Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 6 contracts

Samples: Credit Agreement (Tengasco Inc), Credit Agreement (Tengasco Inc), Credit Agreement (Tengasco Inc)

Letters of Credit. ~~(a)~~ During the ~~Availability~~ Revolving Commitment Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank ~~shall, on~~ agrees to issue Letters of Credit for the ~~requested date, issue such~~ account of the Borrower in the aggregate amount up to but not exceeding the Letter of Credit ~~in accordance with the Issuing Bank’s usual and customary business practices.~~ Sublimit; provided, that (di) ~~The Issuing Bank shall examine all documents purporting to represent a demand for payment under a~~ each Letter of Credit ~~promptly following its receipt thereof. The Issuing Bank~~ shall ~~notify~~ be denominated in Dollars; (ii) the ~~Borrower and the Administrative Agent~~ stated amount of ~~such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice~~ each Letter of Credit shall not ~~relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to~~ be less than $100,000 or such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing lesser amount as is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due acceptable to the Issuing Bank; ~~provided that for purposes solely~~ (iii) after giving effect to such issuance, in no event shall the Total Utilization of Revolving Commitments exceed the Revolving Commitments then in effect; (iv) after giving effect to such issuance, in no event shall the Letter of Credit Usage exceed the Letter of Credit Sublimit then in effect; (v) in no event shall any standby Letter of Credit have an expiration date later than the earlier of (1) five Business Days prior to the Revolving Commitment Termination Date and (2) the date which is one year from the date of issuance of such ~~Borrowing,~~ standby Letter of Credit; and (vi) in no event shall any commercial Letter of Credit (x) have an expiration date later than the ~~conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify~~ earlier of (1) the ~~Lenders~~ Revolving Commitment Termination Date and (2) the date which is 180 days from the date of issuance of such ~~Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds~~ commercial Letter of ~~its Base Rate Loan included in~~ Credit or be issued if such ~~Borrowing available~~ commercial Letter of Credit is otherwise unacceptable to ~~the Administrative Agent for the account of~~ the Issuing Bank in ~~accordance with Section 2.5~~its reasonable discretion. ~~The proceeds of such Borrowing shall be applied directly by~~ Subject to the ~~Administrative Agent to reimburse~~ foregoing, the Issuing Bank may agree that a standby Letter of Credit shall automatically be extended for ~~such LC Disbursement. (e) If for any reason a Base Rate Borrowing may~~ one or more successive periods not ~~be (as determined in the sole discretion of the Administrative Agent)~~to exceed one year each, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against unless the Issuing Bank ~~or any other Person~~ elects not to extend for any ~~reason whatsoever~~such additional period; provided, ~~(ii)~~ that the ~~existence~~ Issuing Bank shall not extend any such Letter of ~~a Default or~~ Credit if it has received written notice that an Event of Default or has occurred and is continuing at the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time ~~after~~ the Issuing Bank ~~has received from any~~ must elect to allow such ~~Lender the funds for its participation in a LC Disbursement~~extension; provided, ~~the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof~~further, ~~the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided~~ that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower event there is ~~required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as~~ a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Defaulting Lender~~, but no more frequently than quarterly~~, the Issuing Bank shall ~~deliver (through the Administrative Agent)~~ not be required to ~~each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time~~issue, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity renew or ~~enforceability of~~ extend any Letter of Credit ~~or this Agreement;~~ to the extent (iix) the ~~existence~~ Defaulting Lender’s Pro Rata Share of ~~any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any~~ Letter of Credit ~~(or any Persons or entities for whom any such beneficiary or transferee~~ Commitment may not be ~~acting), any Lender (including the Issuing Bank~~reallocated pursuant to Section 2.22(a) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (~~iii~~y) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank ~~under a Letter of Credit against presentation of a draft or other document~~ has not otherwise entered into arrangements satisfactory to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to it and the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by eliminate the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, risk with respect to ~~documents presented that appear on their face to be~~ the participation in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter Letters of Credit ~~is issued and subject to applicable laws~~of the Defaulting Lender, ~~(i) each standby Letter~~ including by cash collateralizing such Defaulting Lender’s Pro Rata Share of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.the

Appears in 4 contracts

Samples: Credit and Guaranty Agreement (RadNet, Inc.), Credit and Guaranty Agreement (RadNet, Inc.), Credit Agreement (RadNet, Inc.)

Letters of Credit. (a) ~~During~~ Until the ~~Availability Period~~Commitment Termination Date, the Issuing Bank, in reliance upon the agreements of the other Revolving Credit Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.6(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the ~~Borrower~~Company, Letters of Credit for the account of the ~~Borrower~~ Borrowers on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Commitment Termination ~~Date;~~ Date (except pursuant to a clause whereby the Issuing Bank is entitled to terminate the Letter of Credit on an annual basis by giving prior written notice to the beneficiary thereof in accordance with the written terms of such Letter of Credit): (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~50,000; and (iii) the ~~Borrower~~ Borrowers may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC ~~Commitment or~~ Commitment, (B) the aggregate ~~Credit Exposure~~ LC Exposure, plus the aggregate outstanding Revolving Loans of all Revolving Credit Lenders would exceed the Aggregate ~~Commitment Amount~~Revolving Commitments then in effect, or (c) the outstanding Borrowing Base Obligations would exceed the Borrowing Base. ~~Each~~ Upon the issuance of each Letter of Credit each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Revolving Credit Lender’s ~~Pro Rata Share~~ Revolving Credit Percentage of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Revolving Credit Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the ~~Borrower~~ Company shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions ~~in Article III~~precedent to the effectiveness of this Agreement, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the ~~Borrower~~ Borrowers shall have executed and delivered any ~~additional applications, agreements and instruments~~ Letter of Credit Agreement relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such ~~applications, agreements or instruments~~ Letter of Credit Agreement and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection~~ Section 2.6(a) or (a2) ~~of this Section or~~ that one or more of the conditions ~~specified~~ precedent set forth in ~~Article III~~ Section 8 of this Agreement are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the ~~Borrower~~ Company and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement ~~thereunder~~hereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the ~~Borrower~~ Borrowers of ~~its obligation~~ their obligations to reimburse the Issuing Bank and the Revolving Credit Lenders with respect to such LC Disbursement. The ~~Borrower~~ Borrowers shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such ~~drawing~~drawing upon the Issuing Bank’s written demand therefor, but otherwise without presentment, ~~demand~~ demand, or other formalities of any kind. Unless the ~~Borrower~~ Company shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (Eastern time) on the Business Day immediately prior to the date on which ~~such~~ drawing is honored that the ~~Borrower intends~~ Borrowers intend to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the ~~Borrower~~ Borrowers shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Revolving Credit Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank~~; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable~~. The Administrative Agent shall notify the Revolving Credit Lenders of such Borrowing in accordance with Section 2.3, and each Revolving Credit Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.9. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Revolving Credit Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Revolving Credit Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its ~~Pro Rata Share~~ Revolving Credit Percentage of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Revolving Credit Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Revolving Credit Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the ~~Borrower~~ Borrowers or any of ~~its~~ their Subsidiaries, (iv) any breach of this Agreement by ~~the~~ any Borrower or any other Revolving Credit Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Revolving Credit Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Revolving Credit Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Revolving Credit Lender its ~~Pro Rata Share~~ Revolving Credit Percentage of such payment~~; provided~~ : provided, that if such payment is required to be returned for any reason to ~~the~~ a Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Revolving Credit Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Revolving Credit Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.6 on the due date therefor, such Revolving Credit Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate~~; provided~~ : provided, that if such Revolving Credit Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Revolving Credit Lender shall be obligated to pay interest on such amount at the rate ~~set forth in Section 2.12(b)~~for Default Interest. (g) If any Event of Default shall occur and be continuing, on the Business Day that the ~~Borrower~~ Company receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the ~~Borrower~~ Borrowers shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the ratable benefit of ~~the Issuing Bank and~~ the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid ~~fees~~ interest thereon~~; provided~~ : provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the ~~Borrower~~ Borrowers described in ~~Section 8.1(g~~Sections 9.1 (h) or 9.1 (hi). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the ~~Borrower~~ Borrowers under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account~~. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection~~. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the ~~Borrower’s~~ Borrowers’ risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the ~~Borrower~~ Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the ~~Borrower~~ Borrowers under this ~~Agreement and the other Loan Documents~~Agreement. If the ~~Borrower is~~ Borrowers are required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the ~~Borrower within~~ Borrowers with three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each fiscal quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the ~~Borrower~~ Company a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such fiscal quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The ~~Borrower’s obligation~~ Borrowers’ obligations to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i1) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii2) ~~the~~ The existence of any claim, set-off, defense or other right which ~~the~~ a Borrower or any Subsidiary or Affiliate of ~~the~~ a Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (~~iii~~3) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv4) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not strictly comply with the terms of such Letter of Credit; (v5) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the ~~Borrower’s~~ Borrowers’ obligations hereunder; or (vi6) ~~the~~ The existence of a Default or an Event of Default. . (j) Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any ~~Related Party~~ Affiliate of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the ~~Borrower~~ Borrowers to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the ~~Borrower~~ Borrowers to the extent permitted by applicable law) suffered by the ~~Borrower~~ Borrowers that are caused by the Issuing Bank’s failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (jk) (Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, ~~(i) each standby Letter~~ performance under Letters of Credit ~~shall~~ by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by the rules of the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), ~~(ii) each documentary Letter~~ and, to the extent not inconsistent therewith, the governing law of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 11.5.

Appears in 3 contracts

Samples: Loan and Security Agreement (Global Defense Technology & Systems, Inc.), Loan and Security Agreement (Global Defense Technology & Systems, Inc.), Loan and Security Agreement (Global Defense Technology & Systems, Inc.)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement, the Issuing ~~Bank, in reliance upon~~ Lender agrees to issue letters of credit for the ~~agreements~~ account of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue~~Borrower or, at the request of ~~the~~ Borrower, ~~Letters of Credit~~ for the account of Gordmans Management Company, Inc. (each, an “L/C”) or to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, an “L/C Undertaking”) with respect to letters of credit issued by an Underlying Issuer (as of the Closing Date, the prospective Underlying Issuer is to be Xxxxx Fargo) for the account of Borrower ~~on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or, in at the ~~case~~ request of ~~any renewal or extension thereof~~Borrower, ~~one year after such renewal or extension) and (B)~~ for the ~~date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter~~ account of ~~Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if~~Gordmans Management Company, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) Inc. To request the issuance of ~~a Letter of Credit~~ an L/C or an L/C Undertaking (or ~~any~~ the amendment, ~~renewal~~ renewal, or extension of an outstanding ~~Letter of Credit~~L/C or L/C Undertaking), ~~the~~ Borrower shall ~~give~~ hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing ~~Bank~~ Lender) to the Issuing Lender and ~~the Administrative~~ Agent ~~irrevocable written notice at least three~~ (~~3) Business Days prior to~~ reasonably in advance of the requested date of ~~such~~ issuance, amendment, renewal, or extension) a notice requesting the issuance of an L/C or L/C Undertaking, or identifying the L/C or L/C Undertaking to be amended, renewed, or extended, specifying the date of issuance, amendment, renewal, or extension (which shall be a Business Day~~) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be~~), the ~~expiration~~ date of on which such ~~Letter of Credit~~L/C or L/C Undertaking is to expire, the amount of such ~~Letter of Credit~~L/C or L/C Undertaking, the name and address of the beneficiary thereof (or the beneficiary of the Underlying Letter of Credit, as applicable), whether the Letter of Credit is for the account of the Borrower or Gordmans Management Company, Inc. and such other information as shall be necessary to prepare, amend, ~~renew~~ renew, or extend such L/C or L/C Undertaking. If requested by the Issuing Lender, Borrower also shall be an applicant under the application with respect to any Underlying Letter of ~~Credit~~Credit that is to be the subject of an L/C Undertaking. ~~In addition~~ The Issuing Lender shall have no obligation to ~~the satisfaction~~ issue a Letter of Credit if any of the ~~conditions in Article III,~~ following would result after giving effect to the issuance of such requested Letter of Credit: (i) the Letter of Credit Usage would exceed the Borrowing Base less the then extant amount of outstanding Revolving Loans, or (ii) the Letter of Credit Usage would exceed the sum of $15,000,000 (subject to reduction in the case of certain issuances as set forth in the Letter of Credit Side Letter), or (iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the then extant amount of outstanding Revolving Loans. Borrower and the Lender Group acknowledge and agree that certain Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Letter of Credit (and corresponding Underlying Letter of Credit) shall be in form and substance acceptable to the Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Lender is obligated to advance funds under a Letter of Credit, Borrower immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not later than 2:00 p.m., New York time, on the date that such L/C Disbursement is made, if Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 1:00 p.m., New York time, on such date, or, if such notice has not been received by Borrower prior to such time on such date, then not later than 2:00 p.m., New York time, on the Business Day that Borrower receives such notice, if such notice is received prior to 1:00 p.m., New York time, on the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be an Revolving Loan hereunder and, thereafter, shall bear interest at the rate then applicable to Revolving Loans that are Base Rate Loans under Section 2.7. To the extent an L/C Disbursement is deemed to be an Revolving Loan hereunder, Borrower’s obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Revolving Loan. Promptly following receipt by Agent of any payment from Borrower pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.12(c) to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their interests may appear. (b) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share of any Revolving Loan deemed made pursuant to the foregoing subsection on the same terms and conditions as if Borrower had requested such Revolving Loan and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Lenders. By the issuance of a Letter of Credit (or ~~any~~ an amendment ~~which increases the amount of such Letter of Credit) will be subject~~ to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and~~ the Lenders with ~~respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse~~ Revolver Commitments, the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given~~ granted to each Lender with a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3Revolver Commitment, and each Lender ~~shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance~~ with ~~Section 2.5. The proceeds of such Borrowing~~ a Revolver Commitment shall be ~~applied directly by the Administrative Agent~~ deemed to ~~reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason~~ have purchased, a ~~Base Rate Borrowing may not be (as determined~~ participation in ~~the sole discretion~~ each Letter of ~~the Administrative Agent)~~Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Lender agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrower on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in clause (a) of this Section, or of any reimbursement payment required to be refunded to Borrower for any reason. Each ~~Lender’s~~ Lender with a Revolver Commitment acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount equal to its ~~participation~~ respective Pro Rata Share of each L/C Disbursement made by the Issuing Lender pursuant to this Section 2.12(b) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in Section 3 hereof. If any such Lender fails to make available to Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, such Lender shall be deemed to be a Defaulting Lender and Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full. (c) Borrower hereby agrees to indemnify, ~~(iii)~~ save, defend, and hold the Lender Group harmless from any ~~adverse change in the condition (financial~~ loss, cost, expense, or ~~otherwise) of the Borrower or any of its Subsidiaries~~liability, ~~(iv) any breach of this Agreement~~ and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of such Issuing Lender or any other ~~Lender, (v) any amendment, renewal or extension~~ member of the Lender Group. Borrower agrees to be bound by the Underlying Issuer’s regulations and interpretations of any Underlying Letter of Credit or by Issuing Lender’s interpretations of any L/C issued by Issuing Lender to or for Borrower’s account, even though this interpretation may be different from Borrower’s own, and Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Borrower understands that the L/C Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrower against such Underlying Issuer. Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (~~vi)~~ including reasonable attorneys fees), or liability incurred by the Lender Group under any L/C Undertaking as a result of the Lender Group’s indemnification of any Underlying Issuer; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of such Issuing Lender or any other ~~circumstance, happening or event whatsoever, whether or not similar to any~~ member of the ~~foregoing. On the date that such participation is required~~ Lender Group. (d) Borrower hereby authorizes and directs any Underlying Issuer to ~~be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation~~ deliver to the ~~Administrative~~ Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender’s instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application. (e) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrower to Agent for the account of the Issuing ~~Bank. Whenever~~Lender; it being acknowledged and agreed by Borrower that the Underlying Issuer also imposes a schedule of charges for amendments, ~~at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement~~extensions, ~~the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof~~drawings, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to itand renewals. (f) To If by reason of (i) any change after the ~~extent that~~ Closing Date in any applicable law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority (other than any change in any Excluded Tax), or (ii) compliance by the Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Federal Reserve Board as from time to time in effect (and any successor thereto): (i) any reserve, deposit, or similar requirement is or shall ~~fail~~ be imposed or modified in respect of any Letter of Credit issued hereunder, or (ii) there shall be imposed on the Underlying Issuer or the Lender Group any other condition regarding any Underlying Letter of Credit or any Letter of Credit issued pursuant hereto, and the result of the foregoing is to increase, directly or indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Borrower, and Borrower shall pay ~~any amount required~~ on demand such amounts as Agent may specify to be ~~paid pursuant~~ necessary to ~~subsection (d)~~ compensate the Lender Group for such additional cost or ~~(e) of this Section on the due date therefor~~reduced receipt, ~~such Lender shall pay~~ together with interest ~~to the Issuing Bank (through the Administrative Agent)~~ on such amount from ~~such due date to~~ the date ~~such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days~~ of such ~~due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount~~ demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder. The determination by Agent of any amount due pursuant to this Section, as set forth in ~~Section 2.12(b)~~a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto. (g) ~~If any Event~~ Borrower acknowledges and agrees that certain of ~~Default shall occur and be continuing, on~~ the ~~Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the~~ Qualified Import Letters of Credit ~~be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and~~ may provide for the ~~benefit~~ presentation of time drafts to the Underlying Issuer. If an Underlying Issuer accepts such a time draft that is presented under an Underlying Letter of Credit, it is acknowledged and agreed that (i) the Letter of Credit will require the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent Lender to reimburse the ~~Issuing Bank~~ Underlying Issuer for ~~LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction~~ amounts paid on account of ~~the reimbursement obligations of the Borrower for the LC Exposure at~~ such time ~~or, if~~ draft on or after the maturity ~~of the Loans has been accelerated~~date thereof, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the ~~existence~~ pricing provisions hereof (including Sections 2.7(b) and 2.13(e)) shall continue to apply, until payment of ~~any claim~~such time draft on or after the maturity date thereof, ~~set-off, defense or other right which~~ as if the ~~Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any~~ Underlying Letter of Credit ~~(or any Persons or entities for whom any such beneficiary or transferee may be acting)~~were still outstanding, any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) on the date on which Issuing Lender makes payment to the Underlying Issuer of the amounts paid on account of such time draft, Borrower immediately shall ~~specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit~~reimburse such amount to Issuing Lender and such amount shall constitute an L/C Disbursement hereunder.

Appears in 3 contracts

Samples: Loan, Guaranty and Security Agreement (Gordmans Stores, Inc.), Loan, Guaranty and Security Agreement (Gordmans Stores, Inc.), Loan, Guaranty and Security Agreement (Gordmans Stores, Inc.)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement, the Issuing ~~Bank, in reliance upon the agreements~~ Lender agrees to issue letters of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ credit for the account of Borrower (each, an “L/C”) or to purchase participations or execute indemnities, guarantees, or reimbursement obligations (each such undertaking, an “L/C Undertaking”) with respect to letters of credit issued by an Underlying Issuer (as of the ~~Borrower on~~ Closing Date, the ~~terms~~ prospective Underlying Issuer is to be Xxxxx Fargo) for the account of Borrower. Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by an Authorized Person and ~~conditions hereinafter set forth; provided that~~ delivered to the Issuing Lender and Agent via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance reasonably satisfactory to the Issuing Lender in its Permitted Discretion and shall specify (i) ~~each~~ the amount of such Letter of Credit, (ii) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (iii) the expiration date of such Letter of Credit, (iv) the name and address of the beneficiary thereof (or the beneficiary of the Underlying Letter of Credit, as applicable), and (v) such other information (including, in the case of an amendment, renewal, or extension, identification of the outstanding Letter of Credit to be so amended, renewed, or extended) as shall ~~expire on~~ be necessary to prepare, amend, renew, or extend such Letter of Credit. If requested by the ~~earlier~~ Issuing Lender, Borrower also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The Issuing Lender shall have no obligation to issue a Letter of Credit if any of the following would result after giving effect to the issuance of such requested Letter of Credit: (i) the Letter of Credit Usage would exceed the Credit Amount less the sum of (A) the ~~date one year after the date of issuance of such Letter of Credit (or~~Bank Product Reserve, ~~in the case of any renewal or extension thereof, one year after such renewal or extension)~~ and (B) the ~~date that is five (5) Business Days prior to the Stated Termination Date;~~ outstanding amount of Advances, or (ii) ~~each~~ the Letter of Credit Usage would exceed $7,500,000, or (iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the sum of (A) the Bank Product Reserve, and (B) the outstanding amount of Advances. Borrower and the Lender Group acknowledge and agree that certain Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date, including the SVB Letter of Credit. Borrower and the Lender Group acknowledge and agree that the Existing WFB Letter of Credit shall for all purposes under this Agreement and the other Loan Documents be ~~in a stated amount of at least $5,000; and (iii) the Borrower may not request any~~ deemed to be an Underlying Letter of Credit ~~if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount~~for which Issuing Lender has issued an L/C Undertaking. Each ~~Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each~~ Letter of Credit (and corresponding Underlying Letter of Credit) shall be in form and substance acceptable to the Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Lender is obligated to advance funds under a Letter of Credit, Borrower shall reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount equal to such ~~Lender’s Pro Rata Share~~ L/C Disbursement not later than 11:00 a.m., California time, on the date that such L/C Disbursement is made, if Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on the ~~aggregate amount available~~ Business Day that Borrower receives such notice, if such notice is received prior to ~~be drawn under such Letter of Credit~~ 10:00 a.m., California time, on the date of ~~issuance. Each issuance~~ receipt, and, in the absence of ~~a Letter of Credit~~ such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to ~~utilize~~ be an Advance hereunder and, initially, shall bear interest at the ~~Commitment~~ rate then applicable to Advances that are Base Rate Loans. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrower’s obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. Promptly following receipt by Agent of ~~each Lender by an amount equal~~ any payment from Borrower pursuant to this paragraph, Agent shall distribute such payment to the ~~amount of~~ Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.11(b) to reimburse the Issuing Lender, then to such ~~participation~~Lenders and the Issuing Lender as their interests may appear. (b) ~~To request~~ Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.11(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as if Borrower had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Lenders. By the issuance of a Letter of Credit (or ~~any amendment, renewal or extension of~~ an ~~outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior~~ amendment to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and~~ the Lenders with ~~respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse~~ Revolver Commitments, the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given~~ granted to each Lender with a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3Revolver Commitment, and each Lender ~~shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance~~ with ~~Section 2.5. The proceeds of such Borrowing~~ a Revolver Commitment shall be ~~applied directly by the Administrative Agent~~ deemed to ~~reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason~~ have purchased, a ~~Base Rate Borrowing may not be (as determined~~ participation in ~~the sole discretion~~ each Letter of ~~the Administrative Agent)~~Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Lender agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrower on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in Section 2.11(a), or of any reimbursement payment required to be refunded to Borrower for any reason. Each ~~Lender’s~~ Lender with a Revolver Commitment acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount equal to its ~~participation~~ respective Pro Rata Share of each L/C Disbursement made by the Issuing Lender pursuant to this Section 2.11(b) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in Section 3. If any such Lender fails to make available to Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, such Lender shall be deemed to be a Defaulting Lender and Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full. (c) Borrower hereby agrees to indemnify, ~~(iii)~~ save, defend, and hold the Lender Group harmless from any ~~adverse change~~ loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the ~~condition (financial~~ extent that it is caused by the gross negligence or ~~otherwise)~~ willful misconduct of the ~~Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower~~ Issuing Lender or any other ~~Lender, (v) any amendment, renewal or extension~~ member of the Lender Group. Borrower agrees to be bound by the Underlying Issuer’s regulations and interpretations of any Underlying Letter of Credit or by Issuing Lender’s interpretations of any L/C issued by Issuing Lender to or for Borrower’s account, even though this interpretation may be different from Borrower’s own, and Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Borrower understands that the L/C Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrower against such Underlying Issuer. Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (~~vi)~~ including reasonable attorneys fees), or liability incurred by the Lender Group under any L/C Undertaking as a result of the Lender Group’s indemnification of any Underlying Issuer; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of the Issuing Lender or any other ~~circumstance, happening or event whatsoever, whether or not similar to any~~ member of the ~~foregoing~~Lender Group. On Borrower hereby acknowledges and agrees that neither the ~~date that such participation is required to be funded, each~~ Lender Group nor the Issuing Lender shall ~~promptly transfer~~be responsible for delays, errors, or omissions resulting from the malfunction of equipment in ~~immediately available funds, the amount~~ connection with any Letter of ~~its participation~~ Credit. (d) Borrower hereby authorizes and directs any Underlying Issuer to deliver to the ~~Administrative~~ Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender’s instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application. (e) Any and all issuance charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and shall be reimbursable immediately by Borrower to Agent for the account of the Issuing ~~Bank. Whenever~~Lender; it being acknowledged and agreed by Borrower that, ~~at any time after~~ as of the ~~Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement~~Closing Date, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed issuance charge imposed by the ~~Administrative Agent or~~ prospective Underlying Issuer is .825% per annum times the ~~Issuing Bank~~ undrawn amount of each Underlying Letter of Credit, that such issuance charge may be changed from time to ittime, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals. (f) To If by reason of (i) any change after the ~~extent that~~ Closing Date in any ~~Lender shall fail to pay~~ applicable law, treaty, rule, or regulation or any ~~amount required to be paid pursuant to subsection (d)~~ change in the interpretation or application thereof by any Governmental Authority, or (eii) compliance by the Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of ~~this Section on the due date therefor~~any Governmental Authority or monetary authority including, ~~such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to~~ Regulation D of the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders Reserve Board as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to ~~time, the Issuing Bank shall deliver to such Lender~~ time in effect (and any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:successor thereto): (i) any ~~lack of validity~~ reserve, deposit, or ~~enforceability~~ similar requirement is or shall be imposed or modified in respect of any Letter of Credit ~~or this Agreement;~~issued hereunder, or (ii) there shall be imposed on the ~~existence of any claim, set-off, defense~~ Underlying Issuer or ~~other right which~~ the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender ~~(including the Issuing Bank) or~~ Group any other ~~Person for whom such beneficiary or~~ condition regarding any ~~such transferee may be acting, whether in connection with this Agreement or the~~ Underlying Letter of Credit or any ~~document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a~~ Letter of Credit ~~proving to be forged~~issued pursuant hereto, ~~fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by~~ and the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any result of the foregoing ~~shall have any liability~~ is to increase, directly or ~~responsibility by reason~~ indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or ~~in connection with the issuance or transfer of~~ maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Borrower, and Borrower shall pay within 30 days after demand therefor, such amounts as Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment ~~or failure~~ in full thereof at the rate then applicable to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing BankBase Rate Loans hereunder; provided that ~~the foregoing~~ Borrower shall not be ~~construed~~ required to ~~excuse the Issuing Bank from liability~~ compensate a Lender pursuant to this Section for any such amounts incurred more than 180 days prior to the date that such Lender first demands payment from Borrower of such amounts; provided further that if an event or circumstance giving rise to such amounts is retroactive, then the ~~extent~~ 180-day period referred to above shall be extended to include the period of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms retroactive effect thereof. The ~~parties hereto expressly agree that~~determination by Agent of any amount due pursuant to this Section, as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of ~~gross negligence~~ manifest or ~~willful misconduct~~ demonstrable error, be final and conclusive and binding on ~~the part~~ all of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credithereto. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 3 contracts

Samples: Credit Agreement (Omniture, Inc.), Credit Agreement (Omniture, Inc.), Credit Agreement (Omniture, Inc.)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d)~~ terms and ~~(e)~~ conditions of this ~~Section~~Agreement, ~~may, in its sole discretion, issue, at the request~~ Lender agrees to issue letters of ~~the Borrower, Letters of Credit~~ credit for the account of Borrower (each, an "L/C") or to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, an "L/C Undertaking") with respect to letters of credit issued by an Underlying Issuer (as of the ~~Borrower on~~ Closing Date, the ~~terms and conditions hereinafter set forth; provided that (i~~prospective Underlying Issuer is to be Xxxxx Fargo) ~~each Letter~~ for the account of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment AmountBorrower. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request for the issuance of a Letter of ~~Credit (~~Credit, or ~~any~~ the amendment, ~~renewal~~ renewal, or extension of an any outstanding Letter of Credit), ~~the Borrower~~ shall ~~give the Issuing Bank~~ be made in writing by an Authorized Person and ~~the Administrative Agent irrevocable written notice at least three (3) Business Days prior~~ delivered to Lender via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such ~~issuance specifying the date (which~~ request shall be ~~a Business Day~~in form and substance reasonably satisfactory to Lender in its Permitted Discretion and shall specify (i) ~~such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit,~~ the amount of such Letter of Credit, (ii) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (iii) the expiration of such Letter of Credit, (iv) the name and address of the beneficiary thereof (or the beneficiary of the Underlying Letter of Credit, as applicable), and (v) such other information (including, in the case of an amendment, renewal, or extension, identification of the outstanding Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, ~~renew~~ renew, or extend such Letter of Credit. ~~In addition~~ If requested by Lender, Borrower also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the ~~satisfaction~~ subject of an L/C Undertaking. Lender shall have no obligation to issue a Letter of Credit if any of the ~~conditions in Article III,~~ following would result after giving effect to the issuance of such requested Letter of Credit: (i) the Letter of Credit Usage would exceed the Borrowing Base less the outstanding amount of Advances, or (ii) the Letter of Credit Usage would exceed $10,000,000.00, or (iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the outstanding amount of Advances. Borrower and Lender acknowledge and agree that certain Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Letter of Credit (~~or any amendment which increases the amount of such~~ and corresponding Underlying Letter of Credit) ~~will~~ shall be ~~subject~~ in form and substance acceptable to Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. If Lender is obligated to advance funds under a Letter of Credit, Borrower immediately shall reimburse such L/C Disbursement to Lender by paying to Lender an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on the date that such L/C Disbursement is made, if Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on the Business Day that Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.6. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrower's obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. (b) Borrower hereby agrees to indemnify, save, defend, and hold Lender harmless from any loss, cost, expense, or liability, and reasonable out-of-pocket fees of outside attorneys incurred by Lender arising out of or in connection with any Letter of Credit; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the ~~further conditions~~ extent that ~~such~~ it is caused by the gross negligence or willful misconduct of Lender. Borrower agrees to be bound by the Underlying Issuer's regulations and interpretations of any Underlying Letter of Credit or by Lender's interpretations of any L/C issued by Lender to or for Borrower's account, even though this interpretation may be different from Borrower's own, and Borrower understands and agrees that Lender shall not be liable for any error, negligence, or mistake, whether of omission or commission, in ~~such form and contain such terms as~~ following Borrower's instructions or those contained in the ~~Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such~~ Letter of Credit or any modifications, amendments, or supplements thereto, except to the extent cause by the gross negligence or willful misconduct of the Lender. Borrower understands that the L/C Undertakings may require Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrower against such Underlying Issuer. Borrower hereby agrees to indemnify, save, defend, and hold Lender harmless with respect to any loss, cost, expense (including reasonable out-of-pocket fees of outside attorneys), or liability incurred by Lender under any L/C Undertaking as ~~the Issuing Bank shall reasonably require; provided that in the event~~ a result of Lender's indemnification of any ~~conflict between such applications~~Underlying Issuer; provided, ~~agreements~~ however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or ~~instruments~~ liability to the extent that it is caused by the gross negligence or willful misconduct of Lender. Borrower hereby acknowledges and ~~this Agreement~~agrees that Lender shall not be responsible for delays, errors, or omissions resulting from the ~~terms~~ malfunction of ~~this Agreement shall control~~equipment in connection with any Letter of Credit. (c) ~~At least two (2) Business Days prior~~ Borrower hereby authorizes and directs any Underlying Issuer to ~~the issuance of any Letter of Credit~~deliver to Lender all instruments, ~~the Issuing Bank will confirm with the Administrative Agent (~~documents, and other writings and property received by ~~telephone or in writing) that the Administrative Agent has received~~ such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is Underlying Issuer pursuant to ~~issue the requested Letter of Credit, directing the Issuing Bank not to issue the~~ such Underlying Letter of Credit ~~because~~ and to accept and rely upon Lender's instructions with respect to all matters arising in connection with such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Underlying Letter of Credit ~~in accordance with~~ and the ~~Issuing Bank’s usual and customary business practices~~related application. (d) ~~The Issuing Bank~~ Any and all reasonable charges and commissions and reasonable out-of-pocket fees,and costs incurred by Lender relating to Underlying Letters of Credit shall ~~examine all documents purporting~~ be Lender Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrower to ~~represent a demand~~ Lender for ~~payment under a~~ the account of Lender; it being acknowledged and agreed by Borrower that, as of the Closing Date, the issuance charge imposed by the prospective Underlying Issuer is .825% per annum times the face amount of each Underlying Letter of ~~Credit promptly following its receipt thereof~~Credit, that such issuance charge may be changed from time to time, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals. The ~~Issuing Bank~~ Lender shall ~~notify~~ provide the Borrower ~~and~~ with invoices, to the ~~Administrative Agent of~~ extent such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders invoices exist, with respect to such ~~LC Disbursement. The Borrower shall be irrevocably~~ charges, fees and ~~unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid~~ costs contemplated by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in this Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement2.12(d). (e) If ~~for any~~ by reason ~~a Base Rate Borrowing may not be (as determined in the sole discretion~~ of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any ~~set-off~~change after the Closing Date in any applicable law, ~~counterclaim~~treaty, ~~recoupment~~rule, ~~defense~~ or ~~other right that such Lender~~ regulation or any ~~other Person may have against~~ change in the ~~Issuing Bank~~ interpretation or application thereof by any ~~other Person for any reason whatsoever~~Governmental Authority, or (ii) compliance by the ~~existence~~ Underlying Issuer or Lender with any direction, request, or requirement (irrespective of ~~a Default~~ whether having the force of law) of any Governmental Authority or ~~an Event of Default or the termination~~ monetary authority including, Regulation D of the ~~Aggregate Commitments,~~ Federal Reserve Board as from time to time in effect (~~iii~~and any successor thereto): (i) any ~~adverse change~~ reserve, deposit, or similar requirement is or shall be imposed or modified in ~~the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension~~ respect of any Letter of Credit issued hereunder, or (ii) there shall be imposed on the Underlying Issuer or ~~(vi)~~ Lender any other ~~circumstance, happening or event whatsoever, whether or not similar to~~ condition regarding any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters Underlying Letter of Credit ~~be Cash Collateralized~~ or any Letter of Credit issued pursuant ~~to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank~~ hereto; and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the ~~occurrence of an Event of Default~~foregoing is to increase, ~~such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured~~ directly or ~~waived. (h) Upon the request of any Lender, but no more frequently than quarterly~~indirectly, the ~~Issuing Bank shall deliver (through the Administrative Agent)~~ cost to ~~each~~ Lender ~~and the Borrower a report describing the aggregate Letters~~ of ~~Credit then outstanding. Upon the request of any Lender from time to time~~issuing, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolutemaking, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity guaranteeing, or ~~enforceability of~~ maintaining any Letter of Credit or ~~this Agreement; (ii)~~ to reduce the ~~existence of~~ amount receivable in respect thereof by Lender, then, and in any ~~claim~~such case, ~~set-off~~Lender may, ~~defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have~~ at any time ~~against~~ within a ~~beneficiary~~ reasonable period after the additional cost is incurred or ~~any transferee~~ the amount received is reduced, notify Borrower, and Borrower shall pay on demand such amounts as Lender may specify to be necessary to compensate Lender for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder. The determination by Lender of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving amount due pursuant to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, ~~constitute~~ as set forth in a ~~legal or equitable discharge of~~certificate setting forth the calculation thereof in reasonable detail, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree thatshall, in the absence of ~~gross negligence~~ manifest or ~~willful misconduct~~ demonstrable error, be final and conclusive and binding on ~~the part~~ all of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credithereto. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 3 contracts

Samples: Loan and Security Agreement (Viskase Companies Inc), Loan and Security Agreement (Viskase Companies Inc), Loan and Security Agreement (Viskase Companies Inc)

Letters of Credit. The Bank agrees to (ax) ~~During~~ issue standby letters of credit (each an “LOC” and collectively the ~~Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d~~“LOCs”) ~~and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ for the account of ACE or for the ~~Borrower~~ account of any Wholly-owned Subsidiary of ACE, provided that ACE shall be a joint applicant and account party with respect to any such LOC, and (y) extend the expiration date for or increase the amount of LOCs, in each case from time to time on any Business Day during the ~~terms and conditions hereinafter set forth~~Availability Period; provided that (a) the Bank shall not have any obligation to issue, extend or increase the amount of any LOC if (i) ~~each Letter of~~ the aggregate Credit ~~shall expire on the earlier of~~ Exposure (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (Aextension or increase) ~~the aggregate LC Exposure~~ would exceed the LC Commitment Amount; or (Bii) such issuance, extension or increase would conflict with or cause the ~~aggregate Credit Exposure of all Lenders would~~ Bank to exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender any limit imposed by ~~an amount equal to the amount of such participation.~~ applicable law or any applicable requirement thereof; (b) ~~To request~~ each LOC shall be denominated in Dollars, Sterling, Euro or another currency requested by ACE and acceptable to the ~~issuance~~ Bank in its sole discretion; (c) each LOC shall be payable only against sight drafts (and not time drafts); (d) no LOC shall have a scheduled expiration date (including all rights of ACE or the beneficiary to require extension thereof) later than the scheduled Final Expiration Date; (e) each Lloyd’s LOC shall be issued for the benefit of Lloyd’s in the form at the time of issue required by Lloyd’s for the purposes of being eligible to be included in the Funds at Lloyd’s of a ~~Letter of Credit~~ Member; (~~or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3~~f) ~~Business Days prior to the requested date of such issuance specifying the date (which~~ each Lloyd’s LOC shall be issued for the purposes of being included in the Funds at Lloyd’s of a ~~Business Day~~Member that is a Wholly-owned Subsidiary of ACE and is not a member of any syndicate at Lloyd’s other than the Syndicate; (g) ~~such Letter~~ the Bank shall not have any obligation to issue any LOC (other than a Lloyd’s LOC) that the Bank determines, in the exercise of ~~Credit~~ its reasonable judgment consistent with its customary practice, is unsatisfactory in form or substance; and (h) the Bank shall not have any obligation to issue an LOC that is to be issued (in favor of a beneficiary that is a Sanctioned Person or ~~amended~~is organized under the laws of a Sanctioned Country. An LOC may by its terms be automatically extendible annually; provided that the Bank shall not be required to permit any such automatic extension if the Bank has determined that it would have no obligation at such time to issue such LOC as extended under the terms hereof, ~~renewed or extended, as~~ in which case the ~~case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of~~ Bank shall notify the beneficiary thereof ~~and such other information as shall be necessary~~ of its election not to ~~prepare, amend, renew or~~ extend such ~~Letter of Credit. In addition~~ LOC (which the Bank agrees to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form do on and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms ~~and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter~~ of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent2.02(c), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 3 contracts

Samples: Facility Agreement (ACE LTD), Facility Agreement (ACE LTD), Facility Agreement (ACE LTD)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for (x) its own account or (y) for the account of any of its Subsidiaries, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, ~~in reliance upon~~ at any time and from time to time during the ~~agreements~~ Availability Period. In the event of any inconsistency between the ~~other Lenders pursuant to subsections (d)~~ terms and ~~(e)~~ conditions of this ~~Section~~Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, ~~may~~or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. It is understood and agreed that, in ~~its sole discretion~~connection with any Letter of Credit referred to in clause (y) above, ~~issue~~(i) the Borrower shall be deemed to be a primary account party under, and obligated in respect of, each Letter of Credit issued at the request of the ~~Borrower~~Borrower hereunder, ~~Letters~~ notwithstanding the fact that a Subsidiary may be listed as the account party in the Letter of ~~Credit~~ Credit, and (ii) the Borrower unconditionally and irrevocably agrees that it will be fully responsible for the reimbursement of LC Disbursements, the payment of interest thereon and the payment of participation fees and other fees due hereunder to the same extent as if it were the sole account ~~of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance~~ party in respect of such Letter of Credit (~~or, in~~ the ~~case~~ Borrower hereby irrevocably waiving any defenses that might otherwise be available to it as a guarantor of the obligations of any ~~renewal or extension thereof, one year after such renewal or extension) and (B) the date~~ Subsidiary that ~~is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit~~ shall be an account party in ~~a stated amount~~ respect of ~~at least $5,000; and (iii) the Borrower may not request~~ any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation~~Credit). (b) To request the issuance of a Letter of Credit (or ~~any~~ the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall ~~give~~ hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent ~~irrevocable written notice at least three~~ (~~3) Business Days prior to~~ reasonably in advance of the requested date of ~~such~~ issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day) ), the date on which such Letter of Credit is to ~~be issued~~ expire (~~or amended, renewed or extended, as the case may be~~which shall comply with paragraph (c) of this Section)~~, the expiration date of such Letter of Credit~~, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. ~~In addition~~ If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. 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 Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $400,000,000, (ii) the portion of the LC Exposure attributable to Letters of Credit issued by the applicable Issuing Bank shall not exceed the LC Commitment of such Issuing Bank and (iii) the total Credit Exposures shall not exceed the total Commitments. (c) Each Letter of Credit shall expire at or prior to the ~~satisfaction~~ close of business on the ~~conditions in Article III,~~ earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applicationsor, ~~agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that~~ in the ~~event~~ case of any ~~conflict between~~ renewal or extension thereof, one year after such ~~applications, agreements~~ renewal or ~~instruments~~ extension) and ~~this Agreement,~~ (ii) the ~~terms of this Agreement shall control. (c) At least two (2)~~ date that is five Business Days prior to the ~~issuance of~~ Termination Date; provided that any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent Credit with a ~~copy thereof. Unless~~ one-year tenor may provide for the ~~Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding~~ renewal thereof for additional one-year periods (which shall in no event extend beyond the date ~~the Issuing Bank is~~ referred to ~~issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth~~ in ~~subsection~~ clause (aii) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practicesabove). (d) ~~The Issuing Bank shall examine all documents purporting to represent a demand for payment under~~ By the issuance of a Letter of Credit ~~promptly following its receipt~~ (or an amendment to a Letter of Credit increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing Bank ~~has made~~ or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve~~ the ~~Borrower of its obligation to reimburse~~ Lenders, the Issuing Bank ~~and the Lenders with respect~~ hereby grants to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3each Lender, and each Lender ~~shall make~~ hereby acquires from the ~~proceeds of its Base Rate Loan included~~ Issuing Bank, a participation in such ~~Borrowing~~ Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative ~~Agent~~ Agent, for the account of the Issuing ~~Bank in accordance with Section 2.5. The proceeds~~ Bank, such Lender’s Applicable Percentage of ~~such Borrowing shall be applied directly~~ each LC Disbursement made by ~~the Administrative Agent to reimburse~~ the Issuing Bank ~~for such LC Disbursement.~~ and not reimbursed by the Borrower on the date due as provided in paragraph (e) If of this Section, or of any reimbursement payment required to be refunded to the Borrower for any ~~reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each~~ reason. Each Lender ~~(other than the Issuing Bank) shall be obligated~~ acknowledges and agrees that its obligation to ~~fund the participation that such Lender purchased~~ acquire participations pursuant to ~~subsection (a)~~ this paragraph in respect of ~~this Section in an amount equal to its Pro Rata Share~~ Letters of ~~such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be~~ Credit is absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason circumstance whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) including any amendment, renewal or extension of any Letter of Credit or ~~(vi) any other circumstance, happening~~ the occurrence and continuance of a Default or ~~event whatsoever, whether~~ reduction or ~~not similar to any~~ termination of the ~~foregoing. On~~ Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. (e) If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on the date that is one Business Day after such ~~participation~~ LC Disbursement is ~~required~~ made, if the Borrower has received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on the date of such disbursement, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, New York City time, on (i) the Business Day following the date that the Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time, on the preceding Business Day, or (ii) the second Business Day following the day that the Borrower receives such notice, if such notice is not received by such 10:00 a.m. on the preceding Business Day; provided that unless Borrower otherwise notifies the Administrative Agent, such payment shall be ~~funded~~automatically financed with an ABR Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Borrowing. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Lender shall ~~promptly transfer, in immediately available funds, the amount of its participation~~ pay to the Administrative Agent ~~for the account~~ its Applicable Percentage of the ~~Issuing Bank. Whenever~~payment then due from the Borrower, ~~at any time after~~ in the same manner as provided in Section 2.05 with respect to Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank ~~has~~ the amounts so received by it from ~~any such Lender~~ the ~~funds for its participation in a LC Disbursement, the Issuing Bank (or~~ Lenders. Promptly following receipt by the Administrative Agent ~~on its behalf) receives~~ of any payment ~~on account thereof~~from the Borrower pursuant to this paragraph, the Administrative Agent ~~or the Issuing Bank, as the case may be, will~~ shall distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank ~~within three (3) Business Days of such due date~~or, ~~then, retroactively~~ to the ~~due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day~~ extent that ~~the Borrower receives notice from the Administrative Agent or the Required~~ Lenders ~~demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized~~ have made payments pursuant to this ~~subsection~~paragraph to reimburse the Issuing Bank, ~~the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent~~ then to such Lenders and ~~for the benefit of~~ the Issuing Bank ~~and the Lenders, an amount in cash equal~~ as their interests may appear. Any payment made by a Lender pursuant to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent paragraph to reimburse the Issuing Bank for any LC ~~Disbursements for which it had~~ Disbursement (other than the funding of ABR Loans as contemplated above) shall not ~~been reimbursed and, to the extent~~ constitute a Loan and shall not ~~so applied, shall be held for the satisfaction of the reimbursement obligations of~~ relieve the Borrower ~~for the~~ of its obligation to reimburse such LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waivedDisbursement. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (if) The Borrower’s obligation to reimburse LC Disbursements ~~hereunder~~ as provided in paragraph (e) of this Section shall be absolute, unconditional and ~~irrevocable~~ irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of ~~any of the following circumstances:~~ (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; , or any term or provision therein, (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; , (iviii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document ~~to the Issuing Bank~~ that does not comply with the terms of such Letter of Credit; , or (viv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder~~; or (vi) the existence of a Default or an Event of Default~~. Neither the Administrative Agent, the Lenders nor the Issuing Bank, ~~any Lender~~ nor any of their Related ~~Party of any of the foregoing~~ Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to ~~above~~in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise ~~due~~ care when determining whether drafts or and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented ~~that~~ which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (jg) ~~Unless otherwise expressly agreed~~ The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement. (h) If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.11(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment. (i) From time to time, the Borrower may with the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed) and by notice to the Lenders designate as additional Issuing Banks one or more Lenders that agree to serve in such capacity as provided below. The acceptance by a ~~Letter~~ Lender of ~~Credit is issued~~ any appointment as an Issuing Bank hereunder shall be evidenced by an instrument, which shall be in a form reasonably satisfactory to the Borrower, such Lender and ~~subject to applicable laws~~the Administrative Agent, shall set forth the LC Commitment of such Lender and shall be executed by such Lender, the Borrower and the Administrative Agent and, from and after the effective date of such agreement, (i) ~~each standby Letter~~ such Lender shall have all the rights and obligations of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), an Issuing Bank under this Agreement and (ii) ~~each documentary Letter of Credit~~ references herein to the term “Issuing Bank” shall be ~~governed by~~ deemed to include such Lender in its capacity as an Issuing Bank. (j) If any Event of Default shall occur and be continuing, on the ~~Uniform Customs and Practices for Documentary Credits~~ Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (~~2007 Revision)~~or, ~~International Chamber~~ if the maturity of ~~Commerce Publication No. 600 (or such later revision as may be published by~~ the ~~International Chamber~~ Loans has been accelerated, Lenders with LC Exposure representing greater than 50% of ~~Commerce on any date any Letter~~ the total LC Exposure) demanding the deposit of ~~Credit may be issued) and (iii)~~ cash collateral pursuant to this paragraph, the Borrower shall ~~specify~~ deposit in an account with the ~~foregoing~~ Administrative Agent, in ~~each letter~~ the name of ~~credit application submitted~~ the Administrative Agent and for the ~~issuance~~ benefit of the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to Cash Collateralize shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (d) of Section 6.01. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to Cash Collateralize LC Exposure hereunder as a ~~Letter~~ result of ~~Credit~~the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.

Appears in 3 contracts

Samples: Credit Agreement (Applied Materials Inc /De), Credit Agreement (Applied Materials Inc /De), Credit Agreement (Applied Materials Inc /De)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.20(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~250,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Senior Revolving Credit Exposure ~~of all Lenders~~ would exceed the ~~Aggregate Commitment Amount~~Senior Revolving Commitments. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Senior Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall reasonably approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.20(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to ~~11:00 a.m.~~ 2:00 p.m. (New York time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section ~~2.3~~2.4, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.20 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.11(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105~~102% of the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.20, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, performance under Letters of Credit by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by (i) ~~each standby Letter~~ either (x) the rules of ~~Credit shall be governed by~~ the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), ) or (iiy) ~~each documentary Letter~~ the rules of ~~Credit shall be governed by~~ the “Uniform Customs and Practices for Documentary ~~Credits~~ Credits” (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600~~ 500 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (~~iii~~ii) to the ~~Borrower shall specify~~ extent not inconsistent therewith, the ~~foregoing~~ governing law of this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 3 contracts

Samples: Revolving Credit Agreement (NGP Capital Resources Co), Revolving Credit Agreement (NGP Capital Resources Co), Revolving Credit Agreement (NGP Capital Resources CO)

Letters of Credit. (a) ~~During~~ In the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower event that on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of CAM Exchange Date any ~~renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each~~ Letter of Credit shall be outstanding and undrawn in whole or in part, or any amount drawn under a ~~stated amount of at least $5,000; and (iii) the Borrower may not request any~~ Letter of Credit ifshall constitute an Unpaid Drawing, ~~after~~ each Lender with a U.S. Revolving Credit Commitment or Canadian Revolving Credit Commitment, as applicable, in respect of Unpaid Drawings on Letters of Credit shall, before giving effect to the CAM Exchange, promptly pay over to the Administrative Agent, in immediately available funds and in the currency that such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter Letters of Credit are denominated (or at the request of a Lender, such amount in the Dollar Equivalent thereof at such time), an amount equal to such Lender’s ~~Pro Rata Share of the aggregate amount available~~ Revolving Credit Commitment Percentage (as notified to ~~be drawn under~~ such ~~Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each~~ Lender by ~~an amount equal to~~ the ~~amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit~~Administrative Agent), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, ’s undrawn face amount or (to the ~~amount of~~ extent it has not already done so) such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing BankUnpaid Drawing, as the case may be, ~~will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason~~ together with interest thereon from the CAM Exchange Date to the ~~Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding,~~ date on which such ~~Lender will return~~ amount shall be paid to the Administrative Agent or at the ~~Issuing Bank any portion thereof previously distributed by~~ rate that would be applicable at the time to a Revolving Credit Loan that is an ABR Loan in a principal amount equal to such amount, as the case may be. The Administrative Agent shall establish a separate account or accounts for each Lender (each, an “L/C Reserve Account”) for the ~~Issuing Bank~~ amounts received with respect to ~~it. (f) To the extent that any Lender shall fail to pay any amount required to be paid~~ each such Letter of Credit pursuant to ~~subsection~~ the preceding sentence. The Administrative Agent shall deposit in each Lender’s L/C Reserve Account such Lender’s CAM Percentage of the amounts received from the Lenders as provided above. The Administrative Agent shall have sole dominion and control over each L/C Reserve Account, and the amounts deposited in each L/C Reserve Account shall be held in such L/C Reserve Account until withdrawn as provided in paragraph (b), (c), (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreementbelow. The Administrative Agent shall ~~have exclusive dominion~~ maintain records enabling it to determine the amounts paid over to it and ~~control, including~~ deposited in the ~~exclusive right~~ L/C Reserve Accounts in respect of ~~withdrawal, over such account~~each Letter of Credit and the amounts on deposit in respect of each Letter of Credit attributable to each Lender’s CAM Percentage. The ~~Borrower agrees~~ amounts held in each Lender’s L/C Reserve Account shall be held as a reserve against the Letter of Credit Exposure, shall be the property of such Lender, shall not constitute Loans to ~~execute~~ or give rise to any ~~documents and/or certificates~~ claim of or against any Credit Party and shall not give rise to ~~effectuate the intent of this subsection. Other than~~ any ~~interest earned~~ obligation on the ~~investment~~ part of the Borrower or the Canadian Borrower to pay interest to such ~~deposits~~Lender, ~~which investments~~ it being agreed that the reimbursement obligations in respect of Letters of Credit shall arise only at such times as drawings are made thereunder, as provided in Section 3. (b) In the event that after the CAM Exchange Date any drawing shall be made ~~at the option and sole discretion~~ in respect of a Letter of Credit, the Administrative Agent ~~and~~ shall, at the ~~Borrower’s risk and expense~~request of the Letter of Credit Issuer withdraw from the L/C Reserve Account of each Lender any amounts, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, up to the ~~extent not so applied~~amount of such Lender’s CAM Percentage of such drawing, ~~shall be held for~~ deposited in respect of such Letter of Credit and remaining on deposit and deliver such amounts to the Letter of Credit Issuer in satisfaction of the reimbursement obligations of the ~~Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations~~ Lenders under Section 3 (but not of the Borrower ~~under this Agreement~~ and the ~~other Loan Documents~~Canadian Borrower under Section 3, respectively). If In the ~~Borrower is required~~ event any Lender shall default on its obligation to ~~Cash Collateralize its reimbursement obligations with respect~~ pay over any amount to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with Agent in respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or as provided in this ~~Agreement;~~Section 13.2, the Letter of Credit Issuer shall, in the event of a drawing thereunder, have a claim against such Lender to the same extent as if such Lender had defaulted on its obligations under Section 2.5(e), but shall have no claim against any other Lender in respect of such defaulted amount, notwithstanding the exchange of interests in the reimbursement obligations pursuant to Section 13.1. Each other Lender shall have a claim against such defaulting Lender for any damages sustained by it as a result of such default, including, in the event such Letter of Credit shall expire undrawn, its CAM Percentage of the defaulted amount. (iic) In the ~~existence~~ event that after the CAM Exchange Date any Letter of ~~any claim~~Credit shall expire undrawn, ~~set-off, defense or other right which~~ the ~~Borrower or any Subsidiary or Affiliate~~ Administrative Agent shall withdraw from the L/C Reserve Account of each Lender the amount remaining on deposit therein in respect of such Letter of Credit and distribute such amount to such Lender. (d) With the prior written approval of the ~~Borrower~~ Administrative Agent and the Letter of Credit Issuer, any Lender may ~~have at any time against a beneficiary or any transferee~~ withdraw the amount held in its L/C Reserve Account in respect of the undrawn amount of any Letter of ~~Credit (or any Persons or entities~~ Credit. Any Lender making such a withdrawal shall be unconditionally obligated, in the event there shall subsequently be a drawing under such Letter of Credit, to pay over to the Administrative Agent, for ~~whom any such beneficiary or transferee may be acting), any Lender (including~~ the ~~Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or~~ account of the Letter of Credit ~~or any document related hereto or thereto or any unrelated transaction;~~Issuer on demand, its CAM Percentage of such drawing. (~~iii~~e) Pending the withdrawal by any ~~draft or other document presented under a Letter~~ Lender of ~~Credit proving to be forged, fraudulent or invalid in~~ any ~~respect or any statement therein being untrue or inaccurate in any respect; (iv) payment~~ amounts from its L/C Reserve Account as contemplated by the ~~Issuing Bank under a Letter of Credit against presentation of a draft or other document to~~ above paragraphs, the ~~Issuing Bank that does not comply with~~ Administrative Agent will, at the ~~terms~~ direction of such ~~Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar~~ Lender and subject to ~~any of~~ such rules as the ~~foregoing, that might, but~~ Administrative Agent may prescribe for the ~~provisions~~ avoidance of ~~this Section~~inconvenience, ~~constitute a legal or equitable discharge of~~invest such amounts in Permitted Investments. Each Lender that has not withdrawn its CAM Percentage of amounts in its L/C Reserve Account as provided in paragraph (d) above shall have the right, ~~or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither~~ at intervals reasonably specified by the Administrative Agent, to withdraw the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived earnings on investments so made by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply Administrative Agent with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, amounts in its ~~sole discretion, either accept~~ L/C Reserve Account and ~~make payment upon~~ to retain such ~~documents without responsibility~~ earnings for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Creditits own account. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 3 contracts

Samples: Credit Agreement (Sealy Corp), Credit Agreement (Sealy Corp), Credit Agreement (Sealy Corp)

Letters of Credit. (a) During the Availability Period, ~~the~~ each Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the ~~Borrower~~Borrower Representative, Letters of Credit for the account of ~~the~~ any Borrower or any Loan Party on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or ~~extension~~extension although any Letter of Credit may be automatically renewable for successive one year periods subject to customary evergreen provisions of the applicable Issuing Bank) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~25,000; and (iii) the ~~Borrower~~ Borrowers may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Revolving Lender shall be deemed toto have purchased, and hereby irrevocably and unconditionally ~~agrees to, purchase~~ purchases from the relevant Issuing Bank without recourse a participation in each Letter of Credit equal to such Revolving Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower Representative shall give the relevant Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the relevant Issuing Bank shall approve and that the ~~Borrower~~ Borrowers shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the relevant Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the relevant Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the relevant Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the relevant Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date ~~the~~ such Issuing Bank is to issue the requested Letter of Credit, directing ~~the~~ such Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the relevant Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with ~~the~~ such Issuing Bank’s usual and customary business practices. (d) ~~The~~ Each Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. ~~The~~ Each Issuing Bank shall notify the Borrower Representative and the Administrative Agent of such demand for payment and whether ~~the~~ such Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the ~~Borrower~~ Borrowers of ~~its~~ their obligation to reimburse ~~the~~ such Issuing Bank and the Lenders with respect to such LC Disbursement. The ~~Borrower~~ Borrowers shall be jointly and severally irrevocably and unconditionally obligated to reimburse ~~the~~ each Issuing Bank for any LC Disbursements paid by ~~the~~ such Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower Representative shall have notified the relevant Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the ~~Borrower intends~~ Borrowers intend to reimburse ~~the~~ such Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the ~~Borrower~~ Borrowers shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section ~~3.2~~ 3.3 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the relevant Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the relevant Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the relevant Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the ~~Borrower~~ Borrowers or any of ~~its~~ their Subsidiaries, (iv) any breach of this Agreement by ~~the~~ any Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.the

Appears in 2 contracts

Samples: Revolving Credit Agreement (Fox Factory Holding Corp), Revolving Credit Agreement (Fox Factory Holding Corp)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.23(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit (i) on the Closing Date with respect to all Existing Letters of Credit and (ii) on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article ~~III,~~ 3 the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.23(a) ~~of this Section~~ or that one or more conditions specified in Article ~~III~~ 3 are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (New York time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.7. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing, provided, however, that the obligation of each Lender to fund such participation interest is subject to the condition that the Issuing Bank believed in good faith that all conditions under Section 3.2 were satisfied at the time the applicable Letter of Credit was issued. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection (d) or~~ paragraph (e) ~~of this Section~~ above on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.14(c). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (h) or (h)i) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.23, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross ~~negligence~~ negligence, bad faith or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, ~~(i) each standby Letter~~ performance under Letters of Credit ~~shall~~ by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by the rules of the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be ~~issued)~~issued)and to the extent not inconsistent therewith, ~~(ii) each documentary Letter~~ the governing law of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 2 contracts

Samples: Revolving Credit and Term Loan Agreement (Stanley, Inc.), Revolving Credit and Term Loan Agreement (Stanley, Inc.)

Letters of Credit. ~~(a) During the Availability Period~~The Bank shall, ~~the Issuing Bank, in reliance~~ from time to time upon ~~the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the~~ request of the ~~Borrower~~Borrower prior to the Maturity Date, ~~Letters of Credit for the account of the Borrower on~~ but subject to the terms and conditions ~~hereinafter set forth~~hereof, issue stand-by letters of credit in such form as requested by the Borrower and approved by the Bank from time to time (the “Letters of Credit”); provided, however, that the Borrower shall not be entitled to request the issuance of any Letter of Credit if there exists a Default or an Event of Default; and further provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each no Letter of Credit shall be in issued if, as a ~~stated~~ result of such issuance, the aggregate amount of ~~at least $5,000; and (iii) the Borrower may not request any~~ outstanding Letter of Credit ~~if, after giving effect to such issuance, (A) the aggregate LC Exposure~~ Obligations would exceed the ~~LC Commitment or~~ lesser of (Bx) $250,000 and (y) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Loan Commitment; (ii) no Letter of Credit shall ~~be deemed~~ have a maturity date longer than one year from the date of issuance unless the Bank, in its sole discretion has agreed to ~~utilize the Commitment of each Lender by an amount equal to the amount of such participation.~~ a longer term; (biii) ~~To request the issuance of a~~ no Letter of Credit shall have a maturity date later than ten days prior to the Maturity Date; (~~or any amendment, renewal or extension of an outstanding Letter of Credit),~~ iv) the Borrower shall give the ~~Issuing~~ Bank ~~and the Administrative Agent irrevocable~~ at least five (5) days prior written notice ~~at least three (3) Business Days prior to the requested date~~ of ~~such issuance specifying the date (which shall be~~ each request for a ~~Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such~~ Letter of Credit, which notice shall include the amount of ~~such~~ the requested Letter of Credit, the name and address of the beneficiary ~~thereof~~ and ~~such other information as shall be necessary to prepare, amend, renew or extend such Letter~~ a precise written description of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; , together with the documents described in the next paragraph; and (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any no Letter of Credit ~~or any payment or failure to make any payment thereunder (irrespective~~ shall be requested unless the face amount of ~~any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any~~ such Letter of Credit ~~(including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond~~ does not exceed the ~~control~~ unused portion of the ~~Issuing Bank; provided that~~ Loan Commitment. Borrower hereby irrevocably appoints the ~~foregoing shall not be construed~~ Sponsor as the sole Person authorized to ~~excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims~~ execute and deliver a request for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit ~~comply with~~ and application required hereunder to the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determinationBank. In furtherance of the ~~foregoing~~ foregoing, Borrower hereby makes, constitutes and ~~without limiting the generality thereof~~appoints Sponsor, and its agents and designees, the ~~parties agree that~~true and lawful agents and attorneys-in-fact of Borrower, with ~~respect~~ full power of substitution, to ~~documents presented that appear on their face~~ endorse its name and take all actions necessary to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter request Letters of Credit ~~is issued~~ hereunder and ~~subject to applicable laws, (i) each standby Letter~~ issue all requests for Letters of Credit and to execute and deliver all applications and other documents in connection therewith. The powers granted herein are coupled with an interest and shall be ~~governed by~~ irrevocable during the ~~“International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on~~ term hereof. In conjunction with any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted request for the issuance of a Letter of Credit, the Borrower shall first deliver to Bank its form letter of credit application, duly completed by a duly authorized officer of the Borrower. To the extent that such letter of credit application’s terms are inconsistent with the terms of this Agreement, this Agreement controls. Upon delivery to the Bank of such letter of credit application and other documents, instruments, or agreements which the Bank may require from time to time hereafter in connection therewith, each in form and substance satisfactory to the Bank, subject to the limitations set forth in this Section 2.8, the Bank shall issue a Letter of Credit Borrower understands and agrees that the Bank may refuse upon any reasonable circumstances to issue any Letter of Credit. Upon issuance, a Letter of Credit shall be deemed to be an utilization of the Loan Commitment. Upon any draw upon a Letter of Credit issued hereunder, the Borrower shall immediately reimburse the Bank for such drawn amount and, in the event that the Borrower fails to reimburse such amount on the same Business Day, the Bank shall be irrevocably authorized to draw such amount upon the Loan Commitment at which point the amount drawn shall be an Advance for all purposes hereunder, including without limitation, the accrual of interest. Upon the occurrence of any Event of Default pursuant to this Agreement, the Bank may require the Borrower to immediately deposit with the Bank cash collateral in the amount of all outstanding Letter of Credit Obligations pursuant to this Agreement.

