsurer's Obligationsgoverned by, the payment of which is due under the terms of this Agreement and which has not been otherwise paid;
B. to make refund of any sum which is in excess of the actual amount required to pay the Reinsurer's Obligations under this Agreement;
C. to fund an account with the Company for the Reinsurer's Obligations. Such cash deposit shall be held in an interest bearing account separate from the Company's other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the Reinsurerconditions hereof. In the no event the amount drawn by the Company on any Letter shall Scottish Dublin be entitled to request Letters of Credit is in excess of the actual amount required for A) or C), the Company shall promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the part of the Company or the Reinsurer. The issuing bank shall have no responsibility whatsoever in connection with the propriety of withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that withdrawals are made only upon the order of properly authorized representatives of the Company. At annual intervals, or more frequently as agreed, but never more frequently than quarterly, the Company shall prepare a specific statement of the Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit, in the following manner:
A. if the statement shows that the Reinsurer's Obligations exceed the balance of credit as of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference;
B. if however, the statement shows that the Reinsurer's Obligations are less than the balance of credit as of the statement date, the Company shall within thirty (30) days after receipt of written request from the Reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess creditissued.
Appears in 1 contract
