Letters of Credit. (a) The Banks agree to make available to the Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent. (b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent. (c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans. (d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request. (e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit. (f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent. (g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 2 contracts
Samples: Credit Agreement (Forest City Enterprises Inc), Credit Agreement (Forest City Enterprises Inc)
Letters of Credit. (a) The Banks agree to make available Lender agrees, subject to the Borrower letters terms and conditions of creditthis Agreement, issued by the Agentto issue, pursuant to their respective Commitments up to an aggregate amount at any time after the Funding Date and prior to the Termination Date, one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of or more irrevocable standby or documentary letters of credit will be subject to (ieach, a “Letter of Credit”) the Agent being satisfied with the terms of the letter of credit, (ii) for the Borrower’s executing and delivering such letter account. The Lender will not issue any Letter of credit and reimbursement agreements and related documents as required by Credit if the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the face amount of the requested letter Letter of creditCredit to be issued would exceed Availability. Each Letter of Credit, if any, shall be issued pursuant to a separate L/C Application made by the Borrower to the Lender, which must be completed in a manner satisfactory to the Lender. The Borrower terms and conditions set forth in each such L/C Application shall pay a fee for each letter of credit to supplement the Agent for the Pro rata benefit terms and conditions of the BanksStandby Letter of Credit Agreement or the Commercial Letter of Credit Agreement, upon as applicable.
(b) No Letter of Credit shall be issued with an expiration date later than one (1) year from the date of issuance or the Maturity Date in effect as of the date of issuance, whichever is earlier.
(c) Any request for issuance of each letter a Letter of credit and, thereafter, upon Credit shall be deemed to be a representation by the annual anniversary Borrower that the conditions set forth in Section 4.2 have been satisfied as of the issuance of each such letter of credit remaining outstanding, in the amount date of the Indicated Spread request.
(d) If a draft is submitted under a Letter of Credit when the Borrower is unable, because a Default Period exists or for any other reason, to obtain a Revolving Loans under Advance to pay the LIBOR Rate Option on the stated amount Obligation of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In additionReimbursement, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services Lender on demand and in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agentimmediately available funds, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank Obligation of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on Reimbursement together with interest, accrued from the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available draft until payment in full at the Default Rate. Notwithstanding the Borrower’s inability to the Agent its Pro rata portion of the Draw deemed to be obtain a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand thereforAdvance for any reason, the Agent shall promptly notify Lender is irrevocably authorized, in its sole discretion, to make a Revolving Advance in an amount sufficient to discharge the Borrower, Obligation of Reimbursement and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with all accrued but unpaid interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 2 contracts
Samples: Credit and Security Agreement (Christopher & Banks Corp), Credit and Security Agreement (Christopher & Banks Corp)
Letters of Credit. (a) The Banks agree to make available Provided that no Event of Default then exists, Lender agrees, subject to the Borrower letters following additional conditions, to issue from time to time one or more Letters of credit, issued Credit in favor of a governmental unit or agency or other beneficiary approved by Lender as security for the Agent, pursuant completion of the construction of Improvements in an Approved Subdivision on Lender’s standard form and otherwise in form and substance acceptable to their respective Commitments up to Lender in an aggregate amount not to exceed the Letter of Credit Loan set out in Paragraph 1 above, which Letter of Credit may be issued with respect to obligations of either Borrower or any related or affiliated entity of Borrower as Lender may elect. Any amounts disbursed by Lender under a Letter of Credit at any one time and from time to time shall be deemed disbursements of proceeds of the Letter of Credit Loan and shall be evidenced by the Existing Note. If any Letter of Credit is outstanding on the Business Day immediately preceding the Maturity Date (or if an amount has then been drawn on a Letter of $100,000,000 minus Credit which has not been reimbursed or repaid), Lender may demand delivery of cash collateral in an amount equal to the aggregate principal amount of all then outstanding Surety Bonds issued Letter of Credit Liability, and such cash collateral may be retained by a Surety Lender until such time as the Letter of Credit Liability is reduced to zero (-0-). Lender may apply such cash collateral to the payment of any amounts thereafter drawn on behalf the Letters of Credit immediately upon the Parent pursuant to an Indemnity Agreementfunding of any draw under any Letter of Credit. The availability failure to deliver such cash collateral upon demand shall constitute an immediate Event of letters Default under the Loan Documents without notice or further demand. The repayment of credit will any draws on any Letter of Credit shall be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required secured by the AgentLoan Documents, and (iii) the satisfaction so long as any Letter of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining Credit is outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower Lender shall not be entitled required to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount issue a full release of the letter Security Instrument. It shall be an Event of credit requested, Default under the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may Documents should Lender ever be required by the Agent.
(b) In the event the Agent pays to disburse funds under any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.Credit
Appears in 2 contracts
Samples: Loan Agreement (LGI Homes, Inc.), Loan Agreement (LGI Homes, Inc.)