Appears in 2 contracts

Samples: Loan Facility Agreement (Ruby Tuesday Inc), Loan Facility Agreement (Ruby Tuesday Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.20(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~50,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit (i) on the Closing Date with respect to all Existing Letters of Credit and (ii) on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.20(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (Atlanta, Georgia time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraphs (d) or (e) ~~of this Section~~ below on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.11(d). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence and continuance of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.20, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and Practices for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600 (or such later revision~~ 500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing~~ this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 2 contracts

Samples: Revolving Credit Agreement (Rollins Inc), Revolving Credit Agreement (Rollins Inc)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement, the Issuing ~~Bank, in reliance upon the agreements~~ Lender agrees to issue letters of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ credit for the account of ~~the~~ Subsidiary Borrower ~~on the terms and conditions hereinafter set forth; provided that~~ (ieach, an "L/C") or to purchase participations or execute indemnities or reimbursement obligations (each ~~Letter~~ such undertaking, an "L/C Undertaking") with respect to letters of ~~Credit shall expire on the earlier of~~ credit issued by an Underlying Issuer (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share as of the ~~aggregate amount available~~ Closing Date, the prospective Underlying Issuer is to be ~~drawn under such Letter~~ Xxxxx Fargo) for the account of ~~Credit on the date of issuance~~Subsidiary Borrower. ~~Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b)~~ To request the issuance of ~~a Letter of Credit~~ an L/C or an L/C Undertaking (or ~~any~~ the amendment, ~~renewal~~ renewal, or extension of an outstanding ~~Letter of Credit~~L/C or L/C Undertaking), ~~the~~ Subsidiary Borrower shall ~~give~~ hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing ~~Bank~~ Lender) to the Issuing Lender and ~~the Administrative~~ Agent ~~irrevocable written notice at least three~~ (~~3) Business Days prior to~~ reasonably in advance of the requested date of ~~such~~ issuance, amendment, renewal, or extension) a notice requesting the issuance ~~specifying~~ of an L/C or L/C Undertaking, or identifying the ~~date (which shall be a Business Day) such Letter of Credit is~~ L/C or L/C Undertaking to be ~~issued (or~~ amended, ~~renewed~~ renewed, or extended, as the ~~case may be)~~date of issuance, amendment, renewal, or extension, the ~~expiration~~ date of on which such ~~Letter of Credit~~L/C or L/C Undertaking is to expire, the amount of such ~~Letter of Credit~~L/C or L/C Undertaking, the name and address of the beneficiary thereof (or the beneficiary of the Underlying Letter of Credit, as applicable), and such other information as shall be necessary to prepare, amend, ~~renew~~ renew, or extend such L/C or L/C Undertaking. If requested by the Issuing Lender, Subsidiary Borrower also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The Issuing Lender shall have no obligation to issue, or to participate in, a Letter of Credit if the following would result after giving effect to the requested Letter of Credit: (i) the Letter of Credit Usage would exceed the Borrowing Base less the amount of outstanding Advances, (ii) the Letter of Credit Usage under this Agreement, the Domestic Loan Agreement and the UK Loan Agreement would exceed $10,000,000 in the aggregate, or (iii) the Letter of Credit Usage would exceed the Maximum Subsidiary Revolver Amount less the then extant amount of outstanding Advances. Each L/C and L/C Undertaking must either be given by a party who is either: (a) an Irish licensed bank pursuant to the 1971 Central Bank Act; (b) a credit institution established and licensed in a Member State of the European Union which has "passported" in its license to carry on banking business in Ireland; or (c) another party who is not resident in Ireland who gives the L/C or L/C Undertaking to satisfy a requirement of another entity qualifying under (a) or (b) above and the L/C or L/C Undertaking must be made solely to secure financial facilities to be made available by that other party. In ~~addition~~ addition, each Letter of Credit (and corresponding Underlying Letter of Credit) shall have an expiry date no later than 30 days prior to the ~~satisfaction~~ Maturity Date and all such Letters of Credit (and corresponding Underlying Letter of Credit) shall be in form and substance acceptable to the Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars, Euros or English Pounds. If the amounts payable thereunder are in Euros, or English pounds, Agent shall have the right in its Permitted Discretion to establish Foreign Exchange Reserves against the Borrowing Base. If Issuing Lender is obligated to advance funds under a Letter of Credit, Subsidiary Borrower immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on the date that such L/C Disbursement is made, if Subsidiary Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Subsidiary Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on the Business Day that Subsidiary Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.6. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Subsidiary Borrower's obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. Promptly following receipt by Agent of any payment from Subsidiary Borrower pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.12(c) to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their interest may appear. (b) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions ~~in Article III,~~ as if Subsidiary Borrower had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Lenders. By the issuance of ~~such~~ a Letter of Credit (or ~~any~~ an amendment ~~which increases the amount of such Letter of Credit) will be subject~~ to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and~~ the Lenders with ~~respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse~~ Revolver Commitment, the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given~~ granted to each Lender with a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3Revolver Commitment, and each Lender ~~shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance~~ with ~~Section 2.5. The proceeds of such Borrowing~~ a Revolver Commitment shall be ~~applied directly by the Administrative Agent~~ deemed to ~~reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason~~ have purchased, a ~~Base Rate Borrowing may not be (as determined~~ participation in ~~the sole discretion~~ each Letter of ~~the Administrative Agent)~~Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Lender agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Subsidiary Borrower on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in clause (a) of this Section, or of any reimbursement payment required to be refunded to Subsidiary Borrower for any reason. Each ~~Lender’s~~ Lender with a Revolver Commitment acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount equal to its ~~participation~~ respective Pro Rata Share pursuant to this Section 2.12(b) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in Section 3 hereof. If any such Lender fails to make available to Agent the amount of such Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full. (c) Subsidiary Borrower hereby agrees to indemnify, ~~(iii)~~ save, defend, and hold the Lender Group harmless from any ~~adverse change~~ loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; provided, however, that Subsidiary Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the ~~condition (financial~~ gross negligence or ~~otherwise)~~ wilful misconduct of the ~~Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower~~ Issuing Lender or any other ~~Lender, (v) any amendment, renewal or extension~~ member of the Lender Group. Subsidiary Borrower agrees to be bound by the Underlying Issuer's regulations and interpretations of any Underlying Letter of Credit or by Issuing Lender's interpretations of any L/C issued by Issuing Lender to or for Subsidiary Borrower's account, even though this interpretation may be different from Subsidiary Borrower's own, and Subsidiary Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Subsidiary Borrower's instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Subsidiary Borrower understands that the L/C Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Subsidiary Borrower against such Underlying Issuer. Subsidiary Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (~~vi)~~ including reasonable attorneys fees), or liability incurred by the Lender Group under any L/C Undertaking as a result of the Lender Group's indemnification of any Underlying Issuer; provided, however, that Subsidiary Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the gross negligence or wilful misconduct of the Issuing Lender or any other ~~circumstance, happening or event whatsoever, whether or not similar to any~~ member of the ~~foregoing. On the date that such participation is required~~ Lender Group. (d) Subsidiary Borrower hereby authorizes and directs any Underlying Issuer to ~~be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation~~ deliver to the ~~Administrative~~ Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender's instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application. (e) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by Subsidiary Borrower to Agent for the account of the Issuing ~~Bank. Whenever~~Lender; it being acknowledged and agreed by Subsidiary Borrower that, ~~at any time after~~ as of the ~~Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement~~date of this Agreement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed issuance charge imposed by the ~~Administrative Agent or~~ prospective Underlying Issuer is .825% per annum times the ~~Issuing Bank~~ face amount of each Underlying Letter of Credit, that such issuance charge may be changed from time to ittime, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals. (f) To If by reason of (i) any change in any applicable law, treaty, rule, or regulation or any change in the ~~extent that~~ interpretation or application thereof by any ~~Lender shall fail to pay any amount required to be paid pursuant to subsection (d)~~ Governmental Authority, or (eii) compliance by the Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of ~~this Section on the due date therefor~~any Governmental Authority or monetary authority including, ~~such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to~~ Regulation D of the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders Reserve Board as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to ~~time, the Issuing Bank shall deliver to such Lender~~ time in effect (and any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:successor thereto): (i) any ~~lack of validity~~ reserve, deposit, or ~~enforceability~~ similar requirement is or shall be imposed or modified in respect of any Letter of Credit ~~or this Agreement;~~issued hereunder, or (ii) there shall be imposed on the ~~existence of any claim, set-off, defense~~ Underlying Issuer or ~~other right which~~ the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender ~~(including the Issuing Bank) or~~ Group any other ~~Person for whom such beneficiary or~~ condition regarding any ~~such transferee may be acting, whether in connection with this Agreement or the~~ Underlying Letter of Credit or any ~~document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a~~ Letter of Credit ~~proving to be forged~~issued pursuant hereto, ~~fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by~~ and the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any result of the foregoing ~~shall have any liability~~ is to increase, directly or ~~responsibility by reason~~ indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or ~~in connection with the issuance or transfer of~~ maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Subsidiary Borrower, and Subsidiary Borrower shall pay on demand such amounts as Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment ~~or failure~~ in full thereof at the rate then applicable to ~~make any payment thereunder (irrespective~~ Base Rate Loans hereunder. The determination by Agent of any of amount due pursuant to this Section, as set forth in a certificate setting forth the ~~circumstances referred to above)~~calculation thereof in reasonable detail, or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree thatshall, in the absence of ~~gross negligence~~ manifest or ~~willful misconduct~~ demonstrable error, be final and conclusive and binding on ~~the part~~ all of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credithereto. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Loan Agreement (Palm Inc), Loan Agreement (Palm Inc)

Letters of Credit. Subject to the terms and conditions of this Agreement, and on the condition that aggregate Letter of Credit Liabilities shall never exceed $5,000,000, (ai) ~~During~~ Borrower shall have the ~~Availability Period, the Issuing Bank~~right to, in ~~reliance upon~~ addition to Loans provided for in Section 2.1 hereof, utilize the ~~agreements~~ Revolving Loan Commitments from time to time during the Revolving Loan Availability Period by obtaining the issuance of ~~the other Lenders pursuant to subsections (d) and (e)~~ standby letters of ~~this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ credit for the account of Borrower if Borrower shall so request in the ~~Borrower on~~ notice referred to in Section 2.2(b)(i) hereof (such standby letters of credit as any of them may be amended, supplemented, extended or confirmed from time to time, being herein collectively called the ~~terms~~ "Letters of Credit)" and ~~conditions hereinafter set forth; provided that~~ (iii) ~~each Letter~~ TCB agrees to issue such Letters of ~~Credit shall expire on the earlier of (A) the date one year after~~ Credit. Upon the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of ~~Credit (or any amendment, renewal or extension of an outstanding Letter of~~ Credit), the ~~Borrower~~ applicable Issuer shall ~~give~~ be deemed, without further action by any party hereto, to have sold to each Revolving Loan Lender, and each such Lender shall be deemed, without further action by any party hereto, to have purchased from the ~~Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior~~ applicable Issuer, a participation, to the ~~requested date~~ extent of such ~~issuance specifying the date (which shall be a Business Day)~~ Lender's Revolving Loan Commitment Percentage, in such Letter of Credit ~~is to be issued (or amended~~and the related Letter of Credit Liabilities, ~~renewed or extended, as~~ which participation shall terminate on the ~~case may be),~~ earlier of the expiration date of such Letter of ~~Credit,~~ Credit or the ~~amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit~~applicable Termination Date. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such No Letter of Credit shall ~~be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall~~ have ~~executed and delivered any additional applications, agreements and instruments relating to such~~ an expiration date later than one year from date of issuance. Any Letter of Credit as that shall have an expiration date after the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because end of the ~~limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then,~~ Revolving Loan Availability Period shall be subject to ~~the terms~~ Cover or backed by a standby letter of credit in form and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3substance, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined issued by a ~~court of competent jurisdiction)~~Person, ~~the Issuing Bank shall be deemed~~ acceptable to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, Agent in its sole discretion. TCB or, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the ~~terms~~ prior approval of ~~such~~ Borrower and Agent, another Lender shall be the Issuer of each Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Loan Agreement (Carrols Corp), Loan Agreement (Carrols Corp)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.22(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit (i) on the Closing Date with respect to all Existing Letters of Credit and (ii) on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance (or such shorter period as may be agreed to by the Issuing Bank) specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (New York time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraphs (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on demand on such amount from such due date to the date such payment is made at a rate per annum equal to (i) the Federal Funds ~~Rate; provided that if~~ Rate until the second Business Day after such ~~Lender shall fail to make such payment to the Issuing Bank within three~~ demand and (3ii) ~~Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount~~ at the ~~rate set forth in Section 2.12(b)~~Base Rate at all times thereafter. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent for the benefit of the Issuing Bank as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.22, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, performance under Letters of Credit by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by (i) ~~each standby Letter~~ either (x) the rules of ~~Credit shall be governed by~~ the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), ) or (iiy) ~~each documentary Letter~~ the rules of ~~Credit shall be governed by~~ the “Uniform Customs and Practices for Documentary ~~Credits~~ Credits” (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600~~ 500 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (~~iii~~ii) to the ~~Borrower shall specify~~ extent not inconsistent therewith, the ~~foregoing~~ governing law of this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 2 contracts

Samples: Revolving Credit Agreement (Newmarket Corp), Revolving Credit Agreement (Newmarket Corp)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.20(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is no later than five (5) ~~Business Days~~ days prior to the ~~Stated~~ Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~250,000.00; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate ~~Credit Exposure~~ LC Exposure, plus the aggregate outstanding Revolving Loans of all ~~Lenders~~ Lenders, would exceed the Aggregate ~~Commitment Amount~~Revolving Commitments. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s 's Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of ~~Credit~~Credit , the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve (such approval not to be withheld unreasonably) and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.20(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s 's usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.4. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s 's obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of ~~Credit~~ Credit, or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.20 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the ~~Issuing Bank and the~~ Lenders, an amount in cash equal to 105% of the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid ~~fees~~ interest thereon; provided that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, ~~without~~ with demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8. 1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection.~~ Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s 's risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this ~~Agreement and the other Loan Documents~~Agreement. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Revolving Credit Agreement (American Healthways Inc), Revolving Credit Agreement (American Healthways Inc)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement, the Issuing ~~Bank, in reliance upon the agreements~~ Lender agrees to issue letters of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ credit for the account of ~~the Borrower on the terms and conditions hereinafter set forth; provided that~~ Borrowers (ieach, an "L/C") or to purchase participations or execute indemnities or reimbursement obligations (each ~~Letter~~ such undertaking, an "L/C Undertaking") with respect to letters of ~~Credit shall expire on the earlier of~~ credit issued by an Underlying Issuer (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share as of the ~~aggregate amount available~~ Closing Date, the prospective Underlying Issuer is to be ~~drawn under such Letter~~ Xxxxx Fargo) for the account of ~~Credit on the date of issuance~~Borrowers. ~~Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b)~~ To request the issuance of ~~a Letter of Credit~~ an L/C or an L/C Undertaking (or ~~any~~ the amendment, ~~renewal~~ renewal, or extension of an outstanding ~~Letter of Credit~~L/C or L/C Undertaking), ~~the~~ Administrative Borrower shall ~~give~~ hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing ~~Bank~~ Lender) to the Issuing Lender and ~~the Administrative~~ Agent ~~irrevocable written notice at least three~~ (~~3) Business Days prior to~~ reasonably in advance of the requested date of ~~such~~ issuance, amendment, renewal, or extension) a notice requesting the issuance ~~specifying~~ of an L/C or L/C Undertaking, or identifying the ~~date (which shall be a Business Day) such Letter of Credit is~~ L/C or L/C Undertaking to be ~~issued (or~~ amended, ~~renewed~~ renewed, or extended, as the ~~case may be)~~date of issuance, amendment, renewal, or extension, the ~~expiration~~ date of on which such ~~Letter of Credit~~L/C or L/C Undertaking is to expire, the amount of such ~~Letter of Credit~~L/C or L/C Undertaking, the name and address of the beneficiary thereof (or of the Underlying Letter of Credit, as applicable), and such other information as shall be necessary to prepare, amend, ~~renew~~ renew, or extend such L/C or L/C Undertaking. If requested by the Issuing Lender, Borrowers also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The Issuing Lender shall not issue a Letter of Credit if any of the following would result after giving effect to the requested Letter of Credit: (i) the Letter of Credit Usage would exceed the Borrowing Base less the then extant amount of outstanding Advances, or (ii) the Letter of Credit Usage would exceed $5,000,000, or (iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the then extant amount of outstanding Advances. ~~In addition~~ Borrowers and the Lender Group acknowledge and agree that certain Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Letter of Credit (and corresponding Underlying Letter of Credit) shall be in form and substance acceptable to the ~~satisfaction~~ Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Lender is obligated to advance funds under a Letter of Credit, Borrowers immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not later than 2:00 p.m., New York time, on the date that such L/C Disbursement is made, if Administrative Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 1:00 p.m., New York time, on such date, or, if such notice has not been received by Administrative Borrower prior to such time on such date, then not later than 2:00 p.m., New York time, on (i) the Business Day that Administrative Borrower receives such notice, if such notice is received prior to 1:00 p.m., New York time, on the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.6. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers' obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. Promptly following receipt by Agent of any payment from Borrowers pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.12(c) to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their interest may appear. (b) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions ~~in Article III,~~ as if Borrowers had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Lenders. By the issuance of ~~such~~ a Letter of Credit (or ~~any~~ an amendment ~~which increases the amount of such Letter of Credit) will be subject~~ to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and~~ the Lenders with ~~respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse~~ Revolver Commitment, the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given~~ granted to each Lender with a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3Revolver Commitment, and each Lender ~~shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance~~ with ~~Section 2.5. The proceeds of such Borrowing~~ a Revolver Commitment shall be ~~applied directly by the Administrative Agent~~ deemed to ~~reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason~~ have purchased, a ~~Base Rate Borrowing may not be (as determined~~ participation in ~~the sole discretion~~ each Letter of ~~the Administrative Agent)~~Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Lender agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrowers on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in clause (a) of this Section, or of any reimbursement payment required to be refunded to Borrowers for any reason. Each ~~Lender’s~~ Lender with a Revolver Commitment acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount equal to its ~~participation~~ respective Pro Rata Share pursuant to this Section 2.12(b) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in Section 3 hereof. If any such Lender fails to make available to Agent the amount of such Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full. (c) Each Borrower hereby agrees to indemnify, ~~(iii)~~ save, defend, and hold the Lender Group harmless from any ~~adverse change~~ loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; provided, however, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the ~~condition (financial~~ gross negligence or ~~otherwise)~~ willful misconduct of the ~~Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower~~ Issuing Lender or any other ~~Lender, (v) any amendment, renewal or extension~~ member of the Lender Group. Each Borrower agrees to be bound by the Underlying Issuer's regulations and interpretations of any Underlying Letter of Credit or by Issuing Lender's interpretations of any L/C issued by Issuing Lender to or for such Borrower's account, even though this interpretation may be different from such Borrower's own, and each Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrowers' instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Each Borrower understands that the L/C Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrowers against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (~~vi)~~ including reasonable attorneys fees), or liability incurred by the Lender Group under any L/C Undertaking as a result of the Lender Group's indemnification of any Underlying Issuer; provided, however, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the gross negligence or willful misconduct of the Issuing Lender or any other ~~circumstance, happening or event whatsoever, whether or not similar to any~~ member of the ~~foregoing. On the date that such participation is required~~ Lender Group. (d) Each Borrower hereby authorizes and directs any Underlying Issuer to ~~be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation~~ deliver to the ~~Administrative~~ Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender's instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application. (e) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrowers to Agent for the account of the Issuing ~~Bank. Whenever~~Lender; it being acknowledged and agreed by each Borrower that, ~~at any time after~~ as of the ~~Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement~~Closing Date, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed issuance charge imposed by the ~~Administrative Agent or~~ prospective Underlying Issuer is .825% per annum times the ~~Issuing Bank~~ face amount of each Underlying Letter of Credit, that such issuance charge may be changed from time to ittime, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals. (f) To If by reason of (i) any change in any applicable law, treaty, rule, or regulation or any change in the ~~extent that~~ interpretation or application thereof by any ~~Lender shall fail to pay any amount required to be paid pursuant to subsection (d)~~ Governmental Authority, or (eii) compliance by the Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of ~~this Section on the due date therefor~~any Governmental Authority or monetary authority including, ~~such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to~~ Regulation D of the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders Reserve Board as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to ~~time, the Issuing Bank shall deliver to such Lender~~ time in effect (and any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:successor thereto): (i) any ~~lack of validity~~ reserve, deposit, or ~~enforceability~~ similar requirement is or shall be imposed or modified in respect of any Letter of Credit ~~or this Agreement;~~issued hereunder, or (ii) there shall be imposed on the ~~existence of any claim, set-off, defense~~ Underlying Issuer or ~~other right which~~ the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender ~~(including the Issuing Bank) or~~ Group any other ~~Person for whom such beneficiary or~~ condition regarding any ~~such transferee may be acting, whether in connection with this Agreement or the~~ Underlying Letter of Credit or any ~~document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a~~ Letter of Credit ~~proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by~~ issued pursuant hereto; and the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any result of the foregoing ~~shall have any liability~~ is to increase, directly or ~~responsibility by reason~~ indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or ~~in connection with the issuance or transfer of~~ maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Administrative Borrower, and Borrowers shall pay on demand such amounts as Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment ~~or failure~~ in full thereof at the rate then applicable to ~~make any payment thereunder (irrespective~~ Base Rate Loans hereunder. The determination by Agent of any of amount due pursuant to this Section, as set forth in a certificate setting forth the ~~circumstances referred to above)~~calculation thereof in reasonable detail, or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree thatshall, in the absence of ~~gross negligence~~ manifest or ~~willful misconduct~~ demonstrable error, be final and conclusive and binding on ~~the part~~ all of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credithereto. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Loan and Security Agreement (Advanced Lighting Technologies Inc), Loan and Security Agreement (Advanced Lighting Technologies Inc)

Letters of Credit. ~~(a) During the Availability Period,~~ The Borrower shall give the Issuing ~~Bank, in reliance upon~~ Bank (which shall promptly notify the ~~agreements~~ Lenders of such request and their Percentage Share of such Letter of Credit) advance notice to be received by the ~~other Lenders pursuant to subsections~~ Issuing Bank not later than 11:00 a.m. (dCentral time) ~~and (e)~~ not less than three Business Days prior thereto of ~~this Section, may, in its sole discretion, issue, at the~~ each request ~~of the Borrower, Letters of Credit~~ for the ~~account of the Borrower on the terms~~ issuance, and ~~conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on~~ at least the earlier of (A) ~~the date one year after~~ 30 Business Days prior to the date of ~~issuance~~ the renewal or extension, of a Letter of Credit hereunder or (B) 30 calendar days prior to the last date upon which the Issuing Bank is required to give notice of cancellation or non-renewal of such Letter of Credit thereunder, which request shall specify (~~or, in the case of any renewal or extension thereof, one year after such renewal or extension~~i) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such ~~participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding~~ Letter of Credit), ~~the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three~~ (3ii) ~~Business Days prior to the requested date of such issuance specifying~~ the date (which shall be a Business Day) such Letter of Credit is to be ~~issued (or amended~~issued, renewed or extended, as (iii) the ~~case may be)~~duration thereof, ~~the expiration date of such Letter of Credit, the amount of such Letter of Credit,~~ (iv) the name and address of the beneficiary thereof and (v) such other information as the Administrative Agent may reasonably request, all of which shall be ~~necessary~~ reasonably satisfactory to ~~prepare~~the Administrative Agent. Subject to the terms and conditions of this Agreement, ~~amend~~on the date specified for the issuance, renewal or extension of a Letter of Credit, the Administrative Agent shall issue, renew or extend such Letter of ~~Credit~~Credit to the beneficiary thereof. In ~~addition to the satisfaction of the conditions in Article III,~~ conjunction with the issuance of ~~such~~ each Letter of Credit, the Borrower shall execute a Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in Agreement. In the event of any conflict between ~~such applications, agreements or instruments~~ any provision of a Letter of Credit Agreement and this Agreement, the ~~terms~~ Borrower, the Issuing Bank, the Administrative Agent and the Lenders hereby agree that the provisions of this Agreement shall ~~control. (c) At least two (2) Business Days prior~~ govern. The Issuing Bank will send to the Borrower and each Lender, immediately upon issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an ~~Event of Default or the termination of the Aggregate Commitments~~amendment thereto, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur true and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms complete copy of such Letter of Credit~~; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of~~, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Creditamendment thereto. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Credit Agreement (Wca Waste Corp), Credit Agreement (Wca Waste Corp)

Letters of Credit. ~~(a)~~ During the ~~Availability~~ Revolving Commitment Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank ~~shall, on~~ agrees to issue Letters of Credit for the ~~requested date, issue such~~ account of the Borrower in the aggregate amount up to but not exceeding the Letter of Credit ~~in accordance with the Issuing Bank’s usual and customary business practices.~~ Sublimit; provided, that (di) ~~The Issuing Bank shall examine all documents purporting to represent a demand for payment under a~~ each Letter of Credit ~~promptly following its receipt thereof. The Issuing Bank~~ shall ~~notify~~ be denominated in Dollars; (ii) the ~~Borrower and the Administrative Agent~~ stated amount of ~~such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice~~ each Letter of Credit shall not ~~relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to~~ be less than $100,000 or such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing lesser amount as is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due acceptable to the Issuing Bank; ~~provided that for purposes solely~~ (iii) after giving effect to such issuance, in no event shall the Total Utilization of Revolving Commitments exceed the Revolving Commitments then in effect; (iv) after giving effect to such issuance, in no event shall the Letter of Credit Usage exceed the Letter of Credit Sublimit then in effect; (v) in no event shall any standby Letter of Credit have an expiration date later than the earlier of (1) five Business Days prior to the Revolving Commitment Termination Date and (2) the date which is one year from the date of issuance of such ~~Borrowing,~~ standby Letter of Credit; and (vi) in no event shall any commercial Letter of Credit (x) have an expiration date later than the ~~conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify~~ earlier of (1) the ~~Lenders~~ Revolving Commitment Termination Date and (2) the date which is 180 days from the date of issuance of such ~~Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds~~ commercial Letter of ~~its Base Rate Loan included in~~ Credit or be issued if such ~~Borrowing available~~ commercial Letter of Credit is otherwise unacceptable to ~~the Administrative Agent for the account of~~ the Issuing Bank in ~~accordance with Section 2.5~~its reasonable discretion. ~~The proceeds of such Borrowing shall be applied directly by~~ Subject to the ~~Administrative Agent to reimburse~~ foregoing, the Issuing Bank may agree that a standby Letter of Credit shall automatically be extended for ~~such LC Disbursement. (e) If for any reason a Base Rate Borrowing may~~ one or more successive periods not ~~be (as determined in the sole discretion of the Administrative Agent)~~to exceed one year each, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against unless the Issuing Bank ~~or any other Person~~ elects not to extend for any ~~reason whatsoever~~such additional period; provided, ~~(ii)~~ that the ~~existence~~ Issuing Bank shall not extend any such Letter of ~~a Default or~~ Credit if it has received written notice that an Event of Default or has occurred and is continuing at the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time ~~after~~ the Issuing Bank ~~has received from any~~ must elect to allow such ~~Lender the funds for its participation in a LC Disbursement~~extension; provided, ~~the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof~~further, ~~the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided~~ that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower event there is ~~required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as~~ a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Defaulting Lender~~, but no more frequently than quarterly~~, the Issuing Bank shall ~~deliver (through the Administrative Agent)~~ not be required to ~~each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time~~issue, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity renew or ~~enforceability of~~ extend any Letter of Credit ~~or this Agreement;~~ to the extent (iix) the ~~existence~~ Defaulting Lender’s Pro Rata Share of ~~any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any~~ Letter of Credit Commitment may not be reallocated pursuant to Section 2.22(a) or (~~or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including~~ y) the Issuing Bank has not otherwise entered into arrangements satisfactory to it and the Borrower to eliminate the Issuing Bank~~) or any other Person for whom~~ ’s risk with respect to the participation in Letters of Credit of the Defaulting Lender, including by cash collateralizing such ~~beneficiary or any such transferee may be acting, whether in connection with this Agreement or~~ Defaulting Lender’s Pro Rata Share of the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of CreditUsage. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Credit and Guaranty Agreement (RadNet, Inc.), Credit and Guaranty Agreement (RadNet, Inc.)

Letters of Credit. The Bank agrees to (ax) ~~During~~ issue standby letters of credit (each an “LOC” and collectively the ~~Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d~~“LOCs”) ~~and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ for the account of ACE or for the ~~Borrower~~ account of any Wholly-owned Subsidiary of ACE, provided that ACE shall be a joint applicant and account party with respect to any such LOC, and (y) subject to Section 2.02(c), extend the expiration date for or increase the amount of LOCs, in each case from time to time on any Business Day during the ~~terms and conditions hereinafter set forth~~Availability Period; provided that (a) the Bank shall not have any obligation to issue, extend or increase the amount of any LOC if (i) ~~each Letter of~~ the aggregate Credit ~~shall expire on the earlier of~~ Exposure (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (Aextension or increase) ~~the aggregate LC Exposure~~ would exceed the LC Commitment Amount; or (Bii) such issuance, extension or increase would conflict with or cause the ~~aggregate Credit Exposure of all Lenders would~~ Bank to exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender any limit imposed by ~~an amount equal to the amount of such participation.~~ applicable law or any applicable requirement thereof; (b) ~~To request~~ each LOC shall be denominated in Dollars, Sterling, Euro or another currency requested by ACE and acceptable to the ~~issuance~~ Bank in its sole discretion; (c) each LOC shall be payable only against sight drafts (and not time drafts); (d) no LOC shall have a scheduled expiration date (including all rights of ACE or the beneficiary to require extension thereof) later than the scheduled Final Expiration Date; (e) each Lloyd’s LOC shall be issued for the benefit of Lloyd’s in the form at the time of issue required by Lloyd’s for the purposes of being eligible to be included in the Funds at Lloyd’s of a ~~Letter of Credit~~ Member; (~~or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3~~f) ~~Business Days prior to the requested date of such issuance specifying the date (which~~ each Lloyd’s LOC shall be issued for the purposes of being included in the Funds at Lloyd’s of a ~~Business Day~~Member that is a Wholly-owned Subsidiary of ACE and is not a member of any syndicate at Lloyd’s other than the Syndicate; (g) ~~such Letter~~ the Bank shall not have any obligation to issue any LOC (other than a Lloyd’s LOC) that the Bank determines, in the exercise of ~~Credit~~ its reasonable judgment consistent with its customary practice, is unsatisfactory in form or substance; and (h) the Bank shall not have any obligation to issue or extend an LOC that is or is to be issued (in favor of a beneficiary that is or ~~amended~~becomes a Sanctioned Person or is or becomes organized under the laws of a Sanctioned Country. An LOC may by its terms be automatically extendible annually; provided that the Bank shall not be required to permit any such automatic extension if the Bank has determined that it would have no obligation at such time to issue such LOC as extended under the terms hereof, ~~renewed or extended, as~~ in which case the ~~case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of~~ Bank shall notify the beneficiary thereof ~~and such other information as shall be necessary~~ of its election not to ~~prepare, amend, renew or~~ extend such ~~Letter of Credit. In addition~~ LOC (which the Bank agrees to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form do on and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms ~~and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter~~ of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent2.02(c), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Letter of Credit Facility Agreement, Facility Agreement (ACE LTD)

Letters of Credit. (a) ~~During~~ Each Borrower may request the ~~Availability Period, the Issuing Bank, in reliance upon the agreements~~ issuance of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters~~ a Letter of Credit on a sight basis for its own account or for the account of any of its subsidiaries, in a form reasonably acceptable to the ~~Borrower~~ Administrative Agent and the relevant Issuing Bank, at any time and from time to time, on or after the ~~terms~~ Closing Date and ~~conditions hereinafter set forth; provided that~~ prior to the earlier to occur of (i) ~~each Letter~~ the termination of the Revolving Credit ~~shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension)~~ Commitments and (Bii) the date that is ~~five (5)~~ 5 Business Days prior to the ~~Stated Termination~~ applicable Revolving Credit Maturity Date~~; (ii)~~ . This Section 2.23 shall not be construed to impose an obligation upon any Issuing Bank to issue any Letter of Credit that is inconsistent with the terms and conditions of this Agreement. Letters of Credit may be denominated in dollars or in one or more Alternative Currencies. On and as of the Closing Date each Existing Letter of Credit shall be deemed to constitute a Letter of Credit issued hereunder on the Closing Date. (b) In order to request the issuance of a Letter of Credit (or to amend, renew or extend an existing Letter of Credit), the relevant Borrower shall deliver a notice (a “Letter of Credit Application”) to the relevant Issuing Bank and the Administrative Agent (reasonably, and in any event, unless waived by the relevant Issuing Bank, no later than 2 Business Days in advance of the requested date of issuance, amendment, renewal or extension) requesting the issuance of a ~~stated amount~~ Letter of ~~at least $5,000;~~ Credit, or identifying the Letter of Credit to be amended, renewed or extended and specifying (i) the date of issuance, amendment, renewal or extension, (ii) the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) below), (iii) the ~~Borrower may not request any~~ amount of such Letter of Credit, (iv) the currency in which such Letter of Credit is requested to be denominated, (v) the name and address of the beneficiary thereof and (vi) such other information as the relevant Issuing Bank may request with respect to such Letter of Credit. 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 relevant Borrower shall be deemed to represent and warrant that, after giving effect to such issuance, amendment, renewal or extension (Ai) the aggregate LC L/C Exposure ~~would~~ shall not exceed the ~~LC Commitment or~~ Letter of Credit Sublimit and, other than with respect to the Existing Letters of Credit, unless otherwise agreed by the applicable Issuing Bank in its sole discretion, the L/C Exposure of the relevant Issuing Bank shall not (Bbut may in the sole discretion of the applicable Issuing Bank) exceed such Issuing Bank’s pro rata portion (based on the Revolving Credit Commitments of such Issuing Bank) of the Letter of Credit Sublimit, (ii) the ~~aggregate~~ Aggregate Revolving Credit Exposure ~~of all Lenders would~~ shall not exceed the ~~Aggregate~~ Total Revolving Credit Commitment ~~Amount~~then in effect and (iii) the Revolving Credit Exposure attributable to the Foreign Subsidiary Borrowers shall not exceed the Foreign Subsidiary Borrower Sublimit. Promptly after receipt of any Letter of Credit Application, the relevant Issuing Bank will confirm with the Administrative Agent (in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the relevant Borrower and, if not, such Issuing Bank will provide the Administrative Agent with a copy thereof. Subject to the terms and conditions hereof, such Issuing Bank shall, on the requested date, issue a Letter of Credit for the account of the relevant Borrower or enter into the applicable amendment, as the case may be. Promptly after receipt of any Letter of Credit Application, the relevant Issuing Bank will confirm with the Administrative Agent (in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the relevant Borrower and, if not, such Issuing Bank will provide the Administrative Agent with a copy thereof. Subject to the terms and conditions hereof, such Issuing Bank shall, on the requested date, issue a Letter of Credit for the account of the relevant Borrower or enter into the applicable amendment, as the case may be. 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 relevant Issuing Bank will also deliver to the relevant Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. (c) Each ~~Lender~~ Letter of Credit shall expire at the close of business on the earlier of the date 1 year after the date of the issuance of such Letter of Credit and the date that is 5 days prior to the applicable Revolving Credit Maturity Date, unless such Letter of Credit expires by its terms on an earlier date or an L/C Backstop exists (the “Letter of Credit Expiration Date”); provided, however, that a Letter of Credit may, upon the request of the relevant Borrower, include a provision whereby such Letter of Credit (an “Auto-Renewal Letter of Credit”) shall be renewed automatically for additional consecutive periods of 12 months or less (but not beyond the date that is 5 days prior to the applicable Revolving Credit Maturity Date unless an L/C Backstop exists) unless the relevant Issuing Bank notifies the beneficiary thereof at least 30 days (or such longer period as may be specified in such Letter of Credit) prior to the then-applicable Letter of Credit Expiration Date that such Letter of Credit will not be renewed. Once an Auto-Renewal Letter of Credit has been issued, the Revolving Credit Lenders shall be deemed toto have authorized (but may not require) the relevant Issuing Bank to permit the renewal of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided that the relevant Issuing Bank shall not permit any such renewal if (i) the relevant Issuing Bank has determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof (by reason of the provisions of Section 2.23(l) or otherwise) or (ii) it has received notice (in writing) 5 Business Days prior to the day that is 30 days (or such longer period as may be specified in such Letter of Credit) prior to the then-applicable Letter of Credit Expiration Date from the Administrative Agent, any Revolving Credit Lender or the relevant Borrower that one or more of the applicable conditions specified in Section 4.01 is not then satisfied. (d) By the issuance of a Letter of Credit and without any further action on the part of an Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Revolving Credit Lender, and each such Lender hereby ~~irrevocably and unconditionally agrees to~~acquires from such Issuing Bank, ~~purchase from the Issuing Bank without recourse~~ a participation in ~~each~~ such Letter of Credit equal to such Lender’s Pro Rata ~~Share~~ Percentage of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request~~ Credit, effective upon the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In ~~addition to the satisfaction~~ consideration and in furtherance of the ~~conditions in Article III~~foregoing, ~~the issuance of such Letter of~~ each Revolving Credit ~~(or any amendment which increases the amount of such Letter of Credit) will be subject~~ Lender hereby absolutely and unconditionally agrees to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating pay to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, for the account of such Issuing Bank, such Lender’s Pro Rata Percentage of each L/C Disbursement made by such Issuing Bank and not reimbursed by the relevant Borrower (or, if applicable, another party pursuant to its obligations under any other Loan Document) forthwith on ~~or before the Business Day immediately preceding~~ the date ~~the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of~~ due as provided in Section 2.02(f). Each Revolving Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, thenLender acknowledges and agrees that, subject to the ~~terms and conditions hereof~~express provisions of Section 2.09(d), the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to ~~reimburse the Issuing Bank and the Lenders with respect~~ acquire participations pursuant to ~~such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank~~ this paragraph in respect of ~~such drawing, without presentment, demand or other formalities~~ Letters of ~~any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing~~ Credit is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason circumstance whatsoever, ~~(ii)~~ including the ~~existence~~ occurrence and continuance of a Default or an Event of ~~Default~~ Default, and that each such payment shall be made without any offset, abatement, withholding or ~~the termination of the Aggregate Commitments, (iii)~~ reduction whatsoever. Upon any ~~adverse~~ change in the ~~condition (financial~~ Revolving Credit Commitments or ~~otherwise)~~ Pro Rata Percentages of the ~~Borrower~~ Revolving Credit Lenders pursuant to Section 2.21 or ~~any~~ 9.04(b), it is hereby agreed that, with respect to all outstanding Letters of ~~its Subsidiaries~~Credit and unreimbursed L/C Disbursements relating thereto, ~~(iv~~there shall be an automatic adjustment to the participations pursuant to this Section 2.23(d) ~~any breach~~ to reflect the new Pro Rata Percentages of ~~this Agreement by~~ each Revolving Credit Lender. For the ~~Borrower or any other Lender~~avoidance of doubt, ~~(v) any amendment~~the Issuing Banks shall not be obligated to make L/C Disbursements, ~~renewal or extension~~ and Revolving Credit Lenders shall not be obligated to participate in Letters of ~~any~~ Credit if, as of the date of the applicable L/C Disbursement, the Letter of Credit ~~or (vi) any other circumstance, happening or event whatsoever, whether or not similar~~ giving rise to such L/C Disbursement has a stated expiry date after the Revolving Credit Maturity Date with respect to any Revolving Credit Commitments then in effect and the aggregate stated amount of all Letters of Credit having stated expiry dates after such Revolving Credit Maturity Date would exceed the ~~foregoing~~aggregate amount of Revolving Credit Commitments which will remain in effect after such Revolving Credit Maturity Date. On Each Revolving Credit Lender’s risk participation in each outstanding Letter of Credit shall be automatically adjusted on each Revolving Credit Maturity Date for any Revolving Credit Commitments as, and to the ~~date that such participation is required to be funded~~extent, ~~each Lender~~ provided in Section 2.09(d). (e) If an Issuing Bank shall ~~promptly transfer,~~ make any L/C Disbursement in ~~immediately available funds~~respect of a Letter of Credit, the ~~amount of its participation~~ relevant Borrower shall pay to the Administrative Agent ~~for~~ an amount equal to such L/C Disbursement not later than 12:00 noon on the ~~account~~ immediately following Business Day. In the case of a Letter of Credit denominated in an Alternative Currency, the ~~Issuing Bank. Whenever, at any time after~~ relevant Borrower shall reimburse the relevant Issuing Bank ~~has received from any~~ in the currency in which such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to itL/C Disbursement shall have been made. (f) ~~To the extent that any Lender shall fail~~ (i) Each Borrower’s obligations to ~~pay any amount required to be paid pursuant to subsection (d) or~~ reimburse L/C Disbursements as provided in paragraph (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder above shall be absolute, unconditional and ~~irrevocable~~ irrevocable, and shall be performed strictly in accordance with the terms of this ~~Agreement~~ Agreement, under any and all circumstances ~~whatsoever~~ whatsoever, and irrespective of ~~any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii)~~ the existence of any claim, ~~set-off~~setoff, defense or other right ~~which~~ that the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) Borrowers or any other Person ~~for whom such~~ may at any time have against the beneficiary under any Letter of Credit, any Issuing Bank, the Administrative Agent or any ~~such transferee may be acting, whether in connection with this Agreement or the Letter of Credit~~ Lender or any ~~document related hereto or thereto or~~ other Person, including any ~~unrelated transaction; (iii)~~ defense based on the failure of any draft or other document presented under a Letter of Credit ~~proving~~ to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the ~~foregoing~~ Borrowers shall not be ~~construed~~ obligated to ~~excuse the~~ reimburse any Issuing Bank ~~from liability to the Borrower to the extent~~ for any wrongful payment made by such Issuing Bank as a result of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the such Issuing Bank’s ~~failure to exercise due care when~~ gross negligence, bad faith, willful misconduct or material breach of its obligations (as determined in a final and non-appealable judgment by a court of competent jurisdiction) in determining whether drafts or and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Credit Agreement (VWR Corp), Credit Agreement (VWR Corp)

Letters of Credit. ~~(a) During~~ Subject to the ~~Availability~~ terms and conditions of this Agreement, during the Commitment Period, ~~the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may~~Agent shall, in its ~~sole discretion~~own name, ~~issue~~but only as agent for the Banks, ~~at the request of the Borrower,~~ issue such Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (orBorrower, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the as Borrower may from time to time request. Borrower shall not request any Letter of Credit (and Agent shall not be obligated to issue any Letter of Credit) if, after giving effect ~~to such issuance~~thereto, (Aa) the aggregate ~~LC Exposure~~ amount of all issued and outstanding Letters of Credit would exceed ~~the LC Commitment~~ Fifty Million Dollars ($50,000,000) or (Bb) the sum of (i) the aggregate ~~Credit Exposure~~ outstanding principal amount of the Revolving Loans, plus (ii) the aggregate of all ~~Lenders would~~ issued and outstanding Letters of Credit, plus (iii) the aggregate amount of all outstanding Competitive Bid Loans shall exceed the ~~Aggregate Commitment Amount~~Commitment. ~~Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in~~ The issuance of each Letter of Credit ~~equal to such Lender’s Pro Rata Share~~ shall confer upon each Bank the benefits and liabilities of a participation consisting of an undivided pro rata interest in the ~~aggregate amount available to be drawn under such~~ Letter of Credit on to the ~~date~~ extent of ~~issuance~~such Bank's Commitment Percentage. Each ~~issuance of~~ request for a Letter of Credit shall be ~~deemed~~ delivered to ~~utilize the Commitment of each Lender by an amount equal to the amount of such participation.~~ Agent not later than 11:00 A.M. (bCleveland, Ohio time) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the ~~requested~~ day upon which the Letter of Credit is to be issued. Each such request shall be in a form acceptable to Agent and specify the face amount thereof, the account party, the beneficiary, the intended date of issuance, the expiry date thereof, and the nature of the transaction to be supported thereby. Concurrently with each such ~~issuance specifying~~ request, the ~~date (which shall be a Business Day) such~~ Borrower for whose benefit the Letter of Credit is to be issued ~~(or amended~~shall execute and deliver to Agent an appropriate application and agreement, ~~renewed or extended~~being in the standard form of Agent for such letters of credit, as amended to conform to the ~~case may be), the expiration date~~ provisions of this Agreement if required by Agent. Agent shall give each Bank notice of each such ~~Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such~~ request for a Letter of Credit. In ~~addition to the satisfaction~~ respect of ~~the conditions in Article III, the issuance of such~~ each Letter of Credit and the drafts thereunder, if any, Borrower agrees (~~or any amendment which increases~~ a) to pay to Agent, for the pro rata benefit of the Banks, a non-refundable commission based upon the face amount of ~~such~~ the Letter of Credit, which shall be paid in advance on a quarter-annual basis, at the rate per annum of the then current Applicable LIBOR Margin (i.e. the Applicable LIBOR Margin in effect on the date that the Letter of Credit is issued and, as to each quarter-annual payment date thereafter, the Applicable LIBOR Margin in effect on the date of such quarter-annual payment) ~~will be subject~~ times the face amount of the Letter of Credit from the date of the Letter of Credit to the ~~further conditions~~ date of its expiry; (b) to pay to Agent, for its sole account, an additional Letter of Credit fee, which shall be paid on the date that such Letter of Credit ~~shall be in such form and contain such terms as~~ is issued, at the ~~Issuing Bank shall approve and that~~ rate per annum of one-eighth of one percent (1/8%) of the ~~Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter~~ face amount of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit ~~because such issuance is not then permitted hereunder because~~ from the date of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its ~~Base Rate Loan included in such Borrowing available~~ expiry; and (c) to ~~the Administrative~~ pay to Agent for ~~the account of the Issuing Bank in accordance with Section 2.5. The proceeds of~~ its sole account, such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent)other issuance, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, ~~renewal or extension of any Letter of Credit or (vi) any other circumstance~~negotiation, ~~happening or event whatsoever~~draw, ~~whether or not~~ acceptance, telex, courier, postage and similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative transactional fees as are generally charged by Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time~~, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding~~. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when Whenever a Letter of Credit is ~~issued and~~ drawn, unless the amount drawn is immediately reimbursed by Borrower, the amount outstanding thereunder shall be deemed to be a Revolving Loan to Borrower subject to ~~applicable laws,~~ the provisions and requirements of Section 2.1A and 2.2 hereof (~~i) each standby Letter of Credit~~ unless any such requirement shall pertain to a minimum draw requirement and such requirement shall be ~~governed~~ waived by Agent) and shall be evidenced by the ~~“International Standby Practices 1998” (ISP98) (or~~ Revolving Credit Notes. Each such ~~later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit~~ Revolving Loan shall be ~~governed~~ deemed to be a Prime Rate Loan unless otherwise requested by (in accordance with the ~~Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber~~ notice provisions of ~~Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued~~Section 2.2(b) hereof) and ~~(iii)~~ available to Borrower hereunder. Each Bank is hereby authorized to record on its records relating to its Revolving Credit Note such Bank's pro rata share of the ~~Borrower shall specify~~ amounts paid and not reimbursed on the ~~foregoing in each letter of credit application submitted for the issuance of a Letter~~ Letters of Credit.

Appears in 2 contracts

Samples: Credit Agreement (Amcast Industrial Corp), Credit Agreement (Amcast Industrial Corp)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d~~Section 2.22(d) and ~~(e) of this Section~~2.22(e), may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower or any Subsidiary on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination ~~Date;~~ Date and (ii~~) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii~~) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate ~~Commitment Amount~~Revolving Commitments. Each Lender shall be deemed to, and hereby irrevocably and Table of Contents unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of ~~issuance~~issuance of such Letter of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall ~~reasonably~~ require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before 5:00 p.m. the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.proceeds

Appears in 2 contracts

Samples: Credit Agreement (Health Management Associates Inc), Credit Agreement (Health Management Associates Inc)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement, the Issuing ~~Bank, in reliance upon the agreements~~ Lender agrees to issue letters of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ credit for the account of ~~the~~ Subsidiary Borrower ~~on the terms and conditions hereinafter set forth; provided that~~ (ieach, an "L/C") or to purchase participations or execute indemnities or reimbursement obligations (each ~~Letter~~ such undertaking, an "L/C Undertaking") with respect to letters of ~~Credit shall expire on the earlier of~~ credit issued by an Underlying Issuer (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share as of the ~~aggregate amount available~~ Closing Date, the prospective Underlying Issuer is to be ~~drawn under such Letter~~ Xxxxx Fargo) for the account of ~~Credit on the date of issuance~~Subsidiary Borrower. ~~Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b)~~ To request the issuance of ~~a Letter of Credit~~ an L/C or an L/C Undertaking (or ~~any~~ the amendment, ~~renewal~~ renewal, or extension of an outstanding ~~Letter of Credit~~L/C or L/C Undertaking), ~~the~~ Subsidiary Borrower shall ~~give~~ hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing ~~Bank~~ Lender) to the Issuing Lender and ~~the Administrative~~ Agent ~~irrevocable written notice at least three~~ (~~3) Business Days prior to~~ reasonably in advance of the requested date of ~~such~~ issuance, amendment, renewal, or extension) a notice requesting the issuance ~~specifying~~ of an L/C or L/C Undertaking, or identifying the ~~date (which shall be a Business Day) such Letter of Credit is~~ L/C or L/C Undertaking to be ~~issued (or~~ amended, ~~renewed~~ renewed, or extended, as the ~~case may be)~~date of issuance, amendment, renewal, or extension, the ~~expiration~~ date of on which such ~~Letter of Credit~~L/C or L/C Undertaking is to expire, the amount of such ~~Letter of Credit~~L/C or L/C Undertaking, the name and address of the beneficiary thereof (or the beneficiary of the Underlying Letter of Credit, as applicable), and such other information as shall be necessary to prepare, amend, ~~renew~~ renew, or extend such L/C or L/C Undertaking. If requested by the Issuing Lender, Subsidiary Borrower also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The Issuing Lender shall have no obligation to issue a Letter of Credit if any of the following would result after giving effect to the requested Letter of Credit: (i) the Letter of Credit Usage would exceed the Borrowing Base less the amount of outstanding Advances, or (ii) the Letter of Credit Usage under this Agreement, the Domestic Loan Agreement and the Irish Loan Agreement would exceed $10,000,000 in the aggregate, or (iii) the Letter of Credit Usage would exceed the Maximum Subsidiary Revolver Amount less the then extant amount of outstanding Advances. ~~In addition~~ Each Letter of Credit (and corresponding Underlying Letter of Credit) shall have an expiry date no later than 30 days prior to the ~~satisfaction~~ Maturity Date and all such Letters of Credit (and corresponding Underlying Letter of Credit) shall be in form and substance acceptable to the Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars, Euros or English pounds. If the amounts payable thereunder are in Euros or English pounds, Agent shall have the right in its Permitted Discretion to establish Foreign Exchange Reserves against the Borrowing Base. If Issuing Lender is obligated to advance funds under a Letter of Credit, Subsidiary Borrower immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on the date that such L/C Disbursement is made, if Subsidiary Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Subsidiary Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on the Business Day that Subsidiary Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.6. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Subsidiary Borrower's obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. Promptly following receipt by Agent of any payment from Subsidiary Borrower pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.12(c) to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their interest may appear. (b) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions ~~in Article III,~~ as if Subsidiary Borrower had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Lenders. By the issuance of ~~such~~ a Letter of Credit (or ~~any~~ an amendment ~~which increases the amount of such Letter of Credit) will be subject~~ to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and~~ the Lenders with ~~respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse~~ Revolver Commitment, the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given~~ granted to each Lender with a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3Revolver Commitment, and each Lender ~~shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance~~ with ~~Section 2.5. The proceeds of such Borrowing~~ a Revolver Commitment shall be ~~applied directly by the Administrative Agent~~ deemed to ~~reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason~~ have purchased, a ~~Base Rate Borrowing may not be (as determined~~ participation in ~~the sole discretion~~ each Letter of ~~the Administrative Agent)~~Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Lender agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Subsidiary Borrower on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in clause (a) of this Section, or of any reimbursement payment required to be refunded to Subsidiary Borrower for any reason. Each ~~Lender’s~~ Lender with a Revolver Commitment acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount equal to its ~~participation~~ respective Pro Rata Share pursuant to this Section 2.12(b) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in Section 3 hereof. If any such Lender fails to make available to Agent the amount of such Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full. (c) Subsidiary Borrower hereby agrees to indemnify, ~~(iii)~~ save, defend, and hold the Lender Group harmless from any ~~adverse change~~ loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; provided, however, that Subsidiary Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the ~~condition (financial~~ gross negligence or ~~otherwise)~~ wilful misconduct of the ~~Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower~~ Issuing Lender or any other ~~Lender, (v) any amendment, renewal or extension~~ member of the Lender Group. Subsidiary Borrower agrees to be bound by the Underlying Issuer's regulations and interpretations of any Underlying Letter of Credit or by Issuing Lender's interpretations of any L/C issued by Issuing Lender to or for Subsidiary Borrower's account, even though this interpretation may be different from Subsidiary Borrower's own, and Subsidiary Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Subsidiary Borrower's instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Subsidiary Borrower understands that the L/C Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Subsidiary Borrower against such Underlying Issuer. Subsidiary Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (~~vi)~~ including reasonable attorneys fees), or liability incurred by the Lender Group under any L/C Undertaking as a result of the Lender Group's indemnification of any Underlying Issuer; provided, however, that Subsidiary Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the gross negligence or wilful misconduct of the Issuing Lender or any other ~~circumstance, happening or event whatsoever, whether or not similar to any~~ member of the ~~foregoing. On the date that such participation is required~~ Lender Group. (d) Subsidiary Borrower hereby authorizes and directs any Underlying Issuer to ~~be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation~~ deliver to the ~~Administrative~~ Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender's instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application. (e) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by Subsidiary Borrower to Agent for the account of the Issuing ~~Bank. Whenever~~Lender; it being acknowledged and agreed by Subsidiary Borrower that, ~~at any time after~~ as of the ~~Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement~~date of this Agreement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed issuance charge imposed by the ~~Administrative Agent or~~ prospective Underlying Issuer is .825% per annum times the ~~Issuing Bank~~ face amount of each Underlying Letter of Credit, that such issuance charge may be changed from time to ittime, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals. (f) To If by reason of (i) any change in any applicable law, treaty, rule, or regulation or any change in the ~~extent that~~ interpretation or application thereof by any ~~Lender shall fail to pay any amount required to be paid pursuant to subsection (d)~~ Governmental Authority, or (eii) compliance by the Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of ~~this Section on the due date therefor~~any Governmental Authority or monetary authority including, ~~such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to~~ Regulation D of the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders Reserve Board as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to ~~time, the Issuing Bank shall deliver to such Lender~~ time in effect (and any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:successor thereto): (i) any ~~lack of validity~~ reserve, deposit, or ~~enforceability~~ similar requirement is or shall be imposed or modified in respect of any Letter of Credit ~~or this Agreement;~~issued hereunder, or (ii) there shall be imposed on the ~~existence of any claim, set-off, defense~~ Underlying Issuer or ~~other right which~~ the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender ~~(including the Issuing Bank) or~~ Group any other ~~Person for whom such beneficiary or~~ condition regarding any ~~such transferee may be acting, whether in connection with this Agreement or the~~ Underlying Letter of Credit or any ~~document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a~~ Letter of Credit ~~proving to be forged~~issued pursuant hereto, ~~fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by~~ and the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any result of the foregoing ~~shall have any liability~~ is to increase, directly or ~~responsibility by reason~~ indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or ~~in connection with the issuance or transfer of~~ maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Subsidiary Borrower, and Subsidiary Borrower shall pay on demand such amounts as Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment ~~or failure~~ in full thereof at the rate then applicable to ~~make any payment thereunder (irrespective~~ Base Rate Loans hereunder. The determination by Agent of any of amount due pursuant to this Section, as set forth in a certificate setting forth the ~~circumstances referred to above)~~calculation thereof in reasonable detail, or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree thatshall, in the absence of ~~gross negligence~~ manifest or ~~willful misconduct~~ demonstrable error, be final and conclusive and binding on ~~the part~~ all of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credithereto. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Loan Agreement (Palm Inc), Loan Agreement (Palm Inc)

Letters of Credit. (a1) ~~During~~ Subject to the ~~Availability Period, the Issuing Bank~~terms and conditions set forth herein, in ~~reliance upon~~ addition to Revolving Loans, Borrower may request the ~~agreements~~ issuance of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower,~~ Letters of Credit for its own account by the ~~account~~ Issuing Lender, in a form reasonably acceptable to the Issuing Lender, at any time and from time to time during the term of the ~~Borrower on~~ Revolving Loan Commitments. Letters of Credit issued hereunder shall constitute utilization of the Revolving Loan Commitments. In the event of any inconsistency between the terms and conditions ~~hereinafter set forth; provided that (i) each Letter of Credit shall expire on~~ hereof and the ~~earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case~~ terms and conditions of any ~~renewal~~ form of letter of credit application or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) other agreement submitted by the Borrower ~~may not request~~ to, or entered into by the Borrower with, the Issuing Lender relating to any Letter of ~~Credit if~~Credit, ~~after giving effect to such issuance, (A)~~ the ~~aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender~~ terms and conditions hereof shall ~~be deemed to,~~ govern and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participationcontrol. (b2) To request the issuance of a Letter of Credit (or ~~any~~ the amendment, renewal or extension of an outstanding Letter of Credit), ~~the~~ Borrower shall ~~give~~ deliver to the Issuing ~~Bank~~ Lender and the ~~Administrative~~ Agent ~~irrevocable written notice~~ (if not the Issuing Lender), at least three (3) Business Days ~~prior to~~ in advance of the requested date of ~~such~~ issuance, amendment, renewal or extension, a notice requesting the issuance ~~specifying~~ of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, the date (of issuance, amendment, renewal or extension, the date on which ~~shall be a Business Day)~~ such Letter of Credit is to ~~be issued~~ expire (~~or amended, renewed or extended, as the case may be~~which shall comply with paragraph (3) of this Section), the ~~expiration date~~ amount of such Letter of Credit, whether the ~~amount~~ Letter of ~~such~~ Credit is a "standby" or "commercial" Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. ~~In addition~~ If requested by the Issuing Lender, Borrower also shall submit a letter of credit application on the Issuing Lender's standard form in connection with any request for a Letter of Credit. 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 Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the aggregate LC Exposure of the Issuing Lender (determined for these purposes without giving effect to the ~~satisfaction~~ participations therein of the ~~conditions in Article III,~~ Lenders pursuant to paragraph (4) of this Section) shall not exceed the LC Commitment. (3) Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one (1) year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one (1) year after such renewal or extension) provided that any ~~amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that~~ such Letter of Credit ~~shall be in such form~~ may provide for automatic extensions thereof to a date not later than one (1) year beyond its current expiration date, and ~~contain such terms as~~ (ii) the ~~Issuing Bank shall approve and~~ date that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. is five (~~c) At least two (2~~5) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereofExpiry Date. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the No Letter of Credit ~~because such issuance~~ may be extended beyond the date that is ~~not then permitted hereunder because of the limitations set forth in subsection~~ five (a5) ~~of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject~~ Business Days prior to the ~~terms and conditions hereof~~Expiry Date, ~~the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices~~however. (d4) ~~The Issuing Bank shall examine all documents purporting to represent a demand for payment under~~ Upon its issuance of a Letter of Credit ~~promptly following~~ (or an amendment to a Letter of Credit increasing the amount thereof) in accordance with terms hereof, without any further action on its ~~receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether~~ part, the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given a Notice of Borrowing~~ granted to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3each Lender, and each Lender shall ~~make~~ be deemed to have acquired from the ~~proceeds of its Base Rate Loan included~~ Issuing Lender, a participation in such ~~Borrowing~~ Letter of Credit equal to such Lender's Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the ~~Administrative Agent~~ foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Agent, for the account of the Issuing ~~Bank in accordance with Section 2.5. The proceeds of~~ Lender, such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Lender's applicable Pro Rata Share of ~~such~~ each LC Disbursement made by the Issuing Lender and not reimbursed by Borrower on ~~and as of~~ the date ~~which such Base Rate Borrowing should have occurred~~due as provided in paragraph (5) of this Section, or of any reimbursement payment in respect of any Letter of Credit required to be refunded to Borrower for any reason. Each ~~Lender’s~~ Lender acknowledges and agrees that its obligation to ~~fund its participation shall be~~ acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and ~~unconditional~~ unconditional, provided that the Issuing Lender has complied with the terms hereof in connection therewith, and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason circumstance whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) including any amendment, renewal or extension of any Letter of Credit or ~~(vi)~~ the occurrence and continuance of a Default or Event of Default or any ~~other circumstance, happening~~ subsequent reduction or ~~event whatsoever, whether or not similar to any~~ termination of the ~~foregoing. On~~ Revolving Loan Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. (5) If the ~~date that such participation is required to be funded, each~~ Issuing Lender shall ~~promptly transfer,~~ make any LC Disbursement in ~~immediately available funds~~respect of a Letter of Credit, the ~~amount~~ Borrower shall reimburse the Issuing Lender in respect of ~~its participation~~ such LC Disbursement by paying to the ~~Administrative~~ Agent for the account of the Issuing ~~Bank. Whenever, at any time after the Issuing Bank has received from any such~~ Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute an amount equal to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. LC Disbursement not later than 1:00 p.m. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(bAtlanta time)~~. (g) If any Event of Default shall occur and be continuing~~, on (i) the Business Day that the Borrower receives notice ~~from~~ of such LC Disbursement, if such notice is received prior to 1:00 p.m. (Atlanta time), or (ii) the ~~Administrative Agent or~~ Business Day immediately following the ~~Required Lenders demanding~~ day that ~~its reimbursement obligations with respect~~ the Borrower receives such notice, if such notice is not received prior to such time, provided that Borrower may, subject to the ~~Letters of Credit~~ conditions to borrowing set forth herein, request that such payment be ~~Cash Collateralized pursuant to this subsection, the Borrower shall deposit~~ financed with a Revolving Loan in an ~~account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an~~ equivalent amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent ~~not~~ so ~~applied~~financed, Borrower's obligation to make such payment shall be ~~held for~~ discharged and replaced by the ~~satisfaction~~ resulting Revolving Loan. If Borrower fails to make such payment when due, Agent shall notify each Lender of the ~~reimbursement obligations~~ applicable LC Disbursement and the payment then due from the Borrower in respect thereof, and such Lender shall pay to the Agent its Pro Rata Share of the ~~Borrower for~~ payment then due from Borrower, in the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations same manner as provided herein with respect to Revolving Loans made by such Lender, and Agent shall promptly pay to the ~~Letters~~ Issuing Lender the amounts so received by it from the Lenders. Promptly following receipt by Agent of ~~Credit as a result of~~ any payment from Borrower pursuant to this paragraph, Agent shall distribute such payment to the ~~occurrence of an Event of Default~~Issuing Lender or, ~~such cash collateral so posted (~~to the extent ~~not so applied as aforesaid) shall be returned~~ that the Lenders have made payments pursuant to this paragraph to reimburse the ~~Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any~~ Issuing Lender, ~~but no more frequently than quarterly,~~ then to such Lenders and the Issuing ~~Bank shall deliver (through the Administrative Agent)~~ Lender as their interests may appear. Any payment made directly by a Lender pursuant to ~~each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time~~ this paragraph to ~~time,~~ reimburse the Issuing ~~Bank~~ Lender for any LC Disbursement shall ~~deliver~~ not constitute a Loan and, in any event, shall not relieve Borrower of its obligation to reimburse such ~~Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding~~LC Disbursement. (i) ~~The~~ Borrower’s 's obligation to reimburse LC Disbursements ~~hereunder~~ as provided in paragraph (5) of this Section shall be absolute, unconditional and ~~irrevocable~~ irrevocable, and shall be performed strictly in accordance with the terms ~~of this Agreement~~ hereof under any and all circumstances ~~whatsoever and~~ whatsoever, irrespective of ~~any of the following circumstances:~~ (iA) any lack of validity or enforceability of any Letter of ~~Credit or this Agreement; (ii) the existence of any claim~~Credit, ~~set-off, defense or other right which the Borrower~~ or any ~~Subsidiary~~ term or ~~Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit~~ provision therein, (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iiiB) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; , (ivC) payment by the Issuing ~~Bank~~ Lender under a Letter of Credit against presentation of a draft or other document ~~to the Issuing Bank~~ that does not comply strictly with the terms of such Letter of ~~Credit;~~ Credit and (vD) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge ~~of, or provide a right~~ of ~~set-off against, the~~ Borrower’s 's obligations hereunder~~; or~~. (vi7) ~~the existence of a Default or an Event of Default.~~ Neither the ~~Administrative~~ Agent, the Lenders nor the Issuing ~~Bank, any~~ Lender ~~nor any Related Party of any of the foregoing~~ shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit by the Issuing Lender or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to ~~above~~in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing ~~Bank~~Lender; provided that the foregoing shall not be construed to excuse the Issuing ~~Bank~~ Lender from liability to ~~the~~ Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by ~~the~~ Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing ~~Bank’s failure to exercise due care~~ Lender's gross negligence or willful misconduct when determining whether drafts or and other documents presented under a Letter of Credit comply with the terms thereof. ~~The~~ Subject in all respects to the foregoing, the parties hereto expressly agree that~~, in the absence of gross negligence or willful misconduct on the part of~~ : (a) the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to Lender may accept documents ~~presented~~ that appear on their face to be in substantial compliance with the terms of a Letter of ~~Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents~~ Credit without responsibility for further investigation, regardless of any notice or information to the contrary, ~~or refuse to accept~~ and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit; (b) the Issuing Lender shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit.; and (jc) ~~Unless otherwise expressly agreed~~ this paragraph (7) shall establish the standard of care to be exercised by the Issuing ~~Bank~~ Lender when determining whether drafts and ~~the Borrower when~~ other documents presented under a Letter of Credit comply with the terms thereof (and the parties hereto hereby waive, to the extent permitted by applicable law, any standard of care inconsistent with the foregoing). (8) The Issuing Lender shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under any Letter of Credit. The Issuing Lender shall promptly notify Agent and Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Lender has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve Borrower of its obligation to reimburse the Issuing Lender and the Lenders with respect to any such LC Disbursement. (9) If the Issuing Lender shall make any LC Disbursement in respect of any Letter of Credit, then, unless, Borrower shall reimburse the Issuing Lender for such LC Disbursement in full on the date such LC Disbursement is ~~issued~~ made, the unpaid amount thereof shall bear interest, for each day from and ~~subject~~ including the date such LC Disbursement is made to but excluding the date that Borrower reimburses such LC Disbursement, at the rate per annum then applicable ~~laws~~to Revolving Loans. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Lender, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (5) of this Section to reimburse the Issuing Lender shall be for the account of such Lender to the extent of such payment. (10) If either (i) ~~each standby Letter~~ a Default or Event of ~~Credit~~ Default shall occur and be continuing and the Borrower receives notice from the Agent or the Requisite Lenders demanding the deposit of cash collateral pursuant to this paragraph, Borrower shall immediately deposit with the Issuing Lender an amount in cash equal to the LC Exposure on such date; provided that the obligation to deposit cash collateral in an amount equal to the LC Exposure shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default described in clauses (F) or (G) of Section 6.1. Such deposit shall be ~~governed~~ held by the ~~“International Standby Practices 1998” (ISP98) (or such later revision~~ Agent as ~~may be published by~~ Collateral in the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted first instance for the ~~issuance~~ LC Exposure hereunder and thereafter for the payment of ~~a Letter~~ any other Obligations of ~~Credit~~the Loan Parties hereunder.