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters terms and conditions set forth herein, Lender agrees (1) to issue Letters of credit, issued by Credit for the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf account of the Parent pursuant Borrower from time to an Indemnity Agreement. The availability of letters of credit will be subject to time on any Business Day during the period from the Closing Date until (i) with regard to Letters of Credit issued under the Agent being satisfied with Revolving Commitment, the terms of the letter of creditMaturity Date, and (ii) with regard to Letters of Credit issued under the Borrower’s executing and delivering such letter Letter of credit and reimbursement agreements and related documents as required by Credit Commitment, the AgentLetter of Credit Expiration Date, and (iii2) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans honor drafts under the LIBOR Rate Option on the stated amount Letters of the letter of creditCredit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower that Lender shall not be entitled obligated to obtain letters issue any Letter of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount Credit if as of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice andissuance, not later than 1:00 p.m. (Cleveland timex) on the date aggregate amount of such noticeall Letter of Credit Exposure with regard to Letters of Credit issued under the Revolving Commitment would exceed the amount available under the Revolving Commitment, each Bank will make or (y) the outstanding amount of the Letter of Credit Exposure with regard to Letters of Credit issued under the Letter of Credit Commitment would exceed the amount available under the Letter of Credit Commitment. Within the foregoing limits, and subject to the Agent its Pro rata portion terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Draw deemed Borrower may, during the foregoing period, obtain Letters of Credit to be a Revolving Loanreplace Letters of Credit that have expired or that have been drawn upon and reimbursed. All amounts shall be made available Lender is required to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against advance under any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that issued under the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request Revolving Commitment shall be deemed a representation an Advance hereunder and warranty by the shall bear interest as provided herein. Borrower that such letter of credit as requested in shall be liable for all costs and expenses, including, but not limited to, attorney’s fees and court costs, relating to such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shallCredit, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification any action related to such letter Letter of creditCredit, incurred by Lender in connection with such Letter of Credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 2 contracts
Samples: Credit Agreement (Tyler Technologies Inc), Credit Agreement (Tyler Technologies Inc)
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters terms and conditions hereof, the Revolving Commitments may be utilized, upon the request of creditBorrower, issued in addition to the Revolving Loans provided for in Section 2.1 hereof, by the Agentissuance by the Issuing Bank of one or more Letters of Credit for the account of Borrower; provided, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding however, that no Letter of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds Credit may be issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to if (i) the Agent being satisfied with the terms of the letter of credit, after giving effect thereto (iiA) the Borrower’s executing and delivering such letter Letter of credit and reimbursement agreements and related documents as required by the Agent, and Credit Exposure (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in including the amount of the requested letter Letter of credit. The Borrower shall pay a fee for each letter Credit) would exceed the Letter of credit Credit Limit or (B) such Letter of Credit Exposure plus the aggregate outstanding principal balance of the Revolving Loans would exceed the Revolving Commitments of all Banks, and (ii) the expiration date thereof extends beyond the earlier of one year from issuance or 5 Business Days prior to the Agent for Revolving Commitment Termination Date. In addition to the Pro rata benefit applicable provisions of the BanksArticle 3, upon issuance all Letters of each letter of credit and, thereafter, Credit shall be issued upon the annual anniversary request of Borrower on the terms and conditions set forth in this Section 2.14; and the provisions hereof that are applicable to the issuance of each such letter a Letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Credit shall be entitled correspondingly applicable to .125% of such fee prior to each renewal, extension or reissuance thereof, or amendment thereto. Upon the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.of
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent and the Issuing Bank at least 5 Business Days' prior written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to specifying the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “each Letter of Credit Request”). Each is to be issued and describing the proposed terms of such Letter of Credit Request Credit, including without limitation, the date, face amount, beneficiary and expiry date thereof, the nature of the transactions proposed to be supported thereby and such other information as the Issuing Bank shall include an application for reasonably request, all in detail reasonably satisfactory to the Issuing Bank. Upon receipt of such letter of credit and any other documents that notice, the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of the contents thereof and of such Bank's pro rata share of the amount of such proposed Letter of Credit. The issuance by the Issuing Bank of each Letter of Credit Requestshall, in addition to the conditions precedent set forth in Article 3, be subject to the conditions precedent that such Letter of Credit shall be in such form, contain such terms and support such transactions as shall be reasonably satisfactory to the Agent and the Issuing Bank, and that Borrower shall have executed and delivered a reimbursement agreement acceptable to the Issuing Bank, and such other instruments and agreements relating to such Letter of Credit as either the Agent or the Issuing Bank shall have reasonably requested. Each Letter of Credit shall, to the extent not inconsistent with the express terms hereof or the applicable Application, be such to the Uniform Customs and Practices for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500 (together with any subsequent revisions 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 (other than conflict of law principles).