Appears in 2 contracts

Samples: Credit Agreement (O2wireless Solutions Inc), Credit Agreement (O2wireless Solutions Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d~~Section 2.24(d) and ~~(e) of this Section~~2.24(e), may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit denominated in Dollars for the account of the Borrower or any Subsidiary on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~250,000; and (iii) the Borrower or any Subsidiary may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate LC Exposure plus the aggregate outstanding Revolving Credit Exposure of all Lenders would exceed the Aggregate ~~Commitment Amount~~Revolving Commitments. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit (i) on the Effective Date with respect to all Existing Letters of Credit and (ii) on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before 5:00 p.m. the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.24(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof and the minimum borrowing limitations set forth in Section 2.3 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.7. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to ~~subsection (a~~Section 2.24(a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection (d~~Sections 2.24(d) or (e) ~~of this Section~~ on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Base Rate plus an additional two percent (2%) per annum. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be~~ Cash ~~Collateralized~~ Collateral pursuant to this ~~subsection~~Section 2.24(g), the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to one hundred five percent (105% %) of the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid ~~fees~~ interest thereon; ~~provided~~ provided, that ~~such~~ the obligation to deposit such Cash ~~Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ Collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~Sections 8.1(h) or (hi). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account~~. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection~~. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to provide an amount of Cash ~~Collateralize its reimbursement obligations with respect to the Letters of Credit~~ Collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each Fiscal Quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.24, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, ~~(i)~~ each ~~standby~~ Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and ~~(iii)~~ to the ~~Borrower shall specify~~ extent not inconsistent therewith, the ~~foregoing~~ governing law of this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 2 contracts

Samples: Revolving Credit and Term Loan Agreement, Revolving Credit and Term Loan Agreement (Aaron's Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.22(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the ~~Borrower~~Borrowers’ Agent, Letters of Credit for the account of the ~~Borrower~~ Borrowers on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire ~~on the earlier of (A)~~ not later than the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension~~) and (B) the date that is five (5) Business Days prior to the Stated Termination Date~~); (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000, or such lesser amount as may be agreed to in writing by the Issuing Bank; and (iii) the ~~Borrower~~ Borrowers may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the lesser of (i) the Aggregate Revolving Commitment ~~Amount~~Amount or (ii) the Borrowing Base. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the ~~Borrower~~ Borrowers’ Agent shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the ~~Borrower~~ Borrowers shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the ~~Borrower~~ Borrowers’ Agent and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a an LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the ~~Borrower~~ Borrowers of ~~its~~ their obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The ~~Borrower~~ Borrowers shall be jointly, severally, irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the ~~Borrower~~ Borrowers’ Agent shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the ~~Borrower intends~~ Borrowers intend to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the ~~Borrower~~ Borrowers’ Agent shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a ~~Base~~ LIBOR Index Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its ~~Base~~ LIBOR Index Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a ~~Base~~ LIBOR Index Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such ~~Base~~ LIBOR Index Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of ~~the~~ any Borrower or any ~~of its Subsidiaries~~Subsidiary, (iv) any breach of this Agreement by ~~the~~ any Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the ~~Borrower~~ Borrowers or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraphs (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.13(d). (g) If any Event of Default shall occur and be continuing, on the Business Day that the ~~Borrower~~ Borrowers’ Agent receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be~~ Cash ~~Collateralized~~ Collateral pursuant to this ~~subsection~~paragraph, the ~~Borrower~~ Borrowers shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to deposit such Cash ~~Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ Collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the ~~Borrower~~ Borrowers described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the ~~Borrower~~ Borrowers under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Each Borrower agrees to execute any documents and/or certificates reasonably requested by the Administrative Agent to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the ~~Borrower’s~~ Borrowers’ risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the ~~Borrower~~ Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the ~~Borrower~~ Borrowers under this Agreement and the other Loan Documents. If the ~~Borrower is~~ Borrowers are required to provide an amount of Cash ~~Collateralize its reimbursement obligations with respect to the Letters of Credit~~ Collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the ~~Borrower~~ Borrowers within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the ~~Borrower~~ Borrowers’ Agent a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The ~~Borrower’s~~ Borrowers’ obligation to reimburse LC Disbursements hereunder shall be joint, several, absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which ~~the~~ any Borrower or any Subsidiary or other Affiliate of ~~the~~ any Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.22, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the ~~Borrower’s~~ Borrowers’ obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the ~~Borrower~~ Borrowers to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by ~~the~~ each Borrower to the extent permitted by applicable law) suffered by the ~~Borrower~~ Borrowers that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the ~~Borrower~~ Borrowers when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the ~~Borrower~~ Borrowers shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Revolving Credit and Term Loan Agreement (PRGX Global, Inc.), Revolving Credit and Term Loan Agreement (PRGX Global, Inc.)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension ~~thereof~~thereof (including any automatic extension), one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; ~~and~~ (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment ~~Amount~~Amount and (iv) the Borrower shall not request, and the Issuing Bank shall have no obligation to issue, any Letter of Credit the proceeds of which would be made available to any Person (A) to fund any activity or business of or with any Sanctioned Person or in any Sanctioned Countries, that, at the time of such funding, is the subject of any Sanctions or (B) in any manner that would result in a violation of any Sanctions by any party to this Agreement. Each Revolving Lender shall be deemed toto have purchased, and hereby irrevocably and unconditionally ~~agrees to, purchase~~ purchases from the relevant Issuing Bank without recourse a participation in each Letter of Credit equal to such Revolving Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to ~~11:00~~ 10:00 a.m. on the Business Day ~~immediately prior to the date~~ on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Revolving Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Revolving Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Revolving Credit and Term Loan Agreement (RadNet, Inc.), Revolving Credit and Term Loan Agreement (RadNet, Inc.)

Letters of Credit. (a) ~~During~~ Subject to and upon the ~~Availability Period~~terms and conditions herein set forth, the ~~Issuing Bank, in reliance upon~~ Borrower may request a Letter of Credit Issuer at any time and from time to time on or after the ~~agreements of~~ Closing Date and prior to the ~~other Lenders pursuant~~ date that is 60 Business Days prior to ~~subsections (d) and (e) of this Section, may, in its sole discretion,~~ the Facility Termination Date to issue, ~~at the request of the Borrower, Letters of Credit~~ for the account of the Borrower on or any Subsidiary Guarantor (the Borrower or any such Subsidiary Guarantor, a “Letter of Credit Obligor”), and subject to and upon the terms and conditions ~~hereinafter~~ herein set forth~~; provided that~~ , such Letter of Credit Issuer agrees to issue from time to time, irrevocable standby letters of credit denominated and payable in Dollars in such form as may be approved by such Letter of Credit Issuer and the Administrative Agent (each such letter of credit (a “Letter of Credit” and collectively, the “Letters of Credit”). (b) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued, and the Stated Amount of any outstanding Letter of Credit shall not be increased, if after giving effect thereto the Letter of Credit Outstandings would exceed either (x) the Letter of Credit Commitment Amount (y) when added to the aggregate principal amount of all Loans then outstanding, an amount equal to the Total Commitment at such time; (ii) no individual Letter of Credit shall be issued that has an initial Stated Amount less than $100,000 unless such lesser Stated Amount is acceptable to the Letter of Credit Issuer; and (iii) each Letter of Credit shall ~~expire on~~ have an expiry date (including any renewal periods) occurring not later than the earlier of (A) ~~the date~~ one year ~~after~~ from the date of issuance ~~of such Letter of Credit (or, in the case of any renewal or extension~~ thereof, ~~one year after such renewal or extension)~~ and (B) ~~the date that is five (5)~~ 30 Business Days prior to the ~~Stated~~ Facility Termination Date~~; (ii)~~ , in each case on terms acceptable to the Administrative Agent and the relevant Letter of Credit Issuer. In addition, no Letter of Credit shall be issued or increased in ~~a stated~~ amount ~~of at least $5,000; and (iii)~~ if after giving effect thereto the Borrower ~~may not request~~ would be required to prepay Loans in accordance with Section 5.2(b). (c) Notwithstanding the foregoing, in the event a Lender Default exists, no Letter of Credit Issuer shall be required to issue any Letter of Credit ~~if, after giving effect to such issuance,~~ unless either (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Dayi) such Letter of Credit is Issuer has entered into arrangements satisfactory to ~~be issued~~ it and the Borrower to eliminate such Letter of Credit Issuer’s risk with respect to the participation in Letters of Credit of the Defaulting Lender or Lenders, including by cash collateralizing such Defaulting Lender’s or Lenders’ Commitment Percentage of the Letter of Credit Outstandings; or (~~or amended, renewed or extended, as~~ ii) the ~~case may be), the expiration date~~ issuance of such Letter of Credit, taking into account the ~~amount~~ potential failure of ~~such~~ the Defaulting Lender or Lenders to risk participate therein, will not cause the Letter of ~~Credit, the name~~ Credit Issuer to incur aggregate credit exposure hereunder with respect to Loans and ~~address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such~~ Letter of ~~Credit. In addition to~~ Credit Outstandings in excess of its Commitment, and the ~~satisfaction of~~ Borrower has undertaken, for the ~~conditions in Article III, the issuance~~ benefit of such Letter of Credit ~~(or any amendment which increases the amount of such Letter of Credit) will be subject~~ Issuer, pursuant to ~~the further conditions that such Letter of Credit shall be~~ an instrument satisfactory in ~~such~~ form and ~~contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating~~ substance to such Letter of Credit ~~as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications~~Issuer, ~~agreements~~ not to thereafter incur Loans or ~~instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any~~ Letter of ~~Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing)~~ Credit Outstandings hereunder that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue would cause the Letter of Credit ~~because such issuance is not then permitted~~ Issuer to incur aggregate credit exposure hereunder ~~because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject~~ with respect to ~~the terms~~ Loans and ~~conditions hereof, the Issuing Bank shall, on the requested date, issue such~~ Letter of Credit Outstandings in ~~accordance with the Issuing Bank’s usual and customary business practices~~excess of its Commitment. (d) ~~The Issuing Bank shall examine all documents purporting~~ Unless otherwise agreed to ~~represent a demand for payment under~~ by a Letter of Credit ~~promptly following its receipt thereof. The Issuing Bank shall notify the Borrower~~ Issuer and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of LoansBorrower, the ~~Borrower shall be deemed to have timely given a Notice~~ rules of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” ~~(ISP98) (or such later revision as may be~~ published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later ~~revision~~ version thereof as may be ~~published by~~ in effect at the ~~International Chamber~~ time of ~~Commerce on any date any~~ issuance) shall apply to each Letter of Credit ~~may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit~~issued hereunder.

Appears in 2 contracts

Samples: Credit Agreement (American Dental Partners Inc), Credit Agreement (American Dental Partners Inc)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d)~~ terms and ~~(e)~~ conditions of this ~~Section~~Agreement, ~~may, in its sole discretion, issue, at the request~~ Lender agrees to issue letters of ~~the Borrower, Letters of Credit~~ credit for the account of Borrower (each, an “L/C”) or to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, an “L/C Undertaking”) with respect to letters of credit issued by an Underlying Issuer (as of the ~~Borrower on~~ Closing Date, the ~~terms and conditions hereinafter set forth; provided that (i~~prospective Underlying Issuer is to be Wxxxx Fargo) ~~each Letter~~ for the account of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment AmountBorrower. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request for the issuance of a Letter of ~~Credit (~~Credit, or ~~any~~ the amendment, ~~renewal~~ renewal, or extension of an any outstanding Letter of Credit), ~~the Borrower~~ shall ~~give the Issuing Bank~~ be made in writing by an Authorized Person and ~~the Administrative Agent irrevocable written notice at least three (3) Business Days prior~~ delivered to Lender via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such ~~issuance specifying the date (which~~ request shall be ~~a Business Day~~in form and substance satisfactory to Lender in its Permitted Discretion and shall specify (i) ~~such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit,~~ the amount of such Letter of Credit, (ii) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (iii) the expiration of such Letter of Credit, (iv) the name and address of the beneficiary thereof (or the beneficiary of the Underlying Letter of Credit, as applicable), and (v) such other information (including, in the case of an amendment, renewal, or extension, identification of the outstanding Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, ~~renew~~ renew, or extend such Letter of Credit. ~~In addition~~ If requested by Lender, Borrower also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the ~~satisfaction~~ subject of an L/C Undertaking. Lender shall have no obligation to issue a Letter of Credit if any of the ~~conditions in Article III,~~ following would result after giving effect to the issuance of such requested Letter of Credit: (i) the Letter of Credit Usage would exceed the Borrowing Base less the outstanding amount of Advances, or (ii) the Letter of Credit Usage would exceed $5,000,000, or (iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the outstanding amount of Advances. Borrower and Lender acknowledge and agree that certain Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Letter of Credit (~~or any amendment which increases the amount of such~~ and corresponding Underlying Letter of Credit) ~~will~~ shall be ~~subject~~ in form and substance acceptable to Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. If Lender is obligated to advance funds under a Letter of Credit, Borrower immediately shall reimburse such L/C Disbursement to Lender by paying to Lender an amount equal to such L/C Disbursement not later than 2:00 p.m., Massachusetts time, on the date that such L/C Disbursement is made, if Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 1:00 p.m., Massachusetts time, on such date, or, if such notice has not been received by Borrower prior to such time on such date, then not later than 2:00 p.m., Massachusetts time, on the Business Day that Borrower receives such notice, if such notice is received prior to 1:00 p.m., Massachusetts time, on the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.5. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrower’s obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. (b) Borrower hereby agrees to indemnify, save, defend, and hold Lender harmless from any loss, cost, expense, or liability, and reasonable attorneys fees incurred by Lender arising out of or in connection with any Letter of Credit; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the ~~further conditions~~ extent that ~~such~~ it is caused by the gross negligence or willful misconduct of Lender. Borrower agrees to be bound by the Underlying Issuer’s regulations and interpretations of any Underlying Letter of Credit or by Lender’s interpretations of any L/C issued by Lender to or for Borrower’s account, even though this interpretation may be different from Borrower’s own, and Borrower understands and agrees that Lender shall not be liable for any error, negligence, or mistake, whether of omission or commission, in ~~such form and contain such terms as~~ following Borrower’s instructions or those contained in the ~~Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such~~ Letter of Credit or any modifications, amendments, or supplements thereto. Borrower understands that the L/C Undertakings may require Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrower against such Underlying Issuer. Borrower hereby agrees to indemnify, save, defend, and hold Lender harmless with respect to any loss, cost, expense (including reasonable attorneys fees), or liability incurred by Lender under any L/C Undertaking as ~~the Issuing Bank shall reasonably require; provided that in the event~~ a result of Lender’s indemnification of any ~~conflict between such applications~~Underlying Issuer; provided, ~~agreements~~ however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or ~~instruments~~ liability to the extent that it is caused by the gross negligence or willful misconduct of Lender. Borrower hereby acknowledges and ~~this Agreement~~agrees that Lender shall not be responsible for delays, errors, or omissions resulting from the ~~terms~~ malfunction of ~~this Agreement shall control~~equipment in connection with any Letter of Credit. (c) ~~At least two (2) Business Days prior~~ Borrower hereby authorizes and directs any Underlying Issuer to ~~the issuance of any Letter of Credit~~deliver to Lender all instruments, ~~the Issuing Bank will confirm with the Administrative Agent (~~documents, and other writings and property received by ~~telephone or in writing) that the Administrative Agent has received~~ such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is Underlying Issuer pursuant to ~~issue the requested Letter of Credit, directing the Issuing Bank not to issue the~~ such Underlying Letter of Credit ~~because~~ and to accept and rely upon Lender’s instructions with respect to all matters arising in connection with such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Underlying Letter of Credit ~~in accordance with~~ and the ~~Issuing Bank’s usual and customary business practices~~related application. (d) ~~The Issuing Bank shall examine~~ Any and all ~~documents purporting~~ charges, commissions, fees, and costs incurred by Lender relating to ~~represent a demand for payment under a Letter~~ Underlying Letters of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be ~~irrevocably~~ Lender Expenses for purposes of this Agreement and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately ~~prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower~~ shall be ~~deemed~~ reimbursable by Borrower to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender ~~shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent~~ for the account of Lender; it being acknowledged and agreed by Borrower that, as of the ~~Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly~~ Closing Date, the issuance charge imposed by the ~~Administrative Agent~~ prospective Underlying Issuer is .825% per annum times the face amount of each Underlying Letter of Credit, that such issuance charge may be changed from time to ~~reimburse~~ time, and that the ~~Issuing Bank~~ Underlying Issuer also imposes a schedule of charges for ~~such LC Disbursement~~amendments, extensions, drawings, and renewals. (e) If ~~for any~~ by reason ~~a Base Rate Borrowing may not be (as determined in the sole discretion~~ of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any ~~set-off~~change after the Closing Date in any applicable law, ~~counterclaim~~treaty, ~~recoupment~~rule, ~~defense~~ or ~~other right that such Lender~~ regulation or any ~~other Person may have against~~ change in the ~~Issuing Bank~~ interpretation or application thereof by any ~~other Person for any reason whatsoever~~Governmental Authority, or (ii) compliance by the ~~existence~~ Underlying Issuer or Lender with any direction, request, or requirement (irrespective of ~~a Default~~ whether having the force of law) of any Governmental Authority or ~~an Event of Default or the termination~~ monetary authority including, Regulation D of the ~~Aggregate Commitments,~~ Federal Reserve Board as from time to time in effect (~~iii~~and any successor thereto): (i) any ~~adverse change~~ reserve, deposit, or similar requirement is or shall be imposed or modified in ~~the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension~~ respect of any Letter of Credit issued hereunder, or (ii) there shall be imposed on the Underlying Issuer or ~~(vi)~~ Lender any other ~~circumstance, happening or event whatsoever, whether or not similar to~~ condition regarding any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters Underlying Letter of Credit ~~be Cash Collateralized~~ or any Letter of Credit issued pursuant ~~to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank~~ hereto; and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the ~~occurrence of an Event of Default~~foregoing is to increase, ~~such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured~~ directly or ~~waived. (h) Upon the request of any Lender, but no more frequently than quarterly~~indirectly, the ~~Issuing Bank shall deliver (through the Administrative Agent)~~ cost to ~~each~~ Lender ~~and the Borrower a report describing the aggregate Letters~~ of ~~Credit then outstanding. Upon the request of any Lender from time to time~~issuing, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolutemaking, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity guaranteeing, or ~~enforceability of~~ maintaining any Letter of Credit or ~~this Agreement; (ii)~~ to reduce the ~~existence of~~ amount receivable in respect thereof by Lender, then, and in any ~~claim~~such case, ~~set-off~~Lender may, ~~defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have~~ at any time ~~against~~ within a ~~beneficiary~~ reasonable period after the additional cost is incurred or ~~any transferee~~ the amount received is reduced, notify Borrower, and Borrower shall pay on demand such amounts as Lender may specify to be necessary to compensate Lender for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder. The determination by Lender of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving amount due pursuant to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, ~~constitute~~ as set forth in a ~~legal or equitable discharge of~~certificate setting forth the calculation thereof in reasonable detail, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be ~~deemed~~ prima facie evidence of all amounts due pursuant to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Creditthis Section. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Loan and Security Agreement (Swank, Inc.), Loan and Security Agreement (Swank, Inc.)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.22(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (New York time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraphs (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.13(d). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.22, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, performance under Letters of Credit by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by (i) ~~each standby Letter~~ either (x) the rules of ~~Credit shall be governed by~~ the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), ) or (iiy) ~~each documentary Letter~~ the rules of ~~Credit shall be governed by~~ the “Uniform Customs and Practices for Documentary ~~Credits~~ Credits” (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600~~ 500 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (~~iii~~ii) to the ~~Borrower shall specify~~ extent not inconsistent therewith, the ~~foregoing~~ governing law of this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 2 contracts

Samples: Revolving Credit and Term Loan Agreement (Tc Pipelines Lp), Revolving Credit and Term Loan Agreement (Tc Pipelines Lp)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.23(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~10,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate ~~Credit Exposure~~ LC Exposure, plus the aggregate outstanding Revolving Loans and Swingline Loans of all Lenders would exceed the Aggregate Revolving Commitment ~~Amount~~Amount or the Borrowing Base. ~~Each~~ Upon the issuance of each Letter of Credit each Lender with a Revolving Commitment shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection~~ Section 2.23(a) or (a2) ~~of this Section or~~ that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (Atlanta, GA time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.7. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its share of such payment based on its Pro Rata Share of ~~such payment~~the Revolving Commitments; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.23 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Revolving Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates as may be reasonably necessary to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Revolving Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each Fiscal Quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, and will if indemnified by the Borrower in a manner acceptable to the Issuing Bank, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and Practices for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600 (or such later revision~~ 500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing~~ this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 2 contracts

Samples: Revolving Credit and Term Loan Agreement (Mapics Inc), Revolving Credit and Term Loan Agreement (Mapics Inc)

Letters of Credit. (a) ~~During~~ On the ~~Availability Period~~Closing Date, SunTrust Bank, as the Issuing ~~Bank~~Bank of the Existing Letters of Credit, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d)~~ Section 2.22(d), agrees to continue the prior issuance of the Existing Letters of Credit on the terms and ~~(e)~~ conditions set forth therein. All Existing Letters of ~~this Section~~Credit shall be deemed to have been issued pursuant hereto, ~~may~~and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof. Thereafter during the Availability Period, the Issuing Bank, in ~~its sole discretion~~reliance upon said agreements of the other Lenders pursuant to Section 2.22(d), agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower or any Subsidiary Loan Party on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Commitment Termination Date; (ii) each Letter of Credit ~~shall~~ may be in a any stated amount subject, however, to the provisions of ~~at least $5,000~~clause (iii) hereof; and (iii) neither the Borrower nor any Subsidiary Loan Party may ~~not~~ request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the sum of the aggregate outstanding Revolving Credit ~~Exposure~~ Exposures of all Lenders would exceed the Aggregate ~~Commitment Amount~~Revolving Commitments. ~~Each~~ Upon the issuance of each Letter of Credit (which, as set forth in the definition thereof, includes each Existing Letter of Credit set forth on Schedule 2.22), each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to ~~11:00 a.m.~~ 12:00 noon on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default (other than an Event of Default in existence at the time of the issuance of any Letter of Credit by the Issuing Bank of which the Issuing Bank had actual knowledge) or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.22 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay ~~interest~~ Default Interest on such ~~amount at the rate set forth in Section 2.12(b)~~amount. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the ~~Issuing Bank and the~~ Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid ~~fees~~ interest thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The Borrower agrees to execute any documents and/or certificates to effectuate~~ At the ~~intent~~ request of ~~this subsection. Other than any interest earned on~~ the ~~investment of such deposits~~Borrower, ~~which investments shall be made at the option and sole discretion of~~ the Administrative Agent ~~and~~ shall hold such deposit in an interest-bearing money market demand deposit account at the Borrower’s risk and expense; otherwise, such ~~deposits~~ deposit shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this ~~Agreement and the other Loan Documents~~Agreement. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower ~~within~~ with three (3) Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each fiscal quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such fiscal quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.22, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (~~j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (~~i) ~~each~~ Each standby Letter of Credit shall be ~~governed by~~ subject to the “International Standby Practices ~~1998”~~ (~~ISP98) (or such later revision~~ ISP98 – International Chamber of Commerce Publication Number 590), as the same may be ~~published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued)~~amended from time to time, and (ii) each ~~documentary~~ commercial Letter of Credit shall be ~~governed by~~ subject to the rules of the Uniform Customs and ~~Practices~~ Practice for Documentary ~~Credits (2007 Revision)~~Credits, ~~International Chamber of Commerce Publication No. 600 (or such later revision~~ as ~~may be~~ most recently published by the International Chamber of Commerce ~~on any date any Letter~~ at the time of ~~Credit may be issued)~~ issuance, and (iii) ~~the Borrower shall specify the foregoing in~~ each ~~letter of credit application submitted for the issuance of a~~ Letter of Credit, to the extent not inconsistent therewith, shall be subject to the governing law of this Agreement set forth in Section 10.5.

Appears in 2 contracts

Samples: Revolving Credit Agreement (Watsco Inc), Revolving Credit Agreement (Watsco Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d~~Section 2.22(d) and ~~(e) of this Section~~2.22(e), may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower or any Subsidiary on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate ~~Commitment Amount~~Revolving Commitments. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before 5:00 p.m. the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to ~~11:00 a.m.~~ 2:00 p.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraphs (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.13(d). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence and during the continuation of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (h) or (h)i) of Section 8.1. Such deposit shall be held by the Administrative Agent as ~~collateral~~ Cash Collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence and continuance of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.22, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable ~~law~~Law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable ~~laws~~Laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Credit Agreement (Malibu Boats, Inc.), Credit Agreement (Malibu Boats, Inc.)

Letters of Credit. Subject to the terms and conditions of this Agreement, and on the condition that aggregate Letter of Credit Liabilities shall never exceed $5,000,000, (ai) ~~During~~ Borrower shall have the ~~Availability Period, the Issuing Bank~~right to, in ~~reliance upon~~ addition to Loans provided for in SECTION 2.1 hereof, utilize the ~~agreements~~ Revolving Loan Commitments from time to time during the Revolving Loan Availability Period by obtaining the issuance of ~~the other Lenders pursuant to subsections (d) and (e)~~ standby letters of ~~this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ credit for the account of Borrower if Borrower shall so request in the ~~Borrower on~~ notice referred to in SECTION 2.2(B)(I) hereof (such standby letters of credit as any of them may be amended, supplemented, extended or confirmed from time to time, being herein collectively called the ~~terms~~ "LETTERS OF CREDIT)" and ~~conditions hereinafter set forth; provided that~~ (iii) ~~each Letter~~ TCB agrees to issue such Letters of ~~Credit shall expire on the earlier of (A) the date one year after~~ Credit. Upon the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of ~~Credit (or any amendment, renewal or extension of an outstanding Letter of~~ Credit), the ~~Borrower~~ applicable Issuer shall ~~give~~ be deemed, without further action by any party hereto, to have sold to each Revolving Loan Lender, and each such Lender shall be deemed, without further action by any party hereto, to have purchased from the ~~Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior~~ applicable Issuer, a participation, to the ~~requested date~~ extent of such ~~issuance specifying the date (which shall be a Business Day)~~ Lender's Revolving Loan Commitment Percentage, in such Letter of Credit ~~is to be issued (or amended~~and the related Letter of Credit Liabilities, ~~renewed or extended, as~~ which participation shall terminate on the ~~case may be),~~ earlier of the expiration date of such Letter of ~~Credit,~~ Credit or the ~~amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit~~Revolving Loan Termination Date. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such No Letter of Credit shall ~~be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall~~ have ~~executed and delivered any additional applications, agreements and instruments relating to such~~ an expiration date later than one year from date of issuance. Any Letter of Credit as that shall have an expiration date after the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because end of the ~~limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then,~~ Revolving Loan Availability Period shall be subject to ~~the terms~~ Cover or backed by a standby letter of credit in form and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3substance, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined issued by a ~~court of competent jurisdiction)~~Person, ~~the Issuing Bank shall be deemed~~ acceptable to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, Agent in its sole discretion. TCB or, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the ~~terms~~ prior approval of ~~such~~ Borrower, Agent and the applicable Lender, another Lender shall be the Issuer of each Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Loan Agreement (Innovative Valve Technologies Inc), Loan Agreement (Innovative Valve Technologies Inc)

Letters of Credit. (a) During the ~~Availability Period~~term of this Agreement and provided no Event of Default has occurred and is continuing, the ~~Issuing Bank, in reliance upon the agreements of the other Lenders~~ Lender pursuant to ~~subsections (d) and (e) of~~ this Section, ~~may, in its sole discretion,~~ agrees to issue, at the request of ~~the Borrower~~a Credit Party, Letters of Credit for the account of the ~~Borrower~~ Credit Party on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such ~~Letter~~ standby letter of ~~Credit~~ credit or the date 210 days after the issuance of such trade letter of credit (~~or,~~ or in the case of any renewal or extension thereof, one year or 210 days, respectively, after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated Termination~~ Maturity Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~10,000.00; and (iii) ~~the Borrower~~ a Credit Party may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC ~~Commitment~~ Commitment, or (B) the aggregate ~~Credit Exposure of all Lenders~~ LC Exposure, plus the aggregate outstanding Revolving Loans would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participationtotal Revolving Loan Commitment. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), ~~the Borrower~~ a Credit Party shall give the ~~Issuing Bank and the Administrative Agent~~ Lender irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of ~~Credit~~Credit , the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article ~~III~~IV, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the ~~Issuing Bank~~ Lender shall ~~approve~~ approve, and that the ~~Borrower~~ Credit Party shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the ~~Issuing Bank~~ Lender shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. ~~600~~ 600, (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and, to the extent not inconsistent therewith, the governing law of this Agreement set forth in Section 11.7; provided, however, if agreed to by the Lender and the Borrower, a Letter of Credit and performance under Letters of Credit by the Lender, its correspondents, and the beneficiaries thereof will be governed by the rules of the “International Standby Practices 1998” (ISP98), International Chamber of Commerce Publication No. 590 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and ~~(iii)~~ to the extent not inconsistent therewith, the governing law of this Agreement set forth in Section 11.7. Unless the Lender and the Borrower otherwise agree, the “International Standby Practices 1998” shall ~~specify the foregoing in each letter~~ be applicable to standby letters of credit ~~application submitted~~ and the Uniform Customs and Practices for ~~the issuance~~ Documentary Credits shall be applicable to trade letters of ~~a Letter of Credit~~credit.

Appears in 2 contracts

Samples: Revolving and Term Loan Agreement, Revolving and Term Loan Agreement (Brown & Brown Inc)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions hereof, the ~~Issuing Bank, in reliance upon the agreements of the other Lenders pursuant~~ Fronting Bank agrees to ~~subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower,~~ issue Letters of Credit from time to time for the account of the Borrower on (or to extend the stated maturity thereof or to modify or amend the terms thereof) for the purposes set forth in Section 7.9 on not less than five Business Days’ prior notice thereof by delivery of a Request for Issuance to the Agent (which shall promptly distribute copies thereof to the Lenders) and ~~conditions hereinafter set forth; provided that~~ the Fronting Bank. Each Request for Issuance shall specify (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) ~~such Letter~~ of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or ~~any amendment~~ the date of effectiveness of such extension, modification or amendment) and the stated expiry date thereof (which ~~increases~~ shall be no later than one year following the date of such issuance), (ii) the proposed stated amount of such Letter of Credit, (iii) ~~will~~ the name and address of the beneficiary of such Letter of Credit and (iv) a statement of drawing conditions applicable to such Letter of Credit, and if such Request for Issuance relates to an amendment or modification of a Letter of Credit, it shall be ~~subject~~ accompanied by the consent of the beneficiary of the Letter of Credit thereto. Each Request for Issuance shall be irrevocable unless modified or rescinded by the Borrower not less than two Business Days prior to the ~~further~~ proposed date of issuance (or effectiveness) specified therein. Not later than 12:00 noon (New York City time) on the proposed date of issuance (or effectiveness) specified in such Request for Issuance, and upon fulfillment of the applicable conditions precedent and the other requirements set forth herein, the Fronting Bank shall issue (or extend, amend or modify) such Letter of Credit and provide notice and a copy thereof to the Agent, which shall promptly furnish copies thereof to the Lenders. The Fronting Bank shall provide to the Agent, on a monthly basis, a list of the amounts and expiration dates of all undrawn Letters of Credit, a copy of which list the Agent shall furnish to each Lender that requests such list. (b) No Letter of Credit shall be ~~in such form and contain such terms as~~ requested or issued hereunder if, after the ~~Issuing Bank shall approve and~~ issuance thereof, (i) the Outstanding Credits would exceed the aggregate Commitments or (ii) the LC Outstandings would exceed the LC Commitment Amount. (c) In the event that any Letter of Credit remains outstanding beyond the fifteenth day prior to the Maturity Date, the Borrower shall ~~have executed~~ either (i) pay to the Agent an amount equal to 103% of the LC Outstandings on the later of such date and ~~delivered~~ the date of issuance of such Letter of Credit, which amount the Agent shall hold in the Cash Collateral Account for the account of the Borrower, without interest, for the purpose of paying any ~~additional applications~~draft presented, ~~agreements~~ with the excess, if any, to be returned to the Borrower upon termination or expiration of such Letter of Credit and ~~instruments relating~~ payment in full of all amounts due hereunder or (ii) deliver a back-up letter of credit to the Agent securing the Borrower’s reimbursement obligations with respect to such Letter of Credit as in form and substance acceptable to the ~~Issuing~~ Fronting Bank ~~shall reasonably require; provided that~~ and the Agent and from a creditworthy financial institution acceptable to the Agent. While any Letter of Credit is outstanding, the Agent may not release funds held in the ~~event~~ Cash Collateral Account pursuant to this subsection (c) without the consent of ~~any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control~~all Lenders. (cd) ~~At least two (2) Business Days prior~~ Each Lender, upon issuance of a Letter of Credit, shall be deemed to have purchased without recourse a participation from the Fronting Bank in such Letter of Credit and the rights and obligations arising thereunder and any collateral relating thereto, in each case in an amount equal to such Lender’s Commitment Percentage of the obligations under such Letter of Credit, and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the ~~issuance~~ Fronting Bank therefor and discharge when due, such Lender’s Commitment Percentage of the obligations arising under such Letter of Credit. Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the ~~Issuing Bank will confirm with the Administrative Agent (by telephone or in writing)~~ extent that the ~~Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing~~ Fronting Bank has ~~received notice from the Administrative Agent, on~~ not been reimbursed as required hereunder or ~~before the Business Day immediately preceding the date the Issuing Bank is to issue the requested~~ under any such Letter of Credit, ~~directing~~ each Lender shall pay to the ~~Issuing~~ Fronting Bank ~~not~~ its Commitment Percentage of such unreimbursed drawing in same day funds on the day of notification by the Fronting Bank of an unreimbursed drawing pursuant to ~~issue~~ the ~~Letter~~ provisions of ~~Credit because such issuance is not then permitted hereunder because of the limitations set forth in~~ subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereofe). The ~~Issuing Bank shall notify the Borrower and the Administrative Agent~~ obligation of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation each Lender so to reimburse the ~~Issuing~~ Fronting Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any ~~circumstance~~other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse the Fronting Bank under any Letter of Credit, together with interest as hereinafter provided. (e) In the event of any drawing under any Letter of Credit, the Fronting Bank will promptly notify the Borrower. Unless the Borrower shall immediately notify the Fronting Bank of its intent otherwise to reimburse the Fronting Bank for any drawing made prior to the Maturity Date, the Borrower shall be deemed to have requested a Base Rate Advance in the amount of such drawing as provided in subsection (f), the proceeds of which will be used to satisfy the reimbursement obligation of the Borrower with respect to such drawing. If, at any time on or after the Maturity Date, any drawing is made under any Letter of Credit, the Fronting Bank shall instruct the Agent to withdraw from the Cash Collateral Account funds in an amount equal to the amount of such drawing, which the Agent shall transfer to the Fronting Bank in order to reimburse the Fronting Bank for such drawing. In the case of any drawing made under any Letter of Credit prior to the Maturity Date, the Borrower shall reimburse the Fronting Bank on the day such drawing is paid either with the proceeds of an Advance obtained hereunder or otherwise in same day funds as provided herein. If the Borrower shall fail to reimburse the Fronting Bank as provided herein, the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the Base Rate plus two percent (2%) per annum. The Borrower’s reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment that the applicable account party or the Borrower may claim or have against the Fronting Bank, the Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including, without limitation, ~~(i)~~ any ~~set-off, counterclaim, recoupment,~~ defense ~~or other right that such Lender or~~ based on any ~~other Person may have against~~ failure of the ~~Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default~~ applicable account party or the ~~termination~~ Borrower to receive consideration or the legality, validity, regularity or unenforceability of the ~~Aggregate Commitments, (iii) any adverse change in~~ Letter of Credit. The Fronting Bank will promptly notify the ~~condition (financial or otherwise)~~ Lenders of the ~~Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension~~ amount of any ~~Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded,~~ unreimbursed drawing and each Lender shall promptly ~~transfer~~pay to the Fronting Bank, in immediately available funds, the amount of ~~its participation~~ such Lender’s Commitment Percentage of such unreimbursed drawing. Such payment shall be made on the day such notice is received by such Lender from the Fronting Bank if such notice is received at or before 2:00 p.m., otherwise such payment shall be made at or before 12:00 noon on the Business Day next succeeding the day such notice is received. If such Lender does not pay such amount to the ~~Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing~~ Fronting Bank ~~has received from any~~ in full upon such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceedingrequest, such Lender ~~will return~~ shall, on demand, pay to the ~~Administrative Agent or the Issuing~~ Fronting Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section interest on the ~~due~~ unpaid amount during the period from the date ~~therefor,~~ the Lender received the notice regarding the unreimbursed drawing until the Lender pays such ~~Lender shall pay interest~~ amount to the ~~Issuing~~ Fronting Bank ~~(through the Administrative Agent) on such amount from such due date to the date such payment is made~~ in full at a rate per annum equal to to, if paid within two Business Days of the date of drawing, the Federal Funds Rate and thereafter at a rate equal to the Base Rate~~; provided that if such Lender shall fail~~ . Each Lender’s obligation to make such payment to the ~~Issuing~~ Fronting Bank, and the right of the Fronting Bank to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Agreement or the Commitments, the existence of a Default or Event of Default or the acceleration of the obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever. Simultaneously with the making of each such payment by a Lender to the Fronting Bank, such Lender shall, automatically and without any further action on the part of the Fronting Bank or such Lender, acquire a participation in an amount equal to such payment (excluding the portion of such payment constituting interest owing to the Fronting Bank) in the related unreimbursed drawing portion of the LC Outstandings and in the interest thereon, and shall have a claim against the Borrower with respect thereto. (f) On any day on which the Borrower shall have requested, or been deemed to have requested, a Borrowing to reimburse a drawing under a Letter of Credit, the Fronting Bank shall give notice to the Lenders that a Borrowing has been requested or deemed requested in connection with a drawing under a Letter of Credit, in which case an Advance comprised solely of Base Rate Advances (each such borrowing, a “Mandatory Borrowing”) shall be immediately made by all Lenders (without giving effect to any termination of the Commitments pursuant to Section 9.1) pro rata based on each Lender’s Commitment Percentage, and the proceeds thereof shall be paid directly to the Fronting Bank for application to the applicable LC Outstandings. Each Lender hereby irrevocably agrees to make such Base Rate Advances upon any such request or deemed request on account of each such Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding (i) the amount of Mandatory Borrowing may not comply with the minimum amount for Borrowings otherwise required hereunder, (ii) whether any conditions specified in Article III are then satisfied, (iii) whether a Default or Event of Default then exists, (iv) failure of any such request or deemed request for a Borrowing to be made by the time otherwise required hereunder, (v) the date of such Mandatory Borrowing, or (vi) any reduction in or any termination of the Commitments. Such funding of Borrowings shall be made on the day notice of such Mandatory Borrowing is received by each Lender from the Fronting Bank if such notice is received at or before 2:00 p.m., otherwise such payment shall be made at or before 12:00 noon on the Business Day next succeeding the day such notice is received. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under any applicable bankruptcy law with respect to the Borrower), then each Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) its Commitment Percentage of the outstanding LC Outstandings; provided, further, that in the event any Lender shall fail to fund its Commitment Percentage on the day the Mandatory Borrowing would otherwise have occurred, then the amount of such Lender’s unfunded Commitment Percentage therein shall bear interest payable to the Fronting Bank upon demand, if paid within ~~three (3)~~ two Business Days of such ~~due~~ date, ~~then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount~~ at the ~~rate set forth in Section 2.12(b)~~Federal Funds Rate, and thereafter, at the Base Rate. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement The payment obligations of ~~the Borrower with respect to the Letters of Credit shall become effective immediately,~~ each Lender under subsection (d) and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement ~~and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with~~ in respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of payment under any ~~Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each~~ Letter of Credit ~~then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder~~ shall be ~~absolute,~~ unconditional and ~~irrevocable~~ irrevocable, and shall be ~~performed~~ paid strictly in accordance with the terms of this Agreement under all ~~circumstances whatsoever and irrespective of any of~~ circumstances, including, without limitation, the following circumstances: (i) any lack of validity or enforceability of any Credit Document or any other agreement or instrument relating thereto or to such Letter of ~~Credit or this Agreement~~Credit; (ii) any amendment or waiver of, or any consent to departure from, the terms of any Credit Document or such Letter of Credit; (iii) the existence of any claim, set-off, defense or other right ~~which the Borrower or any Subsidiary or Affiliate of~~ that the Borrower may have at any time against ~~a beneficiary~~ any beneficiary, or any ~~transferee~~ transferee, of ~~any~~ such Letter of Credit (or any ~~Persons or entities~~ persons for whom any ~~such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom~~ such beneficiary or any such transferee may be acting), the Fronting Bank, or any other person, whether in connection with ~~this Agreement~~ any Credit Document, the transactions contemplated hereby or ~~the~~ by such Letter of ~~Credit or any document related hereto or thereto~~ Credit, or any unrelated transaction; (~~iii~~iv) any ~~draft~~ statement or any other document presented under a such Letter of Credit proving to be forged, ~~fraudulent~~ fraudulent, invalid or ~~invalid~~ insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (ivv) payment in good faith by the ~~Issuing~~ Fronting Bank under a the Letter of Credit issued by the Fronting Bank against presentation of a draft or ~~other document to the Issuing Bank~~ certificate that does not comply with the terms of such Letter of Credit;; or (vvi) any other ~~event~~ circumstance or ~~circumstance~~ happening whatsoever, whether or not similar to any of the foregoing~~, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or~~. (vih) The Borrower assumes all risks of the ~~existence~~ acts and omissions of ~~a Default~~ any beneficiary or ~~an Event~~ transferee of ~~Default~~any Letter of Credit. Neither the ~~Administrative Agent~~Fronting Bank, the ~~Issuing Bank, any Lender~~ Lenders nor any ~~Related Party~~ of ~~any~~ their respective officers, directors, employees, agents or Affiliates shall be liable or responsible for (i) the use that may be made of ~~the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any~~ such Letter of Credit or any acts or omissions of any beneficiary or transferee thereof in connection therewith, (ii) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged, (iii) payment by the Fronting Bank against presentation of documents that do not comply with the terms of such Letter of Credit, including failure of any documents to bear any reference or ~~failure~~ adequate reference to such Letter of Credit, or (iv) any other circumstances whatsoever in making or failing to make ~~any~~ payment ~~thereunder~~ under such Letter of Credit, except that, and notwithstanding subsection (~~irrespective of any of~~ f) and the ~~circumstances referred to above~~foregoing clauses (i) through (iii), ~~or any error~~the Borrower and each Lender shall have the right to bring suit against the Fronting Bank, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond and the ~~control of the Issuing Bank; provided that the foregoing~~ Fronting Bank shall ~~not~~ be ~~construed to excuse the Issuing Bank from liability~~ liable to the Borrower and any Lender, to the extent of any ~~actual direct damages (~~direct, as opposed to ~~special~~consequential, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) damages suffered by the Borrower or such Lender that ~~are~~ the Borrower or such Lender proves were caused by the ~~Issuing~~ Fronting Bank’s willful misconduct or gross negligence, including, in the case of the Borrower, the Fronting Bank’s willful failure to ~~exercise due care when determining whether drafts or other documents presented~~ make timely payment under a such Letter of Credit following the presentation to it by the beneficiary thereof of a draft and accompanying certificate(s) that strictly comply with the terms ~~thereof. The parties hereto expressly agree that, in the absence~~ and conditions of ~~gross negligence or willful misconduct on the part~~ such Letter of ~~the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination~~Credit. In furtherance and not in limitation of the ~~foregoing and without limiting the generality thereof~~foregoing, the ~~parties agree that, with respect to documents~~ Fronting Bank may accept sight drafts and accompanying certificates presented under the Letter of Credit issued by the Fronting Bank that appear on their face to be in ~~substantial compliance with the terms of a Letter of Credit~~order, ~~the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents~~ without responsibility for further investigation, regardless of any notice or information to the contrary, ~~or refuse to accept~~ and ~~make~~ payment ~~upon~~ against such documents ~~if such documents are~~ shall not ~~in strict compliance with~~ constitute willful misconduct or gross negligence by the ~~terms of such Letter of Credit~~Fronting Bank. Notwithstanding the foregoing, no Lender shall be obligated to indemnify the Borrower for damages caused by the Fronting Bank’s willful misconduct or gross negligence. (~~j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (~~i) ~~each standby Letter~~ The letters of ~~Credit~~ credit listed on Schedule III shall be ~~governed by the~~ deemed “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter Letters of Credit” upon the occurrence of the Effective Date.

Appears in 2 contracts

Samples: Credit Agreement (Wisconsin Energy Corp), Credit Agreement (Wisconsin Energy Corp)

Letters of Credit. (a) ~~During~~ Upon the ~~Availability Period~~terms and subject to the conditions herein set forth, the Borrower may request, in the form of a Letter of Credit Request, the Issuing Bank, ~~in reliance upon~~ at any time and from time to time after the ~~agreements of the other Lenders pursuant~~ date hereof, to ~~subsections (d) and (e) of this Section, may, in its sole discretion,~~ issue, at and the ~~request of the Borrower~~Issuing Bank shall issue, ~~Letters of Credit~~ for the account of the Borrower ~~on the terms and conditions hereinafter set forth~~one or more Letters of Credit; provided that no Letter of Credit shall be issued if after giving effect to such issuance (i) ~~each~~ the aggregate Letters of Credit Outstanding shall exceed the lesser of (A) $100,000,000 and (B) the aggregate amount of the Commitments of the Lenders then in effect or (ii) the aggregate Credit Extensions (after giving effect to the issuance of such Letter of Credit) would exceed the aggregate amount of Commitments then in effect; and provided further that no Letter of Credit shall be issued if the Issuing Bank shall have received notice from the Administrative Agent or the Required Lenders that the conditions to such issuance have not been met. (b) Each Letter of Credit shall expire at or prior to the close of business on the earlier of (Ai) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (Bii) the date that is five ~~(5)~~ Business Days prior to the ~~Stated Termination~~ latest applicable Maturity Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the The Issuing Bank shall, ~~on the requested date~~promptly following its receipt thereof, ~~issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall~~ examine all documents purporting to represent a demand for payment under a Letter of ~~Credit promptly following its receipt thereof~~Credit. The Issuing Bank shall promptly notify ~~the Borrower and~~ the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank ~~has made or~~ will make ~~a LC Disbursement thereunder~~payment thereunder (which payment shall not be made until at least two Business Days after such notice from the Issuing Bank to the Borrower); provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such ~~LC Disbursement. The Borrower~~ payment. (d) Any L/C Disbursement shall be ~~irrevocably~~ reimbursed by the Borrower in Dollars on the next Business Day of any such payment thereof by the Issuing Bank by paying to the Administrative Agent an amount equal to such drawing not later than 3:00 p.m., New York time, on such date; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.3 that such payment be financed with a Revolving Loan in an equivalent amount and, to the extent so financed, the Borrower's obligation to make such payment shall be discharged and ~~unconditionally obligated~~ replaced by the resulting Revolving Loan; provided that if the Borrower fails to reimburse such Issuing Bank when due pursuant to this paragraph (d), then (i) Section 2.10(f) shall apply and (ii) interest shall accrue on the unpaid amount of the L/C Disbursement, from the date of such disbursement to but excluding the date the Borrower reimburses the Issuing Bank, at the rate per annum then applicable to Base Rate Loans, and such interest accrued shall be for the account of the Issuing Bank; provided further that interest accrued on and after the date of payment by any Lender pursuant to paragraph (g) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment. (e) Immediately upon the issuance of any ~~LC Disbursements paid~~ Letter of Credit by the Issuing Bank ~~in respect~~ (or the amendment of ~~such drawing~~a Letter of Credit increasing the amount thereof), and without ~~presentment~~any further action on the part of the Issuing Bank, ~~demand or other formalities of any kind. Unless the Borrower shall have notified~~ the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have ~~timely given a Notice of Borrowing~~ sold to each Lender, and each such Lender shall be deemed unconditionally and irrevocably to have purchased from the Issuing Bank, without recourse or warranty, an undivided interest and participation, to the ~~Administrative Agent requesting~~ extent of such Lender's Commitment Percentage, in such Letter of Credit, each drawing thereunder and the obligations of the Borrower under this Credit Agreement and the other Credit Documents with respect thereto. Upon any change in the Commitments pursuant to Sections 2.2, 2.7, 2.9 or 11.3 or any termination of the Commitment of any Refusing Lender on any Maturity Date occurring prior to the latest Maturity Date applicable to the Loans pursuant to Section 2.2, it is hereby agreed that with respect to all Letters of Credit Outstanding, there shall be an automatic adjustment to the participations hereby created to reflect the new Commitment of the assigning and assignee Lenders ~~to make a Base Rate Borrowing~~ or the termination of the Commitment of any Refusing Lender on the ~~date on which~~ Maturity Date applicable to such ~~drawing is honored~~ Refusing Lender. Any action taken or omitted by the Issuing Bank under or in ~~an exact~~ connection with a Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create for the Issuing Bank any resulting liability to any Lender. (f) In the event that the Issuing Bank makes any L/C Disbursement and the Borrower shall not have reimbursed such amount ~~due~~ in full to the Issuing ~~Bank; provided that for purposes solely~~ Bank pursuant to Section 2.10(d), the Issuing Bank shall promptly notify the Administrative Agent, which shall promptly notify each Lender of such ~~Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3~~failure, and each Lender shall ~~make the proceeds of its Base Rate Loan included in such Borrowing available~~ promptly and unconditionally pay to the Administrative Agent for the account of the Issuing Bank ~~in accordance with Section 2.5. The proceeds~~ the amount of such ~~Borrowing shall be applied directly by~~ Lender's Commitment Percentage of such unreimbursed payment in Dollars and in same day funds. If the Issuing Bank so notifies the Administrative Agent, and the Administrative Agent so notifies the Lenders prior to ~~reimburse~~ 11:00 a.m., New York time, on any Business Day, each such Lender shall make available to the Issuing Bank ~~for~~ such ~~LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion~~ Lender's Commitment Percentage of the ~~Administrative Agent), or is not,~~ amount of such payment on such Business Day in same day funds. If and to the extent such Lender shall not have so made ~~in accordance with~~ its Commitment Percentage of the ~~foregoing provisions, then each Lender (other than~~ amount of such payment available to the Issuing Bank~~) shall be obligated to fund the participation that~~ , such Lender ~~purchased pursuant~~ agrees to ~~subsection (a) of this Section in an amount equal~~ pay to ~~its Pro Rata Share of~~ the Issuing Bank, forthwith on demand such ~~LC Disbursement on and as of~~ amount, together with interest thereon, for each day from such date until the date ~~which~~ such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation amount is ~~required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation~~ paid to the Administrative Agent for the account of the Issuing ~~Bank~~Bank at the Federal Funds Rate. ~~Whenever, at~~ Each Lender agrees to fund its Commitment Percentage of such unreimbursed payment notwithstanding a failure to satisfy any ~~time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (~~applicable lending conditions or the ~~Administrative Agent on its behalf) receives any payment on account thereof~~provisions of Section 2.1 or Section 2.6, ~~the Administrative Agent~~ or the ~~Issuing Bank, as~~ occurrence of the ~~case may be, will distribute to such Lender its Pro Rata Share~~ applicable Maturity Date. The failure of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender ~~shall fail~~ to ~~pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest~~ make available to the Issuing Bank ~~(through the Administrative Agent) on such amount from such due date to the date such~~ its Commitment Percentage of any payment ~~is made at a rate per annum equal to the Federal Funds Rate; provided that if such~~ under any Letter of Credit shall neither relieve any Lender ~~shall fail~~ of its obligation hereunder to make ~~such payment~~ available to the Issuing Bank ~~within three (3) Business Days~~ its Commitment Percentage of any payment under any Letter of Credit on the date required, as specified above, nor increase the obligation of such ~~due date, then, retroactively~~ other Lender. Whenever any Lender has made payments to the ~~due date~~Issuing Bank in respect of any reimbursement obligation for any Letter of Credit, such Lender shall be ~~obligated~~ entitled to ~~pay interest~~ share ratably, based on its Commitment Percentage, in all payments and collections thereafter received on account of such ~~amount at the rate set forth in Section 2.12(b)~~reimbursement obligation. (g) ~~If any Event of Default shall occur and be continuing, on~~ Whenever the ~~Business Day~~ Borrower desires that the ~~Borrower receives notice from the Administrative Agent~~ Issuing Bank issue a Letter of Credit (or the ~~Required Lenders demanding that its reimbursement obligations with respect to the Letters~~ amendment, renewal or extension of ~~Credit be Cash Collateralized pursuant to this subsection~~an outstanding Letter of Credit), the Borrower shall ~~deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of~~ give to the Issuing Bank and the ~~Lenders~~Administrative Agent at least two Business Days' prior written (including telegraphic, an telex, facsimile or cable communication) notice (or such shorter period as may be agreed upon in writing by the Issuing Bank and the Borrower) specifying the date on which the proposed Letter of Credit is to be issued, amended, renewed or extended (which shall be a Business Day), the stated amount ~~in cash equal to 105%~~ of the ~~aggregate LC Exposure~~ Letter of ~~all Lenders as~~ Credit so requested, the expiration date of such ~~date plus any accrued~~ Letter of Credit, the name and ~~unpaid fees thereon; provided that such obligation to Cash Collateralize~~ address of the ~~reimbursement~~ beneficiary thereof, and the provisions thereof. (h) The obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for ~~LC Disbursements for which it had not been reimbursed and, to the extent not so applied,~~ any L/C Disbursement shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be ~~performed~~ paid strictly in accordance with the terms of this Credit Agreement under all ~~circumstances whatsoever and irrespective of any of the following~~ circumstances: , including, without limitation: (i) any lack of validity or enforceability of any Letter of ~~Credit or this Agreement;~~ Credit; (ii) the existence of any claim, ~~set-off~~setoff, defense or other right which ~~the Borrower or any Subsidiary or Affiliate of~~ the Borrower may have at any time against a beneficiary ~~or any transferee~~ of any Letter of Credit (or against any ~~Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including~~ of the ~~Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting~~Lenders, whether in connection with this ~~Agreement or~~ Credit Agreement, the ~~Letter of Credit or any document related hereto or thereto~~ transactions contemplated herein or any unrelated transaction; ; (iii) any ~~draft~~ draft, demand, certificate or other document presented under a any Letter of Credit proving to be forged, ~~fraudulent~~ fraudulent, invalid or ~~invalid~~ insufficient in any respect or any statement therein being untrue or inaccurate in any respect; ; (iv) ~~payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v)~~ any other ~~event~~ circumstance or ~~circumstance~~ happening whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s 's obligations hereunder; oror (v) the fact that any Event of Default shall have occurred and be continuing. (vii) If any Letters of Credit shall remain outstanding and partially or wholly undrawn on any Maturity Date applicable to the ~~existence~~ Commitments and Loans of ~~a Default or~~ any Refusing Lender, the Borrower shall immediately Cash Collateralize an ~~Event~~ amount equal to such Refusing Lender's Commitment Percentage of ~~Default~~the amount of Letters of Credit Outstanding on such Maturity Date. ~~Neither~~ The Borrower hereby grants to the Administrative Agent, for the ~~Issuing Bank, any Lender nor any Related Party~~ benefit of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the ~~Borrower when~~ Lenders, a ~~Letter~~ security interest in all cash, deposit accounts and all balances therein and all proceeds of ~~Credit is issued and subject~~ the foregoing which form part of the Cash Collateral. Cash Collateral shall be maintained in a blocked, non-interest bearing deposit account of the Administrative Agent (the "L/C Cash Deposit Account"). Amounts deposited into the L/C Cash Deposit Account pursuant to ~~applicable laws, (i~~this Section 2.10(i) ~~each standby Letter~~ shall be made available to the Issuing Bank to the extent such Refusing Lender would have been required to make such amount available to the Issuing Bank in accordance with Section 2.10(f) if the Commitments of such Refusing Lender had not terminated on the relevant Maturity Date. After all relevant Letters of Credit shall ~~be governed by~~ have expired or been fully drawn upon and all other obligations of the ~~“International Standby Practices 1998” (ISP98) (or~~ Borrower thereunder shall have been paid in full, the balance, if any, in such ~~later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit~~ L/C Cash Deposit Account shall be ~~governed by~~ promptly returned to the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of CreditBorrower.