(c) Borrower agrees to pay the following fees, by remittance to the Agent, in respect of Letters of Credit issued hereunder: (i) with respect to each Letter of Credit which is issued as a standby letter of credit, for the account of the Issuing Bank, a fee equal to $175.00; (ii) with respect to each Letter of Credit which is issued as a standby letter of credit, for the ratable account of the Banks, a fee equal to (x) the per annum rate of interest equal to the Applicable Margin in effect for Revolving Loans on the date of issuance multiplied by (y) the face amount of such Letter of Credit for the stated term of such Letter of Credit, adjusted for the actual days outstanding; (iii) with respect to each Letter of Credit which is issued as a commercial letter of credit, for the ratable account of the Banks, a fee in an amount equal to 1/4% multiplied by the face amount of each such Letter of Credit (subject to a minimum fee of $50.00 per each such Lender of Credit); and (iv) with respect to the negotiation of each Letter of Credit, for the account of the Issuing Bank, a fee equal to $50.00, each of the foregoing fees being non-refundable. The foregoing fees shall be due and payable as follows: (A) fees under clause
(d) Upon receipt from the beneficiary of any Letter of Credit of any demand for payment under such Letter of Credit, the Issuing Bank shall promptly notify Borrower, the Agent and each Bank of Borrower's Reimbursement Obligations as a result of such demand and the date on which any payment is to be made to such beneficiary in respect of such demand. Borrower shall, by 1:00 P.M. (St. Louis time) on the date on which a drawing is to be made, reimburse the Issuing Bank for any amount paid or to be paid by the Issuing Bank upon any drawing under any Letter of Credit, without presentment, demand, protest or further notice or other formalities of any kind, in an amount, in same day funds, and the unpaid balance of such amount from time to time remaining outstanding and unpaid after each such drawing shall accrue interest, until paid in full, at the Default Rate, which interest shall be due and payable on demand, or if demand is not sooner made, then on the Quarterly Date next following such drawing and, if applicable, on each Quarterly Date thereafter.
(e) If, by 1:00 P.M. (St. Louis time) on the day on which a drawing is to be made or is made, Borrower fails to reimburse the Issuing Bank as provided in Section 2.14(d), for whatever reason, the Issuing Bank shall promptly notify the Agent, and the Agent shall promptly notify each Bank of the unreimbursed amount of such drawing and of such Bank's respective pro rata portion thereof. On the date of such notice (or if such notice is given after 1:00 P.M. (St. Louis time) on such date, on the next succeeding Business Day), each Bank agrees, without regard to the existence of a Default or Event of Default, to pay to the Issuing Bank, an amount equal to such Bank's pro rata portion of such unreimbursed amount, together with interest on such amount for each day from the date the Issuing Bank pays such draw to the date of payment by such Bank of such amount at a rate of interest per annum equal to the Federal Funds Rate for such period. The delivery Issuing Bank shall pay to each Bank such Bank's pro rata portion of each all amounts received from Borrower for payment, in whole or in part, of the Reimbursement Obligation in respect of any Letter of Credit Request shall be deemed a representation and warranty by Credit, but only to the Borrower that extent such letter Bank has made payment to the Issuing Bank in respect of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of pursuant to this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit2.14(e).
(f) In determining whether to pay under any letter Reimbursement Obligations of creditBorrower in respect of the Letters of Credit shall be absolute, the Agent unconditional and irrevocable, and shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face paid strictly in accordance with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness terms of this Agreement, under all circumstances whatsoever, including, without limitation, the outstanding letters following circumstances:
(1) any lack of credit issued validity or enforceability of any Letter of Credit, or any agreement or instrument related thereto, or any other Loan Documents;
(2) any amendment or waiver of, or any consent to departure from, the terms of any Letter of Credit or any other Loan Document, without the express prior written consent of the Issuing Bank and the Required Banks;
(3) the existence of any claim, set-off, defense or other rights which Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), any Bank or any other Person, whether in connection with such Letter of Credit, this Agreement, any other Loan Document or any agreement or instrument related thereto, the transactions contemplated herein, or any unrelated transaction;
(4) any statement, draft, certificate, demand or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;
(5) payment by the 2002 Issuing Bank under any Letter of Credit Agreement and/or against presentation of a draft, demand, certificate or other document which appears on its face to comply but does not in fact comply with the 2004 Credit Agreement are as listed on Exhibit C hereto and terms of such letters Letter of credit shall be deemed Credit;
(6) any material adverse change in the financial condition of Borrower;
(7) any breach of any Loan Document by Borrower or any other Person; or
(8) any other circumstances or happening whatsoever, whether or not similar to be, and hereby are converted into, outstanding letters any of credit hereunderthe foregoing.
Appears in 2 contracts
Samples: Credit Agreement (Hastings Entertainment Inc), Credit Agreement (Hastings Entertainment Inc)
Letters of Credit. (a) The Banks agree to make available Issuing Bank agrees, subject to the Borrower letters terms and conditions of creditthis Agreement, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf upon request of the Parent pursuant Borrower to issue from time to time for the account of the Borrower Letters of Credit upon delivery to the Issuing Bank of an Indemnity Agreement. The availability Application and Agreement for Letter of letters of credit will be subject Credit relating thereto in form and content acceptable to the Issuing Bank; provided, that (i) the Agent being satisfied with Letter of Credit Outstandings shall not exceed the terms Total Letter of the letter of credit, Credit Commitment and (ii) no Letter of Credit shall be issued if, after giving effect thereto, Letter of Credit Outstandings plus the Borrower’s executing and delivering such letter Revolving Credit Outstandings plus Swing Line Outstandings shall exceed the Total Revolving Credit Commitment. No Letter of credit and reimbursement agreements and related documents as required by the Agent, and Credit shall have an expiry date (iii) the satisfaction including all rights of all conditions to the Borrower obtaining a Loan or any beneficiary named in such Letter of Credit to require renewal) or payment date occurring later than the amount earlier to occur of one year after the requested letter date of credit. The Borrower shall pay a fee for each letter of credit to its issuance or the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee fifth Business Day prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Stated Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In Subject to the event approval by the Agent pays any amount under or on Lenders of the making available of an Alternative Currency not otherwise provided for herein, upon completion of a proper Application and Agreement for Letter of Credit, NationsBank may issue upon request and for the account of a letter Borrower Letters of credit (the payment by the Agent under or on account Credit payable in such Alternative Currency. For purposes of a letter determining Outstanding Letters of credit being herein called a “Draw”)Credit, a Revolving Loan any Letter of Credit issued in an Alternative Currency shall be deemed to be made to recorded in the Borrower by each Bank to Agent's account in Dollars based on the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) Alternative Currency Equivalent Amount on the date of issuance of such notice andLetter of Credit; provided, not later than 1:00 p.m. (Cleveland time) however, that the Agent shall determine the Dollar Equivalent Amount of any Letter of Credit issued in an Alternative Currency on the date of such notice, each Bank will make available to any Advance or Conversion for the Agent its Pro rata portion purpose of determining the Draw deemed to be amount of Outstandings. Any draw on a Revolving Loan. All amounts Letter of Credit issued in an Alternative Currency shall be made available to repaid in the Agent in U.S. Dollars and immediately available funds at its office listed same Alternative Currency Equivalent Amount (determined based on the signature pages heretoSpot Rate of Exchange on the date of drawing under the Letter of Credit). If such corresponding Pro rata amount is not in fact made available to To the Agent by such Bank extent that the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon determine at any time that the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect sum of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate Dollar Value of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount outstanding Loans and Outstanding Letters of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding andCredit, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, case determined on the date of each Advance or issuance of a Letter of Credit, made or amendment issued in Alternative Currencies and (ii) outstanding Loans and Outstanding Letters of Credit made or modification to a letter of credit by itissued in Dollars exceeds the Total Revolving Credit Commitment, give each Bank and the Borrower written notice of the issuance of or amendment or modification shall immediately repay Loans so that after giving effect to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, payment the outstanding letters Loans plus Outstanding Letters of credit issued under Credit do not exceed the 2002 Total Revolving Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunderCommitment.
Appears in 2 contracts
Samples: Credit Agreement (Wackenhut Corrections Corp), Credit Agreement (Wackenhut Corrections Corp)
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters terms and conditions hereof, each Letter of credit, Credit shall be issued (or the stated maturity thereof extended or terms thereof modified or amended) on not less than two Business Days' prior notice thereof by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding delivery of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee Request for each letter of credit Issuance to the Agent and the LC Issuing Bank substantially in the form attached hereto in Exhibit 2.03. Each Request for Issuance shall specify 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 accompanied by the Pro rata benefit consent of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary beneficiary of the issuance Letter of each Credit thereto. The expiry of such letter Letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Credit shall be entitled to .125% of such fee no later than five Business Days' prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit Each Request for Issuance shall be in such form and substance as the Agent, the Banks and irrevocable unless modified or rescinded by the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each one day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which 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, the LC Issuing Bank shall be a Cleveland Banking Day)issue (or extend, which written notice shall be in the form of Exhibit E hereto (each, a “amend or modify) such Letter of Credit Request”). Each and provide notice and a copy thereof to the Agent, which shall promptly furnish copies thereof to the Lenders.
(b) No Letter of Credit Request shall include an application for such letter of credit and any other documents that be requested or issued hereunder if, after the issuance thereof, the Outstanding Credits would exceed the total Commitments.
(c) The Borrower hereby agrees to pay to the Agent customarily requires for the account of the LC Issuing Bank and, if they shall have purchased participations in connection therewith. The Agent the reimbursement obligations of the Borrower pursuant to subsection (d) below, the Lenders, on demand made by the LC Issuing Bank to the Borrower, on and after each date on which the LC Issuing Bank shall promptly notify each Bank of each pay any amount under any Letter of Credit Requestissued 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 Advances 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%.