Appears in 2 contracts

Samples: Multi Year Credit Agreement (Southern Power Co), Multi Year Credit Agreement (Alabama Power Co)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement (including without limitation the provisions of Article III and this Section 2.10(a)), the ~~Issuing Bank~~Total Commitments may be utilized in addition to the Loans provided for in Section 2.1, ~~in reliance~~ upon ~~the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at~~ the request of Borrower made in accordance herewith not later than seven (7) days before the ~~Borrower~~Maturity Date, ~~Letters~~ by the issuance by an Issuing Lender selected by Borrower of ~~Credit~~ letters of credit denominated in Dollars or in an Alternative Currency for the account of Borrower (each, including the ~~Borrower~~ Existing Letters of Credit, a “Letter of Credit”), such Issuing Lender shall amend, renew or extend any Letter of Credit. Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by any of the individuals identified on Exhibit R-1 attached hereto (or, in certain cases, two of such individuals, all as set forth in further detail in Exhibit R-1 attached hereto) and delivered to the ~~terms~~ respective Issuing Lender and ~~conditions hereinafter set forth; provided that~~ Agent via hand delivery, facsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance satisfactory to the respective Issuing Lender in its sole and absolute discretion and shall specify (i) the Issuing Lender, (ii) the amount of such Letter of Credit, (iii) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (iv) the expiration of such Letter of Credit, (v) the name and address of the beneficiary thereof, (vi) whether such Letter of Credit is to be denominated in Dollars or an Alternative Currency (and if to be denominated in an Alternative Currency, the Alternative Currency in which such Letter of Credit is to be denominated) and (vii) such other information (including, in the case of an amendment, renewal, or extension, identification of the outstanding Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter of Credit. It is hereby acknowledged that an Issuing Lender shall have no obligation to issue a Letter of Credit (A) if, after giving effect to the issuance of such requested Letter of Credit, (1) the Letter of Credit Usage would exceed $200,000,000, (2) the Letter of Credit usage would exceed such Issuing Lender’s Letter of Credit Commitment, or (3) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the amount of the Revolving Credit Facility Usage, (B) at any time when one or more of the Lenders is a Defaulting Lender, but only until such time as either (1) the Revolver Commitments of the Defaulting Lender or Defaulting Lenders have been assumed by a Lender that is not a Defaulting Lender, or (2) the Maximum Revolver Amount has been reduced by the amount of such Defaulting Lender’s or Defaulting Lenders’ Revolver Commitments, (C) if any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Lender from issuing such Letter of Credit, or any 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 such Issuing Lender shall prohibit, or request that such Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Lender is not otherwise compensated hereunder) not in effect on the Restatement Effective Date, or shall impose upon such Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Restatement Effective Date and which such Issuing Lender in good xxxxx xxxxx material to it, or (D) if the issuance of such Letter of Credit would violate one or more policies of such Issuing Lender applicable to letters of credit generally. Agent shall provide a report to each Lender on a quarterly basis setting forth the then current Letter of Credit Usage and Lender’s Pro Rata Share thereof. (b) Each Letter of Credit shall expire at or prior to the close of business on the ~~earlier of (A) the~~ date ~~one year~~ twelve months after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, ~~one year~~ twelve months after the then-current expiration date of such Letter of Credit, so long as such renewal or ~~extension~~extension occurs within three months of such then-current expiration date). (i) ~~and~~ If an Issuing Lender shall make any L/C Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such Issuing Lender in respect of such L/C Disbursement by paying to the Agent an amount equal to such L/C Disbursement not later than 1:00 p.m., New York City time, on (Bx) the ~~date~~ Business Day that the Borrower receives notice of such L/C Disbursement, if such notice is ~~five~~ received prior to 10:00 a.m., New York City time, or (5y) the Business ~~Days~~ Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time, provided that, if such L/C Disbursement is in Dollars and is not less than $500,000, the Borrower may, prior to the ~~Stated Termination Date;~~ Maturity Date and subject to the conditions to borrowing set forth herein, request in accordance with Section 2.6 that such payment be financed with a Base Rate Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting Base Rate Loan. (iii) If the Borrower fails to make such payment when due, the Agent shall notify each applicable Lender of the applicable L/C Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Pro Rata Share thereof. (i) By the issuance of a Letter of Credit ~~shall be in~~ (or an amendment to a ~~stated amount of at least $5,000; and (iii) the Borrower may not request any~~ Letter of Credit ~~if, after giving effect to such issuance, (A~~increasing the amount thereof) ~~the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to~~by an Issuing Lender, and without any further action on the part of such Issuing Lender or the Lenders, such Issuing Lender hereby ~~irrevocably~~ grants to each Lender (other than the respective Issuing Lender), and ~~unconditionally agrees to~~each Lender (other than the respective Issuing Lender) hereby acquires from such Issuing Lender, ~~purchase from the Issuing Bank without recourse~~ a participation in ~~each~~ such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each ~~issuance~~ Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter Letters of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason circumstance whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) including any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence and continuance of any Event of Default or Unmatured Event of Default or reduction or termination of the applicable Total Commitments; provided that no Lender shall be required to purchase a participation in a Letter of Credit pursuant to this Section 2.10(d) if (x) the conditions set forth in Section 3.2 would not be satisfied in respect of a credit extension at the time such Letter of Credit was issued and (y) the Required Lenders shall have so notified such Issuing Lender in writing and shall not have subsequently determined that the circumstances giving rise to such conditions not being satisfied no longer exist; provided further that the obligation of the Lenders to participate in Letters of Credit issued prior to the Maturity Date and remaining outstanding thereafter shall continue solely to the extent that the Borrower shall have defaulted in its obligation to cash collateralize such Letters of Credit on the Maturity Date as required by Section 2.8(a). (ii) In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Agent, for account of the respective Issuing Lender, such Lender’s Pro Rata Share of each L/C Disbursement made by such Issuing Lender in respect of Letters of Credit promptly upon the request of such Issuing Lender at any time from the time of such L/C Disbursement until such L/C Disbursement is reimbursed or cash collateralized by the Borrower or at any time after any reimbursement payment or cash collateral is required to be refunded to the Borrower for any reason. Such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each such payment shall be made in the same manner as provided in Section 2.6(e) with respect to ~~the Borrower described in Section 8.1(g~~Loans made by such Lender (and Sections 2.6(e) or and (~~h). Such deposit~~ f) shall ~~be held by the Administrative Agent as collateral for~~ apply, mutatis mutandis, to the payment ~~and performance of the~~ obligations of the ~~Borrower under this Agreement. The Administrative~~ Lenders), and the Agent shall ~~have exclusive dominion and control, including~~ promptly pay to such Issuing Lender the ~~exclusive right of withdrawal, over such account~~amounts so received by it from the Lenders. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied Promptly following receipt by the ~~Administrative~~ Agent of any payment from the Borrower pursuant to ~~reimburse~~ Section 2.10(c), the Agent shall distribute such payment to such Issuing ~~Bank for LC Disbursements for which it had not been reimbursed and~~Lender or, to the extent that the Lenders have made payments pursuant to this paragraph to reimburse such Issuing Lender, then to such Lenders and such Issuing Lender as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse an Issuing Lender for any L/C Disbursement shall not ~~so applied,~~ constitute a Loan and shall ~~be held for the satisfaction of the reimbursement obligations of~~ not relieve the Borrower ~~for the LC Exposure at~~ of its obligation to reimburse such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waivedL/C Disbursement. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (ie) The Borrower’s obligation to reimburse LC L/C Disbursements ~~hereunder~~ as provided in paragraph (c) of this Section shall be absolute, unconditional and ~~irrevocable~~ irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of ~~any of the following circumstances:~~ (i) any lack of validity or enforceability of any Letter of ~~Credit~~ Credit, or ~~this Agreement;~~ any term or provision therein, (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; , (iviii) payment by the respective Issuing ~~Bank~~ Lender under a Letter of Credit against presentation of a draft or other document ~~to the Issuing Bank~~ that does not comply strictly with the terms of such Letter of Credit; , and (viv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge ~~of, or provide a right~~ of ~~set-off against,~~ the Borrower’s obligations ~~hereunder; or~~ hereunder (~~vi)~~ other than payment in full by the ~~existence of a Default or an Event of Default~~Borrower). Neither the ~~Administrative~~ Agent, the ~~Issuing Bank~~Lenders, any ~~Lender~~ Issuing Lender, any Agent-Related Person nor any Lender-Related ~~Party of any of the foregoing~~ Person, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit by an Issuing Lender or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to ~~above~~in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of ~~the~~ such Issuing ~~Bank~~Lender; provided that the foregoing shall not be construed to excuse ~~the~~ such Issuing ~~Bank~~ Lender from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by ~~the~~ such Issuing ~~Bank~~Lender’s ~~failure to exercise due care~~ gross negligence or willful misconduct when determining whether drafts or and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that~~, in the absence of gross negligence or willful misconduct on the part of the~~ : (i) an Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to Lender may accept documents ~~presented~~ that appear on their face to be in substantial compliance with the terms of a Letter of ~~Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents~~ Credit without responsibility for further investigation, regardless of any notice or information to the contrary, ~~or refuse to accept~~ and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit; (ii) an Issuing Lender shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit.; and (jiii) ~~Unless otherwise expressly agreed~~ this sentence shall establish the standard of care to be exercised by ~~the~~ an Issuing ~~Bank~~ Lender when determining whether drafts and ~~the Borrower when~~ other documents presented under a Letter of Credit ~~is issued~~ comply with the terms thereof (and ~~subject~~ the parties hereto hereby waive, to the extent permitted by applicable ~~laws~~law, any standard of care inconsistent with the foregoing). (if) ~~each standby Letter~~ Any and all charges, commissions, fees, and costs incurred by an Issuing Lender relating to Letters of Credit shall be ~~governed~~ Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrower to Agent for the ~~“International Standby Practices 1998”~~ account of such Issuing Lender; it being acknowledged and agreed by Borrower that, as of the Restatement Effective Date, the issuance charge imposed by an Issuing Lender is 0.25% per annum times the undrawn amount of each Letter of Credit, and that an Issuing Lender also imposes a schedule of charges for amendments, extensions, drawings, and renewals. (~~ISP98~~g) ~~(or such later revision as may~~ If the Borrower shall be ~~published by the Institute of International Banking Law & Practice on any date any~~ required to cash collateralize Letter of Credit ~~may be issued)~~Usage pursuant to Section 2.3, Section 2.8, Section 2.9 or Section 7.2, the Borrower shall immediately deposit into a segregated collateral account or accounts (~~ii) each documentary~~ herein, collectively, the “Letter of Credit ~~shall be governed by~~ Collateral Account”) in the ~~Uniform Customs~~ name and ~~Practices for Documentary Credits (2007 Revision), International Chamber~~ under the dominion and control of ~~Commerce Publication No. 600 (or such later revision as may be published by~~ the ~~International Chamber~~ Agent cash denominated in the currency of ~~Commerce on any date any~~ the Letter of Credit ~~may~~ under which such Letter of Credit Usage arises in an amount equal to the amount required under Section 2.3, Section 2.8(a), Section 2.9 or Section 7.2, as applicable. Such deposit shall be ~~issued~~held by the Agent as collateral in the first instance for the Letter of Credit Usage for the applicable Issuing Lender(s) under this Agreement, and ~~(iii)~~ for these purposes the Borrower ~~shall specify~~ hereby grants a security interest to the ~~foregoing in each letter of credit application submitted~~ Agent for the ~~issuance~~ benefit of a the Lenders and the other Issuing Lenders in the Letter of ~~Credit~~Credit Collateral Account and in any financial assets (as defined in the Uniform Commercial Code) or other property held therein.

Appears in 2 contracts

Samples: Amendment No. 6 (Ares Management Lp), Amendment No. 5 (Ares Management Lp)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.20(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower or any of its Subsidiaries on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.20(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (New York time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d) ~~or (e) of this Section~~ below on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.11(c). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement, or whether any Letter of Credit was issued for the account of any Subsidiary of Borrower; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.20, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and Practices for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600 (or such later revision~~ 500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing~~ this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 2 contracts

Samples: Revolving Credit Agreement (Tc Pipelines Lp), Revolving Credit Agreement (Northern Border Pipeline Co)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement, the Issuing ~~Bank, in reliance upon the agreements~~ Lender agrees to issue letters of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ credit for the account of Borrower (each, an “L/C”) or to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, an “L/C Undertaking”) with respect to letters of credit issued by an Underlying Issuer (as of the ~~Borrower on~~ Restatement Effective Date, the ~~terms~~ prospective Underlying Issuer is to be Xxxxx Fargo) for the account of Borrower. Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by an Authorized Person and ~~conditions hereinafter set forth; provided that~~ delivered to the Issuing Lender and Agent via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance satisfactory to the Issuing Lender in its Permitted Discretion and shall specify (i) ~~each Letter of Credit shall expire on~~ the ~~earlier of (A) the date one year after the date of issuance~~ amount of such Letter of ~~Credit~~ Credit, (orii) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (iii) the expiration date of such Letter of Credit, (iv) the name and address of the beneficiary thereof (or the beneficiary of the Underlying Letter of Credit, as applicable), and (v) such other information (including, in the case of ~~any renewal or extension thereof~~an amendment, ~~one year after such renewal~~ renewal, or extension, identification of the outstanding Letter of Credit to be so amended, renewed, or extended) ~~and~~ as shall be necessary to prepare, amend, renew, or extend such Letter of Credit. If requested by the Issuing Lender, Borrower also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The Issuing Lender shall have no obligation to issue a Letter of Credit if any of the following would result after giving effect to the issuance of such requested Letter of Credit: (Bi) the ~~date that is five (5) Business Days prior to~~ Letter of Credit Usage would exceed the ~~Stated Termination Date;~~ Borrowing Base less the outstanding amount of Advances, or (ii) ~~each~~ the Letter of Credit ~~shall be in a stated amount of at least~~ Usage would exceed $~~5,000; and~~ 7,500,000, or (iii) the ~~Borrower may not request any~~ Letter of Credit ~~if, after giving effect to such issuance, (A) the aggregate LC Exposure~~ Usage would exceed the ~~LC Commitment or (B)~~ Maximum Revolver Amount less the outstanding amount of Advances less the Bank Product Reserve, and less the aggregate amount of reserves, if any, established by Agent under Section 2.1(b). Borrower and the Lender Group acknowledge and agree that certain Underlying Letters of Credit ~~Exposure~~ may be issued to support letters of ~~all Lenders would exceed~~ credit that already are outstanding as of the ~~Aggregate Commitment Amount~~Closing Date. Each ~~Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each~~ Letter of Credit (and corresponding Underlying Letter of Credit) shall be in form and substance acceptable to the Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Lender is obligated to advance funds under a Letter of Credit, Borrower immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount equal to such ~~Lender’s Pro Rata Share~~ L/C Disbursement not later than 11:00 a.m., California time, on the date that such L/C Disbursement is made, if Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on the ~~aggregate amount available~~ Business Day that Borrower receives such notice, if such notice is received prior to ~~be drawn under such Letter of Credit~~ 10:00 a.m., California time, on the date of ~~issuance. Each issuance~~ receipt, and, in the absence of ~~a Letter of Credit~~ such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to ~~utilize~~ be an Advance hereunder and, initially, shall bear interest at the ~~Commitment~~ rate then applicable to Advances that are Base Rate Loans. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrower’s obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. Promptly following receipt by Agent of ~~each Lender by an amount equal~~ any payment from Borrower pursuant to this paragraph, Agent shall distribute such payment to the ~~amount of~~ Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.12(b) to reimburse the Issuing Lender, then to such ~~participation~~Lenders and the Issuing Lender as their interests may appear. (b) ~~To request~~ Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as if Borrower had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Lenders. By the issuance of a Letter of Credit (or ~~any amendment, renewal or extension of~~ an ~~outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior~~ amendment to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and~~ the Lenders with ~~respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse~~ Revolver Commitments, the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given~~ granted to each Lender with a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3Revolver Commitment, and each Lender ~~shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance~~ with ~~Section 2.5. The proceeds of such Borrowing~~ a Revolver Commitment shall be ~~applied directly by the Administrative Agent~~ deemed to ~~reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason~~ have purchased, a ~~Base Rate Borrowing may not be (as determined~~ participation in ~~the sole discretion~~ each Letter of ~~the Administrative Agent)~~Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Lender agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrower on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in Section 2.12(a), or of any reimbursement payment required to be refunded to Borrower for any reason. Each ~~Lender’s~~ Lender with a Revolver Commitment acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount equal to its ~~participation~~ respective Pro Rata Share of each L/C Disbursement made by the Issuing Lender pursuant to this Section 2.12(b) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in Section 3. If any such Lender fails to make available to Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, such Lender shall be deemed to be a Defaulting Lender and Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full. (c) Borrower hereby agrees to indemnify, ~~(iii)~~ save, defend, and hold the Lender Group harmless from any ~~adverse change~~ loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the ~~condition (financial~~ extent that it is caused by the gross negligence or ~~otherwise)~~ willful misconduct of the ~~Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower~~ Issuing Lender or any other ~~Lender, (v) any amendment, renewal or extension~~ member of the Lender Group. Borrower agrees to be bound by the Underlying Issuer’s regulations and interpretations of any Underlying Letter of Credit or by Issuing Lender’s interpretations of any L/C issued by Issuing Lender to or for Borrower’s account, even though this interpretation may be different from Borrower’s own, and Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Borrower understands that the L/C Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrower against such Underlying Issuer. Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (~~vi)~~ including reasonable attorneys fees), or liability incurred by the Lender Group under any L/C Undertaking as a result of the Lender Group’s indemnification of any Underlying Issuer; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of the Issuing Lender or any other ~~circumstance, happening or event whatsoever, whether or not similar to any~~ member of the ~~foregoing~~Lender Group. On Borrower hereby acknowledges and agrees that neither the ~~date that such participation is required to be funded, each~~ Lender Group nor the Issuing Lender shall ~~promptly transfer~~be responsible for delays, errors, or omissions resulting from the malfunction of equipment in ~~immediately available funds, the amount~~ connection with any Letter of ~~its participation~~ Credit. (d) Borrower hereby authorizes and directs any Underlying Issuer to deliver to the ~~Administrative~~ Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender’s instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application. (e) Any and all issuance charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrower to Agent for the account of the Issuing ~~Bank. Whenever~~Lender; it being acknowledged and agreed by Borrower that, ~~at any time after~~ as of the ~~Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement~~Restatement Effective Date, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed issuance charge imposed by the ~~Administrative Agent or~~ prospective Underlying Issuer is .825% per annum times the ~~Issuing Bank~~ undrawn amount of each Underlying Letter of Credit, that such issuance charge may be changed from time to ittime, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals. (f) To If by reason of (i) any change after the ~~extent that~~ Restatement Effective Date in any ~~Lender shall fail to pay~~ applicable law, treaty, rule, or regulation or any ~~amount required to be paid pursuant to subsection (d)~~ change in the interpretation or application thereof by any Governmental Authority, or (eii) compliance by the Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of ~~this Section on the due date therefor~~any Governmental Authority or monetary authority including, ~~such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to~~ Regulation D of the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders Reserve Board as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to ~~time, the Issuing Bank shall deliver to such Lender~~ time in effect (and any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:successor thereto): (i) any ~~lack of validity~~ reserve, deposit, or ~~enforceability~~ similar requirement is or shall be imposed or modified in respect of any Letter of Credit ~~or this Agreement;~~issued hereunder, or (ii) there shall be imposed on the ~~existence of any claim, set-off, defense~~ Underlying Issuer or ~~other right which~~ the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender ~~(including the Issuing Bank) or~~ Group any other ~~Person for whom such beneficiary or~~ condition regarding any ~~such transferee may be acting, whether in connection with this Agreement or the~~ Underlying Letter of Credit or any ~~document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a~~ Letter of Credit ~~proving to be forged~~issued pursuant hereto, ~~fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by~~ and the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any result of the foregoing ~~shall have any liability~~ is to increase, directly or ~~responsibility by reason~~ indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or ~~in connection with the issuance or transfer of~~ maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Borrower, and Borrower shall pay on demand such amounts as Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment ~~or failure~~ in full thereof at the rate then applicable to ~~make any payment thereunder (irrespective~~ Base Rate Loans hereunder. The determination by Agent of any of amount due pursuant to this Section, as set forth in a certificate setting forth the ~~circumstances referred to above)~~calculation thereof in reasonable detail, or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree thatshall, in the absence of ~~gross negligence~~ manifest or ~~willful misconduct~~ demonstrable error, be final and conclusive and binding on ~~the part~~ all of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credithereto. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Credit Agreement (Servicesource International LLC), Credit Agreement (Servicesource International LLC)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.22(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower or the Borrower’s Subsidiaries on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (New York time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraphs (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.13(c). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.22, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, performance under Letters of Credit by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by (i) ~~each standby Letter~~ either (x) the rules of ~~Credit shall be governed by~~ the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), ) or (iiy) ~~each documentary Letter~~ the rules of ~~Credit shall be governed by~~ the “Uniform Customs and Practices for Documentary ~~Credits~~ Credits” (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (~~iii~~ii) to the ~~Borrower shall specify~~ extent not inconsistent therewith, the ~~foregoing~~ governing law of this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 2 contracts

Samples: Revolving Credit Agreement (Tc Pipelines Lp), Revolving Credit and Term Loan Agreement (Tc Pipelines Lp)

Letters of Credit. (a) ~~During~~ Upon the ~~Availability Period~~terms and subject to the conditions herein set forth, the ~~Issuing~~ Borrowers may request a Fronting Bank, ~~in reliance upon~~ at any time and from time to time after the ~~agreements of~~ date hereof and prior to the ~~other Lenders pursuant~~ Termination Date, to ~~subsections (d) and (e) of this Section, may, in its sole discretion,~~ issue, at and, subject to the ~~request of the Borrower~~terms and conditions contained herein, ~~Letters of Credit~~ such Fronting Bank shall issue, for the account of the ~~Borrower on~~ Borrowers one or more Letters of Credit in support of obligations of the ~~terms and conditions hereinafter set forth;~~ Borrowers or one or more of the Subsidiaries, provided that no Letter of Credit shall be issued if after giving effect to such issuance (i) ~~each~~ the aggregate Letter of Credit Outstandings would exceed $150,000,000, or (ii) the Total Usage would exceed (x) prior to the expiration of the Interim Period, the Interim Commitment, (y) from and after the expiration of the Interim Period but prior to the Budget Acceptance Date, the lesser of (aa) the Available Commitment and (bb) the Borrowing Base, and (z) from and after the Budget Acceptance Date, the lesser of (cc) the Total Commitment and (dd) the Borrowing Base. (b) No Letter of Credit shall expire ~~on the earlier of~~ later than three hundred sixty-five (A365) ~~the date one year~~ days after the ~~date of issuance of such Letter of Credit (or~~Maturity Date, in provided that if the ~~case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days~~ Termination Date shall occur prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the ~~Issuing~~ Borrowers shall, at or prior to the Termination Date, except as the Administrative Agent may otherwise agree in writing, (i) cause all Letters of Credit which expire after the Termination Date to be returned to the Fronting Bank ~~will confirm with~~ undrawn and marked "canceled" or (ii) if the Borrowers are unable to do so in whole or in part, either (x) provide a "back-to-back" letter of credit to one or more Fronting Banks in a form satisfactory to such Fronting Bank and the Administrative Agent (in their exclusive discretion), issued by ~~telephone or in writing) that~~ a bank satisfactory to such Fronting Bank and the Administrative Agent ~~has received such notice~~(in their exclusive discretion), ~~and~~in an amount equal to the greater of (A) an amount, ~~if not,~~ as determined by the ~~Issuing~~ Fronting Bank ~~will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from~~ and the Administrative Agent, ~~on or before~~ equal to the ~~Business Day immediately preceding~~ face amount of all outstanding Letters of Credit plus the ~~date~~ sum of all projected contractual obligations to the ~~Issuing~~ Administrative Agent, the Fronting Bank ~~is to issue~~ and the ~~requested Letter~~ Lenders of the Borrowers thereunder through the expiration date(s) of such Letters of Credit, ~~directing~~ and (B) 105% of the ~~Issuing Bank not to issue~~ then undrawn stated amount of all outstanding Letters of Credit issued by such Fronting Banks and/or (y) deposit cash in the Letter of Credit ~~because such issuance is not~~ Account in an amount which, together with any amounts then ~~permitted hereunder because of~~ held in the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit Account, is equal to the greater of (A) an amount, as determined by the Fronting Bank and the Administrative Agent, equal to the face amount of all outstanding Letters of Credit plus the sum of all projected contractual obligations to the Administrative Agent, the Fronting Bank and the Lenders of the Borrowers thereunder through the expiration date(s) of such Letters of Credit, and (B) 105% of the then undrawn stated amount of all Letter of Credit Outstandings as collateral security for the Borrowers' reimbursement obligations in ~~accordance~~ connection therewith, such cash to be promptly remitted to the Borrowers upon the expiration, cancellation or other termination or satisfaction of such reimbursement obligations. (c) The Borrowers 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 ~~Issuing Bank’s usual~~ issuance and ~~customary business practices~~processing of the Letters of Credit 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) ~~The Issuing Bank shall examine all documents purporting to represent a demand for payment~~ Drafts drawn under a each Letter of Credit ~~promptly~~ shall be reimbursed by the Borrowers in Dollars not later than the first Business Day following ~~its receipt thereof~~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 1.75% and thereafter until reimbursed in full at a rate per annum equal to the Alternate Base Rate plus 3.75% (computed on the basis of the actual number of days elapsed over a year of 360 days). The ~~Issuing Bank~~ Borrowers shall ~~notify the Borrower and the Administrative Agent of~~ effect such ~~demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving~~ reimbursement (x) if such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately draw occurs prior to the Termination Date (or the earlier date ~~on which such drawing is honored that~~ of termination of the ~~Borrower intends to reimburse~~ Total Commitment), in cash or through a Borrowing of Loans without the ~~Issuing Bank for the amount~~ satisfaction of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section ~~3.2 hereof~~ 4.2 or (y) if such draw occurs on or after the Termination Date (or the earlier date of termination of the Total Commitment), in cash. Each Lender 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 Section 2.29. (e) Immediately upon the issuance of any Letter of Credit by any Fronting Bank, such Fronting Bank shall be deemed to have sold to each Lender other than such Fronting Bank and each such other Lender shall be deemed unconditionally and irrevocably to have purchased from such Fronting Bank, without recourse or warranty, an undivided interest and participation, to the extent of such Lender's Commitment Percentage, in such Letter of Credit, each drawing thereunder and the obligations of the Borrowers under this Agreement with respect thereto. Upon any change in the Commitments pursuant to Section 9.3, it is hereby agreed that with respect to all Letter of Credit Outstandings, there shall be an automatic adjustment to the participations hereby created to reflect the new Commitment Percentages of the assigning and assignee Lenders. 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 ~~be applicable. The Administrative Agent~~ create for such Fronting Bank any resulting liability to any other Lender. (f) In the event that a Fronting Bank makes any payment under any Letter of Credit and the Borrowers shall not have reimbursed such amount in full to such Fronting Bank pursuant to this Section, the Fronting Bank shall promptly notify the ~~Lenders~~ Administrative Agent, which shall promptly notify each Lender of such ~~Borrowing in accordance with Section 2.3~~failure, and each Lender shall ~~make the proceeds of its Base Rate Loan included in such Borrowing available~~ promptly and unconditionally pay to the Administrative Agent for the account of the ~~Issuing~~ Fronting Bank ~~in accordance with Section 2.5. The proceeds~~ the amount of such ~~Borrowing shall be applied directly by~~ Lender's Commitment Percentage of such unreimbursed payment in Dollars and in same day funds. If the Fronting Bank so notifies the Administrative Agent, and the Administrative Agent so notifies the Lenders prior to ~~reimburse~~ 12:00 p.m. (New York City time) on any Business Day, such Lenders shall make available to the ~~Issuing~~ Fronting Bank ~~for~~ such ~~LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion~~ Lender's Commitment Percentage of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of such payment on such Business Day in same day funds. If and to the extent such Lender shall not have so made its ~~participation~~ Commitment Percentage of the amount of such payment available to the Fronting Bank, such Lender 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 Administrative Agent for the account of ~~the Issuing Bank. Whenever,~~ such Fronting Bank at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate~~; provided that if such~~ . The failure of any Lender ~~shall fail~~ to make ~~such payment~~ available to the ~~Issuing~~ Fronting Bank ~~within three (3) Business Days~~ its Commitment Percentage of ~~such due date, then, retroactively~~ any payment under any Letter of Credit shall not relieve any other Lender of its obligation hereunder to make available to the ~~due date~~Fronting Bank its Commitment Percentage of any payment under any Letter of Credit on the date required, ~~such~~ as specified above, but no Lender shall be ~~obligated~~ responsible for the failure of any other Lender to make available to such Fronting Bank such other Lender'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 Lenders pursuant to this paragraph, such Fronting Bank shall pay ~~interest on~~ to each Lender which has paid its Commitment Percentage thereof, in Dollars and in same day funds, an amount equal to such ~~amount at the rate set forth in Section 2.12(b)~~Lender's Commitment Percentage thereof. (g) ~~If any Event of Default~~ Unless otherwise requested by the Administrative Agent, each Fronting Bank shall ~~occur and be continuing,~~ report in writing to the Administrative Agent (i) on the first Business Day of each week, the daily activity (set forth by day) in respect of Letters of Credit during the immediately preceding week, including all issuances, extensions, amendments and renewals, all expirations and cancellations and all disbursements and reimbursements, (ii) on or prior to each Business Day on which such Fronting Bank expects to issue, amend, renew or extend any Letter of Credit, the date of such issuance, amendment, renewal or extension and the aggregate face amount of the Letters of Credit to be issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension (and whether the amount thereof changed), it being understood that such Fronting Bank shall not permit any issuance, renewal, extension or amendment resulting in an increase in the ~~Borrower receives notice~~ amount of a Letter of Credit to occur without first obtaining written confirmation from the Administrative Agent ~~or the Required Lenders demanding~~ that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower it is then permitted under this Agreement~~. The Administrative Agent shall have exclusive dominion and control~~, ~~including the exclusive right of withdrawal, over~~ (iii) on each Business Day on which such ~~account. The Borrower agrees to execute~~ Fronting Bank makes any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower payment under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of ~~Credit or this Agreement;~~ Credit, the date of such payment and the amount of such payment, (iiiv) ~~the existence of~~ on any ~~claim, set-off, defense or other right~~ Business Day on which ~~the~~ a Borrower ~~or any Subsidiary or Affiliate of the Borrower may have at any time against~~ fails to reimburse a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented payment under a Letter of Credit ~~proving~~ required to be ~~forged~~reimbursed to such Fronting Bank on such day, ~~fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by~~ the ~~Issuing Bank under a Letter~~ date of ~~Credit against presentation of a draft or other document to~~ such failure, the ~~Issuing Bank that does not comply with~~ applicable Borrower and the ~~terms~~ amount and currency of such Letter of ~~Credit;~~ Credit payment and (v) on any other ~~event or circumstance whatsoever~~Business Day, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither such other information as the Administrative ~~Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing~~ Agent shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Creditreasonably request. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 2 contracts

Samples: Revolving Credit Agreement (Interstate Bakeries Corp/De/), Revolving Credit Agreement (Interstate Bakeries Corp/De/)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.22(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~50,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate ~~Credit Exposure~~ LC Exposure, plus the aggregate outstanding Revolving Loans and Swingline Loans of all Lenders would exceed the Aggregate Revolving Commitment Amount. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (New York time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.22 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each Fiscal Quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and Practices for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600 (or such later revision~~ 500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing~~ this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 2 contracts

Samples: Revolving Credit Agreement (Landamerica Financial Group Inc), Revolving Credit Agreement (Landamerica Financial Group Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to ~~utilize~~ have been issued by the ~~Commitment~~ Issuing Bank hereunder on the Closing Date. The stated maturity of ~~each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a~~ any Letter of Credit may be extended or the terms thereof may be modified or amended on not less than three Business Days’ prior written notice thereof to the Administrative Agent (~~or any amendment~~which shall promptly distribute copies thereof to the Lenders) and the Issuing Bank; provided, ~~renewal or~~ however, that no such notice shall be required in connection with the automatic extension of an ~~outstanding~~ Evergreen Letter of Credit~~), the Borrower~~ . Each such notice shall ~~give the Issuing Bank and the Administrative Agent irrevocable written notice at least three~~ specify (3i) ~~Business Days prior to the requested date of such issuance specifying~~ the date (which shall be a Business Day, but in no event later than the date that occurs five Business Days prior to the Termination Date) of effectiveness of such ~~Letter of Credit is to be issued (~~extension, modification or ~~amended~~amendment and, ~~renewed or extended, as~~ in the case ~~may be), the expiration date~~ of ~~such~~ any extension of a Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance new stated expiry date of such Letter of Credit (which shall be no later than one year from the date of effectiveness of such extension, subject, in the case of any Evergreen Letter of Credit, to automatic annual renewal or ~~any amendment which increases the amount~~ extension) and (ii) such other information as shall demonstrate compliance of such Letter of ~~Credit) will~~ Credit with the requirements specified therefor in this Agreement. Each such notice shall be ~~subject~~ irrevocable unless modified or rescinded by the Borrower not less than one Business Day prior to the ~~further~~ proposed date of effectiveness specified therein. Not later than 12:00 noon on the proposed date of effectiveness specified in such notice, and upon fulfillment of the applicable conditions ~~that~~ precedent and the other requirements set forth herein, the Issuing Bank shall extend, amend or modify such Letter of Credit and provide notice and a copy thereof to the Administrative Agent, which shall ~~be in such form and contain such terms as~~ promptly furnish copies thereof to the Lenders. (b) Each Lender severally agrees with the Issuing Bank ~~shall approve and that~~ to participate in the ~~Borrower shall have executed and delivered any additional applications~~Extension of Credit resulting from the deemed issuance (or extension, ~~agreements and instruments relating to such~~ modification or amendment) of each Letter of ~~Credit as the Issuing Bank shall reasonably require; provided that~~ Credit, in the ~~event of any conflict between such applications, agreements or instruments~~ manner and ~~this Agreement,~~ the ~~terms of this Agreement shall control~~amount provided in Section 3.02(b). (c) ~~At least two~~ In the event that any Letters of Credit may or will be outstanding on or after the Termination Date, the Borrower shall either (2i) ~~Business Days prior~~ pay to the ~~issuance~~ Administrative Agent no later than the Business Day immediately preceding the Termination Date, in immediately available funds, an amount equal to the aggregate LC Outstandings of ~~any Letter~~ all Letters of ~~Credit~~Credit that may or will be outstanding on the Termination Date that have a stated expiry date on or after such date (including all Evergreen Letters of Credit that are or may be outstanding on the Termination Date), which amount shall be held by the Administrative Agent (for its benefit and the benefit of the Issuing Bank and the Lenders) as cash collateral, pursuant to a cash collateral agreement in form and substance satisfactory to the Administrative Agent, the Issuing Bank ~~will confirm~~ and the Lenders, to secure LC Outstandings and the Borrower’s reimbursement obligations with ~~the Administrative Agent~~ respect thereto, or (~~by telephone or in writing~~ii) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the ~~date~~ Termination Date, enter into a new credit facility that would (A) refinance and replace this Agreement in its entirety and (B) deem all Letters of Credit then outstanding to have been issued pursuant to, and be governed by, such new credit facility, provided that the lenders thereunder shall be Eligible Assignees or otherwise satisfactory to the Issuing Bank ~~is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth~~ in ~~subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to~~ its sole and absolute discretion and the terms and conditions ~~hereof,~~ of such new credit facility shall be satisfactory to the Issuing Bank in its sole and absolute discretion. The Issuing Bank shall, on in the ~~requested date, issue such~~ case of any Evergreen Letter of Credit ~~in accordance with~~ that remains outstanding under this Agreement on or after the ~~Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting~~ Termination Date, as soon as possible on or after such date, provide written notice to ~~represent a demand for payment under a~~ the beneficiary of such Evergreen Letter of Credit ~~promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether~~ stating that the Issuing Bank ~~has made~~ elects not to renew or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving~~ extend such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Evergreen Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms then-scheduled expiry date thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Letter of Credit and Reimbursement Agreement (Duquesne Light Holdings Inc)

Letters of Credit. (a) ~~During the Availability Period, the Issuing Bank, in reliance~~ Subject to and upon the ~~agreements~~ terms and conditions contained herein and in the Letter of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue~~Credit Documents, at the request of ~~the~~ a Borrower (or Administrative Borrower on behalf of such Borrower), ~~Letters of Credit~~ Agent agrees to cause Issuing Bank to issue, and Issuing Bank agrees to issue, for the account of such Borrower one or more Letters of Credit, for the ~~Borrower on the~~ ratable risk of each Lender according to its Pro Rata Share, containing terms and conditions ~~hereinafter set forth; provided that~~ acceptable to Agent and Issuing Bank. (ib) ~~each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of~~ The Borrower requesting such Letter of Credit (~~or, in the case~~ or Administrative Borrower on behalf of ~~any renewal or extension thereof, one year after~~ such ~~renewal or extension~~Borrower) shall give Agent and Issuing Bank three (~~B) the date that is five (5~~3) Business ~~Days~~ Days’ prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount written notice of such ~~participation. (b) To~~ Borrower’s request for the issuance of a Letter of ~~Credit (or any amendment, renewal or extension~~ Credit. Such notice shall be irrevocable and shall specify the original face amount of ~~an outstanding~~ the Letter of ~~Credit)~~Credit requested, the ~~Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the~~ effective date (which date shall be a Business ~~Day~~Day and in no event shall be a date less than ten (10) days prior to the end of the then current term of this Agreement) of issuance of such requested Letter of Credit, whether such Letter of Credit may be drawn in a single or in partial draws, the date on which such requested Letter of Credit is to expire (which date shall be a Business Day and shall not be more than one (1) year from the date of issuance; provided, that, such Letters of Credit may provide for their automatic renewal in one (1) year intervals), the purpose for which such Letter of Credit is to be ~~issued (or amended~~issued, ~~renewed or extended, as~~ and the ~~case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address~~ beneficiary of the ~~beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such~~ requested Letter of Credit. ~~In addition to~~ The Borrower requesting the ~~satisfaction of the conditions in Article III, the issuance of such~~ Letter of Credit (or ~~any amendment which increases the amount~~ Administrative Borrower on behalf of such Borrower) shall attach to such notice the proposed terms of the Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit shall, for purposes hereof be treated in all respects the same as the issuance of a new Letter of Credit hereunder. (c) In addition to being subject to the satisfaction of the applicable conditions precedent contained in Section 4 hereof and the other terms and conditions contained herein, no Letter of Credit shall be available unless each of the following conditions precedent have been satisfied in a manner satisfactory to Agent: (i) the Borrower requesting such Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall have delivered to Issuing Bank at such times and in such manner as Issuing Bank may require, an application, in form and substance reasonably satisfactory to Issuing Bank and Agent, for the issuance of the Letter of Credit and such other Letter of Credit Documents as may be required pursuant to the terms thereof, and the form and terms of the proposed Letter of Credit shall be satisfactory to Agent and Issuing Bank, (viii) as of the date of issuance, no order of any court, arbitrator or other ~~circumstance~~Governmental Authority shall purport by its terms to enjoin or restrain money center banks generally from issuing letters of credit of the type and in the amount of the proposed Letter of Credit, ~~happening~~ and no law, rule or ~~event whatsoever,~~ regulation applicable to money center banks generally and no request or directive (whether or not ~~similar~~ having the force of law) from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that Issuing Bank refrain from, the issuance of letters of credit generally or the issuance of such Letter of Credit, (iii) after giving effect to the issuance of such Letter of Credit, the Letter of Credit Obligations shall not exceed the Letter of Credit Limit, and (iv) Excess Availability, prior to giving effect to any Reserves with respect to such Letter of Credit, on the date of the ~~foregoing. On~~ proposed issuance of any Letter of Credit shall be equal to or greater than: (A) if the ~~date that such participation~~ proposed Letter of Credit is ~~required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent~~ for the ~~account~~ purpose of purchasing Eligible Inventory and the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the documents of title with respect thereto are consigned to Issuing Bank, as the ~~case may be, will distribute~~ sum of (1) the percentage equal to ~~such Lender its Pro Rata Share~~ one hundred (100%) percent minus the then applicable percentage with respect to Eligible Inventory set forth in the definition of the term Borrowing Base multiplied by the Value of such ~~payment; provided that~~ Eligible Inventory, plus (2) freight, taxes, duty and other amounts which Agent estimates must be paid in connection with such Inventory upon arrival and for delivery to one of Borrowers’ locations for Eligible Inventory within the United States of America and (B) if ~~such payment~~ the proposed Letter of Credit is ~~required to be returned~~ for any ~~reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent~~ other purpose or the documents of title are not consigned to Issuing Bank ~~any portion thereof previously distributed by~~ in connection with a Letter of Credit for the ~~Administrative Agent or~~ purpose of purchasing Inventory, an amount equal to one hundred (100%) percent of the ~~Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e)~~ Letter of ~~this Section~~ Credit Obligations with respect thereto. Effective on the ~~due date therefor~~issuance of each Letter of Credit, ~~such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at~~ a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender Reserve shall be ~~obligated to pay interest on such~~ established in the applicable amount ~~at the rate~~ set forth in Section ~~2.12(b~~2.2(c)(iv)(A) or Section 2.2(c)(iv)(B). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect . Notwithstanding anything to the ~~Letters~~ contrary contained herein, Issuing Bank shall not be obligated to issue a Letter of Credit ~~be Cash Collateralized pursuant to this subsection, the Borrower shall deposit~~ in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of ~~the~~ a Borrower ~~under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right~~ or Guarantor arising in connection with a lease of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the BorrowerReal Property or an employment contract. (d) Except in Agent’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerateddiscretion, with the consent of ~~the Required~~ all Lenders, ~~be applied to satisfy other obligations~~ the amount of ~~the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters~~ all outstanding Letter of Credit ~~as a result~~ Obligations shall not at any time exceed the Letter of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waivedCredit Limit. (he) ~~Upon the request of any Lender, but no more frequently than quarterly, the~~ Each Borrower shall reimburse immediately Issuing Bank ~~shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of~~ for any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement draw under ~~all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of~~ any Letter of Credit ~~or this Agreement; (ii)~~ issued for the ~~existence~~ account of such Borrower and pay Issuing Bank the amount of all other charges and fees payable to Issuing Bank in connection with any Letter of Credit issued for the account of such Borrower immediately when due, irrespective of any claim, ~~set-off~~setoff, defense or other right which ~~the Borrower or any Subsidiary or Affiliate of the~~ such Borrower may have at any time against ~~a beneficiary~~ Issuing Bank or any ~~transferee~~ other Person. Each drawing under any Letter of Credit or other amount payable in connection therewith when due shall constitute a request by the Borrower for whose account such Letter of Credit was issued to Agent for a Base Rate Loan in the amount of such drawing or other amount then due, and shall be made by Agent on behalf of Lenders as a Revolving Loan (or Special Agent Advance, as the case may be). The date of such Loan shall be the date of the drawing or as to other amounts, the due date therefor. Any payments made by or on behalf of Agent or any Lender to Issuing Bank and/or related parties in connection with any Letter of Credit shall constitute additional Revolving Loans to such Borrower pursuant to this Section 2 (or Special Agent Advances as the case may be). (f) Borrowers and Guarantors shall indemnify and hold Agent and Lenders harmless from and against any and all losses, claims, damages, liabilities, costs and expenses which Agent or any Lender may suffer or incur in connection with any Letter of Credit and any documents, drafts or acceptances relating thereto, including any losses, claims, damages, liabilities, costs and expenses due to any action taken by Issuing Bank or correspondent with respect to any Letter of Credit, except for such losses, claims, damages, liabilities, costs or expenses that are a direct result of the gross negligence or willful misconduct of Agent or any Lender as determined pursuant to a final non-appealable order of a court of competent jurisdiction. Each Borrower and Guarantor assumes all risks with respect to the acts or omissions of the drawer under or beneficiary of any Letter of Credit (and for such purposes the drawer or ~~any Persons or entities for whom any~~ beneficiary shall be deemed such ~~beneficiary or transferee may be acting)~~Borrower’s agent. Each Borrower and Guarantor assumes all risks for, ~~any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting~~and agrees to pay, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forgedall foreign, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoeverFederal, ~~whether or not similar~~ State and local taxes, duties and levies relating to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of goods subject to any Letter of Credit or any ~~payment~~ documents, drafts or ~~failure~~ acceptances thereunder. Each Borrower and Guarantor hereby releases and holds Agent and Lenders harmless from and against any acts, waivers, errors, delays or omissions with respect to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of ~~Credit (including any document required to make a drawing thereunder)~~Credit, ~~any error in interpretation of technical terms or any consequence arising from causes beyond~~ except for the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct ~~on the part~~ of ~~the Issuing Bank (~~Agent or any Lender as ~~finally~~ determined by pursuant to a final, non-appealable order of a court of competent jurisdiction), . The provisions of this Section 2.2(f) shall survive the ~~Issuing Bank shall be deemed~~ payment of Obligations and the termination of this Agreement. (g) In connection with Inventory purchased pursuant to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a any Letter of Credit, ~~the~~ Borrowers and Guarantors shall, at Agent’s request, instruct all suppliers, carriers, forwarders, customs brokers, warehouses or others receiving or holding cash, checks, Inventory, documents or instruments in which Agent holds a security interest that upon Agent’s request, such items are to be delivered to Agent and/or subject to Agent’s order, and if they shall come into such Borrower’s or Guarantor’s possession, to deliver them, upon Agent’s request, to Agent in their original form. Except as otherwise provided herein, Agent shall not exercise such right to request such items so long as no Default or Event of Default shall exist or have occurred and be continuing. Except as Agent may otherwise specify, Borrowers and Guarantors shall designate Issuing Bank ~~may~~as the consignee on all bills of lading and other negotiable and non-negotiable documents. (h) Each Borrower and Guarantor hereby irrevocably authorizes and directs Issuing Bank to name such Borrower or Guarantor as the account party therein and to deliver to Agent all instruments, ~~in its sole discretion, either accept~~ documents and ~~make payment upon such documents without responsibility for further investigation, regardless of any notice or information~~ other writings and property received by Issuing Bank pursuant to the ~~contrary, or refuse~~ Letter of Credit and to accept and ~~make payment~~ rely upon ~~such documents if such documents are not~~ Agent’s instructions and agreements with respect to all matters arising in ~~strict compliance~~ connection with the ~~terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a~~ Letter of Credit ~~is issued and subject to applicable laws, (i) each standby~~ or the Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.Documents with respect

Appears in 1 contract

Samples: Loan and Security Agreement (Lighting Science Group Corp)

Letters of Credit. (a) ~~During~~ Subject to the terms and conditions set forth herein, in addition to the Loans provided for herein, from time to time during the Availability Period, ~~the~~ any Borrower may request any Issuing ~~Bank, in reliance upon the agreements of the other Lenders pursuant~~ Lender to ~~subsections (d) and (e) of this Section, may, in its sole discretion,~~ issue, at and such Issuing Lender shall issue (unless the ~~request of~~ Required Lenders shall have asserted that the ~~Borrower~~conditions set forth in Section 4.02 with respect to such issuance are not satisfied), Letters of Credit denominated in dollars for the account of ~~the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of~~ such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Borrower. Each Letter of Credit shall be in ~~a stated amount of at least $5,000;~~ such form as shall be acceptable to the Administrative Agent and ~~(iii)~~ the ~~Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the~~ relevant Issuing Lender in its reasonable determination. The aggregate LC Exposure ~~would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender~~ shall ~~be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse~~ constitute a ~~participation in each Letter of Credit equal to such Lender’s Pro Rata Share~~ utilization of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participationCommitments. (b) To request the issuance of a Letter of Credit (or ~~any~~ the amendment, renewal or extension of an outstanding Letter of ~~Credit~~Credit (other than an automatic renewal permitted pursuant to clause (d) of this Section)), the applicable Borrower shall ~~give~~ deliver by hand or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the relevant Issuing ~~Bank~~ Lender of such Letter of Credit) to such Issuing Lender and the Administrative Agent ~~irrevocable written notice at least three~~ (~~3) Business Days prior to~~ reasonably in advance of the requested date of ~~such~~ issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day) ), the date on which such Letter of Credit is to ~~be issued~~ expire (~~or amended, renewed or extended, as the case may be~~which shall comply with clause (d) of this Section)~~, the expiration date of such Letter of Credit~~, the amount of such Letter of Credit, that such Letter of Credit is to be denominated in dollars, the name of the account party (which shall be a Borrower or a Subsidiary and a Borrower as co-applicants), the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and It is understood that the ~~Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter~~ reinstatement of ~~Credit as the Issuing Bank shall reasonably require; provided that in the event~~ all or a portion of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the ~~Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent~~ terms thereof following a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice drawing thereunder shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in constitute an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter ~~of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge~~ of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (Tyson Foods Inc)

Letters of Credit. (a) ~~During~~ Upon the ~~Availability Period~~terms and subject to the conditions herein set forth, the Borrower may request the Issuing Bank, ~~in reliance upon~~ at any time and from time to time after the ~~agreements of~~ date hereof and prior to the ~~other Lenders pursuant~~ Termination Date, to ~~subsections (d) and (e) of this Section, may, in its sole discretion,~~ issue, at and subject to the ~~request of~~ terms and conditions contained herein, the ~~Borrower~~Issuing Bank shall issue, ~~Letters of Credit~~ for the account of the Borrower ~~on the terms and conditions hereinafter set forth~~one or more Letters of Credit; ~~provided~~ PROVIDED that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each no Letter of Credit shall be ~~in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if,~~ issued if after giving effect to such ~~issuance~~issuance (i)the aggregate Letter of Credit Outstandings shall exceed $125,000,000, or (~~A) the~~ ii)the aggregate ~~LC Exposure~~ Credit Extensions would exceed the ~~LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to,~~ limitation set forth in Section 2.01(a)(1); and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a PROVIDED FURTHER that no Letter of Credit shall be ~~deemed~~ issued if the Issuing Bank shall have received notice from the Administrative Agent or the Required Lenders that the conditions to ~~utilize the Commitment of each Lender by an amount equal to the amount of~~ such ~~participation~~issuance have not been met. (b) ~~To request the issuance of a~~ No Letter of Credit shall have an Expiry Date later than the 90th day after the Maturity Date. In the case of each Letter of Credit issued with an expiry date later than the Termination Date, the Borrower shall, on or prior to the Termination Date, either (i)cause such Letter of Credit to be returned to the Issuing Bank undrawn and marked "cancelled" and otherwise discharged in a manner satisfactory to the Issuing Bank or ~~any amendment, renewal or extension of an outstanding~~ (ii)if the Borrower is unable to return and discharge such Letter of Credit), ~~the Borrower shall give~~ either (x)provide a "back-to-back" letter of credit issued by a bank and on terms in form and substance satisfactory to the Issuing Bank and the Administrative Agent ~~irrevocable written notice~~ (in their sole and absolute discretion), in an amount equal to 105% of the undrawn amount of such Letter of Credit or (y)deposit cash in the Cash Collateral Account in an amount equal to 105% of the undrawn amount under such Letter of Credit. (c) The Borrower shall pay to the Administrative Agent, for the account of the Issuing Bank and in addition to all Letter of Credit Fees provided for in Section 2.21, a fronting fee equal to 0.125% per annum of the average daily balance of the maximum amount that at ~~least three~~ any time is available for drawing or payment under each Letter of Credit, payable quarterly in arrears, as well as such fees and charges in connection with the issuance, negotiation, settlement, amendment and processing of each Letter of Credit issued by the Issuing Bank as are customarily imposed by the Issuing Bank from time to time in connection with letter of credit transactions. (3d) Drafts drawn under each Letter of Credit shall be reimbursed by the Borrower in Dollars not later than the first Business ~~Days~~ 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 and thereafter until reimbursed in full at a rate per annum equal to the Alternate Base Rate PLUS 2.00% per annum (computed on the basis of the actual number of days elapsed over any year of 360 days). The Borrower shall effect such reimbursement (x)if such draw occurs prior to the ~~requested~~ Termination Date (or the earlier date of termination of the Total Commitment), through a Borrowing of Loans 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 (or the earlier date of termination of the Total Commitment), in cash. Each Lender agrees to fund its Commitment Percentage of the Loans described in clause (x) of the preceding sentence notwithstanding a failure to satisfy the applicable lending conditions thereto or the provisions of Sections 2.01 and 2.02 or the occurrence of the Termination Date. (e) Immediately upon the issuance of any Letter of Credit by the Issuing Bank, the Issuing Bank shall be deemed to have sold to each Lender and each such Lender shall be deemed unconditionally and irrevocably to have purchased from the Issuing Bank, without recourse or warranty, an undivided interest and participation, to the extent of such Xxxxxx's Commitment Percentage, in 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 Commitments pursuant to Section 10.03, it is hereby agreed that with respect to all Letter of Credit Outstandings, there shall be an automatic adjustment to the participations hereby created to reflect the new Commitment Percentages of the assigning and assignee Lenders. Any action taken or omitted by the Issuing Bank under or in connection with a Letter of Credit, if taken or omitted in the absence of gross negligence or wilful misconduct, shall not create for the Issuing Bank any resulting liability to any Lender. (f) In the event that the Issuing Bank makes any payment under any Letter of Credit and the Borrower shall not have reimbursed such amount in full to the Issuing Bank pursuant to this Section 2.02, the Issuing Bank shall promptly notify the Administrative Agent, which shall promptly notify each Lender of such failure, and each Lender shall promptly and unconditionally pay to the Administrative Agent for the account of the Issuing Bank the amount of such Xxxxxx's Commitment Percentage of such unreimbursed payment in Dollars and in same day funds. If the Issuing Bank so notifies the Administrative Agent, and the Administrative Agent so notifies the Lenders prior to 11:00 a.m., Boston time, on any Business Day, each such Lender shall make available to the Issuing Bank such Xxxxxx's Commitment Percentage of the amount of such payment on such Business Day in same day funds. If and to the extent such Lender shall not have so made its Commitment Percentage of the amount of such payment available to the Issuing Bank, such Lender agrees to pay to the Issuing 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 Administrative Agent for the account of the Issuing Bank at the Federal Funds Effective Rate. The failure of any Lender to make available to the Issuing Bank its Commitment Percentage of any payment under any Letter of Credit shall neither relieve any Lender of its obligation hereunder to make available to the Issuing Bank its Commitment Percentage of any payment under any Letter of Credit on the date required, as specified above, nor increase the obligation of such other Lender. Whenever any Lender has made payments to the Issuing Bank in respect of any reimbursement obligation for any Letter of Credit, such Lender shall be entitled to share ratably, based on its Commitment Percentage, in all payments and collections thereafter received on account of such reimbursement obligation. (g) Whenever the Borrower desires that the Issuing Bank issue a Letter of Credit, it shall give to the Issuing Bank at least two Business Days' prior written (including telegraphic, telex, facsimile or cable communication) notice (or such shorter period as may be agreed upon in writing by the Issuing Bank and the Borrower) specifying the date (on which ~~shall be a Business Day) such~~ the proposed Letter of Credit is to be issued (~~or amended~~which shall be a Business Day), ~~renewed or extended, as~~ the ~~case may be)~~stated amount of the Letter of Credit so requested, the expiration date ~~of such Letter of Credit, the amount~~ of such Letter of Credit, the name and address of the beneficiary ~~thereof~~ thereof, and ~~such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to~~ the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall controlprovisions thereof. (ch) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because The obligations of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, drawings made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of under any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be ~~performed~~ paid strictly in accordance with the terms of this Agreement under all ~~circumstances whatsoever~~ circumstances, including, without limitation (it being understood that any such payment by the Borrower shall be without prejudice to, and ~~irrespective~~ shall not constitute a waiver of, any rights the Borrower might have or might acquire as a result of the payment by the Issuing Bank of any of draft or the ~~following circumstances:~~reimbursement by the Borrower thereof): (i) any lack of validity or enforceability of any Letter of ~~Credit or this Agreement;~~ Credit; (~~ii) the~~ ii)the existence of any claim, ~~set-off~~setoff, defense or other right which the Borrower or any ~~Subsidiary or Affiliate of the Borrower~~ Guarantor may have at any time against a beneficiary ~~or any transferee~~ of any Letter of Credit (or against any ~~Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including~~ of the ~~Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting~~Lenders, whether in connection with this ~~Agreement or~~ Agreement, the ~~Letter of Credit or any document related hereto or thereto~~ transactions contemplated herein or any unrelated transaction; ; (~~iii) any draft~~ iii)any draft, demand, certificate or other document presented under a any Letter of Credit proving to be forged, ~~fraudulent~~ fraudulent, invalid or ~~invalid~~ insufficient in any respect or any statement therein being untrue or inaccurate in any respect; ; (~~iv) payment~~ iv)payment by the Issuing Bank ~~under a~~ of any Letter of Credit against presentation of a demand, draft or certificate or other document ~~to the Issuing Bank that~~ which does not comply with the terms of such Letter of Credit; ; (~~v) any~~ v)any other ~~event~~ circumstance or ~~circumstance~~ happening whatsoever, whether or not similar to any of the foregoing, ; or (vi)the fact that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an any Event of ~~Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing~~ Default shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not occurred and be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Creditcontinuing. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Revolving Credit and Guaranty Agreement (Bradlees Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.22(e), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~500,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in ~~Article~~ ARTICLE III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a) of this~~ Section 3.2 or that one or more conditions specified in ~~Article~~ ARTICLE III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to ~~11:00 a.m.~~ 1:00 p.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.in

Appears in 1 contract

Samples: Credit Agreement (Piper Jaffray Companies)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement (including without limitation the provisions of Article III and this Section 2.10(a)), upon the request of Borrower made in accordance herewith not later than seven (7) days before the Maturity Date, the Issuing ~~Bank~~Lender shall issue letters of credit denominated in Dollars for the account of Borrower and, if requested by Borrower, for the benefit of one of its Affiliates (each, a “Letter of Credit”), and, subject to the provisions of Section 2.1(a)(iii), the Issuing Lender shall amend, renew or extend any Letter of Credit. Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by any of the individuals identified on Exhibit R-1 attached hereto (or, in ~~reliance upon~~ certain cases, two of such individuals, all as set forth in further detail in Exhibit R-1 attached hereto) and delivered to the ~~agreements~~ Issuing Lender and Agent via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the ~~other Lenders pursuant~~ requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance satisfactory to ~~subsections (d) and (e) of this Section, may,~~ the Issuing Lender in its sole ~~discretion~~and absolute discretion and shall specify (i) the amount of such Letter of Credit, ~~issue~~(ii) the date of issuance, at amendment, renewal, or extension of such Letter of Credit, (iii) the ~~request~~ expiration of such Letter of Credit, (iv) the name and address of the beneficiary thereof, (v) the identity of Borrower~~, Letters~~ ’s Affiliate for whose benefit such Letter of Credit shall be issued in the event that Borrower requests that the issuing Lender issue a Letter of Credit for the ~~account~~ benefit of one of its Affiliates, and (vi) such other information (including, in the case of an amendment, renewal, or extension, identification of the ~~Borrower on the terms and conditions hereinafter set forth; provided that (i) each~~ outstanding Letter of Credit to be so amended, renewed, or extended) as shall ~~expire on~~ be necessary to prepare, amend, renew, or extend such Letter of Credit. It is hereby acknowledged that the ~~earlier~~ Issuing Lender shall have no obligation to issue a Letter of Credit (A) if, after giving effect to the ~~date~~ issuance of such requested Letter of Credit, (1) the Letter of Credit Usage would exceed $25,000,000, or (2) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the amount of the Revolving Credit Facility Usage, (B) at any time when one ~~year after~~ or more of the ~~date~~ Lenders is a Defaulting Lender, but only until such time as either (1) the Revolver Commitments of the Defaulting Lender or Defaulting Lenders have been assumed by a Lender that is not a Defaulting Lender, (2) the Maximum Revolver Amount has been reduced by the amount of such Defaulting Lender’s or Defaulting Lenders’ Revolver Commitments or (3) such Defaulting Lender’s Letter of Credit exposure has been cash collateralized, (C) if 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 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 Closing Date, or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Lender in good xxxxx xxxxx material to it, or (D) if the issuance of such Letter of Credit would violate one or more policies of the Issuing Lender applicable to letters of credit generally. Agent shall provide a report to each Lender on a quarterly basis setting forth the then current Letter of Credit Usage and Lender’s Pro Rata Share thereof. (~~or, in~~ b) Each Letter of Credit shall have an expiry date no later than the ~~case~~ earlier to occur of ~~any renewal or extension thereof,~~ (i) one year after the issuance or renewal of such ~~renewal or extension)~~ Letter of Credit and ~~(B) the date that is five (5) Business Days prior to the Stated Termination Date;~~ (ii) ~~each Letter~~ the Maturity Date, and all Letters of Credit shall be in form and substance acceptable to the Issuing Lender in its sole and absolute discretion. Notwithstanding the foregoing, to the extent Borrower so requests with respect to any new Letter of Credit issued hereunder, the Issuing Lender agrees to issue a ~~stated~~ Letter of Credit that has automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”). Unless otherwise directed by the Issuing Lender, Borrower shall not be required to make a specific request to the Issuing Lender for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, each Lender with a Revolver Commitment shall be deemed to have authorized the Issuing Lender to permit the renewal of such Letter of Credit at any time prior to an expiry date not later than the Maturity Date (subject to the cash collateral requirement of Section 2.1(a)(iii)); provided that the Issuing Lender shall not permit any such renewal if (x) the Issuing Lender has determined in its reasonable discretion that it would have no obligation at such time to issue such Letter of Credit in its renewed form under Section 2.10(a), or (y) it has received notice on or before the day that is seven Business Days before the renewal date from Agent, any Lender or Borrower that one or more of the applicable conditions specified in Section 3.2 (other than 3.2(d)) are not then satisfied. The foregoing to the contrary notwithstanding, any change to the face amount of ~~at least $5,000; and (iii) the Borrower may not request~~ any Letter of Credit ifshall only be made pursuant to an amendment thereto in accordance with the provisions of this Agreement, ~~after giving effect~~ and in no event shall Agent or the Issuing Lender issue a Letter of Credit which provides for an automatic increase, automatic decrease or other automatic change to the face amount of any Letter of Credit. (c) If the Issuing Lender is obligated to advance funds under a Letter of Credit, Borrower shall reimburse such L/C Disbursement to the Issuing Lender by paying to Agent an amount equal to such ~~issuance~~L/C Disbursement not later than 1:00 p.m. (Pacific Time) on the date that such L/C Disbursement is made, if Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 9:00 a.m. (APacific Time) on such date, or, if such notice has not been received by Borrower prior to 9:00 a.m. (Pacific Time) on such date, then not later than 1:00 p.m. (Pacific Time) on the ~~aggregate LC Exposure would exceed~~ Business Day immediately following the ~~LC Commitment or (B)~~ day that Borrower receives such notice. Such reimbursement shall be made in Dollars. In the ~~aggregate Credit Exposure~~ absence of ~~all Lenders would exceed~~ such reimbursement, the ~~Aggregate Commitment Amount. Each Lender~~ L/C Disbursement immediately and automatically shall be deemed toto be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.3. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrower’s obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. To the extent Borrower has provided to Agent cash or Cash Equivalents to cash collateralize outstanding Letters of Credit pursuant to the provisions of this Agreement, and ~~hereby irrevocably and unconditionally agrees to~~if no other reimbursement obligation for a separate L/C Disbursement exists, ~~purchase from~~ then Agent may utilize the cash collateral to reimburse the Issuing ~~Bank without recourse a participation in each Letter~~ Lender for such L/C Disbursement. Promptly following receipt by Agent of ~~Credit equal~~ any payment from Borrower pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.10(d) to reimburse the Issuing Lender, then to such ~~Lender’s~~ Lenders and the Issuing Lender as their interests may appear. (d) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.10(c) which is deemed to be an Advance hereunder, each Lender agrees to fund in Dollars in immediately available funds its Pro Rata Share of any Advance deemed made pursuant to the ~~aggregate amount available to be drawn under such Letter of Credit~~ foregoing subsection on the ~~date of issuance. Each issuance of a Letter of Credit~~ same terms and conditions as if Borrower had requested such Advance and Agent shall ~~be deemed to utilize the Commitment of each Lender by an amount equal~~ promptly pay to the ~~amount of such participation. (b) To request~~ Issuing Lender the amounts so received by it from the Lenders. By the issuance of a Letter of Credit (or ~~any amendment, renewal or extension of~~ an ~~outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior~~ amendment to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve~~ the ~~Borrower of its obligation to reimburse~~ Lenders, the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given a Notice of Borrowing~~ granted to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3each Lender, and each Lender shall ~~make the proceeds~~ be deemed to have purchased, a participation in each Letter of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent)Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Lender agrees to pay to Agent in Dollars in immediately available funds, for the account of the Issuing Lender, such Lender’s Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to Agent in Dollars in immediately available funds, for the account of the Issuing Lender, such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrower on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in clause (c) above, or of any reimbursement payment required to be refunded to Borrower for any reason. Each ~~Lender’s~~ Lender acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount in Dollars in immediately available funds equal to its ~~participation~~ respective Pro Rata Share of each L/C Disbursement made by the Issuing Lender pursuant to this Section 2.10(d) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in Article III hereof. If any such Lender fails to make available to Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, (i) such Lender shall be deemed to be a Defaulting Lender, (ii) Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full, and (iii) Agent shall be authorized by Borrower and each Lender to request that the Lenders fund an additional Advance equal to such Defaulting Lender’s Pro Rata Share of such L/C Disbursement (subject in any ~~adverse change~~ event to the limitation set forth in the ~~condition~~ proviso in Section 2.1(a)(i)(A)). (~~financial~~ e) Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless from any loss, cost, expense, or ~~otherwise)~~ liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is found in a final non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, willful misconduct or violation of the ~~Borrower or any of its Subsidiaries, (iv) any breach~~ express terms of this Agreement by the ~~Borrower~~ Issuing Lender or any other member of the Lender Group. The indemnity set forth above is in addition to any other indemnity set forth in this Agreement or in any other Loan Document (including the indemnities by Borrower set forth in Section 8.2 hereof), and shall not be deemed to limit the provisions of any other indemnity or any other similar provision set forth herein or therein. Borrower agrees to be bound by the Issuing Lender~~, (v) any amendment, renewal or extension~~ ’s good faith interpretations of any Letter of Credit issued by the Issuing Lender to or ~~(vi)~~ for Borrower’s account, even though this interpretation may be different from Borrower’s own, and Borrower understands and agrees that the Lender Group shall not be liable for any ~~other circumstance~~error, ~~happening~~ negligence, or ~~event whatsoever~~mistake, whether of omission or ~~not similar to~~ commission, in following Borrower’s instructions or those contained in the Letter of Credit or any of modifications, amendments, or supplements thereto. Borrower hereby acknowledges and agrees that neither the ~~foregoing. On~~ Lender Group nor the ~~date that such participation is required to be funded, each~~ Issuing Lender shall ~~promptly transfer~~be responsible for delays, errors, or omissions resulting from the malfunction of equipment in connection with any Letter of Credit. (f) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender relating to Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately ~~available funds, the amount of its participation~~ shall be reimbursable by Borrower to ~~the Administrative~~ Agent for the account of the Issuing ~~Bank. Whenever, at any time after~~ Lender; it being acknowledged and agreed by Borrower that the issuance charge imposed by the Issuing ~~Bank has received from any such~~ Lender is fixed at 0.125% per annum times the ~~funds for its participation~~ undrawn amount of each Letter of Credit, which shall in no event be less than a ~~LC Disbursement~~minimum of $500 and no greater than a maximum of $1,500, and that the Issuing ~~Bank (or the Administrative Agent on its behalf) receives any payment on account thereof~~Lender also imposes a schedule of charges for amendments, ~~the Administrative Agent or the Issuing Bank~~extensions, ~~as the case may be~~drawings, ~~will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee~~and renewals, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender which shall be ~~obligated to pay interest on such amount at~~ no more than the ~~rate set forth in Section 2.12(b)~~rates therefor that have been most recently published by CNB. (g) If ~~any Event~~ by reason of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any ~~lack of validity~~ change after the Closing Date in any applicable law, treaty, rule, or ~~enforceability of~~ regulation or any ~~Letter of Credit~~ change in the interpretation or ~~this Agreement;~~ application thereof by any Governmental Authority, or (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment compliance by the ~~Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply~~ Lender Group with ~~the terms of such Letter of Credit; (v)~~ any ~~other event or circumstance whatsoever~~direction, ~~whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of~~request, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the ~~circumstances referred~~ Federal Reserve Board as from time to ~~above), or~~ time in effect (and any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.successor thereto):

Appears in 1 contract

Samples: Credit Agreement (Ares Commercial Real Estate Corp)