(d) If the LC Issuing Bank shall not have been reimbursed in full for any payment made by the LC Issuing Bank under a Letter of Credit issued by the LC Issuing Bank on the date of such payment, the LC Issuing Bank shall give the 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 purchase a participation in the reimbursement obligation of the Borrower to the LC Issuing Bank by paying to the Agent for the account of the LC Issuing Bank an amount equal to such Lender's Percentage of such unreimbursed amount paid by the LC Issuing Bank, plus interest on such amount at a rate per annum equal to the Federal Funds 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 such Lender shall have received an LC Payment Notice from the LC Issuing Bank. Each Lender's obligation to make each such payment to the Agent for the account of the 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) or the failure of the LC Issuing Bank to provide the LC Payment Notice by 12:00 noon on the Business Day immediately succeeding the date of payment under a Letter of Credit by the LC Issuing Bank. Each Lender further agrees that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e) The delivery failure of each Letter any Lender to make any payment to the Agent for the account of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued 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 any payment to the Agent for the account of the LC Issuing Bank in accordance with subsection (d) above within five Business Days after the LC Payment Notice relating thereto, then, for so long as such failure shall continue, the LC Issuing Bank shall be deemed, for purposes of Section 8.01 and will not violate Article VI hereof, to be a Lender owed a Borrowing in an amount equal to the outstanding principal amount due and payable by such Non-Performing Lender to the Agent for the account of the LC Issuing Bank pursuant to subsection (d) above. Any Non-Performing Lender and the Borrower (without waiving any claim against such Lender for such Lender's failure to purchase a participation in the reimbursement obligations of the Borrower under subsection (d) above) severally agree to pay to the Agent for the account of the 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 this Section 3.01 and shall include a representation and warranty as subsection (d) above until the date such amount is paid to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on at (i) in the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice case of the issuance Borrower, the interest rate applicable at the time to Base Rate Advances and (ii) in the case of or amendment or modification such Lender, the rate applicable to such letter of creditBase Rate Advances plus 1%.
(f) In determining whether to pay The payment obligations of each Lender under Section 2.03(d) and of the Borrower under this Agreement in respect of any payment under any letter Letter of creditCredit by the LC Issuing Bank shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the Agent shall not 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;
(ii) any amendment or waiver of, or any consent to departure from, the terms of this Agreement, any other Loan Document or such Letter of Credit;
(iii) the existence of any claim, set-off, defense or other right which the Borrower may have at any obligation relative to time against any beneficiary, or any transferee, of such Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the Banks LC Issuing Bank, or any other than to determine that Person, whether in connection with this Agreement, the transactions contemplated hereby, thereby or by such Letter of Credit, or any documents required unrelated transaction;
(iv) any statement or any other document presented under such Letter of Credit reasonably proving to be delivered forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(v) payment in good faith by the LC Issuing Bank under such letter the Letter of credit have been delivered and Credit issued by the LC Issuing Bank against presentation of a draft or certificate that they appear to does not comply on their face with the requirements terms of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or not similar to any of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agentforegoing.
(g) Immediately The Borrower assumes all risks of the acts and omissions of any beneficiary or transferee of any Letter of Credit. Neither the LC Issuing Bank, the Lenders nor any of their respective officers, directors, employees, agents or Affiliates shall be liable or responsible for (i) the use that may be made of 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 adequate reference to such Letter of Credit; or (iv) any other circumstances whatsoever in making or failing to make payment under such Letter of Credit. Notwithstanding any provision to the contrary contained in any Loan Document, the Borrower and each Lender shall have the right to bring suit against the LC Issuing Bank, and the LC Issuing Bank shall be liable to the Borrower and any Lender, to the extent of any direct, as opposed to consequential, damages suffered by the Borrower 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 make timely payment under 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 and conditions of such Letter of Credit. In furtherance and not in limitation of the foregoing, the 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 order, without responsibility for further investigation, regardless of any notice or information to the contrary, and payment against such documents shall not constitute willful misconduct or gross negligence by the LC Issuing Bank. Notwithstanding the foregoing, no Lender shall be obligated to indemnify the Borrower for damages caused by the LC Issuing Bank's willful misconduct or gross negligence.
(h) If any Letter of Credit contains a provision pursuant to which it is deemed to be automatically renewed unless notice of termination of such Letter of Credit is given by the LC Issuing Bank, the LC Issuing Bank shall timely give notice of termination if (i) as of close of business on the seventeenth day prior to the effectiveness last day upon which the LC Issuing Bank's notice of this Agreementtermination may be given to the beneficiaries of such Letter of Credit, the outstanding letters LC Issuing Bank has received a notice of credit issued under termination from the 2002 Borrower or a notice from the Agent that the conditions to issuance of such Letter of Credit Agreement and/or have not been satisfied or (ii) the 2004 renewed Letter of Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunderwould have a term not permitted by Section 2.03(a).
Appears in 2 contracts
Samples: Credit Agreement (Interstate Power & Light Co), Credit Agreement (Wisconsin Power & Light Co)
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters terms and conditions hereof, the Fronting Bank agrees to issue Letters of credit, issued by Credit from time to time for the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf account of the Parent pursuant Borrower (or to an Indemnity Agreementextend 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 the Fronting Bank. The availability of letters of credit will be subject to Each Request for Issuance shall specify (i) the Agent being satisfied with date (which shall be a Business Day) of issuance of such Letter of Credit (or the terms date of effectiveness of such extension, modification or amendment) and the letter stated expiry date thereof (which shall be no later than one year following the date of creditsuch issuance), (ii) the Borrower’s executing and delivering proposed stated amount of such letter Letter of credit and reimbursement agreements and related documents as required by the AgentCredit, and (iii) the satisfaction name and address of all 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 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 obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking two Business Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which or effectiveness) specified therein. Not later than 12:00 noon (Milwaukee, Wisconsin 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 be a Cleveland Banking Day)issue (or extend, which written notice shall be in the form of Exhibit E hereto (each, a “amend or modify) such Letter of Credit Request”)and provide notice and a copy thereof to the Agent, which shall promptly furnish copies thereof to the Lenders. Each 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 Request shall include be requested or issued hereunder if, after the 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 either (i) pay to the Agent an application amount equal to 103% of the LC Outstandings on the later of such date and 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 draft presented, with the excess, if any, to be returned to the Borrower upon termination or expiration of such Letter of Credit and payment in full of all amounts due hereunder or (ii) deliver a back-up letter of credit and any other documents that to the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each securing the Borrower’s reimbursement obligations with respect to such Letter of Credit Requestin form and substance acceptable to the Fronting Bank 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 Cash Collateral Account pursuant to this subsection (c) without the consent of all Lenders.
(d) 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 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 extent that the Fronting Bank has not been reimbursed as required hereunder or under any such Letter of Credit, each Lender shall pay to the Fronting Bank 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 the provisions of subsection (e). The obligation of each Lender so to reimburse the Fronting Bank shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any 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) The delivery In the event of each any drawing under any Letter of Credit Request shall be deemed a representation and warranty by Credit, the Fronting Bank will promptly notify the Borrower. Unless the Borrower that such letter shall immediately notify the Fronting Bank of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate its intent otherwise to reimburse the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Fronting Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under for any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately drawing made prior to the effectiveness of this AgreementMaturity Date, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit Borrower shall be deemed to behave 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 hereby are converted intounconditional under all circumstances irrespective of any rights of set-off, outstanding letters 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 credit hereunder.the Letter of Credit drawn upon or any other Person, including, without limitation, any defense based on any failure of the applicable account party or the Borrower to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit. The Fronting Bank will promptly notify the Lenders of the amount of any unreimbursed drawing and each Lender shall promptly pay to the Fronting Bank, in immediately available funds, the amount of 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
Appears in 2 contracts
Samples: Credit Agreement (Wisconsin Energy Corp), Credit Agreement (Wisconsin Energy Corp)
Letters of Credit. (a) The Banks agree to make available On the terms and subject to the Borrower letters of credit, issued conditions set forth in this Agreement (and any other reasonable documentation required by the Agentapplicable Issuing Lender for the benefit of Lenders from Borrower in connection with the issuance of any Letter of Credit, such as a master letter of credit agreement or other Letter of Credit Documents), and provided there does not then exist a Default or an Event of Default, Issuing Lender (on behalf of Lenders, on a Pro Rata Share basis) agrees to issue for the account of Borrower Letters of Credit from the Revolving Loan Commitment during the period commencing on the Closing Date and continuing up until the Credit Termination Date of such stated amounts as Borrower may from time to time request, but not exceeding, in the aggregate at any time, the lesser of (i) the Borrowing Base, minus (x) any reserves established by Administrative Agent pursuant to their respective Commitments up to an aggregate amount at any one time Section 2.1(c) hereof, (y) the outstanding of $100,000,000 minus the aggregate principal amount of the Revolving Loans and (z) all then outstanding Surety Bonds issued by a Surety on behalf Letter of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of creditCredit Obligations, and (ii) the an amount to be mutually agreed upon between Borrower’s executing , Required Lenders and delivering such letter Administrative Agent. The Letters of credit Credit must be in form and reimbursement agreements substance reasonably acceptable to Issuing Lender. Borrower shall promptly and related documents as duly execute and deliver any other customary documentation reasonably required by the Administrative Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan Issuing Lender or Lenders in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of connection with the issuance of each any such letter Letter of credit remaining outstanding, in Credit. The expiration date on any Letter of Credit will not be more than one (1) year from the amount date of issuance for such Letter of Credit and not later than the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee date that is five (5) Business Days prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Credit Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In Borrower shall, without duplication of amounts provided for in Section 2.19, jointly and severally reimburse each Issuing Lender, Administrative Agent and each Lender, immediately upon demand, for any payments made by such Lender, Issuing Lender or Administrative Agent to any Person with respect to any Letter of Credit and for any other customary fees and charges and reasonable out-of-pocket costs, fees and expenses incurred by Issuing Lender, Administrative Agent or any Lender in connection with the event the application for, issuance of, administration of, or amendment to any Letter of Credit and, until Issuing Lender or Administrative Agent pays any amount under or on account for benefit of a letter of credit (the payment Lenders is so reimbursed by the Agent under or on account of a letter of credit being herein called a “Draw”)Borrower, a Revolving Loan shall such payments will be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In Without limiting the event no Revolving Loan generality of the foregoing, Administrative Agent or only a partial Revolving Loan is deemed Issuing Lender, at its sole discretion, may deduct, or require Administrative Agent to be madededuct, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any such amounts due and owing from any account of the Borrower maintained with the Administrative Agent.