Letters of Credit. (a) ~~During~~ From time to time and on any Business Day during the ~~Availability Period~~period from the date hereof to the tenth Business Day preceding the Termination Date, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections~~ subsection (d) ~~and (e)~~ of this ~~Section~~Section 2.16, ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five ~~(5)~~ Business Days prior to the ~~Stated~~ Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~25,000; and (iii) the Borrower may not request any Extension of Credit relating to a Letter of Credit if, after giving effect to such ~~issuance~~Extension of Credit, (AX) the aggregate LC Exposure would exceed the LC Commitment or (BY) the aggregate ~~Credit Exposure of all Lenders~~ Outstanding Credits would exceed the ~~Aggregate Commitment Amount~~Commitments. ~~Each~~ Upon each Extension of Credit relating to a Letter of Credit, each Lender shall be ~~deemed to~~deemed, and hereby irrevocably and unconditionally ~~agrees to~~agrees, to purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s 's Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each ~~issuance of a~~ Letter of Credit shall ~~be deemed to~~ utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request ~~the issuance~~ an Extension of Credit relating to a Letter of ~~Credit (or any amendment, renewal or extension of an outstanding Letter of~~ Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three ~~(3)~~ Business Days prior to the requested date of such ~~issuance~~ Extension of Credit specifying the date (which shall be a Business Day) on which such ~~Letter~~ Extension of Credit is to ~~be issued (or amended, renewed or extended, as the case may be)~~occur, the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in ~~Article III~~Section 3.02, ~~the issuance of~~ such ~~Letter~~ Extension of Credit ~~(or any amendment which increases the amount of such Letter of Credit)~~ will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such ~~Letter~~ Extension of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to ~~the issuance~~ each Extension of ~~any~~ Credit relating to a Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice,~~ notice and, if it has not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date on which the Issuing Bank is to ~~issue~~ make the requested Extension of Credit relating to such Letter of ~~Credit,~~ Credit directing the Issuing Bank not to ~~issue the Letter~~ make such Extension of Credit because such ~~issuance~~ Extension of Credit is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section 2.16, or that one or more conditions specified in ~~Article III~~ Section 3.02 are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, ~~issue~~ make such ~~Letter~~ Extension of Credit in accordance with the Issuing Bank’s 's usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent (i) of such demand for payment and (ii) whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to ~~11:00~~ 10:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of ~~Loans~~Advances, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting ~~the Lenders to make~~ a Borrowing compromising Base Rate ~~Borrowing~~ Advances on the date on which such drawing is honored in ~~an exact~~ the amount ~~due~~ payable to the Issuing ~~Bank~~Bank in respect of such LC Disbursement; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section ~~3.2~~ 3.02 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section ~~2.3~~2.03(a), and each Lender shall make the proceeds of its Base Rate ~~Loan~~ Advance included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.03(a). The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a ~~Base Rate~~ Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender ~~(other than the Issuing Bank)~~ shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date on which such ~~Base Rate~~ Borrowing should have occurred. Each Lender’s 's obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of ~~a Default or~~ an Event of Default or the termination of the ~~Aggregate~~ Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay when due any amount required to be paid pursuant to subsection (d) ~~or (e)~~ of this Section ~~on the due date therefor~~2.16, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from the date such amount became due ~~date~~ and payable to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank ~~within~~ three ~~(3)~~ Business Days of after the date such amount became due ~~date~~and payable, then, retroactively to ~~the due~~ such date, such Lender shall ~~be obligated to~~ pay interest on such amount at a rate per annum equal to the ~~rate set forth~~ Base Rate in ~~Section 2.12(b)~~effect from time to time plus 2%. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the ~~Required~~ Majority Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default ~~with respect to the Borrower~~ described in subsection (e) of Section ~~8.1(g) or (h)~~6.01. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s 's risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the ~~Loans~~ Advances has been accelerated, with the consent of the ~~Required~~ Majority Lenders, be applied to satisfy other obligations of the Borrower under this ~~Agreement and the other Loan Documents~~Agreement. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower ~~within three (3) Business Days~~ promptly after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each fiscal quarter of the Borrower, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the ~~aggregate~~ Letters of Credit ~~then outstanding~~outstanding and the LC Exposure at the end of such fiscal quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s 's obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right ~~which~~ that the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any ~~Persons~~ Person or ~~entities~~ entity for ~~whom~~ which any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or ~~the~~ any Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (Progress Energy Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections~~ Section 2.21(d), agrees to issue or, in the case of that certain Letter of Credit referenced in clause (~~d) and (e~~a) of ~~this Section~~the definition thereof, ~~may, in its sole discretion, issue~~to continue the prior issuance of, at the request and for the account of the Borrower, Letters of Credit ~~for the account~~ on behalf of the Borrower or, if so requested by the Borrower, on behalf of any Subsidiary (provided, however, if any such Letter of Credit is issued on behalf of a Subsidiary, the Borrower shall be obligated to make reimbursement for any LC Disbursements as set forth in paragraph (d) of this Section 2.21) on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~500,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate ~~Credit~~ LC Exposure plus the aggregate outstanding Revolving Loans of all Lenders would exceed the Aggregate ~~Commitment Amount~~Revolving Commitments. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s 's Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, if the Letter of Credit is to be issued on behalf of a Subsidiary, the name and address of such Subsidiary, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower and, if applicable, such Subsidiary on whose behalf such Letter of Credit is being issued, shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.21(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s 's usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such ~~drawing~~drawing (whether or not the applicable Letter of Credit has been issued on behalf of the Borrower or, at the request of the Borrower, on behalf of any Subsidiary pursuant to paragraph (a) of this Section 2.21), without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s 's obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.21 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the ~~Issuing Bank and the~~ Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid ~~fees~~ interest thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, ~~without~~ with demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8. 1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection.~~ Other than any interest earned on the investment of such ~~deposits~~deposits in interest-bearing money market or bank demand accounts, which investments shall be made at the ~~option and sole discretion~~ request of the Borrower, subject, however, to the reasonable approval of the Administrative ~~Agent~~ Agent, and at the Borrower’s 's risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this ~~Agreement and the other Loan Documents~~Agreement. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower ~~within~~ with three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each fiscal quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such fiscal quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s 's obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s 's obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s 's failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and Practices for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication ~~No. 600 (or such later revision~~ No.500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing~~ this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 1 contract

Samples: Revolving Credit and Term Loan Agreement (Fpic Insurance Group Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.21(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~20,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit (i) on the Closing Date with respect to all Existing Letters of Credit and (ii) on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.21(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (New York time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d) ~~or (e) of this Section~~ below on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.12(c). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.21, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and Practices for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600 (or such later revision~~ 500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing~~ this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 1 contract

Samples: Revolving Credit Agreement (United Industrial Corp /De/)

Letters of Credit. (a) ~~During~~ On the ~~Availability Period~~Closing Date, each “L/C” issued and outstanding under the ~~Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d)~~ Prepetition Credit Agreement shall automatically and ~~(e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower~~ without any action on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case part of any ~~renewal or extension thereof~~Person, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to ~~utilize the Commitment of each Lender by~~ be an ~~amount equal to the amount of such participation~~L/C under this Agreement. (b) Subject to the terms and conditions of this Agreement, the Issuing Lender agrees to issue letters of credit for the account of Borrowers (each, an “L/C”) or to purchase participations or execute indemnities or reimbursement obligations (each such undertaking, an “L/C Undertaking”) with respect to letters of credit issued by an Underlying Issuer (as of the Closing Date, the prospective Underlying Issuer is to be Xxxxx Fargo) for the account of Borrowers. To request the issuance of ~~a Letter of Credit~~ an L/C or an L/C Undertaking (or ~~any~~ the amendment, ~~renewal~~ renewal, or extension of an outstanding ~~Letter of Credit~~L/C or L/C Undertaking), ~~the~~ Administrative Borrower shall ~~give~~ hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing ~~Bank~~ Lender) to the Issuing Lender and ~~the Administrative~~ Agent ~~irrevocable written notice at least three~~ (~~3) Business Days prior to~~ reasonably in advance of the requested date of ~~such~~ issuance, amendment, renewal, or extension) a notice requesting the issuance ~~specifying~~ of an L/C or L/C Undertaking, or identifying the ~~date (which shall be a Business Day) such Letter of Credit is~~ L/C or L/C Undertaking to be ~~issued (or~~ amended, ~~renewed~~ renewed, or extended, as the ~~case may be)~~date of issuance, amendment, renewal, or extension, the ~~expiration~~ date of on which such ~~Letter of Credit~~L/C or L/C Undertaking is to expire, the amount of such ~~Letter of Credit~~L/C or L/C Undertaking, the name and address of the beneficiary thereof (or of the Underlying Letter of Credit, as applicable), and such other information as shall be necessary to prepare, amend, ~~renew~~ renew, or extend such L/C or L/C Undertaking. If requested by the Issuing Lender, Borrowers also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The Issuing Lender shall have no obligation to issue a Letter of Credit if any of the following would result after giving effect to the requested Letter of Credit: (i) the Letter of Credit Usage would exceed the lesser of (A) the Borrowing Base less the then extant amount of outstanding Advances and (B) the Tranche B Borrowing Base less the then extant amount of outstanding Advances, or (ii) the Letter of Credit Usage would exceed $5,000,000, or (iii) the Letter of Credit Usage would exceed any specified amount approved by the Bankruptcy Court solely for L/Cs in the Final Order or the Interim Order, whichever is then in effect; or (iv) the Letter of Credit Usage would exceed the aggregate Revolving Credit Commitments of all Revolving Credit Lenders less the then extant amount of outstanding Advances. ~~In addition~~ Borrowers and the Lender Group acknowledge and agree that certain Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Letter of Credit (and corresponding Underlying Letter of Credit) shall have an expiry date no later than 30 days prior to July 14, 2006 and all such Letters of Credit (and corresponding Underlying Letter of Credit) shall be in form and substance acceptable to the ~~satisfaction~~ Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Lender is obligated to advance funds under a Letter of Credit, Borrowers immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not later than 2:00 p.m., Boston, Massachusetts time, on the date that such L/C Disbursement is made, if Administrative Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 1:00 p.m., Boston, Massachusetts time, on such date, or, if such notice has not been received by Administrative Borrower prior to such time on such date, then not later than 2:00 p.m., Boston, Massachusetts time, on (i) the Business Day that Administrative Borrower receives such notice, if such notice is received prior to 1:00 p.m., Boston, Massachusetts time, on the date of receipt, and, (ii) in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.7. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers’ obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. Promptly following receipt by Agent of any payment from Borrowers pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Revolving Credit Lenders have made payments pursuant to Section 2.15(d) to reimburse the Issuing Lender, then to such Revolving Credit Lenders and the Issuing Lender as their interest may appear. (c) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.15(b), each Revolving Credit Lender with a Revolving Credit Commitment agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions ~~in Article III,~~ as if Borrowers had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Revolving Credit Lenders. By the issuance of ~~such~~ a Letter of Credit (or ~~any~~ an amendment ~~which increases the amount of such Letter of Credit) will be subject~~ to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve~~ the ~~Borrower of its obligation to reimburse~~ Revolving Credit Lenders with Revolving Credit Commitments, the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given~~ granted to each Revolving Credit Lender with a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3Revolving Credit Commitment, and each Revolving Credit Lender ~~shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance~~ with ~~Section 2.5. The proceeds of such Borrowing~~ a Revolving Credit Commitment shall be ~~applied directly by the Administrative Agent~~ deemed to ~~reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason~~ have purchased, a ~~Base Rate Borrowing may not be (as determined~~ participation in ~~the sole discretion~~ each Letter of ~~the Administrative Agent)~~Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Revolving Credit Lender agrees to pay to Agent, for the account of the Issuing Lender, such Revolving Credit Lender’s Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Credit Lender with a Revolving Credit Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Revolving Credit Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrowers on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in clause (a) of this Section, or of any reimbursement payment required to be refunded to Borrowers for any reason. Each ~~Lender’s~~ Revolving Credit Lender with a Revolving Credit Commitment acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount equal to its ~~participation~~ respective Pro Rata Share pursuant to this Section 2.15(c) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in Section 3 hereof. If any such Revolving Credit Lender fails to make available to Agent the amount of such Revolving Credit Lender’s Pro Rata Share of any payments made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Revolving Credit Lender together with interest thereon at the Defaulting Lender Rate until paid in full. (d) Each Borrower hereby agrees to indemnify, ~~(iii)~~ save, defend, and hold the Revolving Credit Lenders harmless from any ~~adverse change~~ loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Revolving Credit Lenders arising out of or in connection with any Letter of Credit; provided, however, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the ~~condition (financial~~ gross negligence or ~~otherwise)~~ willful misconduct of the ~~Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower~~ Issuing Lender or any other ~~Lender, (v) any amendment, renewal or extension~~ member of the Revolving Credit Lenders. Each Borrower agrees to be bound by the Underlying Issuer’s regulations and interpretations of any Underlying Letter of Credit or by Issuing Lender’s interpretations of any L/C issued by Issuing Lender to or for such Borrower’s account, even though this interpretation may be different from such Borrower’s own, and each Borrower understands and agrees that the Revolving Credit Lenders shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrowers’ instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Each Borrower understands that the L/C Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrowers against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save, defend, and hold the Revolving Credit Lenders harmless with respect to any loss, cost, expense (~~vi)~~ including reasonable attorneys fees), or liability incurred by the Revolving Credit Lenders under any L/C Undertaking as a result of the Revolving Credit Lenders’ indemnification of any Underlying Issuer; provided, however, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the gross negligence or willful misconduct of the Issuing Lender or any other ~~circumstance, happening or event whatsoever, whether or not similar to any~~ member of the ~~foregoing. On the date that such participation is required~~ Revolving Credit Lenders. (e) Each Borrower hereby authorizes and directs any Underlying Issuer to ~~be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation~~ deliver to the ~~Administrative~~ Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender’s instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application. (f) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrowers to Agent for the account of the Issuing ~~Bank. Whenever~~Lender; it being acknowledged and agreed by each Borrower that, ~~at any time after~~ as of the ~~Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement~~Closing Date, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed issuance charge imposed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment prospective Underlying Issuer is ~~made at a rate~~ 0.50% per annum ~~equal to~~ times the ~~Federal Funds Rate; provided~~ face amount of each Underlying Letter of Credit, and that ~~if such Lender shall fail to make such payment to~~ the ~~Issuing Bank within three (3) Business Days~~ Underlying Issuer also imposes a schedule of ~~such due date~~charges for amendments, ~~then~~extensions, ~~retroactively to the due date~~drawings, ~~such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b)~~and renewals. (g) If by reason of (i) any ~~Event of Default shall occur and be continuing~~change in any applicable law, on treaty, rule, or regulation or any change in the ~~Business Day that~~ interpretation or application thereof by any Governmental Authority, or (ii) compliance by the ~~Borrower receives notice from the Administrative Agent~~ Underlying Issuer or the ~~Required~~ Revolving Credit Lenders ~~demanding that its reimbursement obligations~~ with ~~respect to~~ any direction, request, or requirement (irrespective of whether having the ~~Letters~~ force of ~~Credit be Cash Collateralized pursuant to this subsection~~law) of any Governmental Authority or monetary authority including, ~~the Borrower shall deposit in an account with the Administrative Agent, in the name~~ Regulation D of the ~~Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders~~ Federal Reserve Board as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to ~~time, the Issuing Bank shall deliver to such Lender~~ time in effect (and any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:successor thereto): (i) any ~~lack of validity~~ reserve, deposit, or ~~enforceability~~ similar requirement is or shall be imposed or modified in respect of any Letter of Credit ~~or this Agreement;~~issued hereunder, or (ii) there shall be imposed on the ~~existence of any claim, set-off, defense~~ Underlying Issuer or ~~other right which~~ the ~~Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of~~ Revolving Credit ~~(or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or~~ Lenders any other ~~Person for whom such beneficiary or~~ condition regarding any ~~such transferee may be acting, whether in connection with this Agreement or the~~ Underlying Letter of Credit or any ~~document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a~~ Letter of Credit ~~proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by~~ issued pursuant hereto; and the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any result of the foregoing ~~shall have any liability~~ is to increase, directly or ~~responsibility by reason~~ indirectly, the cost to the Revolving Credit Lenders of issuing, making, guaranteeing, or ~~in connection with the issuance or transfer of~~ maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by the Revolving Credit Lenders, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Administrative Borrower, and Borrowers shall pay on demand such amounts as Agent may specify to be necessary to compensate the Revolving Credit Lenders for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment ~~or failure~~ in full thereof at the rate then applicable to ~~make any payment thereunder (irrespective~~ Base Rate Loans hereunder. The determination by Agent of any of amount due pursuant to this Section 2.15, as set forth in a certificate setting forth the ~~circumstances referred to above)~~calculation thereof in reasonable detail, or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree thatshall, in the absence of ~~gross negligence~~ manifest or ~~willful misconduct~~ demonstrable error, be final and conclusive and binding on ~~the part~~ all of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credithereto. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Loan and Security Agreement (Ultimate Electronics Inc)

Letters of Credit. ~~(a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant~~ 2.4.1 If requested to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected do so by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, ~~either accept~~ upon the terms and ~~make payment upon such documents without responsibility for further investigation, regardless of any notice or information~~ subject to the ~~contrary~~conditions of this Agreement, ~~or refuse~~ issue Letters of Credit for the account of the Borrowers, in such form and face amount as may be requested by such Borrower and agreed to ~~accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed~~ by the Issuing ~~Bank and~~ Bank; provided, however, that the ~~Borrower when a Letter~~ Stated Amount of Letters of Credit ~~is issued and subject to applicable laws~~outstanding at any time, plus the aggregate amount of all unreimbursed draws under such outstanding Letters of Credit, shall not at any time (i) ~~each standby Letter of Credit shall be governed by~~ exceed $30,000,000 in the ~~“International Standby Practices 1998” (ISP98) (~~aggregate, or ~~such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued),~~ (ii) ~~each documentary Letter~~ when added to the then outstanding amount of Revolving Credit ~~shall be governed by~~ Loans (including any Swingline Loans) at such time, exceed the ~~Uniform Customs~~ aggregate amount of the Revolving Credit Commitments of the Banks; and ~~Practices for Documentary Credits (2007 Revision)~~provided, ~~International Chamber of Commerce Publication No. 600 (or such later revision as may be published by~~ further, that at the ~~International Chamber of Commerce on~~ time any ~~date any Letter of Credit may be issued) and (iii) the~~ Borrower ~~shall specify the foregoing in each letter of credit application submitted for~~ requests the issuance of a Letter of Credit and after giving effect to the issuance thereof, there has not occurred and is not continuing any Event of Default or any event which, with the giving of notice or the passage of time, or both, would constitute an Event of Default. Upon the issuance of each Letter of Credit by the Issuing Bank, each Bank shall be deemed to automatically have purchased a participation in such Letter of Credit in accordance with its Commitment Percentage of the Revolving Credit Commitments and each Bank severally agrees that it shall be absolutely liable (absent the gross negligence or willful misconduct of the Issuing Bank), without regard to the occurrence of any Event of Default or any event which, with the giving of notice or the passage of time, or both, would constitute an Event of Default or any other condition precedent whatsoever, to the extent of such Bank’s Revolving Credit Commitment, to reimburse the Issuing Bank on demand an amount equal to its Commitment Percentage of the amount of each draft paid by such Issuing Bank under each Letter of Credit to the extent that such amount is not reimbursed by the Borrowers pursuant hereto. 2.4.2 It is understood and agreed by the parties hereto that amounts drawn under the Letters of Credit shall become immediately due and payable by the Borrowers to the Issuing Bank through the Administrative Agent, and that all Letters of Credit shall in any event expire not later than fourteen (14) days prior to the Revolving Credit Maturity Date. If any Borrower requests the Issuing Bank to issue any Letter of Credit which would by its terms expire later than fourteen (14) days prior to the Revolving Credit Maturity Date, the Borrowers shall pledge cash or cash equivalents with the Administrative Agent for the benefit of the Banks in the face amount of such Letter of Credit plus any applicable fees and charges. 2.4.3 In order to evidence such Letters of Credit, the Borrowers will enter into with the Issuing Bank such agreements and execute such instruments and documents as the Issuing Bank requires, including, but not limited to, a letter of credit application and agreement on the Issuing Bank’s customary form.

Appears in 1 contract

Samples: Revolving Credit Agreement (Unifirst Corp)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (Ring Energy, Inc.)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.20(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.20(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraphs (d) or (e) ~~of this Section~~ above on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.11(c). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) ), including interest and profits, if any, on any such investments, as aforesaid, shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.20, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, performance under Letters of Credit by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by (i) ~~each standby Letter~~ either (x) the rules of ~~Credit shall be governed by~~ the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), ) or (iiy) ~~each documentary Letter~~ the rules of ~~Credit shall be governed by~~ the “Uniform Customs and Practices for Documentary ~~Credits~~ Credits” (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (~~iii~~ii) to the ~~Borrower shall specify~~ extent not inconsistent therewith, the ~~foregoing~~ governing law of this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 1 contract

Samples: Revolving Credit Agreement (Scripps E W Co /De)

Letters of Credit. (a) ~~During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant~~ Subject to ~~subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on~~ the terms and conditions ~~hereinafter set forth; provided~~ of this Agreement, Borrower may utilize the Commitments by requesting that the Issuing Bank issue standby letters of credit (i) each a "Letter of ~~Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or~~Credit"); provided, ~~in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date~~ that ~~is five (5) Business Days prior to the Stated Termination Date; (ii) each~~ no Letter of Credit shall be ~~in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit~~ issued if, after giving effect to ~~such issuance~~the issuance thereof, (Ai) the ~~aggregate LC Exposure~~ Outstanding Revolving Credit would exceed the ~~LC Commitment~~ Borrowing Base then most recently determined, (ii) Borrowing Base Availability would be less than $5,000,000, or (Biii) the ~~aggregate~~ Letter of Credit ~~Exposure of all Lenders~~ Liabilities would exceed $15,000,000. Upon the ~~Aggregate Commitment Amount. Each Lender~~ date of issue of each Letter of Credit, the Issuing Bank shall be ~~deemed to~~deemed, without further action by any party hereto, to have sold to each Bank, and ~~hereby irrevocably and unconditionally agrees to~~each Bank shall be deemed, ~~purchase~~ without further action by any party hereto, to have purchased from the Issuing ~~Bank without recourse~~ Bank, a participation ~~in each Letter~~ to the extent of ~~Credit equal to~~ such ~~Lender’s~~ Bank's Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participationCommitments. (b) ~~To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the~~ Borrower shall give the Issuing Bank ~~and the~~ (with a copy to Administrative ~~Agent irrevocable written notice~~ Agent) at least three (3) Business Days prior notice (effective upon receipt and irrevocable unless appropriately revoked sufficiently prior to issuance of the ~~requested date~~ Letter of ~~such issuance~~ Credit) specifying the date ~~(which shall~~ of each Letter of Credit and the nature of the transactions to be ~~a Business Day)~~ supported thereby. Upon receipt of such notice and confirmation by the Issuing Bank with Administrative Agent that such Letter of Credit ~~is to~~ may be issued ~~(or amended, renewed or extended, as the case may be)~~in compliance with this Agreement, the ~~expiration date~~ Issuing Bank shall promptly notify Administrative Agent of the contents thereof and of each such Bank's Pro Rata Share of the amount of the proposed Letter of Credit, and Administrative Agent shall promptly thereupon notify the Bank's of such information. In addition, the Issuing Bank shall promptly deliver to the Administrative Agent a photocopy of such Letter of Credit~~, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit~~. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Each Letter of Credit shall have an expiration date that does not exceed one year from the date of issuance (unless specifically consented to by Administrative Agent, the Issuing Bank and the Required Banks) and that does not extend beyond the Termination Date, shall be payable in ~~such~~ Dollars, shall support a transaction entered into in the ordinary course of business of Borrower, Parent or a Subsidiary, shall be satisfactory in form and ~~contain~~ substance to the Issuing Bank, and shall be issued pursuant to such ~~terms~~ agreements, documents and instruments as the Issuing Bank ~~shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall~~ may reasonably require~~; provided that in~~ , none of which shall be inconsistent with this Agreement (and to the ~~event of any~~ extent they irreconcilably conflict ~~between such applications, agreements or instruments and~~ with this Agreement, the terms of this Agreement shall control). Each Letter of Credit shall (i) provide for the payment of drafts presented for, on or thereunder by the beneficiary in accordance with the terms thereof, when such drafts are accompanied by the documents (if any) described in the Letter of Credit and (ii) to the extent not inconsistent with the terms hereof, be subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500 (together with any subsequent revision thereof approved by a Congress of the International Chamber of Commerce and adhered to by the Issuing Bank, the "UCP"), and shall, as to matters not governed by the UCP, be governed by, and construed and interpreted in accordance with, the Laws of the State of Texas. (c) ~~At least two (2) Business Days prior to the issuance~~ Upon receipt from any Letter of Credit beneficiary of any demand for payment or other drawing under such Letter of Credit, the Issuing Bank ~~will confirm with~~ shall promptly notify Borrower and each Bank as to the ~~Administrative Agent (by telephone~~ amount to be paid as a result of such demand or ~~in writing) that~~ drawing and the ~~Administrative Agent has received such notice, and, if not,~~ respective payment date. If at any time the Issuing Bank ~~will provide the Administrative Agent with~~ shall make a ~~copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is~~ payment to ~~issue the requested~~ a beneficiary of a Letter of Credit pursuant to a drawing under such Letter of Credit, ~~directing the Issuing~~ each Bank ~~not~~ will pay to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank~~’s usual and customary business practices~~, immediately upon the Issuing Bank's demand at any time commencing after such payment until reimbursement therefor in full by Borrower, an amount equal to such Bank's Pro Rata Share of such payment, together with interest on such amount for each day from the date of such payment to the date of payment by such Bank of such amount at a rate of interest per annum equal to the Federal Funds Rate. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to immediately reimburse the Issuing Bank for any ~~LC Disbursements~~ amounts paid by the Issuing Bank upon any drawing under any Letter of Credit, without presentment, demand, protest or other formalities of any kind (each such reimbursement obligation, herein a "Reimbursement Obligation"). The Issuing Bank will pay to each Bank such Bank's Pro Rata Share of all amounts received from or on behalf of 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 Issuing Bank in respect of such ~~drawing, without presentment, demand or other formalities~~ Letter of ~~any kind~~Credit pursuant to Subsection (c) above. ~~Unless~~ Outstanding Reimbursement Obligations shall bear interest at the ~~Borrower shall have notified the Issuing Bank~~ Highest Lawful Rate and ~~the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which~~ such ~~drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower~~ interest shall be ~~deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing~~ payable on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursementdemand. (e) ~~If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion~~ The Reimbursement Obligations of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder Papers shall be absolute, unconditional and ~~irrevocable~~ irrevocable, and shall be performed strictly in accordance with the terms of this Agreement and the other Loan Papers under all circumstances ~~whatsoever and irrespective of any of~~ whatsoever, including, without limitation, the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or ~~this Agreement~~any other Loan Papers; (ii) ~~the~~ Any amendment or waiver of or any consent to departure from any Loan Papers; (iii) The existence of any claim, ~~set-off~~setoff, counterclaim, defense or other right which ~~the~~ Borrower or any ~~Subsidiary or Affiliate of the Borrower~~ other Person may have at any time against a any beneficiary ~~or any transferee~~ of any Letter of ~~Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting)~~Credit, ~~any Lender (including~~ Administrative Agent, the Issuing Bank) , the Banks or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or ~~the Letter of Credit or~~ any ~~document related hereto or thereto~~ other Loan Papers or any unrelated transaction; (~~iii~~iv) ~~any~~ Any statement, draft or other document presented under a any Letter of Credit proving to be forged, ~~fraudulent~~ fraudulent, invalid or ~~invalid~~ insufficient in any respect or any statement therein being untrue or inaccurate in any ~~respect~~respect whatsoever; (ivv) ~~payment~~ Payment by the Issuing Bank under a any Letter of Credit against presentation of a draft or other document ~~to the Issuing Bank~~ that does not comply with the terms of such Letter of Credit;, provided, that such payment shall not have constituted gross negligence or willful misconduct of the Issuing Bank; and (vvi) ~~any~~ Any other ~~event or~~ circumstance whatsoever, whether or not similar to any of the foregoing, provided that ~~might, but for~~ such other circumstance or event shall not have been the ~~provisions~~ result of ~~this Section, constitute a legal~~ the gross negligence or ~~equitable discharge of, or provide a right~~ willful misconduct of ~~set-off against,~~ the ~~Borrower’s obligations hereunder; or~~Issuing Bank. (vif) Borrower assumes all risks of the ~~existence~~ acts or omissions of ~~a Default or an Event~~ any beneficiary of ~~Default~~any Letter of Credit with respect to its use of such Letter of Credit. Neither ~~the~~ Administrative Agent, the Issuing Bank, ~~any Lender~~ the Banks nor any ~~Related Party~~ of ~~any of the foregoing~~ their respective officers or directors shall have any responsibility or liability to Borrower or ~~responsibility by reason~~ any other Person for: (a) the failure of any draft to bear any reference or ~~in connection with~~ adequate reference to any Letter of Credit, or the ~~issuance~~ failure of any documents to accompany any draft at negotiation, or ~~transfer~~ the failure of any Person to surrender or to take up any Letter of Credit or ~~any payment or failure~~ to ~~make any payment thereunder (irrespective~~ send documents apart from drafts as required by the terms of any Letter of ~~the circumstances referred to above)~~Credit, or the failure of any ~~error~~Person to note the amount of any instrument on any Letter of Credit, ~~omission~~(b) errors, ~~interruption~~omissions, ~~loss~~ interruptions or ~~delay~~ delays in transmission or delivery of any messages, (c) the validity, sufficiency or genuineness of any draft or other document, or any endorsement(s) thereon,even if any such draft, ~~notice~~ document or ~~other communication under~~ endorsement should in fact prove to be in any and all respects invalid, insufficient, fraudulent or ~~relating~~ forged or any statement therein is untrue or inaccurate in any respect, (d) the payment by the Issuing Bank to the beneficiary of any Letter of Credit against presentation of any draft or other document that does not comply with the terms of the Letter of Credit, or (~~including~~ e) any ~~document required~~ other circumstance whatsoever in making or failing to make any payment under a ~~drawing thereunder)~~Letter of Credit; provided,however, ~~any error in interpretation of technical terms or any consequence arising from causes beyond~~ that, notwithstanding the ~~control of~~ foregoing,Borrower shall have a claim against the Issuing Bank~~; provided that the foregoing shall not be construed to excuse~~ , and the Issuing Bank ~~from liability~~ shall be liable to ~~the Borrower~~ Borrower, to the extent of any ~~actual direct~~ direct, but not indirect or consequential, damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by ~~the~~ Borrower ~~that are~~ which Borrower proves in a final nonappealable judgment were caused by (i) the Issuing Bank~~’s failure to exercise due care when~~ 's willful misconduct or gross negligence in determining whether ~~drafts or other~~ documents presented under a any Letter of Credit ~~comply~~ complied with the terms ~~thereof~~thereof or (ii) the Issuing Bank's willful failure to pay under any Letter of Credit after presentation to it of documents strictly complying with the terms and conditions of such Letter of Credit. The ~~parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the~~ Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to may accept documents ~~presented~~ that appear on their face to be in ~~substantial compliance with the terms of a Letter of Credit~~order, ~~the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents~~ without responsibility for further investigation, regardless of any notice or information to the contrary~~, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit~~. (jg) ~~Unless otherwise expressly agreed~~ The Issuing Bank may be replaced at any time by written agreemement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Banks of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the Borrower ~~when a Letter~~ shall pay all unpaid fees accrued for the account of ~~Credit is issued~~ the replaced Issuing Bank pursuant to Section 2.11(c). From and ~~subject to applicable laws~~after the effective date of any such replacement, (i) ~~each standby Letter~~ the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit ~~shall~~ to be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued)issued thereafter, and (ii) ~~each documentary Letter~~ references herein to the term "Issuing Bank" shall be deemed to refer to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter required to issue additional Letters of Credit.

Appears in 1 contract

Samples: Credit Agreement (Frozen Food Express Industries Inc)

Letters of Credit. (a) As of the Closing Date, Fleet National Bank shall be the Issuing Bank for all Existing Letters of Credit listed in Schedule 2.24. All other Letters of Credit issued pursuant to this Section shall be issued by SunTrust Bank as Issuing Bank, including any Letters of Credit issued as a replacement of, or as an extension to an Existing Letter of Credit. As of the Closing Date, the Existing Letters of Credit shall be deemed issued and outstanding under this Agreement, without any further action by the parties hereto. During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.24(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~50,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate ~~Credit Exposure~~ LC Exposure, plus the aggregate outstanding Revolving Loans of all Lenders would exceed the Aggregate ~~Commitment Amount~~Revolving Commitments. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of ~~Credit~~Credit , the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.24(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.8. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.24 on the due date ~~therefor~~therefore, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the ~~Issuing Bank and the~~ Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid ~~fees~~ interest thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account~~. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection~~. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this ~~Agreement and the other Loan Documents~~Agreement. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each fiscal quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such fiscal quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, ~~(i) each standby Letter~~ performance under Letters of Credit ~~shall~~ by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by the rules of the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and ~~(iii)~~ to the ~~Borrower shall specify~~ extent not inconsistent therewith, the ~~foregoing~~ governing law of this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 1 contract

Samples: Revolving Credit and Letter of Credit Loan Agreement (Us Xpress Enterprises Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.23(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; , (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s 's Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of ~~Credit~~Credit , the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.23(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s 's usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (Atlanta, Georgia time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.8. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s 's obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.24 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such Such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each Fiscal Quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s 's obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s 's obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s 's failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and Practices for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600 (or such later revision~~ 500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing~~ this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 1 contract

Samples: Revolving Credit Agreement (Hughes Supply Inc)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions set forth herein, the ~~Issuing Bank~~Borrower may request the issuance of standby letters of credit (each, ~~in reliance upon the agreements~~ a “Letter of ~~the other Lenders pursuant to subsections~~ Credit”), for its own account (~~d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ or for the account of any Subsidiary, and in such event the Borrower on shall be obligated under this Agreement and under such Letter of Credit as if the Borrower were the named account party and such Letter of Credit shall create LC Exposure), in a form reasonably acceptable to the Agent and the applicable Issuing Bank, at any time and from time to time prior to the Maturity Date (subject to Section 2.8(c)). In the event of any inconsistency between the terms and conditions ~~hereinafter set forth; provided that (i) each~~ of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the applicable Issuing Bank relating to any Letter of ~~Credit~~ Credit, the terms and conditions of this Agreement shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each control. Each Letter of Credit shall be ~~in a stated amount~~ subject either to the Uniform Customs and Practices for Documentary Credits, as most recently published by the International Chamber of Commerce (the “ICC”) at ~~least $5,000; and~~ the time of issuance (~~iii~~“UCP”) or the ~~Borrower may not request any Letter~~ rules of ~~Credit if~~International Standby Practices (ICC Publication 590) (“ISP98”), ~~after giving effect to such issuance, (A)~~ as determined by the ~~aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to~~applicable Issuing Bank, and ~~hereby irrevocably and unconditionally agrees to~~to the extent not inconsistent therewith, ~~purchase from~~ the ~~Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share~~ Legal Requirements of the ~~aggregate amount available to be drawn under such Letter~~ State of ~~Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation~~New York. (b) To request the issuance of a Letter of Credit (or ~~any~~ the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall ~~give~~ hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to the applicable Issuing Bank and the ~~Administrative~~ Agent ~~irrevocable written notice at least three~~ (3reasonably, but in no event less than five (5) Business ~~Days prior to~~ Days, in advance of the requested date of ~~such~~ issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day) ), the date on which such Letter of Credit is to ~~be issued~~ expire (~~or amended, renewed or extended, as the case may be~~which shall comply with paragraph (c) of this Section)~~, the expiration date of such Letter of Credit~~, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. ~~In addition~~ If requested by the applicable Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for a Letter of Credit. 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 Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $35,000,000, (ii) the LC Exposure of any Issuing Bank shall not exceed the lesser of (x) $17,500,000 (without the consent of such Issuing Bank) or (y) such Issuing Bank’s Lender Commitment, (iii) the total Revolving Credit Exposures plus the sum of the outstanding Swing Loans and the outstanding Competitive Bid Loans shall not exceed the Total Commitment, and (iv) no more than fifteen (15) Letters of Credit shall be issued and outstanding at any one time. Upon request, copies of all Letters of Credit, and amendments, extensions, increases, decreases and cancellations related thereto, must be delivered to the ~~satisfaction~~ Agent and the other Lenders by the applicable Issuing Bank. (c) Each Letter of Credit shall expire no later than the ~~conditions in Article III,~~ earlier of (i) the close of business on the date which is twelve (12) months following the date of issuance of such Letter of Credit, provided that a Letter of Credit may contain an “evergreen” provision providing for one or more automatic extensions of the expiration date thereof of up to one (1) year each in the absence of notice of non-renewal from the applicable Issuing Bank, or (ii) the close of business on the date that is fourteen (14) days prior to the Maturity Date, except that, in any ~~amendment which increases~~ such case, a Letter of Credit may extend beyond such dates to the extent that Borrower shall have deposited in the Letter of Credit Collateral Account, at the time of issuance of such Letter of Credit, Cash Collateral in an amount equal to or in excess of the amount of such Letter of Credit~~) will~~ , which amount may not be ~~subject to the further conditions that~~ withdrawn or reduced as long as such Letter of Credit shall remain outstanding or a Default or an Event of Default shall be ~~in such form~~ continuing hereunder. (d) By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and ~~contain such terms as~~ without any further action on the part of the applicable Issuing Bank ~~shall approve~~ or the Lenders, each Issuing Bank hereby grants to each Lender, and ~~that the Borrower shall have executed and delivered any additional applications~~each Lender hereby acquires from each Issuing Bank, ~~agreements and instruments relating to~~ a participation in such Letter of Credit as equal to such Lender’s Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Agent, for the account of the applicable Issuing Bank, such Lender’s Percentage of each LC Disbursement made by such Issuing Bank ~~shall reasonably require;~~ and not reimbursed by the Borrower on the date due as provided ~~that~~ in ~~the event~~ paragraph (e) of this Section, or of any ~~conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior~~ reimbursement payment required to be refunded to the ~~issuance~~ Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit and to fund its Lender’s Percentage of each LC Disbursement made by the applicable Issuing Bank is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, any amendment, renewal or extension of any Letter of Credit, the occurrence and continuance of a Default, the reduction or termination of the Total Commitment or the commencement of a proceeding under any applicable bankruptcy or insolvency law with respect to Borrower, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. (e) If an Issuing Bank ~~will confirm with~~ shall make any LC Disbursement in respect of a Letter of Credit, the ~~Administrative~~ Borrower shall reimburse such LC Disbursement by paying to the Agent ~~(by telephone or in writing)~~ an amount equal to such LC Disbursement not later than 12:00 noon, Pittsburgh, Pennsylvania time, on the Business Day that ~~the Administrative Agent has received~~ such ~~notice, and~~LC Disbursement is made, if ~~not,~~ the ~~Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has~~ Borrower shall have received notice ~~from the Administrative Agent~~of such LC Disbursement prior to 10:00 a.m., Pittsburgh, Pennsylvania time, on ~~or before~~ such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, Pittsburgh, Pennsylvania time, on the Business Day immediately ~~preceding~~ following the ~~date~~ day that the ~~Issuing Bank is to issue~~ Borrower receives such notice; provided that the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, thenBorrower may, subject to the ~~terms and~~ conditions ~~hereof~~to borrowing set forth herein, ~~the Issuing Bank shall, on the requested date, issue such Letter of Credit~~ request in accordance with Section 2.1 that such payment be financed with a Base Rate Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting Base Rate Borrowing. If the Borrower fails to make such payment when due, the Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Agent its Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.2 with respect to Loans made by such Lender (and Section 2.2 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Agent of any payment from the Borrower pursuant to this paragraph, the Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank~~’s usual~~ , then to such Lenders and ~~customary business practices. (d) The~~ such Issuing Bank ~~shall examine all documents purporting~~ as their interests may appear. Any payment made by a Lender pursuant to ~~represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The~~ this paragraph to reimburse the applicable Issuing Bank ~~shall notify the Borrower and the Administrative Agent of such demand~~ for ~~payment and whether the Issuing Bank has made or will make a~~ any LC Disbursement ~~thereunder; provided that any failure to give or delay in giving such notice~~ (other than the funding of Base Rate Borrowings as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements ~~hereunder~~ as provided in paragraph (e) of this Section 2.8 shall be absolute, unconditional and ~~irrevocable~~ irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of ~~any of the following circumstances:~~ (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; , or any term or provision therein, (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; , (iviii) payment by ~~the~~ an Issuing Bank under a Letter of Credit against presentation of a draft or other document ~~to the Issuing Bank~~ that does not comply with the terms of such Letter of Credit; , or (viv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.8, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder~~; or (vi) the existence of a Default or an Event of Default~~. Neither the ~~Administrative~~ Agent, the Lenders nor the Issuing ~~Bank~~Banks, ~~any Lender~~ nor any ~~Related Party~~ of ~~any of the foregoing~~ their Affiliates, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to ~~above~~in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the applicable Issuing Bank; provided that the foregoing shall not be construed to excuse the applicable Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the applicable Issuing Bank’s failure to exercise ~~due~~ care when determining whether drafts or and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the applicable Issuing ~~Bank (as finally determined by a court of competent jurisdiction)~~Bank, the applicable Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented ~~that~~ which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the applicable Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any ~~notice or~~ information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (jg) ~~Unless otherwise expressly agreed~~ The applicable Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The applicable Issuing Bank shall promptly notify the Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement. (h) If an Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to Base Rate Borrowings; provided that, if the Borrower fails to reimburse such LC Disbursement when ~~a Letter~~ due pursuant to paragraph (e) of ~~Credit is issued~~ this Section, then the LC Disbursement shall bear interest, for each day from and ~~subject~~ including the date such LC Disbursement was due to, but excluding, the date that the Borrower reimburses such LC Disbursement at the Past Due Rate. Interest accrued pursuant to this paragraph shall be for the account of the applicable ~~laws~~Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section 2.8 to reimburse the applicable Issuing Bank shall be for the account of such Lender to the extent of such payment. (i) An Issuing Bank may be replaced at any time by written agreement among the Borrower, the Agent, the replaced Issuing Bank and the successor Issuing Bank. The Agent shall notify the Lenders of any such replacement of an Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid Fronting Fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.6. From and after the effective date of any such replacement, (i) ~~each standby Letter~~ the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit ~~shall~~ to be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), issued thereafter and (ii) ~~each documentary Letter~~ references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be ~~governed by~~ required to issue additional Letters of Credit. (j) At any time that there shall exist a Defaulting Lender, within three (3) Business Days following the ~~Uniform Customs and Practices for Documentary Credits~~ written request of the Agent or the applicable Issuing Bank (~~2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by~~ with a copy to the ~~International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii~~Agent) the Borrower shall ~~specify~~ Cash Collateralize such Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.11(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than an amount equal to 100% of the ~~foregoing in each letter~~ Fronting Exposure of ~~credit application submitted for~~ the ~~issuance~~ applicable Issuing Bank with respect to Letters of ~~a Letter~~ Credit issued and outstanding at such time. Cash Collateral (or the appropriate portion thereof) provided to reduce the applicable Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.8(j) following (i) the elimination of ~~Credit~~the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Agent and the applicable Issuing Bank that there exists excess Cash Collateral; provided that, subject to Section 2.11, the Person providing Cash Collateral and the applicable Issuing Bank may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations and provided further that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to Section 7.2(b) below.

Appears in 1 contract

Samples: Credit Agreement (Eastgroup Properties Inc)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions set forth herein, the ~~Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section,~~ Borrowers may, ~~in its sole discretion~~by and through the Borrower Agent, ~~issue, at~~ request the ~~request~~ issuance of ~~the Borrower,~~ standby and commercial Letters of Credit for its own account or for the account of a Subsidiary, in a form reasonably acceptable to the ~~Borrower on~~ Lender, from time to time during the Revolving Availability Period. If the terms and conditions ~~hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case~~ of any ~~renewal~~ form of letter of credit application or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) other agreement submitted by the Borrower ~~may not request~~ Agent to, or otherwise entered into by the Borrowers with, the Lender relating to any Letter of Credit ifare not consistent with the terms and conditions of this Agreement, ~~after giving effect to such issuance, (A)~~ the ~~aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure~~ terms and conditions of ~~all Lenders would exceed the Aggregate Commitment Amount. Each Lender~~ this Agreement shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participationcontrol. (b) To request the issuance of a Letter of Credit (or ~~any~~ the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower Agent shall ~~give~~ hand deliver or telecopy (or transmit by electronic communication, if arrangements and a distribution list for doing so have been approved by the ~~Issuing Bank~~ Lender) to the Lender (reasonably, and ~~the Administrative Agent irrevocable written notice at least~~ in any event not later than three (3) Business ~~Days prior to~~ Days, in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of, as the case may be a Secured Facility Letter of Credit or an Unsecured Facility Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying (i) whether such ~~issuance specifying~~ Letter of Credit is requested under the Secured Facility or the Unsecured Facility, (ii) the requested date of issuance, amendment, renewal or extension (which shall be a Business Day), (iii) the date on which such Letter of Credit is to ~~be issued~~ expire (~~or amended, renewed or extended, as the case may be~~which shall comply with Section 2.05(c)), ~~the expiration date of such Letter of Credit,~~ (iv) the amount of such Letter of Credit, (v) the name and address of the beneficiary thereof and (vi) such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. ~~In addition~~ If requested by the Lender, the Borrower Agent also shall submit a letter of credit application on the Lender’s standard form (with such changes as are agreed by the Lender and the Borrower Agent) in connection with any request for a Letter of Credit. 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 Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, (A) if such Letter of Credit is a Secured Facility Letter of Credit, the Secured Facility Exposure shall not exceed the lesser of (1) the Secured Facility Maximum Amount then in effect and (2) the aggregate Collateral Value of the Eligible Collateral then held by the Lender, and (B) if such Letter of Credit is an Unsecured Facility Letter of Credit, the Unsecured Facility Exposure plus the Secured Facility Exposure shall not exceed the Unsecured Facility Maximum Amount then in effect. (c) Each Letter of Credit shall expire at or before the close of business on the date that is one year after such Letter of Credit is issued (or, in the case of any renewal or extension thereof, not later than one year after such renewal or extension). If the Borrower Agent so requests, a Letter of Credit shall have an automatic renewal provision; provided that any Letter of Credit that has an automatic renewal provision must permit the Lender to prevent any such renewal by giving prior notice to the ~~satisfaction of~~ beneficiary thereof not later than 30 days prior to the ~~conditions in Article III, the issuance~~ renewal date of such Letter of Credit. If any Letter of Credit remains outstanding after the Revolving Availability Termination Date, the Borrowers shall either (~~or any amendment which increases~~ i) Cash Collateralize the outstanding amount of such Letter of Credit, or (ii) ~~will be subject~~ if the Lender agrees in its sole discretion, provide back-to-back letters of credit from a financial institution reasonably acceptable to Lender, in either case, within five Business Days after the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall controlRevolving Availability Termination Date. (cd) ~~At least two (2) Business Days prior to~~ If the ~~issuance of~~ Lender makes any LC Disbursement under a Letter of Credit, the ~~Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received~~ Borrowers shall reimburse such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in paying an amount equal to ~~its Pro Rata Share of~~ such LC Disbursement to the Lender not later than 2:00 p.m., Prevailing Eastern Time, on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower Agent receives written notice ~~from~~ of such LC Disbursement, if such notice is received before 11:00 a.m., Prevailing Eastern Time, on the ~~Administrative Agent~~ day of receipt or (ii) the ~~Required Lenders demanding that its reimbursement obligations with respect~~ next Business Day, if such notice is not received before 11:00 a.m. on the day of receipt; provided that, if such LC Disbursement is at least $100,000 and relates to ~~the Letters~~ a Letter of Credit ~~be Cash Collateralized pursuant to this subsection~~issued for the account of the Parent, the Borrower ~~shall deposit~~ Agent may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 that such payment be made with the proceeds of a Base Rate Loan in an ~~account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an~~ equivalent amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent ~~not~~ so ~~applied~~financed, the Parent’s obligation to make such payment shall be ~~held for~~ discharged and replaced by the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waivedresulting Base Rate Loan. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (ie) The ~~Borrower’s~~ obligation of the Borrowers to reimburse LC Disbursements ~~hereunder~~ as provided in Section 2.05(d) shall be absolute, unconditional and ~~irrevocable~~ irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of ~~any of the following circumstances:~~ (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; , or any term or provision therein, (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; , (iviii) payment by the ~~Issuing Bank~~ Lender under a Letter of Credit against presentation of a draft or other document ~~to the Issuing Bank~~ that does not comply with the terms of such Letter of Credit; , or (viv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the ~~Borrower’s~~ Borrowers’ obligations hereunder~~; or (vi) the existence of a Default or an Event of Default~~. ~~Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any~~ None of the ~~foregoing~~ Lender and its Related Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to ~~above~~in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereofLender. ~~The parties hereto expressly agree that, in~~ In the absence of gross negligence or willful misconduct on the part of the ~~Issuing Bank~~ Lender (as finally determined by a court of competent jurisdiction), the ~~Issuing Bank~~ Lender shall be deemed to have exercised ~~due~~ care in each such determination. ~~In furtherance of the foregoing and without~~ Without limiting the generality ~~thereof~~of the foregoing, the parties agree that, with respect to documents presented ~~that~~ which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the ~~Issuing Bank~~ Lender may, in its sole discretion, either (A) accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the ~~contrary,~~ contrary or (B) refuse to accept and make payment upon such documents if such documents ~~are~~ do not ~~in strict compliance~~ strictly comply with the terms of such Letter of Credit. (jf) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when~~ The Lender shall, promptly after its receipt thereof, examine all documents purporting to represent a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices demand for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of payment under a Letter of Credit. (g) Unless the Borrowers reimburse an LC Disbursement in full on the day it is made (if notice is given to the Borrower Agent before 11:00 a.m., Prevailing Eastern Time, on the day the LC Disbursement is made or, otherwise, on the next Business Day), the unpaid amount thereof shall bear interest, for each day from and including the day on which such LC Disbursement is made to but excluding the day on which the Borrowers reimburse such LC Disbursement, at the rate per annum then applicable to Base Rate Loans; provided that, if the Borrowers fail to reimburse such LC Disbursement when due pursuant to Section 2.05(d), then Sections 2.13(d) shall apply.

Appears in 1 contract

Samples: Credit Agreement (James River Group Holdings, Ltd.)

Letters of Credit. ~~(a) During~~ Upon the ~~Availability Period~~terms and subject to the conditions hereof, each Issuing Lender agrees to issue Letters of Credit payable in Dollars from time to time after the ~~Issuing Bank, in reliance upon~~ Closing Date and prior to the ~~agreements~~ earlier of the ~~other Lenders pursuant to subsections (d)~~ Tranche A Termination Date and ~~(e)~~ the termination of ~~this Section~~the Tranche A Commitments, ~~may, in its sole discretion, issue, at~~ upon the request of the Borrower, ~~Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth;~~ provided that ~~(i) each Letter of Credit shall expire on the earlier of~~ (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 principal amount of the Tranche A Loans then outstanding would exceed the Total Tranche A Commitment, (B) in no event shall any Issuing Lender issue (x) any Letter of Credit having an expiration date later than five Business Days before the Tranche A Termination Date or (y) any Letter of Credit having an expiration date more than one year after ~~the~~ its date of ~~issuance of such~~ issuance, provided, further, that any Letter of Credit with a 365-day duration may provide for the renewal thereof for additional one-year periods (~~or,~~ which shall in ~~the case of any renewal or extension thereof, one year after such renewal or extension) and (B)~~ no event extend beyond the date ~~that is five~~ referred to in clause (5x) ~~Business Days prior to the Stated Termination Date;~~ above), (~~ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii~~C) the Borrower ~~may~~ shall not request that an Issuing Lender issue any Letter of Credit if, after giving effect to such issuance, ~~(A)~~ the ~~aggregate LC~~ L/C Exposure would exceed ~~the LC Commitment or~~ $35,000,000, and (BD) ~~the aggregate~~ no Issuing Lender shall be obligated to issue Letters of Credit if its L/C Exposure ~~of all Lenders~~ would exceed an amount separately agreed upon by the ~~Aggregate Commitment Amount~~Borrower and such Issuing Lender. ~~Each~~ Existing Letters of Credit listed on Schedule 2.24 hereto shall be deemed to be issued on the Closing Date as Letters of Credit under this Agreement. Letters of Credit will be issued under the Tranche A Facility. (i) Immediately upon the issuance of each Letter of Credit, each Tranche A Lender shall be deemed to, and hereby ~~irrevocably and unconditionally~~ agrees to, ~~purchase~~ have irrevocably purchased from the applicable Issuing ~~Bank without recourse~~ Lender a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with ~~the Issuing Bank’s usual and customary business practices~~its Tranche A Percentage. (dii) ~~The Issuing Bank shall examine all documents purporting to represent a demand for payment under a~~ Each Letter of Credit ~~promptly following its receipt thereof. The~~ may, at the option of the applicable Issuing ~~Bank shall notify the Borrower and the Administrative Agent of~~ Lender, provide that such ~~demand for payment and whether the~~ Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof Lender may (but shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account required to) pay all or any part of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing maximum amount which may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time ~~after the Issuing Bank has received from any such Lender the funds~~ be available for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason drawing thereunder to the ~~Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion~~ beneficiary thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of ~~Default~~Default and the acceleration of the maturity of the Loans, provided that, if payment is not then due to such beneficiary, such ~~cash collateral~~ Issuing Lender shall deposit the funds in question in an account with such Issuing Lender to secure payment to such beneficiary and any funds so ~~posted (to the extent not so applied as aforesaid)~~ deposited shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver paid to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of ~~Credit;~~ Credit if conditions to such payment are satisfied or returned to the Administrative Agent for distribution to the Lenders (~~v) any other event or circumstance whatsoever~~or, ~~whether or not similar~~ if all Obligations shall have been paid in full in cash, to ~~any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against,~~ the Borrower~~’s obligations hereunder; or (vi~~) if no payment to such beneficiary has been made and the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any final date available for drawings under such Letter of Credit ~~or any~~ has passed. Each payment or ~~failure to make any payment thereunder (irrespective~~ deposit of ~~any~~ funds by an Issuing Lender as provided in this paragraph shall be treated for all purposes of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make this Agreement as a drawing ~~thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond~~ duly honored by such Issuing Lender under the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such related Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (PHH Corp)

Letters of Credit. (a) ~~During~~ Upon the ~~Availability Period~~terms and subject to the conditions herein set forth, at any time and from time to time after the date hereof and prior to the Expiration Date, the ~~Issuing Bank, in reliance upon~~ Lead Borrower may request the ~~agreements of the other Lenders pursuant~~ Issuer to ~~subsections (d) and (e) of this Section, may, in its sole discretion,~~ issue, at and subject to the ~~request of~~ terms and conditions contained herein, the ~~Borrower~~Issuer shall issue, ~~Letters of Credit~~ for the account of the ~~Borrower on the terms and conditions hereinafter set forth~~Borrowers one or more Letters of Credit; ~~provided~~ provided, however, that no Letter of Credit shall be issued if after giving effect to such issuance (i) ~~each~~ the aggregate Letter of Credit Outstandings shall exceed the Letter of Credit Sublimit or (ii) the aggregate Credit Extensions (including Swingline Loans) would exceed the limitation set forth in Section 2.01; and provided, further, that no Letter of Credit shall be issued if the Issuer shall have received notice from the Agent or the Required Lenders that the conditions to such issuance have not been met. If at any time the Total Commitment is reduced to an amount less than the Letter of Credit Sublimit, then the Letter of Credit Sublimit shall be reduced to an amount equal to (or, at Lead Borrower's option, less than) the Total Commitment. (b) Each Standby Letter of Credit shall expire at or prior to the close of business on the earlier of ~~(A)~~ the date which is (i) one (1) year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one (1) year after such renewal or extension) and (Bii) five (5) Business Days prior to the Expiration Date; provided, however, that each Standby Letter of Credit may, upon the request of the Lead Borrower, include a provision whereby such Letter of Credit shall be renewed automatically for additional consecutive periods of twelve (12) months or less (but not beyond the date that is five (5) Business Days prior to the ~~Stated Termination~~ Expiration Date; ) unless the Issuer notifies the beneficiary thereof at least thirty (30) days prior to the then-applicable expiration date that such Letter of Credit will not be renewed. (c) Each Commercial Letter of Credit shall expire at or prior to the close of business on the earlier of the date which is (i) sixty (60) days after the date of the issuance of such Commercial Letter of Credit and (ii) five (5) Business Days prior to the Expiration Date. (d) Drafts drawn under each Letter of Credit shall be reimbursed by the Borrowers in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit dollars on the ~~date~~ same Business Day of ~~issuance. Each issuance of a Letter of Credit shall be deemed~~ any such drawing by paying to ~~utilize~~ the ~~Commitment of each Lender by~~ Agent an amount equal to ~~the amount of~~ such ~~participation.~~ drawing not later than 1:00 p.m., Boston time, on (bi) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Lead Borrower shall have ~~executed and delivered any additional applications~~received notice of such drawing, ~~agreements and instruments relating to~~ if such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days notice is received prior to ~~the issuance of any Letter of Credit~~1:00 p.m., the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative AgentBoston time, on such date, or ~~before~~ (ii) the Business Day immediately ~~preceding~~ following the ~~date~~ day that the ~~Issuing Bank~~ Lead Borrower receives such notice, if such notice is ~~to issue~~ received after 1:00 p.m., Boston time on the ~~requested Letter~~ day of ~~Credit~~drawing; provided, ~~directing~~ however, that the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, thenLead Borrower may, subject to the ~~terms and~~ conditions ~~hereof~~to borrowing set forth herein, ~~the Issuing Bank shall, on the requested date, issue such Letter of Credit~~ request in accordance with Section 2.03 that such payment be financed with a Revolving Credit Loan consisting of a Prime Rate Loan or Swingline Loan in an equivalent amount and, to the ~~Issuing Bank’s usual~~ extent so financed, the Borrowers' obligation to make such payment shall be discharged and ~~customary business practices. (d)~~ replaced by the resulting Prime Rate Loan or Swingline Loan. The ~~Issuing Bank shall~~ Issuer shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of ~~Credit promptly following its receipt thereof~~Credit. The ~~Issuing Bank~~ Issuer shall promptly notify the ~~Borrower~~ Agent and the ~~Administrative Agent~~ Lead Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the ~~Issuing Bank~~ Issuer has made or will make ~~a LC Disbursement~~ payment thereunder; ~~provided~~ provided, however, that any failure to give or delay in giving such notice shall not relieve the ~~Borrower~~ Borrowers of ~~its~~ their obligation to reimburse the ~~Issuing Bank~~ Issuer and the Lenders with respect to any such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursementpayment. (e) If ~~for any reason a Base Rate Borrowing may not be (as determined in~~ the ~~sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank)~~ Issuer shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of make any Letter of Credit ~~or (vi) any other circumstance~~Disbursement, ~~happening or event whatsoever~~then, ~~whether or not similar to any of~~ unless the ~~foregoing. On~~ Borrowers shall reimburse the Issuer in full on the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is ~~required~~ made, the unpaid amount thereof shall bear interest at the rate per annum then applicable to ~~be returned~~ Prime Rate Loans for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount each day from ~~such due date to~~ and including the date such payment is made ~~at a rate per annum equal~~ to, but excluding, the date that the Borrowers reimburse the Issuer therefor; provided, however, that, if the Borrowers fail to reimburse such Issuer when due pursuant to Section 2.13(d), then the Default Rate shall apply. Interest accrued pursuant to this subsection shall be for the account of the Issuer, except that interest accrued on and after the date of payment by any Lender pursuant to Section 2.13(g) to reimburse the Issuer shall be for the account of such Lender to the ~~Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days~~ extent of such ~~due date~~payment. (f) Immediately upon the issuance of any Letter of Credit by the Issuer (or the amendment of a Letter of Credit increasing the amount thereof), ~~then~~and without any further action on the part of the Issuer, ~~retroactively~~ the Issuer shall be deemed to ~~the due date~~have sold to each Lender, and each such Lender shall be ~~obligated~~ deemed unconditionally and irrevocably to ~~pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice~~ have purchased from the ~~Administrative Agent~~ Issuer, without recourse or ~~the Required Lenders demanding that its reimbursement obligations with respect~~ warranty, an undivided interest and participation, to the ~~Letters~~ extent of such Lender's Revolving Credit ~~be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent~~Commitment Percentage, in ~~the name~~ such Letter of ~~the Administrative Agent~~ Credit, each drawing thereunder and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower Borrowers under this Agreement and the other Loan ~~Documents~~Documents with respect thereto. If Upon any change in the ~~Borrower~~ Revolving Credit Commitments under this Agreement, it is ~~required to Cash Collateralize its reimbursement obligations~~ hereby agreed that with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit ~~then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder~~ Outstandings, there shall be ~~absolute, unconditional and irrevocable and shall be performed strictly in accordance with~~ an automatic adjustment to the ~~terms of this Agreement under all circumstances whatsoever and irrespective of any~~ participations hereby created to reflect the new Revolving Credit Commitment Percentages of the ~~following circumstances: (i) any lack of validity~~ assigning and assignee Lenders. Any action taken or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment omitted by the ~~Issuing Bank~~ Issuer under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of ~~Credit comply with the terms thereof. The parties hereto expressly agree that~~Credit, if taken or omitted in the absence of gross negligence or willful ~~misconduct on~~ misconduct, shall not create for the ~~part~~ Issuer any resulting liability to any Lender. (g) In the event that the Issuer makes any Letter of Credit Disbursement and the ~~Issuing Bank (as finally determined by a court of competent jurisdiction~~Borrowers shall not have reimbursed such amount in full to the Issuer pursuant to this Section 2.13(g), the ~~Issuing Bank~~ Issuer shall promptly notify the Agent, which shall promptly notify each Lender of such failure, and each Lender shall promptly and unconditionally pay in dollars and in same day funds to the Agent for the account of the Issuer the amount of such Lender's Revolving Credit Commitment Percentage of such unreimbursed payment. If the Issuer so notifies the Agent, and the Agent so notifies the Lenders prior to 1:00 p.m., Boston time, on any Business Day, each such Lender shall make available to the Issuer such Lender's Revolving Credit Commitment Percentage of the amount of such payment on such Business Day in same day funds (or if such notice is received by the Lenders after 1:00 p.m., Boston time on the day of receipt, payment shall be ~~deemed~~ made on the immediately following Business Day). If and to the extent such Lender shall not have ~~exercised due care in each such determination. In furtherance~~ so made its Revolving Credit Commitment Percentage of the ~~foregoing~~ amount of such payment available to the Issuer, such Lender agrees to pay to the Issuer 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 the Issuer at the greater of the Federal Funds Effective Rate and ~~without limiting~~ a rate determined by the ~~generality thereof~~Agent in accordance with banking industry rules on interbank compensation. Each Lender agrees to fund its Revolving Credit Commitment Percentage of such unreimbursed payment notwithstanding a failure to satisfy any applicable lending conditions or the provisions of Section 2.01 or Section 2.10, or the ~~parties agree that~~occurrence of the Expiration Date. The failure of any Lender to make available to the Issuer its Revolving Credit Commitment Percentage of any payment under any Letter of Credit shall neither relieve any Lender of its obligation hereunder to make available to the Issuer its Revolving Credit Commitment Percentage of any payment under any Letter of Credit on the date required, ~~with~~ as specified above, nor increase the obligation of such other Lender. Whenever any Lender has made payments to the Issuer in respect ~~to documents presented that appear on their face to be in substantial compliance with the terms~~ of a any reimbursement obligation for any Letter of Credit, ~~the Issuing Bank may~~such Lender shall be entitled to share ratably, based on its Revolving Credit Commitment Percentage, in ~~its sole discretion, either accept~~ all payments and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms collections thereafter received on account of such ~~Letter of Credit~~reimbursement obligation. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Loan Agreement (Rex Stores Corp)

Letters of Credit. (a) ~~During~~ Borrower, any of its Subsidiaries and/or any Permitted Joint Venture, an irrevocable standby letter of credit so requested by the ~~Availability Period~~Borrower in a form customarily used by such Letter of Credit Issuer or in such other form as may be approved by such Letter of Credit Issuer and the Administrative Agent (each such standby letter of credit, a "Standby Letter of Credit" and, collectively, the ~~Issuing Bank~~"Standby Letters of Credit"), ~~in reliance upon the agreements of the other Lenders pursuant to subsections (d)~~ and (ey) ~~of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ for the account of the Borrower on and for the ~~terms~~ benefit of sellers of goods to the Borrower, any of its Subsidiaries or any Per mitted Joint Venture, an irrevocable documentary letter of credit in a form customarily used by such Letter of Credit Issuer or in such other form as may be approved by such Letter of Credit Issuer and ~~conditions hereinafter set forth; provided that~~ the Administrative Agent in support of commercial transactions of the Borrower, any of its Subsidiaries or any Permitted Joint Venture, as the case may be, entered into in the ordinary course of its business (each such documentary letter of credit, a "Trade Letter of Credit" and, collectively, the "Trade Letters of Credit" and together with the Standby Letters of Credit, the "Letters of Credit"). Notwithstanding the foregoing, no Letter of Credit Issuer shall be obligated to issue any Letter of Credit at a time when a Bank Default exists unless such Letter of Credit Issuer has entered into arrangements satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer's risk with respect to the participation in Letters of Credit of the Bank which is the subject of the Bank Default, including by cash collateralizing such Bank's Percentage of the Letter of Credit Outstandings. (b) Notwithstanding the foregoing, (i) ~~each~~ no Letter of Credit shall ~~expire on~~ be issued the ~~earlier~~ Stated Amount of which, when added to the Letter of Credit Outstandings at such time, would exceed either (x) the difference between (A) ~~the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension)~~ $30,000,000 and (B) ~~the date that is five~~ Non-Facility Letter of Credit Outstandings or (5y) ~~Business Days prior~~ when added to the ~~Stated Termination Date;~~ aggregate principal amount of all Revolving Loans and all Competitive Bid Loans then outstanding, the Total Commitment at such time; (ii) each Letter of Credit shall be by its terms terminate on or before the earlier of (x)(A) in ~~a stated amount~~ the case of ~~at least $5,000;~~ Standby Letters of Credit, the date which occurs 18 months after such Standby Letter of Credit's date of issuance (subject to extension provisions acceptable to the Administrative Agent and the respective Letter of Credit Issuer) and (B) in the case of Trade Letters of Credit, the date which occurs 180 days after such Trade Letter of Credit's date of issuance and (y) the third Business Day preceding the Final Maturity Date; (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each ~~Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a~~ Standby Letter of Credit shall be ~~deemed to utilize the Commitment of~~ denominated in Dollars; (iv) each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Trade Letter of Credit shall be denominated in ~~such form and contain such terms as the Issuing Bank shall approve and~~ Dollars or an Approved Alternate Currency, provided that ~~the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such~~ no Trade -------- Letter of Credit as denominated in an Approved Alternate Currency shall be issued by any Letter of Credit Issuer if the ~~Issuing Bank shall reasonably require; provided that in the event~~ Stated Amount of ~~any conflict between~~ such ~~applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any~~ Trade Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is when added to ~~issue the requested Letter of Credit, directing the Issuing Bank not to issue~~ the Letter of Credit ~~because~~ Outstandings at such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank time in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Trade Letters of Credit ~~be Cash Collateralized pursuant to this subsection~~denominated in Approved Alternate Currencies, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreementwould exceed $5,000,000; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (Ametek Inc)

Letters of Credit. ~~(a) During~~ Subject to the ~~Availability~~ terms and conditions of this Agreement, during the Commitment Period, Agent (or such other Bank as shall agree to be the ~~Issuing~~ Fronting Bank~~, in reliance upon the agreements of the other Lenders pursuant to subsections (d~~) ~~and (e) of this Section, may~~shall, in its ~~sole discretion~~own name, ~~issue~~but only as agent for the Banks (other than the Canadian Banks and, at on and after the ~~request of~~ Activation Date, only the ~~Borrower~~Domestic Banks), issue such Letters of Credit for the account of ~~the~~ Borrower ~~on the terms and conditions hereinafter set forth; provided that (i) each Letter~~ or any Guarantor of ~~Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or~~Payment, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the as Borrower may from time to time request. Borrower shall not request any Letter of Credit (and neither Agent nor any Fronting Bank shall be obligated to issue any Letter of Credit) if, after giving effect ~~to such issuance~~thereto, (Aa) the ~~aggregate LC~~ Letter of Credit Exposure would exceed the ~~LC Commitment~~ 21 Letter of Credit Commitment, or (Bb) the ~~aggregate~~ Revolving Credit Exposure ~~of all Lenders~~ would exceed the ~~Aggregate Commitment Amount~~aggregate amount of the Revolving Credit Commitments. ~~Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in~~ The issuance of each Letter of Credit ~~equal to such Lender’s Pro Rata Share~~ shall confer upon each Bank (other than the Canadian Banks and, on and after the Activation Date, only the Domestic Banks) the benefits and liabilities of a participation consisting of an undivided pro rata interest in the ~~aggregate amount available to be drawn under such~~ Letter of Credit on to the ~~date~~ extent of ~~issuance~~that Bank's Commitment Percentage or Revised Commitment Percentage, as applicable. Each ~~issuance of~~ request for a Letter of Credit shall be ~~deemed~~ delivered to ~~utilize the Commitment of each Lender by an amount equal to the amount of such participation.~~ Agent (~~b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank~~ and the ~~Administrative Agent irrevocable written notice at least~~ Fronting Bank, if the Fronting Bank is a Bank other than Agent) not later than 11:00 A.M. (Cleveland, Ohio time) three (3) Business Days prior to the ~~requested date of such issuance specifying~~ day upon which the ~~date (which shall be a Business Day) such~~ Letter of Credit is to be ~~issued~~ issued. Each such request shall be in a form acceptable to Agent (and the Fronting Bank, if the Fronting Bank is a Bank other than Agent) and shall specify the face amount thereof, whether such Letter of Credit is a commercial documentary or a standby letter of credit, the account party, the beneficiary, the intended date of issuance, the expiry date thereof, and the nature of the transaction to be supported thereby. Concurrently with each such request, Borrower, and any Guarantor of Payment for whose benefit the Letter of Credit is to be issued, shall execute and deliver to Agent (or ~~amended~~the Fronting Bank, ~~renewed or extended~~if the Fronting Bank is a Bank other than Agent) an appropriate application and agreement, being in the standard form of the Fronting Bank for such letters of credit, as amended to conform to the ~~case may be~~provisions of this Agreement if required by Agent. Agent shall give each Bank (other than a Canadian Bank and, on and after the Activation Date, only a Domestic Bank) notice of each such request for a Letter of Credit. In respect of each Letter of Credit and the drafts thereunder, if any, whether issued for the account of Borrower or a Guarantor of Payment, Borrower agrees to pay to Agent, for the pro rata benefit of the Banks (other than the Canadian Banks and, on and after the Activation Date, only the Domestic Banks), a commission based upon the ~~expiration~~ face amount of the Letter of Credit, which shall be paid quarterly in arrears, on the last day of each March, June, September and December, at a rate per annum equal to (a) the then current Applicable Margin for LIBOR Loans (i.e. the Applicable Margin for LIBOR Loans in effect on the date such Letter of Credit is issued and, as to each quarterly payment thereafter, the Applicable Margin for LIBOR Loans in effect on the date of such quarterly payment), times (b) the average undrawn face amount of such Letter of Credit during such fiscal quarter. Whenever a Letter of Credit is drawn, Borrower shall immediately reimburse the Fronting Bank for the amount drawn. In the event that the amount drawn is not reimbursed by Borrower within one (1) Business Day of the drawing of such Letter of Credit, at the ~~amount~~ sole option of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (~~by telephone or in writing) that~~ and the ~~Administrative Agent has received such notice, and~~Fronting Bank, if ~~not,~~ the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Fronting Bank is ~~to issue the requested Letter of Credit, directing the Issuing~~ a Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than ~~from the proceeds of Loans~~Agent), ~~the~~ Borrower shall be deemed to have ~~timely given~~ requested a ~~Notice of Borrowing~~ Revolving Loan, subject to the ~~Administrative Agent requesting~~ provisions of Section 2.1A, in the ~~Lenders~~ amount drawn. Such Revolving Loan shall be evidenced by the Revolving Credit Notes. Each Bank (other than a Canadian Bank and, on and after the Activation Date, only a Domestic Bank) agrees to make a ~~Base Rate Borrowing~~ Revolving Loan on the date ~~on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely~~ of such ~~Borrowing~~notice, ~~the~~ subject to no conditions precedent ~~set forth in Section 3.2 hereof shall not be applicable~~whatsoever. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Each Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than a Canadian Bank and, on and after the ~~Issuing~~ Activation Date, only a Domestic Bank) ~~shall be obligated~~ acknowledges and agrees that its obligation to ~~fund the participation that such Lender purchased~~ make a Revolving Loan pursuant to ~~subsection (a) of~~ Section 2.1A when required by this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be 2.1C is absolute and unconditional and shall not be affected by any ~~circumstance~~circumstance whatsoever, including, without limitation, ~~(i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against~~ the ~~Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ occurrence and continuance of ~~a Default or~~ an Unmatured Event of Default or ~~the termination~~ Event of ~~the Aggregate Commitments~~Default, ~~(iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of~~ and that its ~~Subsidiaries~~payment to Agent, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of Agent, of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share proceeds of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender Revolving Loan shall be ~~obligated~~ made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not such Bank's Revolving Credit Commitment shall have been reduced or terminated. Borrower irrevocably authorizes and instructs Agent to ~~pay interest on such amount at~~ apply the ~~rate set forth in Section 2.12(b). (g) If~~ proceeds of any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized borrowing pursuant to this ~~subsection~~paragraph to reimburse, in full, the ~~Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and~~ Fronting Bank for the ~~benefit of the Issuing Bank and the Lenders, an~~ amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned drawn on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank Each such Revolving Loan shall be deemed to ~~have exercised due care in each~~ be a Base Rate Loan unless otherwise requested by and available to Borrower hereunder. Each Bank is hereby authorized to record on its records relating to its Revolving Credit Note such ~~determination. In furtherance~~ Bank's pro rata share of the ~~foregoing~~ amounts paid and ~~without limiting~~ not reimbursed on the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter Letters of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (Applied Industrial Technologies Inc)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement, the Issuing ~~Bank, in reliance upon the agreements~~ Lender agrees to issue letters of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ credit for the account of ~~the Borrower on the terms and conditions hereinafter set forth; provided that~~ Borrowers (ieach, an "L/C") or to purchase participations or execute indemnities or reimbursement obligations (each ~~Letter~~ such undertaking, an "L/C UNDERTAKING") with respect to letters of ~~Credit shall expire on the earlier of~~ credit issued by an Underlying Issuer (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share as of the ~~aggregate amount available~~ Closing Date, the prospective Underlying Issuer is to be ~~drawn under such Letter~~ Xxxxx Fargo) for the account of ~~Credit on the date of issuance~~Borrowers. ~~Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b)~~ To request the issuance of ~~a Letter of Credit~~ an L/C or an L/C Undertaking (or ~~any~~ the amendment, ~~renewal~~ renewal, or extension of an outstanding ~~Letter of Credit~~L/C or L/C Undertaking), ~~the~~ Administrative Borrower shall ~~give~~ hand deliver or telecopy (or transmit by electronic -44- communication, if arrangements for doing so have been approved by the Issuing ~~Bank~~ Lender) to the Issuing Lender and ~~the Administrative~~ Agent ~~irrevocable written notice at least three~~ (~~3) Business Days prior to~~ reasonably in advance of the requested date of ~~such~~ issuance, amendment, renewal, or extension) a notice requesting the issuance ~~specifying~~ of an L/C or L/C Undertaking, or identifying the ~~date (which shall be a Business Day) such Letter of Credit is~~ L/C or L/C Undertaking to be ~~issued (or~~ amended, ~~renewed~~ renewed, or extended, as the ~~case may be)~~date of issuance, amendment, renewal, or extension, the ~~expiration~~ date of on which such ~~Letter of Credit~~L/C or L/C Undertaking is to expire, the amount of such ~~Letter of Credit~~L/C or L/C Undertaking, the name and address of the beneficiary thereof (or of the Underlying Letter of Credit, as applicable), and such other information as shall be necessary to prepare, amend, ~~renew~~ renew, or extend such L/C or L/C Undertaking. Prior to or concurrent with the date of each issuance of a Letter of Credit by the Issuing Lender, Borrowers shall make a loan to the Issuing Lender in a Dollar amount equal to 105% of the requested Letter of Credit. ~~In addition~~ Upon receipt of the proceeds of such loan the Issuing Lender shall not be obligated to segregate the proceeds thereof or pay Borrowers any interest thereon. Upon the drawing under any Letter of Credit issued by the Issuing Lender, it shall be entitled to offset or recoup the amount of such drawing from such loan amount and, thereafter, shall owe Borrowers only the net amount remaining. The Issuing Lender shall only be obligated to repay the net amount of any such loan owing at such time as all of the Letters of Credit have expired or have been drawn and the Issuing Lender has been reimbursed the amount of such drawings. If requested by the Issuing Lender, Borrowers also shall be an applicant under the application with respect to any Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The Issuing Lender shall have no obligation to issue a Letter of Credit if any of the following would result after giving effect to the requested Letter of Credit: (i) the Letter of Credit Usage would exceed the Borrowing Base LESS the sum of (y) the outstanding principal amount of the Term Loan, and (z) the amount of outstanding Advances, or (ii) the Letter of Credit Usage would exceed (y) prior to the satisfaction of the Revolver Conditions, the lesser of (1) $19,000,000, or (2) 95% of the Letter of Credit Loan Amount, and (z) after the satisfaction of the Revolver Conditions, $25,000,000, or (iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount LESS the sum of (y) the outstanding principal amount of the Term Loan, and (z) the amount of outstanding Advances. Borrowers and the Lender Group acknowledge and agree that certain Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Letter of Credit (and corresponding Underlying Letter of Credit) shall be in form and substance acceptable to the Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Lender is obligated to advance funds under a Letter of Credit, Borrowers immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on the date that such L/C Disbursement is made, if Administrative -45- Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Administrative Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on (i) the Business Day that Administrative Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances under SECTION 2.6. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers' obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. Promptly following receipt by Agent of any payment from Borrowers pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments pursuant to SECTION 2.12(c) to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their interest may appear. (b) Promptly following receipt of a notice of L/C Disbursement pursuant to SECTION 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions ~~in Article III,~~ as if Borrowers had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Lenders. By the issuance of ~~such~~ a Letter of Credit (or ~~any~~ an amendment ~~which increases the amount of such Letter of Credit) will be subject~~ to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and~~ the Lenders with ~~respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse~~ Revolver Commitment, the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given~~ granted to each Lender with a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3Revolver Commitment, and each Lender ~~shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance~~ with ~~Section 2.5. The proceeds of such Borrowing~~ a Revolver Commitment shall be ~~applied directly by the Administrative Agent~~ deemed to ~~reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason~~ have purchased, a ~~Base Rate Borrowing may not be (as determined~~ participation in ~~the sole discretion~~ each Letter of ~~the Administrative Agent)~~Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Lender agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrowers on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in clause (a) of this Section, or of any reimbursement payment required to be refunded to Borrowers for any reason. Each ~~Lender’s~~ Lender with a Revolver Commitment acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount equal to its ~~participation~~ respective Pro Rata Share pursuant to this SECTION 2.12(b) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in SECTION 3 hereof. If any such Lender fails to make available to Agent the amount of such Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full. (c) Each Borrower hereby agrees to indemnify, ~~(iii)~~ save, defend, and hold the Lender Group harmless from any ~~adverse change~~ loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; PROVIDED, HOWEVER, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the ~~condition (financial~~ gross negligence or ~~otherwise)~~ willful misconduct of the ~~Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower~~ Issuing Lender or any other ~~Lender, (v) any amendment, renewal or extension~~ member of the Lender Group. Each Borrower agrees to be bound by the Underlying Issuer's regulations and interpretations of any Underlying Letter of Credit or by Issuing Lender's interpretations of any L/C issued by Issuing Lender to or for such Borrower's account, even though this interpretation may be different from such Borrower's own, and each Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrowers' instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Each Borrower understands that the L/C Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrowers against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, cost, expense (~~vi)~~ including reasonable attorneys fees), or liability incurred by the Lender Group under any L/C Undertaking as a result of the Lender Group's indemnification of any Underlying Issuer; PROVIDED, HOWEVER, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability that is caused by the gross negligence or willful misconduct of the Issuing Lender or any other ~~circumstance, happening or event whatsoever, whether or not similar to any~~ member of the ~~foregoing. On the date that such participation is required~~ Lender Group. (d) Each Borrower hereby authorizes and directs any Underlying Issuer to ~~be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation~~ deliver to the ~~Administrative~~ Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender's instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application. (e) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrowers to Agent for the account of the Issuing ~~Bank. Whenever~~Lender; it being acknowledged and agreed by each Borrower that, ~~at any time after~~ as of the ~~Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement~~Closing Date, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed issuance charge imposed by the ~~Administrative Agent or~~ prospective Underlying Issuer is .825% per annum times the ~~Issuing Bank~~ face amount of each Underlying Letter of Credit, that such issuance charge may be changed from time to ittime, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals. (f) To If by reason of (i) any change in any applicable law, treaty, rule, or regulation or any change in the ~~extent that~~ interpretation or application thereof by any ~~Lender shall fail to pay any amount required to be paid pursuant to subsection (d)~~ Governmental Authority, or (eii) compliance by the Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of ~~this Section on the due date therefor~~any Governmental Authority or monetary authority including, ~~such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to~~ Regulation D of the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders Reserve Board as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to ~~time, the Issuing Bank shall deliver to such Lender~~ time in effect (and any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:successor thereto): (i) any ~~lack of validity~~ reserve, deposit, or ~~enforceability~~ similar requirement is or shall be imposed or modified in respect of any Letter of Credit ~~or this Agreement;~~issued hereunder, or (ii) there shall be imposed on the ~~existence of any claim, set-off, defense~~ Underlying Issuer or ~~other right which~~ the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender ~~(including the Issuing Bank) or~~ Group any other ~~Person for whom such beneficiary or~~ condition regarding any ~~such transferee may be acting, whether in connection with this Agreement or the~~ Underlying Letter of Credit or any ~~document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a~~ Letter of Credit ~~proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by~~ issued pursuant hereto; and the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any result of the foregoing ~~shall have any liability~~ is to increase, directly or ~~responsibility by reason~~ indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or ~~in connection with the issuance or transfer of~~ maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Administrative Borrower, and Borrowers shall pay on demand such amounts as Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment ~~or failure~~ in full thereof at the rate then applicable to ~~make any payment thereunder (irrespective~~ Advances hereunder. The determination by Agent of any of amount due pursuant to this Section, as set forth in a certificate setting forth the ~~circumstances referred to above)~~calculation thereof in reasonable detail, or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree thatshall, in the absence of ~~gross negligence~~ manifest or ~~willful misconduct~~ demonstrable error, be final and conclusive and binding on ~~the part~~ all of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credithereto. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Loan and Security Agreement (Peregrine Systems Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~250,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.13(c). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section ~~8.1(g~~8.1(h) or (hi). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (LendingTree, Inc.)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement (including without limitation the provisions of Article III and this Section 2.10(a)), upon the request of Borrower made in accordance herewith not later than seven (7) days before the Maturity Date, the Issuing ~~Bank~~Lender shall issue letters of credit denominated in Dollars for the account of Borrower and, if requested by Borrower, for the benefit of one of its Affiliates (each, a “Letter of Credit”), and, subject to the provisions of Section 2.1(a)(iii), the Issuing Lender shall amend, renew or extend any Letter of Credit. Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by any of the individuals identified on Exhibit R-1 attached hereto (or, in ~~reliance upon~~ certain cases, two of such individuals, all as set forth in further detail in Exhibit R-1 attached hereto) and delivered to the ~~agreements~~ Issuing Lender and Agent via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the ~~other Lenders pursuant~~ requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance satisfactory to ~~subsections (d) and (e) of this Section, may,~~ the Issuing Lender in its sole ~~discretion~~and absolute discretion and shall specify (i) the amount of such Letter of Credit, ~~issue~~(ii) the -40- date of issuance, at amendment, renewal, or extension of such Letter of Credit, (iii) the ~~request~~ expiration of such Letter of Credit, (iv) the name and address of the ~~Borrower~~beneficiary thereof, ~~Letters~~ (v) the identity of Xxxxxxxx’s Affiliate for whose benefit such Letter of Credit shall be issued in the event that Borrower requests that the issuing Lender issue a Letter of Credit for the ~~account~~ benefit of one of its Affiliates, and (vi) such other information (including, in the case of an amendment, renewal, or extension, identification of the ~~Borrower on the terms and conditions hereinafter set forth; provided that (i) each~~ outstanding Letter of Credit to be so amended, renewed, or extended) as shall ~~expire on~~ be necessary to prepare, amend, renew, or extend such Letter of Credit. It is hereby acknowledged that the ~~earlier~~ Issuing Lender shall have no obligation to issue a Letter of Credit (A) if, after giving effect to the ~~date~~ issuance of such requested Letter of Credit, (1) the Letter of Credit Usage would exceed $25,000,000, (2) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the amount of the Revolving Credit Facility Usage, or (3) the Letter of Credit Usage would exceed the Borrowing Base at such time less the amount of the Revolving Credit Facility Usage, (B) at any time when one ~~year after~~ or more of the ~~date~~ Lenders is a Defaulting Lender, but only until such time as either (1) the Revolver Commitments of the Defaulting Lender or Defaulting Lenders have been assumed by a Lender that is not a Defaulting Lender, (2) the Maximum Revolver Amount has been reduced by the amount of such Defaulting Lender’s or Defaulting Lenders’ Revolver Commitments or (3) such Defaulting Lender’s Letter of Credit exposure has been cash collateralized, (C) if 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 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 Closing Date, or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Lender in good xxxxx xxxxx material to it, or (D) if the issuance of such Letter of Credit would violate one or more policies of the Issuing Lender applicable to letters of credit generally. Agent shall provide a report to each Lender on a quarterly basis setting forth the then current Letter of Credit Usage and Xxxxxx’s Pro Rata Share thereof. (~~or, in~~ b) Each Letter of Credit shall have an expiry date no later than the ~~case~~ earlier to occur of ~~any renewal or extension thereof,~~ (i) one year after the issuance or renewal of such ~~renewal or extension)~~ Letter of Credit and ~~(B) the date that is five (5) Business Days prior to the Stated Termination Date;~~ (ii) ~~each Letter~~ the Maturity Date, and all Letters of Credit shall be in form and substance acceptable to the Issuing Lender in its sole and absolute discretion. Notwithstanding the foregoing, to the extent Borrower so requests with respect to any new Letter of Credit issued hereunder, the Issuing Xxxxxx agrees to issue a ~~stated~~ Letter of Credit that has automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”). Unless otherwise directed by the Issuing Lender, Borrower shall not be required to make a specific request to the Issuing Lender for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, each Lender with a Revolver Commitment shall be deemed to have authorized the Issuing Lender to permit the renewal of such Letter of Credit at any time prior to an expiry date not later than the Maturity Date (subject to the cash collateral requirement of Section 2.1(a)(iii)); provided that the Issuing Lender shall not permit any such renewal if (x) the Issuing Lender has determined in its reasonable discretion that it would have no obligation at -41- such time to issue such Letter of Credit in its renewed form under Section 2.10(a), or (y) it has received notice on or before the day that is seven Business Days before the renewal date from Agent, any Lender or Borrower that one or more of the applicable conditions specified in Section 3.2 (other than 3.2(d)) are not then satisfied. The foregoing to the contrary notwithstanding, any change to the face amount of ~~at least $5,000; and (iii) the Borrower may not request~~ any Letter of Credit ifshall only be made pursuant to an amendment thereto in accordance with the provisions of this Agreement, ~~after giving effect~~ and in no event shall Agent or the Issuing Lender issue a Letter of Credit which provides for an automatic increase, automatic decrease or other automatic change to the face amount of any Letter of Credit. (c) If the Issuing Lender is obligated to advance funds under a Letter of Credit, Borrower shall reimburse such L/C Disbursement to the Issuing Lender by paying to Agent an amount equal to such ~~issuance~~L/C Disbursement not later than 1:00 p.m. (Pacific Time) on the date that such L/C Disbursement is made, if Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 9:00 a.m. (APacific Time) on such date, or, if such notice has not been received by Borrower prior to 9:00 a.m. (Pacific Time) on such date, then not later than 1:00 p.m. (Pacific Time) on the ~~aggregate LC Exposure would exceed~~ Business Day immediately following the ~~LC Commitment or (B)~~ day that Xxxxxxxx receives such notice. Such reimbursement shall be made in Dollars. In the ~~aggregate Credit Exposure~~ absence of ~~all Lenders would exceed~~ such reimbursement, the ~~Aggregate Commitment Amount. Each Lender~~ L/C Disbursement immediately and automatically shall be deemed toto be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.3. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Xxxxxxxx’s obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. To the extent Borrower has provided to Agent cash or Cash Equivalents to cash collateralize outstanding Letters of Credit pursuant to the provisions of this Agreement, and ~~hereby irrevocably and unconditionally agrees to~~if no other reimbursement obligation for a separate L/C Disbursement exists, ~~purchase from~~ then Agent may utilize the cash collateral to reimburse the Issuing ~~Bank without recourse a participation in each Letter~~ Lender for such L/C Disbursement. Promptly following receipt by Agent of ~~Credit equal~~ any payment from Borrower pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.10(d) to reimburse the Issuing Lender, then to such ~~Lender’s~~ Lenders and the Issuing Lender as their interests may appear. (d) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.10(c) which is deemed to be an Advance hereunder, each Lender agrees to fund in Dollars in immediately available funds its Pro Rata Share of any Advance deemed made pursuant to the ~~aggregate amount available to be drawn under such Letter of Credit~~ foregoing subsection on the ~~date of issuance. Each issuance of a Letter of Credit~~ same terms and conditions as if Borrower had requested such Advance and Agent shall ~~be deemed to utilize the Commitment of each Lender by an amount equal~~ promptly pay to the ~~amount of such participation. (b) To request~~ Issuing Lender the amounts so received by it from the Lenders. By the issuance of a Letter of Credit (or ~~any amendment, renewal or extension of~~ an ~~outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior~~ amendment to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve~~ the ~~Borrower of its obligation to reimburse~~ Lenders, the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given a Notice of Borrowing~~ granted to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3each Lender, and each Lender shall ~~make the proceeds~~ be deemed to have purchased, a participation in each Letter of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent)Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Lender agrees to pay to Agent in Dollars in immediately available funds, for the account of the Issuing Lender, such Xxxxxx’s Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to Agent in Dollars in immediately available funds, for the account of the Issuing Lender, such Xxxxxx’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Xxxxxxxx on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in clause (c) above, or of any reimbursement payment required to be refunded to Borrower for any reason. Each ~~Lender’s~~ Lender acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount in Dollars in immediately available funds equal to its ~~participation~~ respective Pro Rata Share of each L/C Disbursement made by the Issuing Lender pursuant to this Section 2.10(d) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in Article III hereof. If any such Lender fails to make available to Agent the amount of such Xxxxxx’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, (i) such Lender shall be deemed to be a Defaulting Lender, (ii) Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full, and (iii) Agent shall be authorized by Borrower and each Lender to request that the Lenders fund an additional Advance equal to such Defaulting Lender’s Pro Rata Share of such L/C Disbursement (subject in any ~~adverse change~~ event to the limitation set forth in the ~~condition~~ proviso in Section 2.1(a)(i)(A)). (~~financial~~ e) Xxxxxxxx hereby agrees to indemnify, save, defend, and hold the Lender Group harmless from any loss, cost, expense, or ~~otherwise)~~ liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is found in a final non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, willful misconduct or violation of the ~~Borrower or any of its Subsidiaries, (iv) any breach~~ express terms of this Agreement by the ~~Borrower~~ Issuing Lender or any other ~~Lender~~member of the Lender Group. The indemnity set forth above is in addition to any other indemnity set forth in this Agreement or in any other Loan Document (including the indemnities by Borrower set forth in Section 8.2 hereof), ~~(v)~~ and shall not be deemed to limit the provisions of any ~~amendment, renewal~~ other indemnity or ~~extension~~ any other similar provision set forth herein or therein. Borrower agrees to be bound by the Issuing Xxxxxx’s good faith interpretations of any Letter of Credit issued by the Issuing Lender to or ~~(vi)~~ for Xxxxxxxx’s account, even though this interpretation may be different from Xxxxxxxx’s own, and Borrower understands and agrees that the Lender Group shall not be liable for any ~~other circumstance~~error, ~~happening~~ negligence, or ~~event whatsoever~~mistake, whether of omission or ~~not similar to~~ commission, in following Xxxxxxxx’s instructions or those contained in the Letter of Credit or any of modifications, amendments, or supplements thereto. Borrower hereby acknowledges and agrees that neither the ~~foregoing. On~~ Lender Group nor the ~~date that such participation is required to be funded, each~~ Issuing Lender shall ~~promptly transfer~~be responsible for delays, errors, or omissions resulting from the malfunction of equipment in connection with any Letter of Credit. (f) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender relating to Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately ~~available funds, the amount of its participation~~ shall be reimbursable by Borrower to ~~the Administrative~~ Agent for the account of the Issuing ~~Bank. Whenever, at any time after~~ Lender; it being acknowledged and agreed by Borrower that the issuance charge imposed by the Issuing ~~Bank has received from any such~~ Lender is fixed at 0.125% per annum times the ~~funds for its participation~~ undrawn amount of each Letter of Credit, which shall in no event be less than a ~~LC Disbursement~~minimum of $500 and no greater than a maximum of $1,500, and that the Issuing ~~Bank (or the Administrative Agent on its behalf) receives any payment on account thereof~~Lender also imposes a schedule of charges for amendments, ~~the Administrative Agent or the Issuing Bank~~-43- extensions, ~~as the case may be~~drawings, ~~will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee~~and renewals, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender which shall be ~~obligated to pay interest on such amount at~~ no more than the ~~rate set forth in Section 2.12(b)~~rates therefor that have been most recently published by CNB. (g) If ~~any Event~~ by reason of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any ~~lack of validity~~ change after the Closing Date in any applicable law, treaty, rule, or ~~enforceability of~~ regulation or any ~~Letter of Credit~~ change in the interpretation or ~~this Agreement;~~ application thereof by any Governmental Authority, or (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment compliance by the ~~Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply~~ Lender Group with ~~the terms of such Letter of Credit; (v)~~ any ~~other event or circumstance whatsoever~~direction, ~~whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of~~request, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the ~~circumstances referred~~ Federal Reserve Board as from time to ~~above), or~~ time in effect (and any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.successor thereto):

Appears in 1 contract

Samples: Credit Agreement (Ares Commercial Real Estate Corp)

Letters of Credit. ~~(a) During~~ At any time that no default has occurred and is continuing or would result, and no event has occurred and is continuing or would result which, with the ~~Availability Period~~giving of notice or the lapse of time or both would be a default, the ~~Issuing Bank, in reliance upon the agreements~~ Bank agrees to issue letters of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ credit for the account of the Borrower ~~on the terms and conditions hereinafter set forth;~~ and/ or DMI until September 30, 2007, provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (Aa) the aggregate ~~LC Exposure would exceed the LC Commitment~~ maximum available amount which is drawn and unreimbursed or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to may be drawn under ~~such Letter~~ all letters of ~~Credit on the date~~ credit which are outstanding at any time, including without limitation all letters of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be credit issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the ~~Issuing Bank in accordance~~ Borrower and/ or DMI which are outstanding on the date of this agreement, shall not exceed $7,000,000.00, (b) the issuance of any letter of credit with ~~Section 2.5. The proceeds of such Borrowing~~ an expiration date beyond September 30, 2007, shall be ~~applied directly by~~ entirely at the ~~Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole~~ discretion of the ~~Administrative Agent)~~Bank, ~~or is not, made in accordance with the foregoing provisions, then each Lender~~ (~~other than the Issuing Bank~~c) any letter of credit shall be ~~obligated to fund~~ a commercial letter of credit and the ~~participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as~~ form of the ~~date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation~~ requested letter of credit shall be ~~absolute and unconditional and shall not be affected by any circumstance~~satisfactory to the Bank, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the ~~condition (financial or otherwise) of the Borrower or any of its Subsidiaries~~Bank’s sole discretion, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection and (d) ~~or (e)~~ the Borrower and DMI shall have executed an application and reimbursement agreement for any letter of ~~this Section on~~ credit in the ~~due date therefor, such Lender~~ Bank’s standard form. The Borrower shall pay ~~interest to~~ the ~~Issuing~~ Bank a fee (~~through~~ the ~~Administrative Agent~~“L/C Fee”) ~~on such amount from such due date to the date such payment~~ for each commercial letter of credit that is ~~made~~ issued, at a rate per annum ~~equal~~ set forth below opposite the applicable Funded Debt to EBITDA Ratio, payable in arrears for each calendar quarter within ten (10) days of billing by the ~~Federal Funds Rate; provided that if such Lender shall fail~~ Bank. Funded Debt to ~~make such payment to~~ EBITDA Ratio is defined in Section 4.2L of the ~~Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender~~ Credit Agreement. No credit shall be ~~obligated~~ given for fees paid due to early termination of any letter of credit. The Borrower shall also pay ~~interest on such amount at~~ the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations Bank’s standard transaction fees with respect to ~~the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in~~ any transactions occurring on an account ~~with~~ of any letter of credit. Each fee shall be payable when the ~~Administrative Agent~~related letter of credit is issued, ~~in the name~~ and transaction fees shall be payable upon completion of the ~~Administrative Agent and for~~ transaction as to which they are charged. All fees may be debited by the ~~benefit of the Issuing~~ Bank ~~and the Lenders, an amount in cash equal~~ to ~~105% of the aggregate LC Exposure of all Lenders as of such date plus~~ any ~~accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations~~ deposit account of the Borrower carried with ~~respect to~~ the ~~Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable,~~ Bank without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed further authority and, ~~to the extent not so applied~~in any event, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to paid by the Borrower within ~~three~~ ten (310) ~~Business Days after all Events~~ days following billing. Greater than or equal to 2.00 to 1.00 125 bp Less than 2.00 to 1.00 but greater than or equal to 1.00 to 1.00 75 bp Less than 1.00 to 1.00 75 bp The Bank’s determination of ~~Default have been cured or waived. (h) Upon~~ the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder L/C Fee shall be ~~absolute~~conclusive, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any absent manifest error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Note Modification Agreement (Flexsteel Industries Inc)

Letters of Credit. (a) ~~During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant~~ Subject to ~~subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on~~ the terms and conditions ~~hereinafter set forth; provided that~~ hereof, the Lender agrees to arrange for Letters of Credit to be issued (or the stated maturity thereof extended or terms thereof modified or amended) on behalf of the Borrower and its Subsidiaries on not less than three Business Days' prior notice thereof by delivery by the Borrower of a Request for Issuance to the Lender. Each Request for Issuance shall specify (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) ~~such Letter~~ of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or ~~any amendment~~ the date of effectiveness of such extension, modification or amendment) and the stated expiry date thereof (which ~~increases~~ shall be no later than the fifth Business Day preceding the Maturity Date), (ii) the proposed stated amount (denominated in dollars) of such Letter of Credit (which shall not be less than $1,000,000), (iii) the name and address of the beneficiary of such Letter of Credit and (iv) a statement of drawing conditions applicable to such Letter of Credit~~) will~~ , and if such Request for Issuance relates to an amendment or modification of a Letter of Credit, it shall be ~~subject~~ accompanied by the consent of the beneficiary of the Letter of Credit thereto. Each Request for Issuance shall be irrevocable unless modified or rescinded by the Borrower not less than two days prior to the ~~further conditions that such~~ proposed date of issuance (or effectiveness) specified therein. (b) No Letter of Credit shall be ~~in such form and contain such terms as~~ requested or issued hereunder if the ~~Issuing Bank shall approve and that~~ issuance thereof would increase the ~~Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as~~ amount (if any) by which the ~~Issuing Bank shall reasonably require; provided that in~~ Outstanding Credits exceed the ~~event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control~~Commitment. (c) ~~At least two (2) Business Days prior~~ The Borrower hereby agrees to pay to the ~~issuance of~~ Lender on each date on which any amount is paid under any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with Credit a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject sum equal to the ~~terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices~~amount so paid. (d) The ~~Issuing Bank shall examine all documents purporting to represent a demand for~~ payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement ~~and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with~~ in respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of payment under any ~~Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each~~ Letter of Credit ~~then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder~~ shall be ~~absolute,~~ unconditional and ~~irrevocable~~ irrevocable, and shall be ~~performed~~ paid strictly in accordance with the terms of this Agreement under all ~~circumstances whatsoever and irrespective of any of~~ circumstances, including the following circumstances: (i) any lack of validity or enforceability of this Agreement or any other agreement or instrument relating hereto or to such Letter of ~~Credit or this Agreement~~Credit; (ii) any amendment or waiver of, or any consent to departure from, the terms of this Agreement or such Letter of Credit; (iii) the existence of any claim, ~~set-~~set off, defense or other right ~~which the Borrower or any Subsidiary or Affiliate of~~ that the Borrower may have at any time against ~~a beneficiary~~ any beneficiary, or any ~~transferee~~ transferee, of ~~any~~ such Letter of Credit (or any ~~Persons or entities~~ persons for whom any ~~such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom~~ such beneficiary or any such transferee may be acting) or any other person, whether in connection with this ~~Agreement~~ Agreement, the transactions contemplated hereby or ~~the~~ by such Letter of ~~Credit or any document related hereto or thereto~~ Credit, or any unrelated transaction; (~~iii~~iv) any ~~draft~~ statement or any other document presented under a such Letter of Credit proving to be forged, ~~fraudulent~~ fraudulent, invalid or ~~invalid~~ insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (ivv) payment by in good faith under the ~~Issuing Bank under a~~ Letter of Credit against presentation of a draft or ~~other document to the Issuing Bank~~ certificate that does not comply with the terms of such Letter of Credit;; or (vvi) any other ~~event~~ circumstance or ~~circumstance~~ happening whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (Txu Corp /Tx/)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~SECTION 2.24(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ PROVIDED, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination ~~Date;~~ Date and (ii~~) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii~~) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate ~~Credit Exposure~~ LC Exposure, PLUS the aggregate outstanding Revolving Loans and Swingline Loans of all Lenders would exceed the Aggregate Revolving Commitment Amount. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s 's Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of ~~Credit~~Credit , the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in ~~Article~~ ARTICLE III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ PROVIDED, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~SECTION 2.24(A) ~~of this Section~~ or that one or more conditions specified in ~~Article~~ ARTICLE III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s 's usual and customary business practices. Within five (5) Business Days of issuing such Letter of Credit in accordance herewith, the Issuing Bank shall advise each Lender of the issuance and amount of such Letter of Credit. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ PROVIDED, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (New York time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ PROVIDED, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in ~~Section~~ SECTION 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with ~~Section~~ SECTION 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with ~~Section 2.5~~SECTION 2.7. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s 's obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ PROVIDED, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d) ~~or (e)~~ of this ~~Section~~ SECTION 2.24 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ PROVIDED, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ PROVIDED, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of SECTION 8. 1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s 's risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s 's obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s 's obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ PROVIDED, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s 's failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (~~j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (~~i) ~~each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and Practices for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600 (or such later revision~~ 500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter~~ this Agreement set forth in Section 10.5. (j) The parties acknowledge and agree that, for all purposes of this Agreement and the other Loan Documents, the Existing Letters of Credit ~~may~~ shall be ~~issued)~~ deemed to be Letters of Credit hereunder to the same extent, and ~~(iii)~~ with the ~~Borrower shall specify~~ same effect, as if such Existing Letters of Credit had been issued as Letters of Credit pursuant to this Section 2.24 on the ~~foregoing in each letter of credit application submitted for the issuance of a Letter of Credit~~Closing Date.

Appears in 1 contract

Samples: Revolving Credit Agreement (Swift Transportation Co Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.22(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on ~~the earlier of (A)~~ the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension~~) and (B)~~ ); provided, that no Letter of Credit shall be issued or renewed on or after the ~~date that is five (5) Business Days prior to the Stated~~ Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate ~~Credit Exposure~~ LC Exposure, plus the aggregate outstanding Revolving Loans of all ~~Lenders~~ Lenders, would exceed the Aggregate ~~Commitment Amount~~Revolving Commitments. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender~~’s Pro Rata Share~~ 's Revolving Commitment Percentage of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of ~~Credit~~Credit , the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s 's usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its ~~Pro Rata Share~~ Revolving Commitment Percentage of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s 's obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its ~~Pro Rata Share~~ Revolving Commitment Percentage of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.22 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If (i) any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect~~ the deposit of cash collateral pursuant to this paragraph, or (ii) on the Commitment Termination Date, there are any Letters of Credit ~~be Cash Collateralized pursuant to this subsection~~outstanding hereunder, then in either case the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the ~~Issuing Bank and the~~ Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid ~~fees~~ interest thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8. 1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits~~Such deposits shall, ~~which investments shall be made at the option and sole discretion of the Administrative Agent and~~ at the Borrower~~’s risk and~~ 's expense, be held in an interest bearing account which shall bear interest at an interest rate which is customary for overnight deposits of such ~~deposits shall not bear interest~~type. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this ~~Agreement and the other Loan Documents~~Agreement. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. Notwithstanding the foregoing, in the event that there are any Letters of Credit outstanding on the Commitment Termination Date and there is no Event of Default then in existence, in lieu of depositing cash collateral as set forth above, the Borrower may deliver a letter of credit (issued by a financial institution acceptable to the Administrative Agent) payable to the Administrative Agent, for the benefit of the Lenders, in form and substance satisfactory to the Administrative Agent which assures the Required Lenders satisfaction of all reimbursement obligations of the Borrower for the LC Exposure at such time. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each fiscal quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such fiscal quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s 's obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s 's obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s 's failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, ~~(i) each standby Letter~~ performance under Letters of Credit ~~shall~~ by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by the “rules of the "International Standby Practices 1998” " (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and ~~(iii)~~ to the ~~Borrower shall specify~~ extent not inconsistent therewith, the ~~foregoing~~ governing law of this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 1 contract

Samples: Credit Agreement (Harland John H Co)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions set forth herein, the ~~Issuing Bank, in reliance upon~~ Borrowers' Agent may request the ~~agreements~~ issuance of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower,~~ Letters of Credit for the account of any of the ~~Borrower on~~ Borrowers or their Subsidiaries, in a form reasonably acceptable to the ~~terms~~ Agent, by delivering to the Agent by electronic or facsimile transmission (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a letter of credit application in the form required by the Agent. A Letter of Credit shall be issued, amended, renewed or extended only if (and ~~conditions hereinafter set forth; provided that~~ upon issuance, amendment, renewal or extension of each Letter of Credit, the Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) ~~each~~ the Total Exposure at such time does not exceed the lesser of (x) the Borrowing Base at such time or (y) the aggregate Revolving Credit Commitments at such time, and (ii) the Letter of Credit Exposure at such time does not exceed the LC Sublimit at such time. (b) Each Letter of Credit shall expire (without giving effect to any extension thereof by reason of an interruption of business) at or prior to the close of business on the earlier of (Ai) the date ~~one year~~ 360 days, in the case of standby Letters of Credit, or 180 days, in the case of commercial or documentary Letters of Credit, after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension ~~thereof~~of any standby Letter of Credit, ~~one year~~ 365 days after such renewal or extension) provided that any such standby Letter of Credit may provide for automatic extensions thereof to a date not later than 365 days beyond its current expiration date, and (Bii) the date that is five (5) ~~Business~~ Banking Days prior to the ~~Stated~~ Revolving Credit Termination Date~~; (ii) each~~ . No Letter of Credit ~~shall~~ may be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on extended beyond the date ~~of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation.~~ that is five (b5) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Banking Days prior to the ~~requested date of such issuance specifying the date (which shall be a Business Day) such Letter of~~ Revolving Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall controlTermination Date. (c) ~~At least two (2) Business Days prior to~~ If the ~~issuance~~ Agent shall make any disbursement in respect of any Letter of Credit, the ~~Issuing Bank will confirm~~ resulting Reimbursement Obligation created thereby shall be deemed to be a Revolving Credit Loan from each of the Lenders in accordance with each Lender's Revolving Credit Commitment Percentage. The Agent shall notify the ~~Administrative~~ Lenders of the creation of any Reimbursement Obligation within two Banking Days of any disbursement made by the Agent ~~(by telephone~~ pursuant to or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested under any Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders Borrowers' Reimbursement Obligations with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and ~~irrevocable~~ irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of ~~any of the following circumstances:~~ (i) any lack of validity or enforceability of any Letter of ~~Credit~~ Credit, or ~~this Agreement;~~ any term or provision therein, (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; , (iviii) payment by the ~~Issuing Bank~~ Agent to the beneficiary under a Letter of Credit against presentation of a draft or other document ~~to the Issuing Bank~~ that substantially complies but does not strictly comply with the terms of such Letter of ~~Credit;~~ Credit and (viv) any other event or circumstance ~~whatsoever~~whatsoever (other than gross negligence or willful misconduct of the Agent), whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.13, constitute a legal or equitable discharge ~~of, or provide a right~~ of ~~set-off against,~~ the ~~Borrower’s~~ Borrowers' obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit and Security Agreement (Option Care Inc/De)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions set forth herein, the ~~Issuing Bank~~Borrower may request the issuance of standby letters of credit (each, ~~in reliance upon the agreements~~ a “Letter of ~~the other Lenders pursuant to subsections~~ Credit”), for its own account (~~d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ or for the account of any Subsidiary, and in such event the Borrower on shall be obligated under this Agreement and under such Letter of Credit as if the Borrower were the named account party and such Letter of Credit shall create LC Exposure), in a form reasonably acceptable to the Agent and the applicable Issuing Bank, at any time and from time to time prior to the Maturity Date (subject to Section 2.8(c)). In the event of any inconsistency between the terms and conditions ~~hereinafter set forth; provided that (i) each~~ of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the applicable Issuing Bank relating to any Letter of ~~Credit~~ Credit, the terms and conditions of this Agreement shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each control. Each Letter of Credit shall be ~~in a stated amount~~ subject either to the Uniform Customs and Practices for Documentary Credits, as most recently published by the International Chamber of Commerce (the “ICC”) at ~~least $5,000; and~~ the time of issuance (~~iii~~“UCP”) or the ~~Borrower may not request any Letter~~ rules of ~~Credit if~~International Standby Practices (ICC Publication 590) (“ISP98”), ~~after giving effect to such issuance, (A)~~ as determined by the ~~aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to~~applicable Issuing Bank, and ~~hereby irrevocably and unconditionally agrees to~~to the extent not inconsistent therewith, ~~purchase from~~ the ~~Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share~~ Legal Requirements of the ~~aggregate amount available to be drawn under such Letter~~ State of ~~Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation~~New York. (b) To request the issuance of a Letter of Credit (or ~~any~~ the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall ~~give~~ hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to the applicable Issuing Bank and the ~~Administrative~~ Agent ~~irrevocable written notice at least three~~ (3reasonably, but in no event less than five (5) Business ~~Days prior to~~ Days, in advance of the requested date of ~~such~~ issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day) ), the date on which such Letter of Credit is to ~~be issued~~ expire (~~or amended, renewed or extended, as the case may be~~which shall comply with paragraph (c) of this Section)~~, the expiration date of such Letter of Credit~~, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. ~~In addition~~ If requested by the applicable Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for a Letter of Credit. 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 Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $20,000,000, (ii) the LC Exposure of any Issuing Bank shall not exceed the lesser of (x) $10,000,000 (without the consent of such Issuing Bank) or (y) such Issuing Bank’s Lender Commitment, (iii) the total Revolving Credit Exposures plus the sum of the outstanding Swing Loans and the outstanding Competitive Bid Loans shall not exceed the Total Commitment, and (iv) no more than fifteen (15) Letters of Credit shall be issued and outstanding at any one time. Upon request, copies of all Letters of Credit, and amendments, extensions, increases, decreases and cancellations related thereto, must be delivered to the ~~satisfaction~~ Agent and the other Lenders by the applicable Issuing Bank. (c) Each Letter of Credit shall expire no later than the ~~conditions in Article III,~~ earlier of (i) the close of business on the date which is twelve (12) months following the date of issuance of such Letter of Credit, provided that a Letter of Credit may contain an “evergreen” provision providing for one or more automatic extensions of the expiration date thereof of up to one (1) year each in the absence of notice of non-renewal from the applicable Issuing Bank, or (ii) the close of business on the date that is fourteen (14) days prior to the Maturity Date, except that, in any ~~amendment which increases~~ such case, a Letter of Credit may extend beyond such dates to the extent that Borrower shall have deposited in the Letter of Credit Collateral Account, at the time of issuance of such Letter of Credit, Cash Collateral in an amount equal to or in excess of the amount of such Letter of Credit~~) will~~ , which amount may not be ~~subject to the further conditions that~~ withdrawn or reduced as long as such Letter of Credit shall remain outstanding or a Default or an Event of Default shall be ~~in such form~~ continuing hereunder. (d) By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and ~~contain such terms as~~ without any further action on the part of the applicable Issuing Bank ~~shall approve~~ or the Lenders, each Issuing Bank hereby grants to each Lender, and ~~that the Borrower shall have executed and delivered any additional applications~~each Lender hereby acquires from each Issuing Bank, ~~agreements and instruments relating to~~ a participation in such Letter of Credit as equal to such Lender’s Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Agent, for the account of the applicable Issuing Bank, such Xxxxxx’s Percentage of each LC Disbursement made by such Issuing Bank ~~shall reasonably require;~~ and not reimbursed by the Borrower on the date due as provided ~~that~~ in ~~the event~~ paragraph (e) of this Section, or of any ~~conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior~~ reimbursement payment required to be refunded to the ~~issuance~~ Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit and to fund its Lender’s Percentage of each LC Disbursement made by the applicable Issuing Bank is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, any amendment, renewal or extension of any Letter of Credit, the occurrence and continuance of a Default, the reduction or termination of the Total Commitment or the commencement of a proceeding under any applicable bankruptcy or insolvency law with respect to Borrower, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. (e) If an Issuing Bank ~~will confirm with~~ shall make any LC Disbursement in respect of a Letter of Credit, the ~~Administrative~~ Borrower shall reimburse such LC Disbursement by paying to the Agent ~~(by telephone or in writing)~~ an amount equal to such LC Disbursement not later than 12:00 noon, Pittsburgh, Pennsylvania time, on the Business Day that ~~the Administrative Agent has received~~ such ~~notice, and~~LC Disbursement is made, if ~~not,~~ the ~~Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has~~ Borrower shall have received notice ~~from the Administrative Agent~~of such LC Disbursement prior to 10:00 a.m., Pittsburgh, Pennsylvania time, on ~~or before~~ such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, Pittsburgh, Pennsylvania time, on the Business Day immediately ~~preceding~~ following the ~~date~~ day that the ~~Issuing Bank is to issue~~ Borrower receives such notice; provided that the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, thenBorrower may, subject to the ~~terms and~~ conditions ~~hereof~~to borrowing set forth herein, ~~the Issuing Bank shall, on the requested date, issue such Letter of Credit~~ request in accordance with Section 2.1 that such payment be financed with a Base Rate Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting Base Rate Borrowing. If the Borrower fails to make such payment when due, the Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Agent its Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.2 with respect to Loans made by such Lender (and Section 2.2 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Agent of any payment from the Borrower pursuant to this paragraph, the Agent shall distribute such payment to the applicable Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank~~’s usual~~ , then to such Lenders and ~~customary business practices. (d) The~~ such Issuing Bank ~~shall examine all documents purporting~~ as their interests may appear. Any payment made by a Lender pursuant to ~~represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The~~ this paragraph to reimburse the applicable Issuing Bank ~~shall notify the Borrower and the Administrative Agent of such demand~~ for ~~payment and whether the Issuing Bank has made or will make a~~ any LC Disbursement ~~thereunder; provided that any failure to give or delay in giving such notice~~ (other than the funding of Base Rate Borrowings as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements ~~hereunder~~ as provided in paragraph (e) of this Section 2.8 shall be absolute, unconditional and ~~irrevocable~~ irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of ~~any of the following circumstances:~~ (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; , or any term or provision therein, (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; , (iviii) payment by ~~the~~ an Issuing Bank under a Letter of Credit against presentation of a draft or other document ~~to the Issuing Bank~~ that does not comply with the terms of such Letter of Credit; , or (viv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.8, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder~~; or (vi) the existence of a Default or an Event of Default~~. Neither the ~~Administrative~~ Agent, the Lenders nor the Issuing ~~Bank~~Banks, ~~any Lender~~ nor any ~~Related Party~~ of ~~any of the foregoing~~ their Affiliates, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to ~~above~~in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the applicable Issuing Bank; provided that the foregoing shall not be construed to excuse the applicable Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the applicable Issuing Bank’s failure to exercise ~~due~~ care when determining whether drafts or and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the applicable Issuing ~~Bank (as finally determined by a court of competent jurisdiction)~~Bank, the applicable Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented ~~that~~ which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the applicable Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any ~~notice or~~ information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (jg) ~~Unless otherwise expressly agreed~~ The applicable Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The applicable Issuing Bank shall promptly notify the Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement. (h) If an Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to Base Rate Borrowings; provided that, if the Borrower fails to reimburse such LC Disbursement when ~~a Letter~~ due pursuant to paragraph (e) of ~~Credit is issued~~ this Section, then the LC Disbursement shall bear interest, for each day from and ~~subject~~ including the date such LC Disbursement was due to, but excluding, the date that the Borrower reimburses such LC Disbursement at the Past Due Rate. Interest accrued pursuant to this paragraph shall be for the account of the applicable ~~laws~~Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section 2.8 to reimburse the applicable Issuing Bank shall be for the account of such Lender to the extent of such payment. (i) An Issuing Bank may be replaced at any time by written agreement among the Borrower, the Agent, the replaced Issuing Bank and the successor Issuing Bank. The Agent shall notify the Lenders of any such replacement of an Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid Fronting Fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.6. From and after the effective date of any such replacement, (i) ~~each standby Letter~~ the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit ~~shall~~ to be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), issued thereafter and (ii) ~~each documentary Letter~~ references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be ~~governed by~~ required to issue additional Letters of Credit. (j) At any time that there shall exist a Defaulting Lender, within three (3) Business Days following the ~~Uniform Customs and Practices for Documentary Credits~~ written request of the Agent or the applicable Issuing Bank (~~2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by~~ with a copy to the ~~International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii~~Agent) the Borrower shall ~~specify~~ Cash Collateralize such Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.11(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than an amount equal to 100% of the ~~foregoing in each letter~~ Fronting Exposure of ~~credit application submitted for~~ the ~~issuance~~ applicable Issuing Bank with respect to Letters of ~~a Letter~~ Credit issued and outstanding at such time. Cash Collateral (or the appropriate portion thereof) provided to reduce the applicable Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.8(j) following (i) the elimination of ~~Credit~~the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Agent and the applicable Issuing Bank that there exists excess Cash Collateral; provided that, subject to Section 2.11, the Person providing Cash Collateral and the applicable Issuing Bank may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations and provided further that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to Section 7.2(b) below.

Appears in 1 contract

Samples: Credit Agreement (Eastgroup Properties Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of~~ this ~~Section~~Section 2.23, ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on not later than the earlier of (Ax) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) ), and (By) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; , (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000;~~ 1,000,000 (in the case of any standby Letter of Credit) or $100,000 (in the case of any trade Letter of Credit), and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC ~~Exposure~~ Exposures of all Lenders would exceed the LC ~~Commitment~~ Commitment, or (B) the aggregate Revolving Credit ~~Exposure~~ Exposures of all Lenders would exceed the Aggregate Revolving Commitment Amount. ~~Each~~ Upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. Any Letter of Credit may provide for automatic renewal for additional subsequent periods of 12-months (but in no event to a date which is later than five (5) Business Days prior to the Revolving Commitment Termination Date). (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice substantially in the form of Exhibit 2.23 attached hereto (an “LC Notice”) at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of ~~Credit~~Credit , the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that (i) such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall ~~approve~~ approve, and ~~that~~ (ii) the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.23(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such ~~drawing~~drawing no later than one (1) Business Day after the date designated for payment of the LC Disbursement in the notice provided to the Borrower (together with interest thereon from the date of payment of such LC Disbursements at the rate then applicable to Base Rate Loans), without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to ~~11:00 a.m.~~ 12:00 noon on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be ~~(as determined in the sole discretion of the Administrative Agent), or is not,~~ made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of ~~Credit~~ Credit, or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy or other insolvency proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.23 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the interest rate set forth in Section ~~2.12(b~~2.13(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, or as otherwise required pursuant to Section 2.12, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the aggregate LC ~~Exposure~~ Exposures of all Lenders as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~subsection (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the ~~option and sole~~ reasonable discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank and the Lenders, as the case may be, for LC Disbursements for which ~~it had not~~ no reimbursement has been ~~reimbursed and,~~ made and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the aggregate LC ~~Exposure~~ Exposures of all Lenders at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this ~~Agreement and the other Loan Documents~~Agreement. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower ~~within~~ with three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated ~~transaction~~transaction (it being understood that the foregoing shall not be deemed to preclude the initiation and prosecution to conclusion by the Borrower, in a separate legal proceeding, of any claim for damages against any Person in respect of liability arising from such Person’s gross negligence or willful misconduct); (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing provisions of this Section 2.23(h) shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent ~~permitted~~ not prohibited by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (~~j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (~~i) ~~each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and ~~Practices~~ Practice for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600 (or such later revision~~ 500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing~~ this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 1 contract

Samples: Revolving Credit Agreement (Dollar General Corp)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.23(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination ~~Date;~~ Date and (ii~~) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii~~) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate ~~Credit Exposure~~ LC Exposure, plus the aggregate outstanding Revolving Loans and Swingline Loans of all Lenders would exceed the Aggregate Revolving Commitment Amount. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s 's Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.23(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s 's usual and customary business practices. Within five (5) Business Days of issuing such Letter of Credit in accordance herewith, the Issuing Bank shall advise each Lender of the issuance and amount of such Letter of Credit. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (New York time) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.7. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s 's obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraphs (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.13(c). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s 's risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s 's obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s 's obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s 's failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (ji) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, performance under Letters of Credit by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by (i) ~~each standby Letter~~ either (x) the rules of ~~Credit shall be governed by~~ the “"International Standby Practices 1998” " (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), ) or (iiy) ~~each documentary Letter~~ the rules of ~~Credit shall be governed by~~ the "Uniform Customs and Practices for Documentary ~~Credits~~ Credits" (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600~~ 500 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (~~iii~~ii) to the ~~Borrower~~ extent not inconsistent therewith, the governing law of this Agreement set forth in Section 10.5. (j) The parties acknowledge and agree that, for all purposes of this Agreement and the other Loan Documents, the Existing Letters of Credit shall ~~specify~~ be deemed to be Letters of Credit hereunder to the ~~foregoing in each letter~~ same extent, and with the same effect, as if such Existing Letters of ~~credit application submitted for~~ Credit had been issued as Letters of Credit pursuant to this Section on the ~~issuance of a Letter of Credit~~Closing Date.

Appears in 1 contract

Samples: Revolving Credit Agreement (Swift Transportation Co Inc)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions hereof, ~~the~~ each LC Issuing ~~Bank, in reliance upon the agreements of the other Lenders pursuant~~ Bank agrees to ~~subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower,~~ issue Letters of Credit from time to time for the account of the Borrower (or the stated maturity thereof extended or terms thereof modified or amended) on not less than two Business Days' prior notice thereof by delivery of a Request for Issuance to the ~~terms~~ Administrative Agent (which shall promptly distribute copies thereof to the Lenders) and ~~conditions hereinafter set forth; provided that~~ the applicable LC Issuing Bank. Each Request for Issuance shall specify (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) ~~such Letter~~ of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or ~~any amendment~~ the date of effectiveness of such extension, modification or amendment) and the stated expiry date thereof (which ~~increases~~ shall be no later than five Business Days prior to the Termination Date), (ii) the proposed stated amount of such Letter of Credit (which shall not be less than $100,000), (iii) the name and address of the beneficiary of such Letter of Credit and (iv) a statement of drawing conditions applicable to such Letter of Credit~~) will~~ , and if such Request for Issuance relates to an amendment or modification of a Letter of Credit, it shall be ~~subject~~ accompanied by the consent of the beneficiary of the Letter of Credit thereto. Each Request for Issuance shall be irrevocable unless modified or rescinded by the Borrower not less than one day prior to the ~~further~~ proposed date of issuance (or effectiveness) specified therein. Not later than 12:00 noon on the proposed date of issuance (or effectiveness) specified in such Request for Issuance, and upon fulfillment of the applicable conditions ~~that~~ precedent and the other requirements set forth herein, the applicable LC Issuing Bank shall issue (or extend, amend or modify) such Letter of Credit and provide notice and a copy thereof to the Administrative Agent, which shall promptly furnish copies thereof to the Lenders. (b) No Letter of Credit shall be ~~in such form~~ requested or issued hereunder if, after the issuance thereof, the Outstanding Credits would exceed the total Commitments. The Borrower will not request, and ~~contain such terms as the~~ no LC Issuing Bank ~~shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such~~ will issue a Letter of ~~Credit as~~ Credit, if after the issuance thereof, the LC Outstandings of such LC Issuing Bank ~~shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control~~would exceed $500,000,000. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower ~~shall be irrevocably and unconditionally obligated~~ hereby agrees to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available pay to the Administrative Agent for the account of the applicable LC Issuing Bank and, if they shall have purchased participations in the reimbursement obligations of the Borrower pursuant to subsection (d) below, the Lenders, on demand made by the applicable LC Issuing Bank to the Borrower, on and after each date on which the applicable LC Issuing Bank shall pay any amount under any Letter of Credit issued by such LC Issuing Bank, a sum equal to the amount so paid (the "Reimbursement Amount") plus interest on the Reimbursement Amount from the date so paid by such LC Issuing Bank until repayment to such LC Issuing Bank in ~~accordance with Section 2.5~~full at a fluctuating interest rate per annum equal to the interest rate applicable to Base Rate Advances plus, if any amount paid by such LC Issuing Bank under a Letter of Credit is not reimbursed by the Borrower within three Business Days, 2%. The Borrower may satisfy its obligation hereunder to repay the Reimbursement Amount by requesting a Borrowing under Section 2.02 in the amount of such Reimbursement Amount, and the proceeds of such Borrowing ~~shall~~ may be applied ~~directly~~ to satisfy the Borrower's obligations to the applicable LC Issuing Bank or the Lenders, as the case may be. (d) If any LC Issuing Bank shall not have been reimbursed in full for any payment made by such LC Issuing Bank under a Letter of Credit issued by such LC Issuing Bank on the date of such payment, such LC Issuing Bank shall give the Administrative Agent ~~to reimburse~~ and each Lender prompt notice thereof (an "LC Payment Notice") no later than 12:00 noon on the ~~Issuing Bank for~~ Business Day immediately succeeding the date of such payment by such LC ~~Disbursement. (e) If for any reason~~ Issuing Bank. Each Lender severally agrees to purchase a ~~Base Rate Borrowing may not be (as determined~~ participation in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s reimbursement obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower ~~or any of its Subsidiaries, (iv) any breach of this Agreement~~ to each LC Issuing Bank by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation paying to the Administrative Agent for the account of the ~~Issuing Bank. Whenever, at any time after the~~ applicable LC Issuing Bank ~~has received from any~~ an amount equal to such ~~Lender the funds for its participation in a~~ Lender's Percentage of such unreimbursed amount paid by such LC ~~Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the~~ Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay plus interest ~~to the Issuing Bank (through the Administrative Agent)~~ on such amount ~~from such due date to the date such payment is made~~ at a rate per annum equal to the Federal Funds ~~Rate; provided that if~~ Rate from the date of the payment by the applicable LC Issuing Bank to the date of payment to such LC Issuing Bank by such Lender. Each such payment by a Lender shall be made not later than 3:00 P.M. on the later to occur of (i) the Business Day immediately following the date of such payment by the applicable LC Issuing Bank and (ii) the Business Day on which such Lender shall have received an LC Payment Notice from the applicable LC Issuing Bank. Each Lender's obligation to make each such payment to the Administrative Agent for the account of any LC Issuing Bank shall be several and shall not be affected by the occurrence or continuance of an Event of Default or the failure of any other Lender to make any payment under this Section 2.03(d). Each Lender further agrees that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. (e) The failure of any Lender to make any payment to the Administrative Agent for the account of any LC Issuing Bank in accordance with subsection (d) above shall not relieve any other Lender of its obligation to make payment, but no Lender shall be responsible for the failure of any other Lender. If any Lender (a "Non-Performing Lender") shall fail to make ~~such~~ any payment to the Administrative Agent for the account of any LC Issuing Bank in accordance with subsection (d) above within ~~three (3)~~ five Business Days ~~of such due date~~after the LC Payment Notice relating thereto, then, ~~retroactively~~ for so long as such failure shall continue, the applicable LC Issuing Bank shall be deemed, for purposes of Section 8.01 and Article VI hereof, to be a Lender owed a Borrowing in an amount equal to the outstanding principal amount due ~~date,~~ and payable by such Non-Performing Lender ~~shall be obligated~~ to ~~pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from~~ the Administrative Agent or for the ~~Required Lenders demanding that its reimbursement obligations with respect to the Letters~~ account of ~~Credit be Cash Collateralized~~ such LC Issuing Bank pursuant to ~~this subsection,~~ subsection (d) above. Any Non-Performing Lender and the Borrower ~~shall deposit~~ (without waiving any claim against such Lender for such Lender's failure to purchase a participation in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower ~~with respect~~ under subsection (d) above) severally agree to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect pay to ~~the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by~~ the Administrative Agent ~~as collateral~~ for the ~~payment and performance~~ account of the ~~obligations~~ applicable LC Issuing Bank forthwith on demand such amount, together with interest thereon for each day from the date such Lender would have purchased its participation had it complied with the requirements of subsection (d) above until the ~~Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over~~ date such ~~account. The Borrower agrees~~ amount is paid to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent ~~and~~ at (i) in the case of the Borrower, the interest rate applicable at the ~~Borrower’s risk~~ time to Base Rate Advances and ~~expense~~(ii) in the case of such Lender, ~~such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by~~ the ~~Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement~~ Federal Funds Rate. (f) The payment obligations of ~~the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations~~ each Lender under Section 2.03(d) and of the Borrower under this Agreement ~~and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with~~ in respect ~~to the Letters~~ of any payment under any Letter of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of by any ~~Lender, but no more frequently than quarterly, the~~ LC Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be ~~absolute,~~ unconditional and ~~irrevocable~~ irrevocable, and shall be ~~performed~~ paid strictly in accordance with the terms of this Agreement under all ~~circumstances whatsoever and irrespective of any of~~ circumstances, including, without limitation, the following circumstances: (i) any lack of validity or enforceability of this Agreement, any other Loan Document or any other agreement or instrument relating thereto or to such Letter of ~~Credit or this Agreement~~Credit; (ii) any amendment or waiver of, or any consent to departure from, the terms of this Agreement or such Letter of Credit; (iii) the existence of any claim, set-off, defense or other right which the Borrower ~~or any Subsidiary or Affiliate of the Borrower~~ may have at any time against ~~a beneficiary~~ any beneficiary, or any ~~transferee~~ transferee, of ~~any~~ such Letter of Credit (or any Persons ~~or entities~~ for whom any ~~such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom~~ such beneficiary or any such transferee may be acting), the applicable LC Issuing Bank, or any other Person, whether in connection with this ~~Agreement~~ Agreement, the transactions contemplated hereby, thereby or ~~the~~ by such Letter of ~~Credit or any document related hereto or thereto~~ Credit, or any unrelated transaction; (~~iii~~iv) any ~~draft~~ statement or any other document presented under a such Letter of Credit reasonably proving to be forged, ~~fraudulent~~ fraudulent, invalid or ~~invalid~~ insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (ivv) payment in good faith by the applicable LC Issuing Bank under a the Letter of Credit issued by such LC Issuing Bank against presentation of a draft or ~~other document to the Issuing Bank~~ certificate that does not comply with the terms of such Letter of Credit;; or (vvi) any other ~~event~~ circumstance or ~~circumstance~~ happening whatsoever, whether or not similar to any of the foregoing~~, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or~~. (vig) The Borrower assumes all risks of the ~~existence~~ acts and omissions of ~~a Default~~ any beneficiary or ~~an Event~~ transferee of ~~Default~~any Letter of Credit. Neither the ~~Administrative Agent~~LC Issuing Banks, the ~~Issuing Bank, any Lender~~ Lenders nor any ~~Related Party~~ of ~~any~~ their respective officers, directors, employees, agents or Affiliates shall be liable or responsible for (i) the use that may be made of ~~the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any~~ such Letter of Credit or any acts or omissions of any beneficiary or transferee thereof in connection therewith; (ii) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (iii) payment by any LC Issuing Bank against presentation of documents that do not comply with the terms of such Letter of Credit, including failure of any documents to bear any reference or ~~failure~~ adequate reference to such Letter of Credit; or (iv) any other circumstances whatsoever in making or failing to make ~~any~~ payment ~~thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication~~ under ~~or relating to any~~ such Letter of ~~Credit (including~~ Credit. Notwithstanding any ~~document required~~ provision to ~~make a drawing thereunder)~~the contrary contained in this Agreement, the Borrower and each Lender shall have the right to bring suit against any ~~error in interpretation of technical terms or any consequence arising from causes beyond the control of the~~ LC Issuing Bank~~; provided that the foregoing shall not be construed to excuse the~~ , and such LC Issuing Bank ~~from liability~~ shall be liable to the Borrower and any Lender, to the extent of any ~~actual direct damages (~~direct, as opposed to ~~special~~consequential, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) damages suffered by the Borrower ~~that are~~ or such Lender which the Borrower or such Lender proves were caused by ~~the~~ such LC Issuing Bank’s 's willful misconduct or gross negligence, including, in the case of the Borrower, such LC Issuing Bank's willful failure to ~~exercise due care when determining whether drafts or other documents presented~~ make timely payment under a such Letter of Credit following the presentation to it by the beneficiary thereof of a draft and accompanying certificate(s) that strictly comply with the terms ~~thereof. The parties hereto expressly agree that, in the absence~~ and conditions of ~~gross negligence or willful misconduct on the part~~ such Letter of ~~the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination~~Credit. In furtherance and not in limitation of the ~~foregoing~~ foregoing, each LC Issuing Bank may accept sight drafts and ~~without limiting~~ accompanying certificates presented under the ~~generality thereof, the parties agree that, with respect to documents presented~~ Letter of Credit issued by such LC Issuing Bank that appear on their face to be in ~~substantial compliance with the terms of a Letter of Credit~~order, ~~the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents~~ without responsibility for further investigation, regardless of any notice or information to the contrary, ~~or refuse to accept~~ and ~~make~~ payment ~~upon~~ against such documents if shall not constitute willful misconduct or gross negligence by such ~~documents are not in strict compliance with~~ LC Issuing Bank. Notwithstanding the ~~terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and~~ foregoing, no Lender shall be obligated to indemnify the Borrower ~~when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed~~ for damages caused by ~~the “International Standby Practices 1998” (ISP98) (~~any LC Issuing Bank's willful misconduct or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Creditgross negligence.