(c) So long as letters By the issuance of credit are outstanding, a Letter of Credit (or an amendment to a Letter of Credit increasing the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced thereof) by the LC Obligations then outstanding andIssuing Lender, in addition to otherwise constituting and without any further action on the part of the Revolving Loans, except as otherwise expressly stated hereinIssuing Lender or the other Lenders, the stated amount Issuing Lender hereby grants to each other Lender, and each Lender hereby acquires from the Issuing Lender, a participation in such Letter of Credit equal to such Lender’s Pro Rate Share (deemed as if being a Revolving Loan) of the letters aggregate amount available to be drawn under such Letter of credit Credit. Each 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 treated as principal affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or Event of Default or reduction or termination of the Revolving LoansLoan Commitments, and that each such payment shall be made without any offset, counterclaim, defense, abatement, withholding or reduction whatsoever.
(d) Whenever In consideration and in furtherance of the Borrower desires that a letter foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of credit be issuedthe Issuing Lender, such Lender’s Pro Rate Share of each L/C Disbursement made by the Borrower shall give Issuing Lender promptly upon the Agent written notice request of such Issuing Lender (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland timemade through the Administrative Agent) at least five Cleveland Banking Days (any time from the time of such L/C Disbursement until such L/C Disbursement is reimbursed by Borrower or at any time after any reimbursement payment is required to be refunded to Borrower for any reason. Each such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which payment shall be a Cleveland Banking Day), which written notice shall be made in the form of Exhibit E hereto (eachsame manner as provided herein with respect to Revolving Loans made by such Lender, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Administrative Agent shall promptly notify each Bank pay to the Issuing Lender the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of each Letter any payment from Borrowers pursuant to this Section 2.2, the Administrative Agent shall distribute such payment to the Issuing Lender or, to the extent that the other Lenders have made payments pursuant to this paragraph to reimburse the 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 the Issuing Lender for any L/C Disbursement shall not constitute a Loan and shall not relieve any Borrower of Credit Requestits obligation to reimburse such L/C Disbursement.
(e) The delivery If the Issuing Lender shall make any L/C Disbursement in respect of each a Letter of Credit Request Credit, Borrower shall be deemed a representation reimburse the Issuing Lender in respect of such L/C Disbursement by paying to the Administrative Agent an amount equal to such L/C Disbursement not later than 1:00 p.m., Chicago time, on (A) the Business Day that Parent receives notice of such L/C Disbursement, if such notice is received prior to 12:00 noon, Chicago time, or (B) the Business Day immediately following the day that Parent receives such notice, if such notice is not received prior to such time. If Borrower fails for any reason to make such payment when due, the Administrative Agent shall notify each Lender of the applicable L/C Disbursement, the payment then due from Borrower in respect thereof and warranty by such Lender’s Pro Rate Share thereof, and upon the Borrower that such letter of credit as requested in such Letter of Credit Request written request (which may be issued by e-mail) of the Issuing Lender, each other Lender shall pay to the Administrative Agent, for the account of the Issuing Lender, such Lender’s Pro Rate Share thereof in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditherewith.