Appears in 1 contract

Samples: Credit Agreement (Entergy Corp /De/)

Letters of Credit. (a) ~~During the Availability Period, the Issuing Bank, in reliance~~ Subject to and upon the ~~agreements of the other Lenders pursuant to subsections (d)~~ terms and ~~(e) of this Section~~conditions herein set forth, ~~may, in its sole discretion, issue, at the request of~~ the Borrower, ~~Letters~~ at any time and from time to time on or after the Closing Date and prior to the L/C Maturity Date, may request that a Letter of Credit Issuer issue, for the account of the ~~Borrower~~ Borrower, a standby letter of credit or letters of credit (in such form as may be approved by such Letter of Credit Issuer in its reasonable discretion) which is participated out by such Letter of Credit Issuer pursuant to Section 3.3 (each such letter of credit, a “Letter of Credit”). Notwithstanding the foregoing, the letters of credit identified on Schedule VI (the “Existing L/Cs”) shall be deemed to be a “Letter of Credit” issued on the ~~terms~~ Amendment and ~~conditions hereinafter set forth; provided that~~ Restatement Effective Date for all purposes of this Agreement and (i) the stated amount of the Existing L/Cs and the Unpaid Drawings of the Existing L/Cs shall be included in the calculation of Letter of Credit Outstanding, (ii) the provisions of this Section 3.1 and Sections 4.1(a), (b) and (c) shall apply to the Existing L/Cs and (iii) the Borrower and each of the Lenders hereby expressly acknowledge their respective obligations hereunder with respect to the Existing L/Cs. (b) Notwithstanding the foregoing, (i) no Letter of Credit shall ~~expire on~~ be issued by any Letter of Credit Issuer the ~~earlier~~ Stated Amount of which (A) when added to the ~~date one year after~~ sum of (x) the ~~date~~ Letter of ~~issuance~~ Credit Outstanding at such time and (y) the aggregate principal of all Revolving Credit Loans then outstanding would exceed the Total Revolving Credit Commitment then in effect, (B) when added to the Letter of Credit Outstanding at such time would exceed $100,000,000 or (C) when added to the Letter of Credit Outstanding with respect to Letters of Credit issued by such Letter of Credit ~~(or, in the case~~ Issuer exceeds such Letter of ~~any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date~~Credit Issuer’s Letter of Credit Commitment; (ii) each Letter of Credit shall ~~be in a stated amount~~ have an expiry date occurring no later than one year after the date of ~~at least $5,000; and~~ issuance thereof (~~iii) the Borrower may not request~~ it being understood that any Letter of Credit ~~if, after giving effect to such issuance, (A)~~ may contain customary automatic renewal provisions agreed upon by the ~~aggregate LC Exposure would exceed~~ Borrower and the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each applicable Letter of Credit ~~equal~~ Issuer pursuant to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which ~~shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be),~~ the expiration date of such Letter of ~~Credit~~Credit shall automatically be extended for a period of 12 months, subject to a right on the part of such Letter of Credit Issuer to prevent any such renewal from occurring by giving notice to the beneficiary in advance of such renewal); provided that in no event shall such expiry date occur later than the L/C Maturity Date; (iii) each Letter of Credit shall be denominated in Dollars and shall provide for drawings thereunder to be made in Dollars; (iv) no Letter of Credit shall be issued by any Letter of Credit Issuer after it has received a written notice from the Borrower or any Lender stating that a Default or Event of Default has occurred and is continuing until such time as each Letter of Credit Issuer shall have received a written notice of (x) rescission of such notice from the party or parties originally delivering such notice (provided that in the case of any such notice delivered by the Borrower, the ~~amount~~ Administrative Agent has not objected to or contested such rescission) or (y) the waiver of such Default or Event of Default in accordance with the provisions of Section 12.1 and (v) no Letter of Credit shall be issued by any Letter of Credit Issuer if the Stated Amount of such Letter of Credit, when added to the ~~name and address~~ sum of the ~~beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend~~ aggregate Stated Amount of all outstanding Letters of Credit issued by such Letter of ~~Credit. In addition to~~ Credit Issuer and the ~~satisfaction~~ aggregate amount of all Unpaid Drawings in respect of all Letters of Credit issued by such Letter of Credit Issuer, would exceed the ~~conditions in Article III, the issuance~~ Letter of Credit Commitment of such Letter of Credit ~~(or any amendment which increases the amount of such Letter of Credit) will be subject~~ Issuer. Notwithstanding anything herein to the ~~further conditions that such~~ contrary, no Letter of Credit ~~shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower~~ Issuer shall have ~~executed and delivered~~ any ~~additional applications~~obligation hereunder to issue, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not ~~be affected by any circumstance~~issue, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit ~~or (vi) any other circumstance, happening or event whatsoever, whether or not similar~~ the proceeds of which would be made available to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. Person (i) ~~The Borrower’s obligation~~ to ~~reimburse LC Disbursements hereunder shall be absolute~~fund any activity or business of or with any Sanctioned Person, ~~unconditional and irrevocable and shall be performed strictly~~ or in ~~accordance with~~ any country or territory that, at the ~~terms~~ time of ~~this Agreement under all circumstances whatsoever and irrespective~~ such funding, is the subject of any ~~of the following circumstances: (i) any lack of validity~~ Sanctions or ~~enforceability of any Letter of Credit or this Agreement;~~ (ii) ~~the existence~~ in any manner that would result in a violation of any ~~claim, set-off, defense or other right which the Borrower or~~ Sanctions by any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with party to this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of CreditAgreement. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Revolving Credit Agreement (ITC Holdings Corp.)

Letters of Credit. ~~(a)~~ During the ~~Availability Period~~Term of the Agreement, the ~~Issuing Bank, in reliance upon the agreements of the other Lenders pursuant~~ Bank agrees to ~~subsections (d) and (e) of this Section, may, in its sole discretion,~~ issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of ~~Credit (or~~Credit, ~~in the case of any renewal or extension thereof, one year after such renewal or extension)~~ and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Loan Termination Date; (ii~~) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii~~) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC ~~Commitment~~ Commitment, or (B) the ~~aggregate~~ Maximum Credit ~~Exposure of all Lenders would exceed the Aggregate Commitment~~ Facility Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the ~~Issuing~~ Bank ~~and the Administrative Agent~~ irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of ~~Credit~~Credit as reasonably requested by the Bank. In addition to the satisfaction of the conditions ~~in Article III~~set forth herein, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the ~~Issuing~~ Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the ~~Issuing~~ Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to pay to and reimburse the ~~Issuing~~ Bank for any LC Disbursements paid by the ~~Issuing~~ Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the ~~Issuing~~ Bank ~~and the Administrative Agent~~ prior to 11:00 a.m. ~~on the~~ three (3) Business ~~Day immediately~~ Days prior to the date on which such drawing is honored that the Borrower intends to reimburse the ~~Issuing~~ Bank for the amount of such drawing in funds other than from the proceeds of ~~Loans~~Revolving Loans and the Borrower reimburses the Bank such amount at least one (1) Business Day prior to the date on which such drawing is to be honored, ~~the~~ then Borrower shall be deemed to have timely given a ~~Notice of Borrowing~~ request for borrowing to the ~~Administrative Agent requesting the Lenders~~ Bank to make a ~~Base Rate Borrowing~~ Revolving Loan borrowing on the date on which such drawing is honored in an exact amount due to the ~~Issuing~~ Bank~~; provided that for purposes solely of such Borrowing,~~ . In the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of event the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned unable for any reason to borrow or draw under the Revolving Loan facility, then the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail hereby unconditionally and irrevocably agrees to pay ~~any amount required to be paid pursuant to subsection (d) or (e) of this Section on~~ and reimburse the ~~due date therefor~~Bank without presentment, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or ~~notice~~ other formalities of any kind, ~~upon~~ the ~~occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held~~ LC Disbursement amounts paid by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned Bank on the ~~investment of such deposits, which investments shall be made at~~ date that is the ~~option and sole discretion of~~ next Business Day after the ~~Administrative Agent and at~~ Bank makes payment under the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of ~~Credit then outstanding. (i)~~ Credit. The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed ~~strictly~~ in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the circumstances, including without limitation the following circumstances: (ia) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (iib) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower ~~or any Subsidiary~~ or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), ~~any Lender (including~~ the ~~Issuing Bank)~~ Bank or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (~~iii~~c) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect~~; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any~~ . Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 3.01, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder~~; or (vi) the existence of a Default or an Event of Default~~. ~~Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing~~ The Bank shall not have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the ~~Issuing~~ Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the ~~Issuing~~ Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the ~~Issuing~~ Bank’s ~~failure to exercise due care when~~ willful misconduct or gross negligence in determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the ~~Issuing~~ Bank (as finally determined by a court of competent jurisdiction), the ~~Issuing~~ Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the ~~Issuing~~ Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit~~. (j) Unless otherwise expressly agreed by~~ . Prior to the ~~Issuing Bank and~~ issuance of any Letter of Credit, the Borrower ~~when a~~ shall pay the Bank an upfront fee equal to 0.6% p.a. of the face amount of the Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the ~~issuance~~ term of a the applicable Letter of Credit.

Appears in 1 contract

Samples: Credit Facility Agreement (Cadista Holdings Inc.)

Letters of Credit. (a1) ~~During~~ Subject to the ~~Availability Period~~terms and conditions hereof and provided that all of the conditions contained in Section 10 and 11 have been satisfied, the ~~Issuing Bank, in reliance upon the agreements of the other Lenders pursuant~~ Agent agrees to ~~subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower,~~ issue Letters of Credit for the account of the Borrower, from the date of this Agreement to, but not including, the Maturity Date at such times as the Borrower on may request; provided, however, that the ~~terms and conditions hereinafter set forth; provided that~~ aggregate amount of Letters of Credit (including such requested Letter of Credit) at any one time Outstanding shall not exceed the lesser of (i) ~~each Letter of Credit shall expire on~~ the ~~earlier~~ lesser of (A) the ~~date one year after~~ Total Commitment or (B) the ~~date~~ amount of the Borrowing Base, in each case, minus the aggregate amount of Outstanding Loans (including any amounts drawn under any Letters of Credit and not yet reimbursed by the Borrower), or (ii) $10,000,000.00. The issuance of a Letter of Credit pursuant to this Section 2.7(a) shall be deemed to reduce the aggregate of the unborrowed Commitments of the Banks then in effect by an amount equal to the undrawn face amount of such Letter of Credit as set forth herein. In no event shall any amount drawn under a Letter of Credit be available for reinstatement or a subsequent drawing under a Letter of Credit. Each Bank severally agrees to participate in each such Letter of Credit issued by the Agent in an amount equal to its Commitment Percentage of the total amount of the Letter of Credit requested by the Borrower; provided, however, that no Bank shall be required to participate in any Letter of Credit to the extent that its participation therein plus (~~or,~~ x) such Bank's participation in the ~~case~~ aggregate of all other Letters of Credit Outstanding, and (y) such Bank's Commitment Percentage of the amount of any ~~renewal~~ Loans Outstanding (including any amounts drawn under any Letters of Credit and not yet reimbursed by the Borrower), would exceed an amount equal to such Bank's Commitment as then in effect. Each Bank agrees with the Agent that it will participate in each Letter of Credit issued by the Agent to the extent required by the preceding sentence. No Bank's obligation to participate in a Letter of Credit shall be affected by any other Bank's failure to participate in the same or ~~extension thereof, one year after such renewal or extension~~any other Letter of Credit. (2) ~~and (B)~~ The Borrower shall deliver to the ~~date that is~~ Agent at least five (5) Business Days (or such shorter period as may be agreed to by the Agent in any particular instance) prior to the ~~Stated Termination Date; (ii) each~~ proposed issuance date or amendment date of any Letter of Credit, a Letter of Credit ~~shall be in a stated amount~~ Application signed by the chief executive, chief financial or chief accounting officer of ~~at least $5,000; and (iii)~~ the general partner of the Borrower ~~may not request any~~ in the form of Exhibit D hereto (a "Letter of Credit ~~if,~~ Application") together with a certification by the chief financial or chief accounting officer of the general partner of the Borrower and the chief financial or chief accounting officer of Guarantor that the Borrower and Guarantor are and will be in compliance with all covenants under the Loan Documents after giving effect to ~~such issuance, (A)~~ the ~~aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure~~ issuance of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on~~ Credit. Subject to the ~~date of issuance. Each~~ terms and conditions set forth in Section 2.7(a) and, unless the Agent is aware that the conditions precedent to such issuance of a Letter of Credit set forth in Section 11 have not been satisfied, the Agent will make the requested Letter of Credit available at the Agent's principal office not later than 4:00 p.m. (Boston time) on the issuance date, and, immediately upon the issuance of each Letter of Credit, each Bank shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) participate in such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the ~~satisfaction of the conditions~~ extent set forth in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least Section 2.7(a). Not more than two (2) Business Days ~~prior to~~ after the issuance of any Letter of Credit, the ~~Issuing~~ Agent shall notify each Bank ~~will confirm with~~ of the ~~Administrative Agent (by telephone or in writing) that the Administrative Agent has received~~ amount and other contents of such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit ~~because such issuance is not then permitted hereunder because~~ and of the ~~limitations set forth in subsection~~ date of issuance. The Agent shall notify each Bank at least monthly, or at the request of such Bank, of the amount of all outstanding Letters of Credit. (a3) The chief executive, chief financial or chief accounting officer of ~~this Section or that one or more conditions specified in Article III are not then satisfied, then, subject~~ the general partner of the Borrower may request a Letter of Credit on behalf of the Borrower. The Agent shall be entitled to rely conclusively on such authorized officer's authority to request a Letter of Credit on behalf of the Borrower until the Agent receives written notice to the ~~terms~~ contrary. The Agent shall have no duty to verify the authenticity of the signature appearing on any Letter of Credit Application. (4) Each Letter of Credit Application shall be irrevocable and ~~conditions hereof,~~ the ~~Issuing Bank shall, on~~ Borrower shall be bound to accept the ~~requested date, issue such~~ issuance of a Letter of Credit in accordance ~~with the Issuing Bank’s usual and customary business practices~~therewith. (d5) ~~The Issuing Bank~~ All Letters of Credit shall ~~examine all documents purporting~~ be stated to ~~represent a demand for payment~~ expire no more than twelve (12) months from the date of issuance. (6) In the event that any amount is drawn under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the ~~Issuing Bank in respect of such drawing~~beneficiary thereof, ~~without presentment, demand or other formalities of any kind. Unless~~ the Borrower shall ~~have notified~~ reimburse the ~~Issuing Bank~~ Agent by having such amount drawn treated as an outstanding Base Rate Loan under this Agreement and the ~~Administrative~~ Agent ~~prior~~ shall promptly notify each Bank by telex, telecopy, telegram, telephone (confirmed in writing) or other similar means of transmission, and each Bank shall promptly and unconditionally pay to ~~11:00 a.m.~~ the Agent, for the Agent's own account, an amount equal to such Bank's Commitment Percentage of such Letter of Credit (to the extent of the amount drawn). If and to the extent any Bank shall not make such amount available on the Business Day ~~immediately prior~~ on which such draw occurs, such Bank agrees to pay such amount to the Agent forthwith on demand, together with interest thereon, for each day from the date on which such ~~drawing~~ draw occurred until the date on which such amount is ~~honored that~~ paid to the ~~Borrower intends to reimburse~~ Agent, at the ~~Issuing Bank for~~ Federal Funds Effective Rate until three (3) days after the ~~amount~~ date on which the Agent gives notice of such ~~drawing in funds other than from~~ draw and at the ~~proceeds of Loans~~Federal Funds Effective Rate plus 1% for each day thereafter. Further, ~~the Borrower~~ such Bank shall be deemed to have ~~timely given a Notice~~ assigned any and all payments made of ~~Borrowing~~ principal and interest on its Loans, amounts due with respect to its participations in Letters of Credit and any other amounts due to it hereunder to the ~~Administrative~~ Agent ~~requesting~~ to fund the ~~Lenders~~ amount of any drawn Letter of Credit which such Bank was required to fund pursuant to this Section 2.7(f) until such amount has been funded (as a result of such assignment or otherwise). In the event of any such failure or refusal, the Banks not so failing or refusing shall be entitled to a priority secured position for such amounts as provided in Section 12.6. The failure of any Bank to make ~~a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due~~ funds available to the ~~Issuing Bank; provided that for purposes solely~~ Agent in such amount shall not relieve any other Bank of ~~such Borrowing~~its obligation hereunder to make funds available to the Agent pursuant to this Section 2.7(f). (7) The obligation of the Borrower to reimburse the Agent, and of the ~~conditions precedent set forth in Section 3.2 hereof~~ Banks to make payments to the Agent with respect to Letters of Credit, shall be irrevocable and shall not be ~~applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3,~~ subject to any qualification or exception whatsoever and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the ~~foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a)~~ terms and conditions of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstanceAgreement under all circumstances, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i1) ~~any~~ Any lack of validity or enforceability of this Agreement, any Letter of Credit or ~~this Agreement~~any of the other Loan Documents; (ii2) ~~the~~ The existence of any claim, ~~set-off~~setoff, defense or other right which ~~the Borrower or any Subsidiary or Affiliate of~~ the Borrower may have at any time against a beneficiary named in a Letter of Credit or any transferee of any Letter of Credit (or any ~~Persons or entities~~ Person for whom any such ~~beneficiary or~~ transferee may be acting), the Agent, any ~~Lender (including the Issuing Bank)~~ Bank or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this ~~Agreement or the~~ Agreement, any Letter of ~~Credit or any document related hereto or thereto~~ Credit, the transactions contemplated herein or any unrelated ~~transaction~~transactions (including any underlying transactions between the Borrower or any Subsidiary of the Borrower and the beneficiary named in any Letter of Credit); (~~iii~~3) ~~any draft~~ Any draft, certificate or other document presented under a any Letter of Credit proving to be forged, ~~fraudulent~~ fraudulent, invalid or ~~invalid~~ insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the ~~Issuing Bank~~ Agent; (~~as finally determined by a court~~ 4) The surrender or impairment of ~~competent jurisdiction),~~ any security for the ~~Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance~~ performance or observance of ~~the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with~~ any of the terms of a any of the Loan Documents; (5) Payment by the Agent under any Letter of ~~Credit~~Credit against presentation of a demand, ~~the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice~~ draft or ~~information to the contrary,~~ certificate or ~~refuse to accept and make payment upon such documents if such documents are~~ other document which does not ~~in strict compliance~~ comply with the terms of such Letter of Credit, provided that such payment does not constitute gross negligence or willful misconduct of the Agent; (6) Any other circumstance or happening whatsoever which is similar to any of the foregoing; or (7) The occurrence of any Event of Default or Default. (~~j) Unless otherwise expressly agreed by~~ 8) Whenever the ~~Issuing Bank and~~ Agent receives a reimbursement payment from the Borrower ~~when~~ on account of an amount drawn under a Letter of ~~Credit is issued and subject~~ Credit, as to ~~applicable laws~~which the Agent has received for its own account any payment from the Banks pursuant to this Section 2.7, ~~(i)~~ then the Agent shall promptly pay to each ~~standby~~ Bank which has funded its participation in such Letter of Credit in accordance with this Section 2.7, in Dollars and in the kind of funds so received, such Bank's share of such reimbursement payment based on its Commitment Percentage of such Letter of Credit. (9) The Borrower shall ~~be governed by~~ pay to the ~~“International Standby Practices 1998”~~ Agent for the account of the Banks (~~ISP98~~based on their respective Commitment Percentage of Letters of Credit), a fee equal to the Applicable Margin (expressed as a per annum rate) for LIBOR Rate Loans then in effect on the face amount of the Letter of Credit calculated quarterly and payable on the first (or 1st) day of each January, April, July and October during the term of such ~~later revision as may be published by~~ Letter of Credit, with a final payment on the ~~Institute~~ expiry of ~~International Banking Law & Practice on any date~~ termination thereof. The fee for any Letter of Credit with a term of less than one year (or part of a year) shall be calculated on a pro-rata basis. In addition, the Borrower shall pay the standard service charges for Letters of Credit issued from time to time by the Agent including an issuance fee of $150.00 for each Letter of Credit. Such additional fees shall be paid to the Agent for its own account. All such fees shall be payable when due in immediately available funds and shall be nonrefundable. (10) In addition to amounts payable as elsewhere provided in this Section 2.7, the Borrower hereby agrees to pay, and to protect, indemnify and save harmless the Agent and the Banks from and against, any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees and allocated costs of internal counsel) which the Agent and the Banks may incur or be ~~issued)~~subject to as a consequence, direct or indirect, of (i) the issuance of or participations in the Letters of Credit, other than as a result of the gross negligence or willful misconduct of the Agent or any Bank as determined by a court of competent jurisdiction, or (ii) ~~each documentary Letter~~ the failure of ~~Credit shall be governed by~~ the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date Agent to honor a drawing under any Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future government or governmental authority (all such acts or omissions herein called "Government Acts"). The obligations of the Borrower under this Section 2.7 shall survive the termination of this Agreement and the discharge of the Borrower's other obligations hereunder, including the Obligations. (11) As between (i) the Borrower and (ii) the Agent and the Banks, the Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by the Agent by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, neither the Agent nor any Bank shall be responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of such Letters of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the right or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be ~~issued) and~~ invalid or ineffective for any reason; (iii) for failure of the beneficiary of any Letter of Credit to comply fully with conditions required in order to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for errors in interpretation of technical terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof; (vii) for the misapplication by the beneficiary of any Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (viii) for any consequences arising from causes beyond the control of the Agent or any Bank, including, without limitation, any Government Acts; provided, however, that the Agent will be responsible for grossly negligent actions or willful misconduct on its part. None of the above shall affect, impair, or prevent the vesting of any of the Agent's or any Bank's rights or powers hereunder. (12) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Agent under or in connection with the Letters of Credit issued by it or the related certificates, if taken or omitted in good faith shall not put the Agent or any Bank under any resulting liability to the Borrower ~~shall specify~~ other than as a result of gross negligence or willful misconduct by the ~~foregoing in each letter~~ Agent as determined by a court of ~~credit application submitted for~~ competent jurisdiction. (13) If after the issuance of a Letter of Credit, but prior to the funding of any portion thereof by a Bank, one of the events described in Section 12.1(g), (h) or (i) shall have occurred, each Bank will, on the date such Loan pursuant to Section 2.7(f) was to have been made, purchase an undivided participating interest in the Letter of Credit in an amount equal to its Commitment Percentage of the amount of such Letter of Credit. Each Bank will immediately transfer to the Agent in immediately available funds the amount of its participation and upon receipt thereof the Agent will deliver to such Bank a Letter of Credit participation certificate dated the date of receipt of such funds and in such amount. (14) If any Letter of Credit shall be outstanding at the Maturity Date, the Borrower shall immediately cash collateralize such Letters of Credit or obtain replacement letters of credit for such Letter of Credit (and return to Agent such outstanding Letters of Credit), all in a manner satisfactory to the Agent.

Appears in 1 contract

Samples: Master Revolving Credit Agreement (Ramco Gershenson Properties Trust)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) ~~the date~~ one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (Ax) the aggregate LC Exposure would exceed the LC Commitment or (By) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction or waiver in writing of the conditions set forth in ~~Article III~~Section 3.3, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in ~~Article III~~ Section 3.3 are not then ~~satisfied~~satisfied or waived in writing, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to ~~11:00 a.m.~~ 12:00 p.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section ~~3.2~~ 3.3 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.13(c). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (BioScrip, Inc.)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions set forth herein, the Borrower may request an Issuing Bank, ~~in reliance upon~~ and each Issuing Bank agrees from time to time on any Business Day during the ~~agreements~~ period from the Closing Date until the date that is 30 days prior to the Letter of ~~the other Lenders pursuant~~ Credit Expiration Date, to ~~subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower,~~ issue Letters of Credit denominated in Dollars for the account of the Borrower on or any Restricted Subsidiary of Holdings in a form reasonably acceptable to the ~~terms~~ Borrower (with the Borrower’s agreement not to be unreasonably withheld, delayed or conditioned), the Administrative Agent and ~~conditions hereinafter set forth;~~ the applicable Issuing Bank, or to amend, renew or extend any Letter of Credit, at any time and from time to time prior to the Letter of Credit Expiration Date (provided that ~~(i)~~ the Borrower shall be a co-applicant, and be jointly and severally liable, with respect to each Letter of Credit ~~shall expire on~~ issued for the ~~earlier~~ account of any Restricted Subsidiary of Holdings) upon delivery to the relevant Issuing Bank and the Administrative Agent (Aat least three Business Days in advance of the requested date of issuance, amendment, renewal or extension) of an LC Request requesting the ~~date one year after~~ issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the requested date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit which shall be in a ~~stated amount of at least $5,000; and (iii~~Business Day) ~~the Borrower may not request any Letter of Credit if~~and, ~~after giving effect to such issuance~~as applicable, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on specifying the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) ), the date on which such Letter of Credit is to expire, whether such Letter of Credit is to be ~~issued (~~a Standby Letter of Credit or ~~amended, renewed or extended, as the case may be), the expiration date of such~~ a Commercial Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit, as applicable. ~~In addition~~ The applicable Issuing Bank shall have no obligation to issue (but, solely in the ~~satisfaction~~ case of clause (i), may in its sole discretion issue), and the Borrower shall not request the issuance of, any Letter of Credit at any time if after giving effect to such issuance (i) the aggregate stated amount of the ~~conditions in Article III~~Letters of Credit issued by such Issuing Bank would exceed its LC Commitment, (ii) the LC Exposure would exceed the LC Sublimit or (iii) the total Revolving Exposure would exceed the total Revolving Commitments. If requested by the applicable Issuing Bank, the ~~issuance~~ Borrower also shall submit a letter of ~~such~~ credit application on the applicable Issuing Bank’s standard form in connection with any request for a Letter of Credit (~~or any amendment which increases~~ the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require“Application”); provided that in the event of any ~~conflict~~ inconsistency between ~~such applications, agreements or instruments and this Agreement,~~ the terms and conditions of this Agreement ~~shall control. (c) At least two (2) Business Days prior~~ and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the applicable Issuing Bank relating to ~~the issuance of~~ any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions ~~hereof~~of this Agreement shall control. Notwithstanding anything in this Section 2.18 or otherwise herein to the contrary, ~~the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The~~ an Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by issue any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages Commercial (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable lawStandby) ~~suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a~~ Letter of Credit ~~comply with~~ without the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms consent of such ~~Letter of Credit~~Issuing Bank. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (Datto Holding Corp.)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.22(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Commitment Termination Date; (ii) each Letter of Credit ~~shall~~ may be in a any stated amount subject, however, to the provisions of ~~at least $5,000~~clause (iii) hereof; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the sum of the aggregate outstanding Revolving Credit ~~Exposure~~ Exposures of all Lenders would exceed the lesser of (1) the Aggregate ~~Commitment Amount~~Revolving Commitments and (2) the Borrowing Availability. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s 's Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of ~~Credit~~Credit , the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s 's usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s 's obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.22 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the ~~Issuing Bank and the~~ Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid ~~fees~~ interest thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, ~~without~~ with demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The Borrower agrees to execute any documents and/or certificates to effectuate~~ At the ~~intent~~ request of ~~this subsection. Other than any interest earned on~~ the ~~investment of such deposits~~Borrower, ~~which investments shall be made at the option and sole discretion of~~ the Administrative Agent ~~and~~ shall hold such deposit in an interest-bearing money market demand deposit account at the Borrower’s 's risk and expense; otherwise, such ~~deposits~~ deposit shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this ~~Agreement and the other Loan Documents~~Agreement. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower ~~within~~ with three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each fiscal quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such fiscal quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s 's obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.22, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s 's obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s 's failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and ~~Practices~~ Practice for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication ~~No. 600 (or such later revision~~ No.500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing~~ this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit.~~Section 10.5. {OR396390;8} 28

Appears in 1 contract

Samples: Revolving Credit Agreement (Stein Mart Inc)

Letters of Credit. (a) ~~During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant~~ Subject to ~~subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on~~ the terms and conditions ~~hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or~~hereof, ~~in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii)~~ each Letter of Credit shall be ~~in a~~ issued (or the stated ~~amount of at least $5,000; and (iii~~maturity thereof extended or terms thereof modified or amended) ~~the Borrower may~~ on not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance less than three Business Days’ prior notice thereof by delivery of a ~~Letter of Credit shall be deemed~~ Request for Issuance to utilize the Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent ~~irrevocable written notice at least three~~ (~~3) Business Days prior~~ which shall promptly distribute copies thereof to the ~~requested date of such issuance specifying~~ Lenders) and the LC Issuing Bank. Each Request for Issuance shall specify (i) the date (which shall be a Business Day) ~~such Letter~~ of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or ~~any amendment~~ the date of effectiveness of such extension, modification or amendment) and the stated expiry date thereof (which ~~increases~~ shall be no later than the eighth Business Day preceding the Stated Termination Date), (ii) the proposed stated amount of such Letter of Credit (which shall not be less than $1,000,000), (iii) the name and address of the beneficiary of such Letter of Credit and (iv) a statement of drawing conditions applicable to such Letter of Credit~~) will~~ , and if such Request for Issuance relates to an amendment or modification of a Letter of Credit, it shall be ~~subject~~ accompanied by the consent of the beneficiary of the Letter of Credit thereto. Each Request for Issuance shall be irrevocable unless modified or rescinded by the Borrower not less than two days prior to the ~~further~~ proposed date of issuance (or effectiveness) specified therein. Not later than 12:00 noon on the proposed date of issuance (or effectiveness) specified in such Request for Issuance, and upon fulfillment of the applicable conditions precedent and the other requirements set forth herein unless (x) the L/C Issuer and the Borrower have received written notice from the Required Lenders, 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 V shall not be satisfied and (y) such condition or conditions, as applicable, are unsatisfied on such requested date of issuance or amendment, as applicable, the LC Issuing Bank shall issue (or extend, amend or modify) such Letter of Credit and provide notice and a copy thereof to the Administrative Agent, which shall promptly furnish copies thereof to the Lenders. (b) No Letter of Credit shall be ~~in such form and contain such terms as~~ requested or issued hereunder if, after the ~~Issuing Bank shall approve and that~~ issuance thereof, (i) the ~~Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter~~ aggregate undrawn stated amounts of all Letters of Credit as outstanding would exceed $100,000,000; or (ii) the ~~Issuing Bank shall reasonably require; provided that in~~ Outstanding Credits would exceed the ~~event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control~~total Commitments. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower ~~shall be irrevocably and unconditionally obligated~~ hereby agrees to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available pay to the Administrative Agent for the account of the LC Issuing Bank ~~in accordance with Section 2.5. The proceeds of such Borrowing~~ and, if they shall ~~be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined~~ have purchased participations in the ~~sole discretion~~ reimbursement obligations of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased Borrower pursuant to subsection (ad) ~~of this Section in an amount equal~~ below, the Lenders, on demand made by the LC Issuing Bank to ~~its Pro Rata Share of such LC Disbursement~~ the Borrower, on and ~~as of~~ after each date on which the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the LC Issuing Bank or shall pay any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of amount under any Letter of Credit or issued by the LC Issuing Bank, a sum equal to the amount so paid plus interest on such amount from the date so paid by the LC Issuing Bank until repayment to the LC Issuing Bank in full at a fluctuating interest rate per annum equal to the interest rate applicable to Base Rate Borrowings plus, if any amount paid by the LC Issuing Bank under a Letter of Credit is not reimbursed by the Borrower within three Business Days, 2%. (vid) If the LC Issuing Bank shall not have been reimbursed in full for any ~~other circumstance~~payment made by the LC Issuing Bank under a Letter of Credit issued by the LC Issuing Bank on the date of such payment, ~~happening or event whatsoever, whether or not similar~~ the LC Issuing Bank shall give the Administrative Agent and each Lender prompt notice thereof (an “LC Payment Notice”) no later than 12:00 noon on the Business Day immediately succeeding the date of such payment by the LC Issuing Bank. Each Lender severally agrees to ~~any~~ purchase a participation in the reimbursement obligation of the ~~foregoing. On~~ Borrower to the ~~date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation~~ LC Issuing Bank by paying to the Administrative Agent for the account of the ~~Issuing Bank. Whenever, at any time after the~~ LC Issuing Bank ~~has received from any~~ an amount equal to such ~~Lender~~ Lender’s Commitment Percentage of such unreimbursed amount paid by the ~~funds for its participation in a~~ LC ~~Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the~~ Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay plus interest ~~to the Issuing Bank (through the Administrative Agent)~~ on such amount ~~from such due date to the date such payment is made~~ at a rate per annum equal to the ~~Federal~~ Fed Funds ~~Rate; provided~~ Rate from the date of the payment by the LC Issuing Bank to the date of payment to the LC Issuing Bank by such Lender. Each such payment by a Lender shall be made not later than 3:00 P.M. on the later to occur of (i) the Business Day immediately following the date of such payment by the LC Issuing Bank and (ii) the Business Day on which Lender shall have received an LC Payment Notice from the LC Issuing Bank. Each Lender’s obligation to make each such payment to the Administrative Agent for the account of the LC Issuing Bank shall be several and shall not be affected by the occurrence or continuance of a Potential Default or Event of Default or the failure of any other Lender to make any payment under this Section 2.5(d). Each Lender further agrees that if each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. (e) The failure of any Lender to make any payment to the Administrative Agent for the account of the LC Issuing Bank in accordance with subsection (d) above shall not relieve any other Lender of its obligation to make payment, but no Lender shall be responsible for the failure of any other Lender. If any Lender (a “non-performing Lender”) shall fail to make ~~such~~ any payment to the Administrative Agent for the account of the LC Issuing Bank in accordance with subsection (d) above within ~~three (3)~~ five Business Days ~~of such due date~~after the LC Payment Notice relating thereto, then, ~~retroactively~~ for so long as such failure shall continue, the LC Issuing Bank shall be deemed, for purposes of Section 14.8 and Article XII hereof, to be a Lender owed a Borrowing in an amount equal to the outstanding principal amount due ~~date,~~ and payable by such non-performing Lender ~~shall be obligated~~ to ~~pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from~~ the Administrative Agent or for the ~~Required Lenders demanding that its reimbursement obligations with respect to~~ account of the ~~Letters of Credit be Cash Collateralized~~ LC Issuing Bank pursuant to ~~this subsection,~~ subsection (d) above. Any non-performing Lender and the Borrower ~~shall deposit~~ (without waiving any claim against such Lender for such Lender’s failure to purchase a participation in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower ~~with respect~~ under subsection (d) above) severally agree to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect pay to ~~the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by~~ the Administrative Agent ~~as collateral~~ for the ~~payment and performance~~ account of the ~~obligations~~ LC Issuing Bank forthwith on demand such amount, together with interest thereon for each day from the date such Lender would have purchased its participation had it complied with the requirements of subsection (d) above until the ~~Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over~~ date such ~~account. The Borrower agrees~~ amount is paid to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent ~~and~~ at (i) in the case of the Borrower, the interest rate applicable at the ~~Borrower’s risk~~ time to Base Rate Borrowings and ~~expense~~(ii) in the case of such Lender, ~~such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by~~ the ~~Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement~~ Fed Funds Rate. (f) The payment obligations of ~~the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations~~ each Lender under Section 2.5(d) and of the Borrower under this Agreement ~~and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with~~ in respect ~~to the Letters~~ of any payment under any Letter of Credit ~~as a result of~~ by the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the LC Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be ~~absolute,~~ unconditional and ~~irrevocable~~ irrevocable, and shall be ~~performed~~ paid strictly in accordance with the terms of this Agreement under all ~~circumstances whatsoever and irrespective of any of~~ circumstances, including, without limitation, the following circumstances: (i) any lack of validity or enforceability of this Agreement, any other Credit Document or any other agreement or instrument relating thereto or to such Letter of ~~Credit or this Agreement~~Credit; (ii) any amendment or waiver of, or any consent to departure from, the terms of this Agreement, any other Credit Document or such Letter of Credit; (iii) the existence of any claim, set-off, defense or other right which the Borrower ~~or any Subsidiary or Affiliate of the Borrower~~ may have at any time against ~~a beneficiary~~ any beneficiary, or any ~~transferee~~ transferee, of ~~any~~ such Letter of Credit (or any Persons ~~or entities~~ for whom any ~~such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom~~ such beneficiary or any such transferee may be acting), the LC Issuing Bank, or any other Person, whether in connection with this ~~Agreement~~ Agreement, the transactions contemplated hereby, thereby or ~~the~~ by such Letter of ~~Credit or any document related hereto or thereto~~ Credit, or any unrelated transaction; (~~iii~~iv) any ~~draft~~ statement or any other document presented under a such Letter of Credit proving to be forged, ~~fraudulent~~ fraudulent, invalid or ~~invalid~~ insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (ivv) payment in good faith by the LC Issuing Bank under a the Letter of Credit issued by the LC Issuing Bank against presentation of a draft or ~~other document to the Issuing Bank~~ certificate that does not comply with the terms of such Letter of Credit;; or (vvi) any other ~~event~~ circumstance or ~~circumstance~~ happening whatsoever, whether or not similar to any of the foregoing~~, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or~~. (vig) The Borrower assumes all risks of the ~~existence~~ acts and omissions of ~~a Default~~ any beneficiary or ~~an Event~~ transferee of ~~Default~~any Letter of Credit. Neither the ~~Administrative Agent, the~~ LC Issuing Bank, ~~any Lender~~ the Lenders nor any ~~Related Party~~ of ~~any~~ their respective officers, directors, employees, agents or Affiliates shall be liable or responsible for (i) the use that may be made of ~~the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any~~ such Letter of Credit or any acts or omissions of any beneficiary or transferee thereof in connection therewith; (ii) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (iii) payment by the LC Issuing Bank against presentation of documents that do not comply with the terms of such Letter of Credit, including failure of any documents to bear any reference or ~~failure~~ adequate reference to such Letter of Credit; or (iv) any other circumstances whatsoever in making or failing to make ~~any~~ payment ~~thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication~~ under ~~or relating to any~~ such Letter of Credit. Notwithstanding any provision to the contrary contained in any Credit ~~(including any document required~~ Document, the Borrower and each Lender shall have the right to ~~make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond~~ bring suit against the ~~control of the~~ LC Issuing Bank~~; provided that~~ , and the ~~foregoing shall not be construed to excuse the~~ LC Issuing Bank ~~from liability~~ shall be liable to the Borrower and any Lender, to the extent of any ~~actual direct damages (~~direct, as opposed to ~~special~~consequential, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) damages suffered by the Borrower ~~that are~~ or such Lender which the Borrower or such Lender proves were caused by the LC Issuing Bank’s willful misconduct or gross negligence, including, in the case of the Borrower, the LC Issuing Bank’s willful failure to ~~exercise due care when determining whether drafts or other documents presented~~ make timely payment under a such Letter of Credit following the presentation to it by the beneficiary thereof of a draft and accompanying certificate(s) that strictly comply with the terms ~~thereof. The parties hereto expressly agree that, in the absence~~ and conditions of ~~gross negligence or willful misconduct on the part~~ such Letter of ~~the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination~~Credit. In furtherance and not in limitation of the ~~foregoing and without limiting the generality thereof~~foregoing, the ~~parties agree that, with respect to documents~~ LC Issuing Bank may accept sight drafts and accompanying certificates presented under the Letter of Credit issued by the LC Issuing Bank that appear on their face to be in ~~substantial compliance with the terms of a Letter of Credit~~order, ~~the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents~~ without responsibility for further investigation, regardless of any notice or information to the contrary, ~~or refuse to accept~~ and ~~make~~ payment ~~upon~~ against such documents ~~if such documents are~~ shall not ~~in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed~~ constitute willful misconduct or gross negligence by the LC Issuing ~~Bank and~~ Bank. Notwithstanding the foregoing, no Lender shall be obligated to indemnify the Borrower ~~when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed~~ for damages caused by the ~~“International Standby Practices 1998” (ISP98) (~~LC Issuing Bank’s willful misconduct or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Creditgross negligence.

Appears in 1 contract

Samples: Credit Agreement (Teppco Partners Lp)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to subsections (d) and (e) of this Section, ~~may, in its sole discretion,~~ shall issue, at the request of the Borrower, Letters of Credit denominated in Dollars for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; provided, further that any Letter of Credit with a one year tenor may provide for automatic extension thereof for additional one year periods (which, in no event, shall extend beyond the date referred to in clause (B) of this paragraph (a)) so long as such Letter of Credit (any such Letter of Credit, an “Auto Extension Letter of Credit”) permits the Issuing Bank to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Auto Extension Letter of Credit) by giving prior notice to the beneficiary thereof within a time period during such twelve-month period to be agreed upon at the time such Auto Extension Letter of Credit is issued; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; ~~and~~ (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount, (iv) the Revolving Credit Exposure of each Lender shall not exceed such Lender’s Revolving Commitment at such time and (v) the Borrower shall not request, and the Issuing Bank shall have no obligation to issue, any Letter of Credit the proceeds of which would be made available to any Person (AA) to fund any activity or business of or with any Sanctioned Person or in any Sanctioned Countries, that, at the time of such funding, is the subject of any Sanctions or (BB) in any manner that would result in a violation of any Sanctions by any party to this Agreement. Each Lender with a Revolving Commitment shall be deemed toto have purchased, and hereby irrevocably and unconditionally ~~agrees to, purchase~~ purchases from the relevant Issuing Bank without recourse a participation in each Letter of Credit equal to such ~~Lender~~Xxxxxx’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. With respect to any renewal of any Auto Extension Letter of Credit, unless otherwise directed by the Issuing Bank, the Borrower shall not be required to make a specific request to the Issuing Bank for any such renewal. Once an Auto Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the Issuing Bank to permit the renewal of such Letter of Credit at any time to an expiry date not later than the Revolving Commitment Termination Date. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall reasonably approve and that the Borrower shall have executed and delivered any additional applications, DB1/ 110470318.9 78 agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to itDB1/ 110470318. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Revolving Credit and Term Loan Agreement (Amneal Pharmaceuticals, Inc.)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement (including without limitation the provisions of Article III and this Section 2.10(a)), upon the request of Borrower made in accordance herewith not later than seven (7) days before the Maturity Date, the Issuing ~~Bank~~Lender shall issue letters of credit denominated in Dollars for the account of Borrower and, if requested by Borrower, for the benefit of one of its Affiliates (each, a “Letter of Credit”), and, subject to the provisions of Section 2.1(a)(iii), the Issuing Lender shall amend, renew or extend any Letter of Credit. Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by any of the individuals identified on Exhibit R-1 attached hereto (or, in ~~reliance upon~~ certain cases, two of such individuals, all as set forth in further detail in Exhibit R-1 attached hereto) and delivered to the ~~agreements~~ Issuing Lender and Agent via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the ~~other Lenders pursuant~~ requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance satisfactory to ~~subsections (d) and (e) of this Section, may,~~ the Issuing Lender in its sole ~~discretion~~and absolute discretion and shall specify (i) the amount of such Letter of Credit, ~~issue~~(ii) the date of issuance, at amendment, renewal, or extension of such Letter of Credit, (iii) the ~~request~~ expiration of such Letter of Credit, (iv) the name and address of the ~~Borrower~~beneficiary thereof, ~~Letters~~ (v) the identity of Xxxxxxxx’s Affiliate for whose benefit such Letter of Credit shall be issued in the event that Borrower requests that the issuing Lender issue a Letter of Credit for the ~~account~~ benefit of one of its Affiliates, and (vi) such other information (including, in the case of an amendment, renewal, or extension, identification of the ~~Borrower on the terms and conditions hereinafter set forth; provided that (i) each~~ outstanding Letter of Credit to be so amended, renewed, or extended) as shall ~~expire on~~ be necessary to prepare, amend, renew, or extend such Letter of Credit. It is hereby acknowledged that the ~~earlier~~ Issuing Lender shall have no obligation to issue a Letter of Credit (A) if, after giving effect to the ~~date~~ issuance of such requested Letter of Credit, (1) the Letter of Credit Usage would exceed $25,000,000, (2) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the amount of the Revolving Credit Facility Usage, or (3) the Letter of Credit Usage would exceed the Borrowing Base at such time less the amount of the Revolving Credit Facility Usage, (B) at any time when one ~~year after~~ or more of the ~~date~~ Lenders is a Defaulting Lender, but only until such time as either (1) the Revolver Commitments of the Defaulting Lender or Defaulting Lenders have been assumed by a Lender that is not a Defaulting Lender, (2) the Maximum Revolver Amount has been reduced by the amount of such Defaulting Lender’s or Defaulting Lenders’ Revolver Commitments or (3) such Defaulting Lender’s Letter of Credit exposure has been cash collateralized, (C) if 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 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 Closing Date, or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Lender in good xxxxx xxxxx material to it, or (D) if the issuance of such Letter of Credit would violate one or more policies of the Issuing Lender applicable to letters of credit generally. Agent shall provide a report to each Lender on a quarterly basis setting forth the then current Letter of Credit Usage and Xxxxxx’s Pro Rata Share thereof. (~~or, in~~ b) Each Letter of Credit shall have an expiry date no later than the ~~case~~ earlier to occur of ~~any renewal or extension thereof,~~ (i) one year after the issuance or renewal of such ~~renewal or extension)~~ Letter of Credit and ~~(B) the date that is five (5) Business Days prior to the Stated Termination Date;~~ (ii) ~~each Letter~~ the Maturity Date, and all Letters of Credit shall be in form and substance acceptable to the Issuing Lender in its sole and absolute discretion. Notwithstanding the foregoing, to the extent Borrower so requests with respect to any new Letter of Credit issued hereunder, the Issuing Xxxxxx agrees to issue a ~~stated~~ Letter of Credit that has automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”). Unless otherwise directed by the Issuing Lender, Borrower shall not be required to make a specific request to the Issuing Lender for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, each Lender with a Revolver Commitment shall be deemed to have authorized the Issuing Lender to permit the renewal of such Letter of Credit at any time prior to an expiry date not later than the Maturity Date (subject to the cash collateral requirement of Section 2.1(a)(iii)); provided that the Issuing Lender shall not permit any such renewal if (x) the Issuing Lender has determined in its reasonable discretion that it would have no obligation at such time to issue such Letter of Credit in its renewed form under Section 2.10(a), or (y) it has received notice on or before the day that is seven Business Days before the renewal date from Agent, any Lender or Borrower that one or more of the applicable conditions specified in Section 3.2 (other than 3.2(d)) are not then satisfied. The foregoing to the contrary notwithstanding, any change to the face amount of ~~at least $5,000; and (iii) the Borrower may not request~~ any Letter of Credit ifshall only be made pursuant to an amendment thereto in accordance with the provisions of this Agreement, ~~after giving effect~~ and in no event shall Agent or the Issuing Lender issue a Letter of Credit which provides for an automatic increase, automatic decrease or other automatic change to the face amount of any Letter of Credit. (c) If the Issuing Lender is obligated to advance funds under a Letter of Credit, Borrower shall reimburse such L/C Disbursement to the Issuing Lender by paying to Agent an amount equal to such ~~issuance~~L/C Disbursement not later than 1:00 p.m. (Pacific Time) on the date that such L/C Disbursement is made, if Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 9:00 a.m. (APacific Time) on such date, or, if such notice has not been received by Borrower prior to 9:00 a.m. (Pacific Time) on such date, then not later than 1:00 p.m. (Pacific Time) on the ~~aggregate LC Exposure would exceed~~ Business Day immediately following the ~~LC Commitment or (B)~~ day that Xxxxxxxx receives such notice. Such reimbursement shall be made in Dollars. In the ~~aggregate Credit Exposure~~ absence of ~~all Lenders would exceed~~ such reimbursement, the ~~Aggregate Commitment Amount. Each Lender~~ L/C Disbursement immediately and automatically shall be deemed toto be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances that are Base Rate Loans under Section 2.3. To the extent an L/C Disbursement is deemed to be an Advance hereunder, Xxxxxxxx’s obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Advance. To the extent Borrower has provided to Agent cash or Cash Equivalents to cash collateralize outstanding Letters of Credit pursuant to the provisions of this Agreement, and ~~hereby irrevocably and unconditionally agrees to~~if no other reimbursement obligation for a separate L/C Disbursement exists, ~~purchase from~~ then Agent may utilize the cash collateral to reimburse the Issuing ~~Bank without recourse a participation in each Letter~~ Lender for such L/C Disbursement. Promptly following receipt by Agent of ~~Credit equal~~ any payment from Borrower pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.10(d) to reimburse the Issuing Lender, then to such ~~Lender’s~~ Lenders and the Issuing Lender as their interests may appear. (d) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.10(c) which is deemed to be an Advance hereunder, each Lender agrees to fund in Dollars in immediately available funds its Pro Rata Share of any Advance deemed made pursuant to the ~~aggregate amount available to be drawn under such Letter of Credit~~ foregoing subsection on the ~~date of issuance. Each issuance of a Letter of Credit~~ same terms and conditions as if Borrower had requested such Advance and Agent shall ~~be deemed to utilize the Commitment of each Lender by an amount equal~~ promptly pay to the ~~amount of such participation. (b) To request~~ Issuing Lender the amounts so received by it from the Lenders. By the issuance of a Letter of Credit (or ~~any amendment, renewal or extension of~~ an ~~outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior~~ amendment to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following its receipt~~ increasing the amount thereof~~. The Issuing Bank shall notify~~ ) and without any further action on the ~~Borrower and the Administrative Agent~~ part of ~~such demand for payment and whether~~ the Issuing ~~Bank has made~~ Lender or ~~will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve~~ the ~~Borrower of its obligation to reimburse~~ Lenders, the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower Lender shall be deemed to have ~~timely given a Notice of Borrowing~~ granted to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3each Lender, and each Lender shall ~~make the proceeds~~ be deemed to have purchased, a participation in each Letter of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent)Credit, or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of the Risk Participation Liability of such ~~LC Disbursement on~~ Letter of Credit, and as each such Lender agrees to pay to Agent in Dollars in immediately available funds, for the account of the Issuing Lender, such Xxxxxx’s Pro Rata Share of any payments made by the Issuing Lender under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to Agent in Dollars in immediately available funds, for the account of the Issuing Lender, such Xxxxxx’s Pro Rata Share of each L/C Disbursement made by the Issuing Xxxxxx and not reimbursed by Borrower on the date ~~which such Base Rate Borrowing should have occurred~~due as provided in clause (c) above, or of any reimbursement payment required to be refunded to Borrower for any reason. Each ~~Lender’s~~ Lender acknowledges and agrees that its obligation to ~~fund~~ deliver to Agent, for the account of the Issuing Lender, an amount in Dollars in immediately available funds equal to its ~~participation~~ respective Pro Rata Share of each L/C Disbursement made by the Issuing Lender pursuant to this Section 2.10(d) shall be absolute and unconditional and such remittance shall ~~not~~ be ~~affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense~~ made notwithstanding the occurrence or ~~other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence~~ continuation of ~~a Default or~~ an Event of Default or Default or the ~~termination~~ failure to satisfy any condition set forth in Article III hereof. If any such Lender fails to make available to Agent the amount of such Xxxxxx’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender in respect of such Letter of Credit as provided in this Section, (i) such Lender shall be deemed to be a Defaulting Lender, (ii) Agent (for the account of the ~~Aggregate Commitments~~Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full, and (iii) Agent shall be authorized by Borrower and each Lender to request that the Lenders fund an additional Advance equal to such Defaulting Lender’s Pro Rata Share of such L/C Disbursement (subject in any ~~adverse change~~ event to the limitation set forth in the ~~condition~~ proviso in Section 2.1(a)(i)(A)). (~~financial~~ e) Xxxxxxxx hereby agrees to indemnify, save, defend, and hold the Lender Group harmless from any loss, cost, expense, or ~~otherwise)~~ liability, and reasonable attorneys fees incurred by the Lender Group arising out of or in connection with any Letter of Credit; provided, however, that Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, or liability to the extent that it is found in a final non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, willful misconduct or violation of the ~~Borrower or any of its Subsidiaries, (iv) any breach~~ express terms of this Agreement by the ~~Borrower~~ Issuing Lender or any other ~~Lender~~member of the Lender Group. The indemnity set forth above is in addition to any other indemnity set forth in this Agreement or in any other Loan Document (including the indemnities by Borrower set forth in Section 8.2 hereof), ~~(v)~~ and shall not be deemed to limit the provisions of any ~~amendment, renewal~~ other indemnity or ~~extension~~ any other similar provision set forth herein or therein. Borrower agrees to be bound by the Issuing Xxxxxx’s good faith interpretations of any Letter of Credit issued by the Issuing Lender to or ~~(vi)~~ for Xxxxxxxx’s account, even though this interpretation may be different from Xxxxxxxx’s own, and Borrower understands and agrees that the Lender Group shall not be liable for any ~~other circumstance~~error, ~~happening~~ negligence, or ~~event whatsoever~~mistake, whether of omission or ~~not similar to~~ commission, in following Xxxxxxxx’s instructions or those contained in the Letter of Credit or any of modifications, amendments, or supplements thereto. Borrower hereby acknowledges and agrees that neither the ~~foregoing. On~~ Lender Group nor the ~~date that such participation is required to be funded, each~~ Issuing Lender shall ~~promptly transfer~~be responsible for delays, errors, or omissions resulting from the malfunction of equipment in connection with any Letter of Credit. (f) Any and all charges, commissions, fees, and costs incurred by the Issuing Lender relating to Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and immediately ~~available funds, the amount of its participation~~ shall be reimbursable by Borrower to ~~the Administrative~~ Agent for the account of the Issuing ~~Bank. Whenever, at any time after~~ Lender; it being acknowledged and agreed by Borrower that the issuance charge imposed by the Issuing ~~Bank has received from any such~~ Lender is fixed at 0.125% per annum times the ~~funds for its participation~~ undrawn amount of each Letter of Credit, which shall in no event be less than a ~~LC Disbursement~~minimum of $500 and no greater than a maximum of $1,500, and that the Issuing ~~Bank (or the Administrative Agent on its behalf) receives any payment on account thereof~~Lender also imposes a schedule of charges for amendments, ~~the Administrative Agent or the Issuing Bank~~extensions, ~~as the case may be~~drawings, ~~will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee~~and renewals, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender which shall be ~~obligated to pay interest on such amount at~~ no more than the ~~rate set forth in Section 2.12(b)~~rates therefor that have been most recently published by CNB. (g) If ~~any Event~~ by reason of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any ~~lack of validity~~ change after the Closing Date in any applicable law, treaty, rule, or ~~enforceability of~~ regulation or any ~~Letter of Credit~~ change in the interpretation or ~~this Agreement;~~ application thereof by any Governmental Authority, or (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment compliance by the ~~Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply~~ Lender Group with ~~the terms of such Letter of Credit; (v)~~ any ~~other event or circumstance whatsoever~~direction, ~~whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of~~request, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the ~~circumstances referred~~ Federal Reserve Board as from time to ~~above), or~~ time in effect (and any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.successor thereto):

Appears in 1 contract

Samples: Credit Agreement (Ares Commercial Real Estate Corp)

Letters of Credit. (a) ~~During~~ The Letter of Credit Commitments. (i) Subject to the ~~Availability Period~~terms and conditions set forth herein, ~~the Issuing Bank~~(1) each L/C Issuer agrees, in reliance upon the agreements of the other Revolving Credit Lenders ~~pursuant~~ set forth in this ‎Section 2.03, (x) from time to ~~subsections (d) and (e)~~ time on any Business Day during the period from the Closing Date until the Letter of ~~this Section~~Credit Expiration Date, ~~may, in its sole discretion, issue, at the request of the Borrower,~~ to issue Letters of Credit in Dollars for the account of the Borrower on (provided that any Letter of Credit may be for the benefit of any Subsidiary of the Borrower) and to amend or renew Letters of Credit previously issued by it, in accordance with ‎Section 2.03(b), and (y) to honor drawings under the Letters of Credit and (2) the Revolving Credit Lenders 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 Lender shall be obligated to participate in any Letter of Credit if immediately after giving effect to such L/C Credit Extension, (x) the Revolving Credit Exposure of any Lender would exceed such Lender’s Revolving Credit Commitment, or (y) the Outstanding Amount of the L/C Obligations would 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 ~~hereinafter set forth; provided~~ 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 described in Schedule ‎2.03(a) (ithe “Existing Letters of Credit”) ~~each~~ shall constitute a “Letter of Credit” for all purposes of this Agreement and shall be deemed issued under this Agreement on the Closing Date and shall be subject to and governed by the terms and conditions of this Agreement. (ii) An L/C Issuer shall not issue any Letter of Credit ~~shall expire on the earlier of~~ if: (A) subject to ‎Section 2.03(b)(iii), the expiry date of the requested Letter of Credit would occur more than twelve months after the date ~~one year~~ of issuance or last renewal, unless the Required Revolving Credit Lenders have approved such expiry date; or (B) subject to ‎Section 2.03(b)(iii), the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless (x) all the Revolving Credit Lenders and such L/C Issuer have approved such expiry date or (y) the Borrower has entered into arrangements reasonably satisfactory to the relevant L/C Issuer to Cash Collateralize the Outstanding Amount of such L/C Obligations or backstop such Letter of Credit on the later of (I) the date of issuance of such Letter of Credit ~~(or, in the case of any renewal or extension thereof, one year after such renewal or extension)~~ and (BII) the ~~date that is five (5) Business Days~~ 7th day prior to the ~~Stated Termination Date; (ii) each~~ Letter of Credit ~~shall be in a stated amount of at least $5,000; and~~ Expiration Date). (iii) ~~the Borrower may~~ An L/C Issuer shall not ~~request~~ be under any obligation to issue any Letter of Credit if~~, after giving effect to such issuance,~~ : (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 ~~aggregate LC Exposure would exceed~~ Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the ~~LC Commitment~~ 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 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 for 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 is not otherwise compensated for hereunder and in good fxxxx xxxxx material to it; (B) the ~~aggregate Credit Exposure~~ issuance of ~~all Lenders would exceed~~ the ~~Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each~~ Letter of Credit ~~equal~~ would violate one or more policies of such L/C Issuer applicable to letters of credit generally; (C) except as otherwise agreed by the Administrative Agent and such ~~Lender’s Pro Rata Share of~~ L/C Issuer, the ~~aggregate amount available to be drawn under such~~ Letter of Credit ~~on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by~~ is in an initial stated amount ~~equal to the amount of such participation.~~less than $25,000; (bD) ~~To request~~ the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be ~~issued~~ denominated in a currency other than Dollars unless otherwise agreed by the Administrative Agent and the L/C issuer; (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, with the Borrower or ~~amended, renewed or extended, as~~ such Lender to eliminate the ~~case may be~~L/C Issuer’s Fronting Exposure (after giving effect to ‎Section 2.16(a)(iv), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition ) with respect to the ~~satisfaction of~~ Defaulting Lender arising from either the ~~conditions in Article III, the issuance of such~~ Letter of Credit (then proposed to be issued or ~~any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions~~ that ~~such~~ Letter of Credit ~~shall be~~ and all other L/C Obligations as to which such L/C Issuer has Fronting Exposure, as it may elect in ~~such form and contain such terms as~~ its sole discretion; or (F) the ~~Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such~~ Letter of Credit as contains any provisions for automatic reinstatement of the ~~Issuing Bank shall reasonably require; provided that in the event of~~ stated amount after any ~~conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control~~drawing thereunder. (civ) ~~At least two (2) Business Days prior~~ An L/C Issuer shall be under no obligation to ~~the issuance of~~ amend any Letter of ~~Credit, the Issuing Bank will confirm with the Administrative Agent~~ Credit if (~~by telephone or in writing~~A) ~~that the Administrative Agent has received~~ such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not L/C Issuer would have no obligation at such time to issue the Letter of Credit ~~because such issuance is not then permitted hereunder because of the limitations set forth~~ in ~~subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to~~ its amended form under the terms ~~and conditions~~ hereof, ~~the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices.~~ or (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (iiB) the ~~existence~~ beneficiary of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by does not accept the ~~Issuing Bank under a Letter of Credit against presentation of a draft or other document~~ proposed amendment to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (jv) ~~Unless otherwise expressly agreed~~ An L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by ~~the Issuing Bank~~ it and the ~~Borrower when a~~ documents associated therewith, and such 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 such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the Letter of Credit ~~is issued and subject~~ Application pertaining to ~~applicable laws, (i) each standby Letter~~ such Letters of Credit ~~shall be governed by~~ as fully as if the term “~~International Standby Practices 1998~~Administrative Agent” ~~(ISP98) (~~as used in ‎Article 9 included such L/C Issuer with respect to such acts or ~~such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued)~~omissions, (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (~~iii~~B) ~~the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit~~as additionally provided herein with respect to such L/C Issuer.

Appears in 1 contract

Samples: Credit Agreement (Phibro Animal Health Corp)

Letters of Credit. (a) ~~During~~ The Borrower may request the ~~Availability Period, the Issuing Bank, in reliance upon the agreements~~ issuance of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower,~~ Letters of Credit for its own account or for the account of any of its subsidiaries, in a form reasonably acceptable to the ~~Borrower~~ Administrative Agent and the relevant Issuing Bank, at any time and from time to time on or after the Closing Date and prior to the earlier to occur of (i) the termination of the Revolving Credit Commitments and (ii) the fifth Business Day prior to the Revolving Credit Maturity Date. This Section shall not be construed to impose an obligation upon any Issuing Bank to issue any Letter of Credit that is inconsistent with the terms and conditions ~~hereinafter set forth; provided that (i) each Letter~~ of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participationthis Agreement. (b) To In order to request the issuance of a Letter of Credit (or ~~any amendment~~to amend, ~~renewal~~ renew or ~~extension of~~ extend an ~~outstanding~~ existing Letter of Credit), the Borrower shall ~~give~~ deliver a notice (a “Letter of Credit Application”) to the relevant Issuing Bank and the Administrative Agent ~~irrevocable written notice at least three~~ (3reasonably, and in any event, unless waived by the relevant Issuing Bank, no later than two (2) Business Days ~~prior to~~ in advance of the requested date of ~~such~~ issuance, amendment, renewal or extension) requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended and specifying (i) the date of issuance, amendment, renewal or extension, (ii) the date on which ~~shall be a Business Day)~~ such Letter of Credit is to ~~be issued~~ expire (~~or amended, renewed or extended, as the case may be~~which shall comply with paragraph (c) below), ~~the expiration date of such Letter of Credit,~~ (iii) the amount of such Letter of Credit, (iv) the name and address of the beneficiary thereof and (v) such other information as ~~shall be necessary~~ the relevant Issuing Bank may request with respect to ~~prepare, amend, renew or extend~~ such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such A Letter of Credit shall be ~~in such form~~ issued, amended, renewed or extended only if, and ~~contain such terms as the Issuing Bank shall approve and that~~ upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall ~~have executed~~ be deemed to represent and ~~delivered any additional applications~~warrant that, ~~agreements and instruments relating~~ after giving effect to such ~~Letter of~~ issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed $20,000,000, and (ii) the Aggregate Revolving Credit as Exposure shall not exceed the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance Total Revolving Credit Commitment. Promptly after receipt of any Letter of ~~Credit~~Credit Application, the relevant Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such ~~notice,~~ Letter of Credit Application from the Borrower and, if not, ~~the~~ such Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject Subject to the terms and conditions ~~hereof~~hereof and in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.23, ~~the~~ such Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit ~~promptly following~~ for the account of the Borrower or enter into the applicable amendment, as the case may be. Promptly after its ~~receipt~~ 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~~ , the relevant Issuing Bank ~~shall notify~~ will also deliver to the Borrower and the Administrative Agent a true and complete copy of such ~~demand for payment and whether~~ Letter of Credit or amendment. (c) Each Letter of Credit shall expire at the ~~Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving~~ close of business on the earlier of the date 12 months after the date of the issuance of such ~~notice shall not relieve the Borrower~~ Letter of ~~its obligation to reimburse the Issuing Bank~~ Credit and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the fifth Business Day ~~immediately~~ prior to the Revolving Credit Maturity Date, unless such Letter of Credit expires by its terms on an earlier date ~~on which~~ or an L/C Backstop exists; provided, however, that a Letter of Credit may, upon the request of the Borrower, include a provision whereby such ~~drawing is honored that~~ Letter of Credit (an “Auto Extension Letter of Credit”) shall be extended automatically for additional consecutive periods of 12 months or less (but not beyond the ~~Borrower intends~~ fifth Business Day prior to ~~reimburse~~ the Revolving Credit Maturity Date unless an L/C Backstop exists) unless the relevant Issuing Bank ~~for~~ notifies the ~~amount~~ beneficiary thereof at least 30 days (or such longer period as may be specified in such Letter of Credit) prior to the then-applicable Letter of Credit Expiration Date that such ~~drawing in funds other than from the proceeds~~ Letter of ~~Loans~~Credit will not be extended. Once an Auto Extension Letter of Credit has been issued, the ~~Borrower~~ Revolving Credit Lenders shall be deemed to have ~~timely given~~ authorized (but may not require) the relevant Issuing Bank 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 that the relevant Issuing Bank shall not permit any such extension if (i) the relevant Issuing Bank has determined that it would have no obligation at such time to issue such Letter of Credit in its extension form under the terms hereof (by reason of the provisions of Section 2.23(l) or otherwise) or (ii) it has received notice (which may be by telephone or in writing) five (5) Business Days prior to the day that is 30 days (or such longer period as may be specified in such Letter of Credit) prior to the then-applicable Letter of Credit Expiration Date from the Administrative Agent, any Revolving Credit Lender or the Borrower that one or more of the applicable conditions specified in Section 4.01 is not then satisfied. (d) By the issuance of a ~~Notice~~ Letter of ~~Borrowing~~ Credit and without any further action on the part of an Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Revolving Credit Lender, and each such Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Pro Rata Percentage of the aggregate amount available to be drawn under such Letter of Credit, effective upon the issuance of such Letter of Credit; provided that no Lender shall have any obligation with respect to any drawing made after the Revolving Credit Maturity Date under a Letter of Credit having an expiration date after the Revolving Credit Maturity Date. In consideration and in furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay to the Administrative ~~Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing~~Agent, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of ~~the~~ such Issuing Bank, such Lender’s Pro Rata Percentage of each L/C Disbursement made by such Issuing Bank ~~in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly~~ and not reimbursed by the ~~Administrative Agent to reimburse the Issuing Bank for such LC Disbursement.~~ Borrower (~~e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent)~~or, ~~or is not~~if applicable, ~~made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased~~ another party pursuant to ~~subsection (a~~its obligations under any other Loan Document) ~~of this Section in an amount equal to its Pro Rata Share of such LC Disbursement~~ forthwith on ~~and as of~~ the date ~~which such Base Rate Borrowing should have occurred~~due as provided in Section 2.02(f). Each ~~Lender’s~~ Revolving Credit Lender acknowledges and agrees that its obligation to ~~fund its participation shall be~~ acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason circumstance whatsoever, ~~(ii)~~ including the ~~existence~~ occurrence and continuance of a Default or an Event of ~~Default~~ Default, and that each such payment shall be made without any offset, abatement, withholding or ~~the termination of the Aggregate Commitments, (iii)~~ reduction whatsoever. Upon any ~~adverse~~ change in the ~~condition (financial~~ Revolving Credit Commitments or ~~otherwise)~~ Pro Rata Percentages of the ~~Borrower~~ Revolving Credit Lenders pursuant to Section 2.21 or 9.04(b), it is hereby agreed that, with respect to all outstanding Letters of Credit and unreimbursed L/C Disbursements relating thereto, there shall be an automatic adjustment to the participations pursuant to this Section 2.23(d) to reflect the new Pro Rata Percentages of each Revolving Credit Lender. (e) If an Issuing Bank shall make any L/C Disbursement in respect of ~~its Subsidiaries~~a Letter of Credit, ~~(iv) any breach of this Agreement by~~ the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall ~~promptly transfer, in immediately available funds, the amount of its participation~~ pay to the Administrative Agent ~~for~~ an amount equal to such L/C Disbursement not later than 12:00 noon on the ~~account~~ second Business Day following Borrower’s receipt of notice of such L/C Disbursement from the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s ~~obligation~~ obligations to reimburse LC L/C Disbursements ~~hereunder~~ as provided in paragraph (e) above shall be absolute, unconditional and ~~irrevocable~~ irrevocable, and shall be performed strictly in accordance with the terms of this ~~Agreement~~ Agreement, under any and all circumstances ~~whatsoever~~ whatsoever, and irrespective of ~~any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii)~~ the existence of any claim, ~~set-off~~setoff, defense or other right ~~which~~ that the Borrower or any ~~Subsidiary or Affiliate of the Borrower~~ other Person may ~~have~~ at any time have against a the beneficiary ~~or any transferee of~~ under any Letter of ~~Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting)~~Credit, ~~any Lender (including~~ the Issuing Bank) , the Administrative Agent or any Lender or any other ~~Person for whom such beneficiary or~~ Person, including any ~~such transferee may be acting, whether in connection with this Agreement or~~ defense based on the ~~Letter~~ failure of ~~Credit or any document related hereto or thereto or any unrelated transaction; (iii)~~ any draft or other document presented under a Letter of Credit ~~proving~~ to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: First Lien Credit Agreement (Blackboard Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.21(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the ~~Borrower~~Parent, Letters of Credit for the account of ~~the~~ any Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~250,000; and (iii) ~~the~~ any Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the ~~Borrower~~ Parent shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the applicable Borrower, the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the applicable Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.21(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the ~~Borrower~~ Parent and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve ~~the~~ any Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The ~~Borrower~~ Borrowers jointly and severally shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the ~~Borrower~~ Parent shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (Atlanta, Georgia time) on the Business Day immediately prior to the date on which such drawing is honored that ~~the~~ any Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the ~~Borrower~~ Parent shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of ~~the~~ any Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by ~~the~~ any Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to ~~the~~ any Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.21 on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If any Event of Default shall occur and be continuing, on the Business Day that the ~~Borrower~~ Parent receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the ~~Borrower~~ Borrowers shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105~~102% of the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to ~~the~~ any Borrower described in ~~Section 8.1(g~~clause (h) or (h)i) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the ~~Borrower~~ Borrowers under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Each Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the ~~Borrower’s~~ Borrowers’ risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the ~~Borrower~~ Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the ~~Borrower~~ Borrowers under this ~~Agreement and the other Loan Documents~~Agreement. If the ~~Borrower is~~ Borrowers are required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the ~~Borrower~~ Borrowers within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each Fiscal Quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the ~~Borrower~~ Parent a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) ~~The~~ Each Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which ~~the~~ any Borrower or any Subsidiary or Affiliate of ~~the~~ any Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the ~~Borrower’s~~ Borrowers’ obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to ~~the~~ any Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), ) or punitive damages, claims in respect of which are hereby waived by ~~the~~ each Borrower to the extent permitted by applicable law) suffered by ~~the~~ any Borrower that are caused by the Issuing Bank’s failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby~~ Each Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by subject to the Uniform Customs and Practices for Documentary Credits (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600 (or such later revision~~ 500, as the same may be ~~published by~~ amended from time to time, and, to the ~~International Chamber~~ extent not inconsistent therewith, the governing law of ~~Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing~~ this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 1 contract

Samples: Revolving Credit Agreement (Checkfree Corp \Ga\)

Letters of Credit. ~~(a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant~~ Subject to ~~subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on~~ the terms and conditions ~~hereinafter set forth; provided that~~ of this Agreement and upon (i) ~~each Letter of Credit shall expire on~~ the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) execution by the Borrower ~~may not request any Letter of Credit if, after giving effect to such issuance, (A)~~ and the ~~aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each~~ Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit ~~shall be deemed to utilize the Commitment of each Lender by an amount equal~~ Agreement in form and substance acceptable to the ~~amount~~ Lender (together with all amendments, modifications and restatements thereof, the “Letter of ~~such participation.~~ Credit Agreement”) and (bii) ~~To request~~ the ~~issuance~~ execution and delivery by the Borrower, and the acceptance by the Lender, in its sole and absolute discretion, of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is Lender agrees to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its ~~Subsidiaries~~Subsidiaries such Letters of Credit in the standard form of the Lender and otherwise in form and substance reasonably acceptable to the Lender, ~~(iv) any breach~~ from time to time during the term of this ~~Agreement by~~ Agreement. Without limiting the Lender’s discretion described above, Borrower ~~or any other Lender, (v) any amendment, renewal or extension of~~ shall not request and Lender is not required to issue any Letter of Credit or which would result in the aggregate Letter of Credit Obligations hereunder exceeding One Million Dollars (vi$1,000,000) at any ~~other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing~~time. ~~On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the~~ The amount of ~~its participation~~ any payments made by the Lender with respect to ~~the Administrative Agent~~ draws made by a beneficiary under a Letter of Credit for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to which the Borrower or has failed to reimburse the Lender upon five (5) Business Days the Lender’s demand for repayment shall be deemed to have been converted to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) Revolving Loan as of ~~this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to~~ the date such payment is was made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the ~~Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement~~Lender to such beneficiary. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of Upon the occurrence of an Event of ~~Default, such cash collateral so posted (to~~ a Default and at the ~~extent not so applied as aforesaid) shall be returned~~ option of the Lender upon written notice to the Borrower ~~within three (3) Business Days after~~ during the continuance of such Event of Default, all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit ~~then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder~~ Obligations shall be ~~absolute~~converted to Revolving Loans, ~~unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under~~ all ~~circumstances whatsoever and irrespective~~ without demand, presentment or protest of any ~~of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim~~kind, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect all of which are hereby waived by the ~~Borrower to~~ Borrower. To the extent ~~permitted by applicable law) suffered by~~ the ~~Borrower that are caused by~~ provisions of the ~~Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a~~ Letter of Credit ~~comply with the terms thereof. The parties hereto expressly agree that~~Agreement differ from, ~~in the absence of gross negligence~~ or ~~willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction)~~are inconsistent with, the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of ~~a Letter of Credit~~this Agreement, the ~~Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless~~ provisions of ~~any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit~~this Agreement shall govern. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Loan and Security Agreement (Amtech Systems Inc)

Letters of Credit. (a) ~~During~~ Subject to the ~~Availability Period~~terms and conditions of this Agreement, the ~~Issuing Bank~~Letter of Credit Banks, ~~in reliance upon the agreements~~ on behalf of the ~~other Lenders pursuant~~ Banks, agree to ~~subsections~~ issue and amend (dincluding without limitation, to extend or renew) ~~and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ for the account of the ~~Borrower on~~ Company one or more standby letters of credit (which may be direct pay letters of credit) (individually, a "Letter of Credit" and collectively, the ~~terms~~ "Letters of Credit"), in such form as may be requested from time to time by the Company and ~~conditions hereinafter set forth~~agreed to by the applicable Letter of Credit Bank, from and including the Effective Date to the Termination Date, up to a maximum aggregate Stated Amount at any one time outstanding equal to the L/C Commitment Amount; ~~provided~~ provided, however, that ~~(i) each~~ the Stated Amount of any Letter of Credit issued pursuant to this Section 4.1 shall not exceed the Available Commitment at the time of such issuance; and further, provided, that the expiration date of any Letter of Credit shall ~~expire on~~ not extend beyond the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date~~; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not~~ . A request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of for a Letter of Credit shall be ~~deemed~~ pursuant to ~~utilize the Commitment~~ a letter of ~~each Lender by an amount equal~~ credit application form in form and substance satisfactory to the ~~amount~~ applicable Letter of ~~such participation~~Credit Bank. (b) ~~To request~~ Each Bank severally agrees that it shall be absolutely, unconditionally and irrevocably liable, without regard to the ~~issuance~~ occurrence of a any Default or Event of Default or any condition precedent whatsoever, to the extent of such Bank's pro rata share of the Total Commitments of the Banks, to reimburse each Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of each Drawing paid by such ~~drawing in funds other than from the proceeds~~ Letter of ~~Loans, the Borrower shall be deemed to have timely given a Notice~~ Credit Bank under each Letter of ~~Borrowing~~ Credit issued by such Letter of Credit Bank to the ~~Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which~~ extent such ~~drawing~~ amount is ~~honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall~~ not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly reimbursed by the ~~Administrative Agent~~ Company pursuant to Section 4.4 hereof. Each Bank's obligation to reimburse the ~~Issuing~~ applicable Letter of Credit Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to ~~subsection (a) of~~ this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and 4.1(b) shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right ~~that~~ which such ~~Lender or any other Person~~ Bank may have against a Letter of Credit Bank, the ~~Issuing~~ Company, any direct or indirect beneficiary of any Letter of Credit, the Agent Bank or any other Person ~~for any reason~~ whatsoever, ; (ii) the ~~existence~~ occurrence or continuance of a Default or an Event of ~~Default or the termination of the Aggregate Commitments,~~ Default; (iii) any adverse change in the condition (financial or otherwise) of the ~~Borrower or any of its Subsidiaries,~~ Company; (iv) any breach of this Agreement by the ~~Borrower~~ Company, the Agent Bank or any other ~~Lender,~~ Bank; or (v~~) any amendment, renewal or extension of any Letter of Credit or (vi~~) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing~~. On~~ ; provided, however, that the ~~date that such participation is required to be funded, each Lender~~ Banks shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall not be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit ~~proving~~ Bank pursuant to ~~be forged, fraudulent or invalid in any~~ this Section 4.1(b) with respect ~~or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under~~ to a Letter of Credit ~~against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of~~ if (i) such Letter of ~~Credit; (v) any other event or circumstance whatsoever, whether or not similar~~ Credit Bank has made payment pursuant to ~~any of the foregoing, that might, but for the provisions of this Section, constitute~~ a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection Drawing with ~~the issuance or transfer of any~~ respect to such Letter of Credit ~~or any~~ and the making of such payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of constituted gross negligence or willful misconduct on the part of such Letter of Credit Bank or (ii) a Letter of Credit Bank issues such Letter of Credit after an Event of Default has been declared by any Bank or the ~~Issuing~~ Majority Banks pursuant to Article IX hereof and written notice thereof has been received by such Letter of Credit Bank (or after an Event of Default specified in Section 9.1(c) hereof has occurred. Each Bank's obligation to reimburse a Letter of Credit Bank shall continue to be effective, or be reinstated, as ~~finally determined~~ the case may be, if at any time payment, or any part thereof, of any Reimbursement Obligation of the Company is rescinded or must otherwise be restored or returned by such Letter of Credit Bank upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company or upon or as a ~~court~~ result of ~~competent jurisdiction)~~the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the ~~Issuing~~ Company or any substantial part of its property, or otherwise, all as though such payment had not been made. Upon receipt of a notice of its obligation to reimburse a Letter of Credit Bank prior to 11:00 a.m. on a Business Day, a Bank shall make such reimbursement on such Business Day; if such notice is received after 11:00 a.m., reimbursement shall be ~~deemed~~ due on the next Business Day. The failure of any Bank to ~~have exercised due care~~ honor its obligations hereunder shall not relieve any other Bank of its duty to honor its obligations hereunder. Upon the written request of a Bank, a Letter of Credit Bank shall deliver to such Bank a copy of any Letter of Credit and copies of all material documents delivered to such Letter of Credit Bank in ~~each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that,~~ connection with any Drawing with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (jc) ~~Unless otherwise expressly agreed~~ Each payment made by ~~the Issuing~~ a Bank ~~and the Borrower when~~ to a Letter of Credit ~~is issued~~ Bank pursuant to paragraph (b) above shall be treated as the purchase by such Bank of a participating interest in the Company's Reimbursement Obligation under Section 4.4 hereof in an amount equal to such payment. Each Bank, so long as it has made the payment required to be made by it pursuant to Section 4.1(b) hereof, shall share in accordance with its pro rata share of the Total Commitments of the Banks in any interest which accrues pursuant to Section 4.4(b) hereof. All amounts recovered by the Agent Bank hereunder or under the Notes and ~~subject~~ which are applied by the Agent Bank to ~~applicable laws,~~ the Reimbursement Obligations of the Company under Section 4.4 hereof shall be distributed by the Agent Bank to the Banks who have made the payments required to be made by them pursuant to Section 4.1(b) hereof pro rata in accordance with their respective share of the Total Commitments of the Banks. (id) ~~each standby~~ If and to the extent that any Bank shall fail to make available to a Letter of Credit ~~shall~~ Bank the amount required to be ~~governed~~ paid by ~~the “International Standby Practices 1998” (ISP98~~such Bank pursuant to Section 4.1(b) ~~(or~~ hereof, such ~~later revision as may be published by the Institute of International Banking Law & Practice on any date any~~ Letter of Credit ~~may~~ Bank shall be ~~issued),~~ subrogated to the rights of such Bank under this Agreement to the extent of such failure and shall thereafter (~~ii) each documentary~~ until such Bank shall make such amount available to such Letter of Credit ~~shall~~ Bank) be ~~governed~~ entitled to receive all amounts owing by such Bank hereunder and to the ~~Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber~~ percentage of ~~Commerce Publication No. 600 (or~~ voting rights of such ~~later revision as may be published~~ Bank under this Agreement equal to the percentage the amount such Bank failed to pay bears to the aggregate Stated Amount of all outstanding Letters of Credit issued by ~~the International Chamber of Commerce on any date any~~ such Letter of Credit ~~may be issued)~~ Bank and ~~(iii)~~ the ~~Borrower shall specify the foregoing in each letter~~ aggregate unpaid principal of ~~credit application submitted for the issuance of~~ all outstanding Syndicated Loans at such time. If any Bank fails to reimburse a Letter of ~~Credit~~Credit Bank as provided in Section 4.1(b) hereof, such unreimbursed amount shall bear interest from the date due until paid at the applicable overnight federal funds rate.

Appears in 1 contract

Samples: Credit Agreement (Delta Air Lines Inc /De/)

Letters of Credit. At any time that no default has occurred and is continuing or would result, and no event has occurred and is continuing or would result, with the giving of notice or the lapse of time or both would be a default, the Bank agrees to issue letters of credit for the amount of the Borrower and/or DMI until June 30, 2012, provided that (a) ~~During~~ the ~~Availability Period~~aggregate maximum available amount which is drawn and unreimbursed or may be drawn under all letters of credit which are outstanding at any time, ~~the Issuing Bank, in reliance upon the agreements~~ including without limitation all letters of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters of Credit~~ credit issued for the account of the Borrower on the terms and conditions hereinafter set forth; provided that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit and/or DMI which are outstanding on the date of ~~issuance. Each issuance of a Letter of Credit~~ this agreement, shall ~~be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation.~~ not exceed $1,000,000.00, (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any ~~Letter~~ letter of ~~Credit~~credit with an expiration date beyond June 30, 2012, shall be entirely at the ~~Issuing Bank will confirm with~~ discretion of the ~~Administrative Agent~~ Bank, (~~by telephone or in writing~~c) ~~that~~ any letter of credit shall be a commercial letter of credit and the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue form of the requested ~~Letter~~ letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject credit shall be satisfactory to the ~~terms and conditions hereof~~Bank, in the ~~Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing~~ Bank’s ~~usual~~ sole discretion, and ~~customary business practices.~~ (d) ~~The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify~~ the Borrower and DMI shall have executed an application and reimbursement agreement for any letter of credit in the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC DisbursementBank’s standard form. The Borrower shall ~~be irrevocably and unconditionally obligated to reimburse~~ pay the ~~Issuing~~ Bank a fee (the “L/C Fee”) for ~~any LC Disbursements paid by the Issuing Bank in respect~~ each commercial letter of ~~such drawing~~credit that is issued, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum ~~equal~~ set forth below opposite the applicable Funded Debt to EBITDA Ratio, payable in arrears for each calendar quarter within ten (10) days of billing by the ~~Federal Funds Rate; provided that if such Lender shall fail~~ Bank. Funded Debt to ~~make such payment to~~ EBITDA Ratio is defined in Section 5.2 K of the ~~Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender~~ Credit Agreement. No credit shall be ~~obligated~~ given for the fees paid due to early termination of any letter of credit. The Borrower shall also pay ~~interest on such amount at~~ the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations Bank’s standard transaction fees with respect to ~~the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in~~ any transactions occurring on an account ~~with~~ of any letter of credit. Each fee shall be payable when the ~~Administrative Agent~~related letter of credit is issued, ~~in the name~~ and transaction fees shall be payable upon completion of the ~~Administrative Agent and for~~ transaction as to which they are charged. All fees may be debited by the ~~benefit of the Issuing~~ Bank ~~and the Lenders, an amount in cash equal~~ to ~~105% of the aggregate LC Exposure of all Lenders as of such date plus~~ any ~~accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations~~ deposit account of the Borrower carried with ~~respect to~~ the ~~Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable,~~ Bank without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed further authority and, ~~to the extent not so applied~~in any event, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to paid by the Borrower within ~~three~~ ten (310) ~~Business Days after all Events~~ days following billing. Greater than 3.00 to 1.00 1.50% Less than or equal to 3.00 to 1.00 but greater than or equal to 2.50 to 1.00 1.25% Less than or equal to 2.50 to 1.00 but greater than or equal to 2.00 to 1.00 1.00% Less than or equal to 2.00 to 1.00 but greater than or equal to 1.50 to 1.00 0.75% Less than or equal to 1.50 to 1.00 but greater or equal to 1.00 to 1.00 0.75% Less than or equal to 1.00 to 1.00 0.75% The Bank’s determination of ~~Default have been cured or waived. (h) Upon~~ the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder non-usage fee on Facility C shall be ~~absolute~~conclusive, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any absent manifest error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (Flexsteel Industries Inc)

Letters of Credit. (a) ~~During~~ The Borrower may request the ~~Availability Period, the Issuing Bank, in reliance upon the agreements~~ issuance of ~~the other Lenders pursuant to subsections (d) and (e) of this Section, may, in its sole discretion, issue, at the request of the Borrower, Letters~~ a Letter of Credit on a sight basis for its own account or for the account of any of its subsidiaries, in a form reasonably acceptable to the ~~Borrower~~ Administrative Agent and the relevant Issuing Bank, at any time and from time to time on or after the ~~terms~~ Closing Date and ~~conditions hereinafter set forth; provided that~~ prior to the earlier to occur of (i) ~~each Letter~~ the termination of the Revolving Credit ~~shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension)~~ Commitments and (Bii) the date that is five ~~(5)~~ Business Days prior to the ~~Stated Termination~~ Revolving Credit Maturity Date~~; (ii) each~~ . This Section shall not be construed to impose an obligation upon any Issuing Bank to issue any Letter of Credit that is inconsistent with the terms and conditions of this Agreement. Letters of Credit shall be denominated in a stated amount of at least $5,000; and (iii) the Borrower may not request any Letter of Credit if, after giving effect to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amountdollars. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participation.-(91-) (b) To In order to request the issuance of a Letter of Credit (or ~~any amendment~~to amend, ~~renewal~~ renew or ~~extension of~~ extend an ~~outstanding~~ existing Letter of Credit), the Borrower shall ~~give~~ deliver a notice (a “Letter of Credit Request”) to the relevant Issuing Bank and the Administrative Agent ~~irrevocable written notice at least three~~ (3) reasonably, and in any event, unless waived by the relevant Issuing Bank, no later than two Business Days ~~prior to~~ in advance of the requested date of ~~such~~ issuance, amendment, renewal or extension) requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended and specifying (i) the date of issuance, amendment, renewal or extension, (ii) the date on which ~~shall be a Business Day)~~ such Letter of Credit is to ~~be issued~~ expire (~~or amended, renewed or extended, as the case may be~~which shall comply with paragraph (c) below), ~~the expiration date of such Letter of Credit,~~ (iii) the amount of such Letter of Credit, (iv) the name and address of the beneficiary thereof and (v) such other information as ~~shall be necessary~~ the relevant Issuing Bank may reasonably request with respect to ~~prepare, amend, renew or extend~~ such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such A Letter of Credit shall be ~~in such form~~ issued, amended, renewed or extended only if, and ~~contain such terms as the Issuing Bank shall approve and that~~ upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall ~~have executed~~ be deemed to represent and ~~delivered any additional applications~~warrant that, ~~agreements and instruments relating~~ after giving effect to such ~~Letter of~~ issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed $75,000,000 and (ii) the Aggregate Revolving Credit as Exposure shall not exceed the Issuing Bank shall reasonably require; provided that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance Total Revolving Credit Commitment. Promptly after receipt of any Letter of ~~Credit~~Credit Request, the relevant Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such ~~notice,~~ Letter of Credit Request from the Borrower and, if not, ~~the~~ such Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject Subject to the terms and conditions hereof, ~~the~~ such Issuing Bank shall, on the requested date, issue a Letter of Credit for the account of the Borrower or one of its subsidiaries or enter into the applicable amendment, as the case may be. 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 relevant Issuing Bank will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. (c) Each Letter of Credit shall expire at the close of business on the earlier of the date one year after the date of the issuance of such Letter of Credit and the Revolving Credit Maturity Date, unless such Letter of Credit expires by its terms on an earlier date or an L/C Backstop exists (the “Letter of Credit Expiration Date”); provided, however, that a Letter of Credit may, upon the request of the Borrower, include a provision whereby such Letter of Credit (an “Auto-Renewal Letter of Credit”) shall be renewed automatically for additional consecutive periods of 12 months or less (but not beyond the Revolving Credit Maturity Date unless an L/C Backstop exists) unless the relevant Issuing Bank notifies the beneficiary thereof at least 30 days (or such longer period as may be specified in such Letter of Credit) prior to the then-applicable Letter of Credit Expiration Date that such Letter of Credit will not be renewed. Once an Auto-Renewal Letter of Credit has been issued, the Revolving Credit Lenders shall be deemed to have authorized (but may not require) the relevant Issuing Bank to permit the renewal of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided that (i) the relevant Issuing Bank may, at its option, not permit any such renewal if the relevant Issuing Bank has determined that it would have no obligation at such time to issue such Letter of Credit in ~~accordance with~~ its renewed form under the terms hereof (by reason of the provisions of Section 2.23(l) or otherwise) and (ii) the relevant Issuing ~~Bank’s usual and customary business practices~~Bank shall not permit any such renewal if it has received notice (which may be by telephone or in writing) five Business Days prior to the day that is 30 days (or such longer period as may be specified in such Letter of Credit) prior to the then-applicable Letter of Credit Expiration Date from the Administrative Agent, any -(92-) Revolving Credit Lender or the Borrower that one or more of the applicable conditions specified in Section 4.01 is not then satisfied or waived. (d) ~~The~~ By the issuance of a Letter of Credit and without any further action on the part of an Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Revolving Credit Lender, and each such Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Pro Rata Percentage of the aggregate amount available to be drawn under such Letter of Credit, effective upon the issuance of such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of such Issuing Bank, such Lender’s Pro Rata Percentage of each L/C Disbursement made by such Issuing Bank and not reimbursed by the Borrower (or, if applicable, another party pursuant to its obligations under any other Loan Document) forthwith on the date due as provided in Section 2.02(f). Each Revolving Credit Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Upon any change in the Revolving Credit Commitments or Pro Rata Percentages of the Revolving Credit Lenders pursuant to Section 2.21 or 9.04(b), it is hereby agreed that, with respect to all outstanding Letters of Credit and unreimbursed L/C Disbursements relating thereto, there shall be an automatic adjustment to the participations pursuant to this Section 2.23(d) to reflect the new Pro Rata Percentages of each Revolving Credit Lender. (e) If an Issuing Bank shall make any L/C Disbursement in respect of a Letter of Credit, the Borrower shall pay to the Administrative Agent an amount equal to such L/C Disbursement not later than 12:00 noon on the second Business Day following the day the Borrower receives notice of such L/C Disbursement. (i) The Borrower’s obligations to reimburse L/C Disbursements as provided in paragraph (e) above shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under any and all circumstances whatsoever, and irrespective of the existence of any claim, setoff, defense or other right that the Borrower or any other Person may at any time have against the beneficiary under any Letter of Credit, the Issuing Bank, the Administrative Agent or any Lender or any other Person, including any defense based on the failure of any draft or other document presented under a Letter of Credit to comply with the terms of such Letter of Credit; provided, that the Borrower shall not be obligated to reimburse the Issuing Bank for any wrongful payment made by the Issuing Bank as a result of the Issuing Bank’s gross negligence, bad faith, willful misconduct or breach of its obligations in determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. (ii) Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the relevant Issuing Bank shall not have any responsibility to obtain any document (other than any draft, demand, certificate or other document 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 Person executing or delivering any such document. None of the Issuing -(93-) Banks, the Agents nor any of the respective correspondents, participants or assignees of any Issuing Bank shall be liable to any Lender for (x) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable, (y) any action taken or omitted in the absence of gross negligence or willful misconduct or (z) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Request. 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 that this assumption is not intended to, and shall not, preclude either Borrower from pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement; provided further that the foregoing shall not be construed to excuse such Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise the standard of care set forth above when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. (g) The relevant Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of ~~Credit promptly following its receipt thereof~~Credit. The relevant Issuing Bank shall ~~notify the Borrower and~~ as promptly as possible give telephonic notification, confirmed by fax, to the Administrative Agent and the Borrower of such demand for payment and whether ~~the~~ such Issuing Bank has made or will make ~~a LC~~ an L/C Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its ~~obligation~~ obligations to reimburse ~~the~~ such Issuing Bank and the Revolving Credit Lenders with respect to any such LC L/C Disbursement~~. The Borrower shall be irrevocably and unconditionally obligated to reimburse the~~ . (h) If an Issuing Bank ~~for~~ shall make any ~~LC Disbursements paid by the Issuing Bank~~ L/C Disbursement in respect of ~~such drawing~~a Letter of Credit, ~~without presentment~~then, ~~demand or other formalities of any kind. Unless~~ unless the Borrower shall ~~have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m.~~ reimburse such L/C Disbursement in full on the ~~Business Day immediately prior~~ same day that such LC Disbursement is made, the unpaid amount thereof shall bear interest for the account of an Issuing Bank, for each day from and including the date of such L/C Disbursement, to but excluding the earlier of the date of payment by the Borrower or the date on which interest shall commence to accrue thereon as provided in Section 2.02(f), at the rate per annum that would apply to such ~~drawing is honored that~~ amount if such amount were an ABR Revolving Loan. (i) An Issuing Bank may be removed at any time by the Borrower ~~intends to reimburse the Issuing Bank for the amount of such drawing in funds other than~~ by notice from the ~~proceeds of Loans~~Borrower to such Issuing Bank, ~~the Borrower shall be deemed to have timely given a Notice of Borrowing to~~ the Administrative Agent ~~requesting~~ and the ~~Lenders~~ Lenders. Upon the acceptance of any appointment as an Issuing Bank hereunder by a Lender that shall agree to ~~make a Base Rate Borrowing on the date on~~ serve as successor Issuing Bank (which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall ~~make the proceeds of its Base Rate Loan included in such Borrowing available~~ be reasonably acceptable to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), ~~or is not~~such successor shall succeed to and become vested with all the interests, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on rights and as obligations of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the retiring Issuing Bank. ~~Whenever, at any~~ At the time ~~after the Issuing Bank has received from any~~ such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender removal shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsectionbecome effective, the Borrower shall ~~deposit in~~ pay all accrued and unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any appointment as an ~~account with~~ Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement entered into by such successor, the Borrower and the Administrative Agent, in a form reasonably satisfactory to the ~~name of~~ Borrower and the Administrative ~~Agent~~ Agent, and, from and ~~for~~ after the ~~benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as~~ effective date of such ~~date plus any accrued~~ agreement, (i) such successor Lender shall have all the rights and ~~unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement~~ obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the previous Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender Documents and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) references herein and in the ~~existence of any claim, set-off, defense or~~ other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other Person for whom such beneficiary or any such transferee may be acting, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document Loan Documents to the term “Issuing Bank that does not comply with the terms of such Letter of Credit; (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, any Lender nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above-(94-), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.

Appears in 1 contract

Samples: Credit Agreement (Nuveen Investments Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.22(d), ~~may, in its sole discretion,~~ agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Revolving Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of ~~issuance~~issuance with respect to all other Letters of Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.22(a) ~~of this Section~~ or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. (New Yorktime) on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate ~~Borrowing on~~ Borrowingon the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.6. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata ~~Share of~~ Shareof such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraphs (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section ~~2.12(b~~2.13(d). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding ~~that its reimbursement obligations with respect to~~ the ~~Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid fees thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. ~~The~~ Borrower agrees to execute any documents and/or certificates to effectuate the intent of this ~~subsection~~paragraph. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three ~~(3)~~ Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each calendar quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such Fiscal Quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this ~~Section~~Section 2.22, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, performance under Letters of Credit by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by (i) ~~each standby Letter~~ either (x) the rules of ~~Credit shall be governed by~~ the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), ) or (iiy) ~~each documentary Letter~~ the rules of ~~Credit shall be governed by~~ the “Uniform Customs and Practices for Documentary ~~Credits~~ Credits” (~~2007~~ 1993 Revision), International Chamber of Commerce Publication No. ~~600~~ 500 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (~~iii~~ii) to the ~~Borrower shall specify~~ extent not inconsistent therewith, the ~~foregoing~~ governing law of this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 10.5.

Appears in 1 contract

Samples: Revolving Credit and Term Loan Agreement (Tc Pipelines Lp)

Letters of Credit. (a) ~~During~~ Upon the ~~Availability Period~~terms and subject to the conditions of this Agreement, the Issuing ~~Bank~~Bank shall, ~~in reliance upon~~ from time to time during the ~~agreements of~~ period from the ~~other Lenders pursuant to subsections (d) and (e) of this Section~~Agreement Date through the tenth Business Day preceding the Maturity Date, ~~may, in its sole discretion, issue, at the request of the Borrower,~~ issue one or more Letters of Credit for the account of the ~~Borrower on~~ Borrower; provided, that the ~~terms and conditions hereinafter set forth; provided that (i) each~~ aggregate principal amount of all Letter of Credit Participations shall ~~expire on~~ not exceed at any time the ~~earlier~~ lesser of (A) the ~~date one year after~~ aggregate amount of the ~~date~~ Commitments at such time minus the aggregate unpaid principal amount of ~~issuance of~~ all Loans and Swing Loans outstanding at such ~~Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension)~~ time and (B) ~~the date that is five (5) Business Days prior to the Stated Termination Date; (ii) each~~ $10,000,000. Each Letter of Credit shall be in a ~~stated amount~~ form and shall contain such terms as shall be reasonably satisfactory to the Issuing Bank. (b) Each Letter of ~~at least $5,000;~~ Credit shall be denominated only in Dollars and shall expire on or before the first anniversary of the issuance thereof (~~iii) the Borrower may not request~~ PROVIDED, that, any Letter of Credit ~~if, after giving effect to~~ may include terms that provide for the automatic renewal thereof for successive one-year periods so long as such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate Credit Exposure of all Lenders would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from terms include a provision whereby the Issuing Bank ~~without recourse a participation~~ shall be entitled to elect that any such renewal shall not occur if the conditions set forth in ~~each Letter~~ Section 2.02(b) and (c) could not be fulfilled at such time, and the Issuing Bank shall give notice of ~~Credit equal~~ such election to ~~such Lender’s Pro Rata Share~~ the beneficiary thereof) and in any event not later than the Business Day preceding the Maturity Date. Any extension of the ~~aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance~~ expiry date, or automatic renewal, of a Letter of Credit to a date beyond the first anniversary of the issuance thereof shall ~~be deemed to utilize the Commitment of each Lender by~~ constitute an ~~amount equal to the amount~~ "issuance" of such ~~participation~~Letter of Credit for all purposes hereof on, in the case of any such extension, the date on which such extension shall have been granted and, in the case of any such automatic renewal, on the tenth Business Day preceding the last day on which the Issuing Bank is entitled to give notice of its election that any such renewal shall not occur. (bc) To Letters of Credit shall be issued only on a Business Day, and shall be used for the corporate purposes of the Borrower or the Subsidiaries. (d) The Borrower shall request the issuance of a Letter of Credit ~~(or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and~~ by furnishing to the Administrative Agent ~~irrevocable written notice~~ and the Issuing Bank, at least ~~three (3)~~ five Business Days ~~prior to~~ before the requested date of such ~~issuance specifying~~ issuance, notice thereof in the ~~date (which shall be a Business Day) such Letter~~ form of ~~Credit is to be issued (~~SCHEDULE 1.02 or ~~amended, renewed or extended, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and~~ such other ~~information~~ notice as shall be ~~necessary~~ reasonably satisfactory to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank ~~shall approve and that the Borrower shall have executed and delivered any additional applications~~(and, ~~agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; provided that~~ in the ~~event~~ case of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have ~~timely given~~ made the Representation and Warranty with respect to such issuance provided for in the final paragraph of the form of notice set forth in SCHEDULE 1.02). (e) Upon the date of issuance of a ~~Notice~~ Letter of ~~Borrowing~~ Credit, the Issuing Bank shall be deemed to have granted to each Participating Bank (other than the Issuing Bank), and each Participating Bank (other than the Issuing Bank) shall be deemed to have acquired from the Issuing Bank without further action by any party hereto, a participation in such Letter of Credit and any Drawings that may at any time be made thereunder, to the extent of such Bank's Participating Bank Percentage thereof. (f) The Issuing Bank shall promptly notify the Borrower of its receipt of each Drawing request with respect to a Letter of Credit, stating the date and amount of the Drawing requested thereby and the date and amount of each Drawing disbursed pursuant to such request. The failure of the Issuing Bank to give, or delay in giving, any such notice shall not release or diminish the obligations of the Borrower hereunder in respect of such Drawing. (g) The Borrower shall, on the day it receives notice of each Drawing from the Issuing Bank, if such notice is received prior to 10:00 a.m. (New York time) on such day, and on the Business Day following the day it receives such notice from the Issuing Bank, if such notice is received after 10:00 a.m. (New York time) on such day, reimburse such Drawing by paying to the Issuing Bank in immediately available funds the amount of the payment made by the Issuing Bank with respect to such Drawing, together (but only if such Drawing is not reimbursed on the day notice is received) with interest thereon at a rate per annum equal to the Base Rate as in effect from time to time PLUS the applicable Base Rate Margin until the day such reimbursement is made. In the event that the Borrower shall fail to make any such payment when due and for so long as such failure shall be continuing, the Issuing Bank may give notice of such failure to the Administrative Agent ~~requesting~~ and each Participating Bank, which notice shall include, in the ~~Lenders to make~~ case of a ~~Base Rate Borrowing on~~ Participating Bank, the ~~date on which~~ amount of such ~~drawing is honored in an exact amount due to~~ Participating Bank's Participating Bank Percentage of such Drawing, whereupon each such Participating Bank (other than the Issuing Bank~~; provided that for purposes solely of~~ ) shall promptly remit such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available amount to the Administrative Agent for the account of the Issuing Bank as provided in ~~accordance with~~ Section ~~2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement~~1.03(h). (eh) ~~If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender~~ Each Participating Bank (other than the Issuing Bank) ~~shall be obligated to fund~~ shall, in the ~~participation that such Lender purchased~~ event it receives the notice from the Issuing Bank pursuant to ~~subsection~~ Section 1.03(g) at or before 12:00 noon (aNew York time) ~~of this Section in an amount equal to its Pro Rata Share of such LC Disbursement~~ on ~~and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to~~ any Business Day, fund its participation ~~shall be absolute and unconditional and shall not be affected~~ in any unreimbursed Drawing by ~~any circumstance~~remitting to the Administrative Agent, ~~including, without limitation,~~ no later than 2:00 p.m. (iNew York time) ~~any set-off, counterclaim, recoupment, defense or other right that~~ on such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transferday, in immediately available funds, its Participating Bank Percentage of the reimbursement obligation in respect of each Drawing. The Administrative Agent shall, in the event it receives such funds from such Participating Bank at or before 2:00 p.m. (New York time) on any day, no later than 4:00 p.m. (New York time) on such day, make available the amount ~~of its participation~~ thereof to the Issuing Bank, in immediately available funds. Any amount payable by any Participating Bank to the Administrative Agent for the account of the Issuing ~~Bank. Whenever~~Bank under this Section 1.03(h), at and any ~~time after~~ amount payable by the Administrative Agent to the Issuing Bank ~~has received~~ under this Section 1.03(h), shall bear interest for each day from the date due (and including such day if paid after 2:00 p.m. (New York time), in the case of any such ~~Lender~~ payment by a Participating Bank to the ~~funds for its participation~~ Administrative Agent, or 4:00 p.m. (New York time), in ~~a LC Disbursement,~~ the ~~Issuing Bank (or~~ case of any such payment by the Administrative Agent ~~on its behalf) receives any payment on account thereof, the Administrative Agent or~~ to the Issuing Bank, as on such day) in accordance with this Section 1.03(h) until the ~~case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment~~ date it is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or received by the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate ~~per annum~~ equal to the Federal Funds Rate until (and including) the third Business Day after the date due and thereafter at the Base Rate~~; provided that if such Lender shall fail~~ . Each Participating Bank shall, upon the demand of the Issuing Bank, reimburse the Issuing Bank, to ~~make such payment to~~ the extent the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that has not been reimbursed by the Borrower ~~receives notice from~~ after demand therefor, for the ~~Administrative Agent~~ reasonable costs and expenses (including reasonable legal fees) incurred by it (other than as a result of its willful misconduct or gross negligence) in connection with the ~~Required Lenders demanding that its reimbursement obligations with respect to~~ collection of amounts due under, the administration of, and the preservation and enforcement of any rights conferredby, the Letters of Credit ~~be Cash Collateralized pursuant to this subsection,~~ or the ~~Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit~~ performance of the Issuing ~~Bank and the Lenders, an amount~~ Bank's obligations under this Agreement in ~~cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such~~ respect thereof (other than its obligation to ~~Cash Collateralize~~ make Loans in its capacity as a Bank or Swing Loans in its capacity as the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (hSwing Loan Lender). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed and, to the extent ~~not so applied, shall be held for the satisfaction~~ of such Participating Bank's Participating Bank Percentage (as of the ~~reimbursement obligations~~ time such costs and expenses are incurred) of the ~~Borrower for the LC Exposure at~~ amount of such ~~time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this Agreement~~ costs and ~~the other Loan Documents~~expenses. If the Borrower is required to Cash Collateralize its reimbursement obligations with respect to the Letters of Credit as a result of the occurrence of an Event of Default, such cash collateral so posted (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. (h) Upon the request of any Lender, but no more frequently than quarterly, the The Issuing Bank shall ~~deliver (through the Administrative Agent) to each Lender~~ refund any costs and expenses reimbursed by such Participating Bank that are subsequently recovered from the Borrower ~~a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver~~ in an amount equal to such ~~Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding~~Participating Bank's Participating Bank Percentage thereof. (i) The ~~Borrower’s~~ obligation of each Participating Bank to ~~reimburse LC Disbursements hereunder~~ make available to the Issuing Bank the amounts set forth in this Section 1.03 shall be absolute, unconditional and irrevocable under any and all circumstances without reduction for any set-off or counterclaim of any nature whatsoever, and may not be terminated, suspended or delayed for any reason whatsoever, shall not be subject to any qualification or exception and shall be ~~performed strictly~~ made in accordance with the terms and conditions of this Agreement under all ~~circumstances whatsoever and irrespective of~~ circumstances, including, without limitation, any of the following circumstances: (i) any lack of validity or enforceability of this Agreement or any ~~Letter~~ of ~~Credit or this Agreement~~the other Loan Documents; (ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary ~~or Affiliate of the Borrower~~ may have at any time against a beneficiary or named in a Letter of Credit, any transferee of any Letter of Credit (or any ~~Persons or entities~~ Person for whom any such ~~beneficiary or~~ transferee may be acting), ~~any Lender (including~~ the Administrative Agent, the Issuing Bank) , any Participating Bank or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this ~~Agreement or the~~ Agreement, any Letter of ~~Credit or any document related hereto or thereto~~ Credit, the transactions contemplated herein or any unrelated ~~transaction~~transactions (including any underlying transaction between the Borrower or any Subsidiary and the beneficiary named in any such Letter of Credit); (iii) any ~~draft~~ draft, certificate or any other document presented under a any Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment by~~ the ~~Issuing Bank under a Letter~~ surrender or impairment of ~~Credit against presentation~~ any security for the performance or observance of ~~a draft or other document to the Issuing Bank that does not comply with~~ any of the terms of ~~such Letter~~ any of ~~Credit;~~the Loan Documents; or (v) the occurrence of any ~~other event or circumstance whatsoever~~Default. (i) Without affecting any rights the Participating Banks may have under Applicable Law, ~~whether or not similar to any~~ the Borrower agrees that none of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of set-off against, the Borrower’s obligations hereunder; or (vi) the existence of a Default or an Event of Default. Neither the Administrative AgentParticipating Banks, the Issuing Bank, ~~any Lender nor any Related Party of any~~ the Administrative Agent or their respective officers or directors shall be liable or responsible for, and the obligations of the ~~foregoing~~ Borrower to the Participating Banks, the Issuing Bank and the Administrative Agent hereunder shall ~~have~~ not in any ~~liability or responsibility by reason of or in connection with~~ manner be affected by: (A) the ~~issuance or transfer~~ use that may be made of any Letter of Credit or the proceeds thereof by the beneficiary thereof or any ~~payment~~ other Person or ~~failure to make~~ any ~~payment thereunder~~ acts or omissions of such beneficiary or any other Person; (~~irrespective~~ B) the validity or genuineness of documents presented in connection with any Drawing, or of any ~~of the circumstances referred to above)~~endorsements thereon, or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise due care when determining whether drafts or other even if such documents ~~presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that~~should, in ~~the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction)~~fact, the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face prove to be in ~~substantial compliance with the terms of a Letter of Credit~~any or all respects, ~~the Issuing Bank may~~invalid, ~~in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice~~ fraudulent or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (j) Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, (i) each standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.forged; or

Appears in 1 contract

Samples: Credit Agreement (Garden State Newspapers Inc)

Letters of Credit. (a) During the Availability Period, the Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to ~~subsections (d) and (e) of this Section~~Section 2.24(d), ~~may, in its sole discretion,~~ agrees to --------------- issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) -------- each Letter of Credit shall be a standby letter of credit which shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is five (5) Business Days prior to the ~~Stated~~ Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~500,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate ~~Credit Exposure~~ LC Exposure, plus ---- the aggregate outstanding Revolving Loans of all ~~Lenders~~ Lenders, plus the outstanding Swingline Loans, plus the outstanding ------------------------------------------ Competitive Bid Loans would exceed the Aggregate ~~Commitment Amount~~Revolving Commitments. ~~Each~~ Upon the issuance of each Letter of Credit each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in ~~each~~ such Letter of Credit equal to such Lender’s 's Pro Rata Share of the aggregate amount available to be drawn under such Letter of ~~Credit on the date of issuance~~Credit. Each issuance of a Letter of Credit shall be deemed to utilize the Revolving Commitment of each Lender by an amount equal to the amount of such participation. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the Issuing Bank and the Administrative Agent irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the Issuing Bank shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the Issuing Bank shall reasonably require; ~~provided~~ provided, that in the event of any -------- conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two ~~(2)~~ Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such ~~notice, and,~~ notice and if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative ~~Agent,~~ Agent on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of ~~Credit,~~ Credit (1) directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in ~~subsection (a~~Section 2.24(a) ~~of this Section~~ or that one or --------------- more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s 's usual and customary business practices. (d) The Issuing Bank shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent of such demand for payment and whether the Issuing Bank has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to -------- give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Revolving Loans, the Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; ~~provided~~ provided, that for purposes solely of such Borrowing, the -------- conditions ~~precedent~~ precedents set forth in Section 3.2 hereof shall not be applicable. ----------- The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base ----------- Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section ~~2.5~~2.8. The proceeds of ----------- such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) ~~of this Section~~ in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s 's obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, ~~including,~~ including without ~~limitation,~~ limitation (i) any ~~set-off~~setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Revolving Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; ~~provided~~ provided, that if such payment is required -------- to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to ~~subsection~~ paragraph (d~~) or (e~~) of this Section 2.24 on the due ------------ date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; ~~provided~~ provided, that if -------- such Lender shall fail to make such payment to the Issuing Bank within three (3) Domestic Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the ~~rate set forth in Section 2.12(b)~~Default Rate. (g) If any Event of Default shall occur and be continuing, on the Domestic Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding that its reimbursement obligations with respect to the Letters of Credit be Cash Collateralized pursuant to this subsection, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash equal to 105% of the aggregate LC Exposure of all Lenders as of such date plus any accrued and unpaid fees thereon; provided that such obligation to Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 8.1(g) or (h)Required 8.1. Such deposit shall be held by the Administrative Agent as ----------- collateral in an interest bearing account (which account shall be chosen in the sole discretion of the Administrative Agent and at the Borrower's risk and expense) for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and ~~profits, if any,~~ profits on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, with the consent of the Required Lenders, be applied to satisfy other obligations of the Borrower under this ~~Agreement and the other Loan Documents~~Agreement. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Domestic Business Days after all Events of Default have been cured or waived. (h) ~~Upon~~ Promptly following the ~~request~~ end of ~~any Lender, but no more frequently than quarterly~~each fiscal quarter, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit ~~then outstanding~~outstanding at the end of such fiscal quarter. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (i) The Borrower’s 's obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), any Lender (including the Issuing Bank) or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document to the Issuing Bank that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s 's obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the Administrative Agent, the Issuing Bank, ~~any Lender~~ the Lenders nor any Related Party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; ~~provided~~ provided, that ~~the foregoing~~ nothing in this Agreement, any Letter of Credit or any other Loan Document shall ~~not~~ be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s 's failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit~~. (j)~~ . Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued and subject to applicable laws, ~~(i) each standby Letter~~ performance under Letters of Credit ~~shall~~ by the Issuing Bank, its correspondents, and the beneficiaries thereof will be governed by the “rules of the "International Standby Practices 1998” " (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be ~~issued)~~issued)and to the extent not inconsistent therewith, ~~(ii) each documentary Letter~~ the governing law of ~~Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No~~this Agreement set forth in Section 10.5. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and (iii) the Borrower shall specify the foregoing in each letter of credit application submitted for the issuance of a Letter of Credit.------------

Appears in 1 contract

Samples: Revolving Credit Agreement (Certegy Inc)

Letters of Credit. (a) During the Availability Period, the ~~Issuing Bank, in reliance upon the agreements of the other Lenders pursuant~~ Lender agrees to ~~subsections (d) and (e) of this Section, may, in its sole discretion,~~ issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; ~~provided~~ provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (~~or,~~ or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is ~~five~~ one (51) ~~Business Days~~ day prior to the ~~Stated~~ Commitment Termination Date; (ii) each Letter of Credit shall be in a stated amount of at least $~~5,000~~100,000; and (iii) the Borrower may not request any Letter of ~~Credit~~ Credit, if, after giving effect to such ~~issuance,~~ issuance (A) the ~~aggregate~~ LC Exposure would exceed the LC Commitment or exceed the Cash Collateral, as defined in the Security Agreement or (B) the ~~aggregate Credit Exposure of all Lenders~~ LC Exposure, plus the outstanding Revolving Loans would exceed the Aggregate Commitment Amount. Each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank without recourse a participation in each Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount available to be drawn under such Letter of Credit on the date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize the Commitment of each Lender by an amount equal to the amount of such participationRevolving Commitment. (b) To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give the ~~Issuing Bank and the Administrative Agent~~ Lender irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, ~~renewed~~ extended or ~~extended~~renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of ~~Credit~~Credit , the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition to the satisfaction of the conditions in Article III, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as the ~~Issuing Bank~~ Lender shall approve and that the Borrower shall have executed and delivered any additional applications, agreements and instruments relating to such Letter of Credit as the ~~Issuing Bank~~ Lender shall reasonably require; ~~provided~~ provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control. (c) At least two (2) Business Days prior to the issuance of any Letter of Credit, the Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received such notice, and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice from the Administrative Agent, on or before the Business Day immediately preceding the date the Issuing Bank is to issue the requested Letter of Credit, directing the Issuing Bank not to issue the Letter of Credit because such issuance is not then permitted hereunder because of the limitations set forth in subsection (a) of this Section or that one or more conditions specified in Article III are not then satisfied, then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue such Letter of Credit in accordance with the Issuing Bank’s usual and customary business practices. (d) The ~~Issuing Bank~~ Lender shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. The ~~Issuing Bank~~ Lender shall notify the Borrower ~~and the Administrative Agent~~ of such demand for payment and whether the ~~Issuing Bank~~ Lender has made or will make a LC Disbursement thereunder; ~~provided~~ provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the ~~Issuing Bank and the Lenders~~ Lender with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse the ~~Issuing Bank~~ Lender for any LC Disbursements paid by the ~~Issuing Bank~~ Lender in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior to the date on which such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such drawing in funds other than from the proceeds of Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on the date on which such drawing is honored in an exact amount due to the Issuing Bank; provided that for purposes solely of such Borrowing, the conditions precedent set forth in Section 3.2 hereof shall not be applicable. The Administrative Agent shall notify the Lenders of such Borrowing in accordance with Section 2.3, and each Lender shall make the proceeds of its Base Rate Loan included in such Borrowing available to the Administrative Agent for the account of the Issuing Bank in accordance with Section 2.5. The proceeds of such Borrowing shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for such LC Disbursement. (e) If for any reason a Base Rate Borrowing may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing provisions, then each Lender (other than the Issuing Bank) shall be obligated to fund the participation that such Lender purchased pursuant to subsection (a) of this Section in an amount equal to its Pro Rata Share of such LC Disbursement on and as of the date which such Base Rate Borrowing should have occurred. Each Lender’s obligation to fund its participation shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender or any other Person may have against the Issuing Bank or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of the Aggregate Commitments, (iii) any adverse change in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other Lender, (v) any amendment, renewal or extension of any Letter of Credit or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. On the date that such participation is required to be funded, each Lender shall promptly transfer, in immediately available funds, the amount of its participation to the Administrative Agent for the account of the Issuing Bank. Whenever, at any time after the Issuing Bank has received from any such Lender the funds for its participation in a LC Disbursement, the Issuing Bank (or the Administrative Agent on its behalf) receives any payment on account thereof, the Administrative Agent or the Issuing Bank, as the case may be, will distribute to such Lender its Pro Rata Share of such payment; provided that if such payment is required to be returned for any reason to the Borrower or to a trustee, receiver, liquidator, custodian or similar official in any bankruptcy proceeding, such Lender will return to the Administrative Agent or the Issuing Bank any portion thereof previously distributed by the Administrative Agent or the Issuing Bank to it. (f) To the extent that any Lender shall fail to pay any amount required to be paid pursuant to subsection (d) or (e) of this Section on the due date therefor, such Lender shall pay interest to the Issuing Bank (through the Administrative Agent) on such amount from such due date to the date such payment is made at a rate per annum equal to the Federal Funds Rate; provided that if such Lender shall fail to make such payment to the Issuing Bank within three (3) Business Days of such due date, then, retroactively to the due date, such Lender shall be obligated to pay interest on such amount at the rate set forth in Section 2.12(b). (g) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the ~~Administrative Agent or~~ Lender demanding the ~~Required Lenders demanding that its reimbursement obligations with respect to the Letters~~ deposit of ~~Credit be Cash Collateralized~~ cash collateral pursuant to this ~~subsection~~paragraph, the Borrower shall deposit in an account with the ~~Administrative Agent~~Lender, in the name of the ~~Administrative Agent~~ Lender and for the benefit of the ~~Issuing Bank and the Lenders~~Lender, an amount in cash equal to ~~105% of~~ the ~~aggregate~~ LC Exposure ~~of all Lenders~~ as of such date plus any accrued and unpaid ~~fees~~ interest thereon; ~~provided~~ provided, that ~~such~~ the obligation to ~~Cash Collateralize the reimbursement obligations of the Borrower with respect to the Letters of Credit~~ deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in ~~Section 8.1(g~~clause (g) or (h)) of Section 8.1. Such deposit shall be held by the ~~Administrative Agent~~ Lender as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The ~~Administrative Agent~~ Lender shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account~~. The Borrower agrees to execute any documents and/or certificates to effectuate the intent of this subsection~~. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the ~~Administrative Agent~~ Lender and at the Borrower’s 's risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the ~~Administrative Agent~~ Lender to reimburse ~~the Issuing Bank~~ itself for LC Disbursements for which it had not been reimbursed ~~and,~~ and to the extent ~~not~~ so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated, ~~with the consent of the Required Lenders,~~ be applied to satisfy other obligations of the Borrower under this ~~Agreement and the other Loan Documents~~Agreement. If the Borrower is required to ~~Cash Collateralize its reimbursement obligations with respect to the Letters~~ provide an amount of ~~Credit~~ cash collateral hereunder as a result of the occurrence of an Event of Default, such ~~cash collateral so posted~~ amount (to the extent not so applied as aforesaid) shall be returned to the Borrower ~~within~~ with three ~~(3)~~ Business Days after all Events of Default have been cured or waived.. 29 (h) Upon the request of any Lender, but no more frequently than quarterly, the Issuing Bank shall deliver (through the Administrative Agent) to each Lender and the Borrower a report describing the aggregate Letters of Credit then outstanding. Upon the request of any Lender from time to time, the Issuing Bank shall deliver to such Lender any other information reasonably requested by such Lender with respect to each Letter of Credit then outstanding. (ie) The Borrower’s 's obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances: (i) ~~any~~ Any lack of validity or enforceability of any Letter of Credit or this Agreement; (ii) ~~the~~ The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), ~~any~~ the Lender ~~(including the Issuing Bank)~~ or any other ~~Person for whom such beneficiary or any such transferee may be acting~~Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction; (iii) ~~any~~ Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) ~~payment~~ Payment by the ~~Issuing Bank~~ Lender under a Letter of Credit against presentation of a draft or other document to the ~~Issuing Bank~~ Lender that does not comply with the terms of such Letter of Credit; (v) ~~any~~ Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of ~~set-off~~ setoff against, the Borrower’s 's obligations hereunder; or (vi) ~~the~~ The existence of a Default or an Event of Default. Neither the ~~Administrative Agent, the Issuing Bank, any~~ Lender nor any Related Party of ~~any of~~ the ~~foregoing~~ Lender shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the ~~Issuing Bank~~Lender; ~~provided~~ provided, that the foregoing shall not be construed to excuse the ~~Issuing Bank~~ Lender from liability to the Borrower to the extent of any ~~actual~~ direct damages (as opposed to ~~special, indirect (including claims for lost profits or other~~ consequential ~~damages), or punitive~~ damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the ~~Issuing Bank’s~~ Lender's failure to exercise ~~due~~ care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly ~~agree that~~agree, that in the absence of gross negligence or willful misconduct on the part of the ~~Issuing Bank~~ Lender (as finally determined by a court of competent jurisdiction), the ~~Issuing Bank~~ Lender shall be deemed to have exercised ~~due~~ care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the ~~Issuing Bank~~ Lender may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (jf) ~~Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a~~ Each Letter of ~~Credit is issued and~~ Credit, other than a standby letter of credit, shall be subject to ~~applicable laws~~the Uniform Customs and Practices for Documentary Credits (1993 Revision), ~~(i) each~~ International Chamber of Commerce Publication No. 500, as the same may be amended from time to time, and, to the extent not inconsistent therewith, the governing law of this Agreement set forth in Section 9.5. Any standby ~~Letter~~ letters of ~~Credit~~ credit issued hereunder shall be governed by the “rules of the "International Standby Practices 1998” " (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued), (ii) each documentary Letter of Credit shall be governed by the Uniform Customs and Practices for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600 (or such later revision as may be published by the International Chamber of Commerce on any date any Letter of Credit may be issued) and ~~(iii)~~ to the ~~Borrower shall specify~~ extent not inconsistent therewith, the ~~foregoing~~ governing law of this Agreement set forth in ~~each letter of credit application submitted for the issuance of a Letter of Credit~~Section 9.5.

Appears in 1 contract

Samples: Revolving Credit Loan Agreement (Central Freight Lines Inc)

Common use of Letters of Credit Clause in Contracts