(f) In determining whether The obligations of Borrower with respect to pay any Letter of Credit issued pursuant to this Agreement are absolute, unconditional and irrevocable and shall be payable and performed strictly in accordance with the terms of this Agreement and the Letter of Credit under all circumstances whatsoever, including, without limitation, (i) any lack of validity or enforceability of any Letter of Credit, any other Letter of Credit Document or any Financing Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit, (iii) payment by the Issuing Lender under a Letter of Credit against presentation of a draft or other document that does not comply strictly with the terms of such Letter of Credit, or any payment by the Issuing Lender under any letter Letter of creditCredit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any bankruptcy, reorganization or other insolvency law, (iv) the existence of any claim, counterclaim, setoff, defense or other right that Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Agent shall Issuing Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction, (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 defense to Borrowers’ obligations hereunder, (vi) any amendment or waiver of or consent to any departure from any or all of the Financing Agreements, (vii) any improper use which may be made of any Letter of Credit or any improper acts or omissions of any beneficiary or transferee of any Letter of Credit in connection therewith, (viii) the existence of any claim, set-off, defense or any right which any Borrower may have at any obligation relative to time against any beneficiary or any transferee of any Letter of Credit (or Persons for whom any such beneficiary or any such transferee may be acting), any Lender or any other Person, whether in connection with any Letter of Credit, any transaction contemplated by any Letter of Credit, this Agreement, or any other Financing Agreement, or any unrelated transaction, (ix) the Banks other than to determine that insolvency of any Person issuing any documents required in connection with any Letter of Credit, (x) any breach of any agreement between any Borrower and any beneficiary or transferee of any Letter of Credit, (xi) any irregularity in the transaction with respect to be delivered which any Letter of Credit is issued, including any fraud by the beneficiary or any transferee of such Letter of Credit, (xii) any errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, wireless or otherwise, whether or not they are in code, (xiii) any act, error, neglect or default, omission, insolvency or failure of business of any of the correspondents of the Issuing Lender, and (xiv) any other circumstances arising from causes beyond the control of the Issuing Lender; except, in each case above, as result from the gross negligence or willful misconduct of Issuing Lender.
(g) Issuing Lender will, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment by the beneficiary under such letter any Letter of credit have been delivered and Credit issued by Issuing Lender to ascertain that they the same appear to comply on their face to be in conformity with the requirements terms and conditions of such Letter of Credit. If, after examination, Issuing Lender has determined that a demand for payment under such Letter of Credit does not conform to the terms and conditions of such Letter of Credit, then Issuing Lender will, as soon as reasonably practicable, give notice to the beneficiary to the effect that negotiation was not in accordance with the terms and conditions of such Letter of Credit, stating the reasons therefor and that the relevant document is being held at the disposal of such beneficiary or is being returned to such beneficiary, as Issuing Lender may elect. The beneficiary may attempt to correct any such nonconforming demand for payment under such Letter of Credit if, and to the extent that, such beneficiary is entitled (without regard to the provisions of this sentence) and able to do so. If Issuing Lender determines that a demand for payment under such Letter of Credit conforms to the terms and conditions of such Letter of Credit, then Issuing Lender, on behalf of the letter Lenders, will make payment to the beneficiary in accordance with the terms of creditsuch Letter of Credit. Any action taken Issuing Lender has the right to require the beneficiary to surrender such Letter of Credit to Issuing Lender on the stated expiration date of such Letter of Credit.
(h) As between Borrower, Administrative Agent, Issuing Lenders and Lenders, Borrower assumes all risks of the acts and omissions of, or omitted misuse of Letters of Credit by, the respective beneficiaries of the Letters of Credit. In furtherance and not in limitation of the foregoing, subject to the provisions of the Letter of Credit applications, none of Administrative Agent, Issuing Lenders nor Lenders will 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 or issuance of the Letters of Credit, even if it should in fact prove to be taken in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; provided, however, that the applicable Issuing Lender will examine such documents to insure conformity thereof with any demand for payment; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of a 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, facsimile or otherwise, except to the Agent with respect to a letter extent arising out of credit issued by it if taken or omitted in the absence of such Issuing Lender’s gross negligence or willful misconduct; (v) 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, shall not create any resulting liability except to the extent arising out of such Issuing Lender’s gross negligence or willful misconduct; (vi) for the misapplication by the beneficiary of a Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (vii) for any consequences arising from causes beyond the control of Administrative Agent, Issuing Lenders or Lenders, including, without limitation, any acts by governmental authorities. In furtherance of the foregoing, and without limiting the generality thereof, Borrower agrees to and shall jointly and severally indemnify and hold harmless Administrative Agent, Issuing Lenders and each Lender (and each of its directors, stockholders, officers, employees, agents, successors, assigns and affiliates) from and against each and every claim, loss, cost, expense and liability which might arise against Administrative Agent, any Issuing Lender or such Lender (or any such other Person) arising out of or in connection with any Letter of Credit or otherwise by reason of any transfer, sale, delivery, surrender or endorsement of any xxxx of lading, warehouse receipt or other document held by Administrative Agent or any Issuing Lender or for its account, except solely to the extent arising out of Administrative Agent’s or such Issuing Lender’s gross negligence or willful misconduct. None of the above affects, impairs or prevents the vesting of any of Administrative Agent’s, each Issuing Lender’s or Lenders’ rights or powers under this Agreement or Borrower's obligation to make reimbursement.
(gi) Immediately prior No Issuing Lender shall be under any obligation to issue any Letter of Credit if:
(i) the effectiveness issuance of this Agreement, such Letter of Credit would violate one or more policies of the outstanding Issuing Lender applicable to letters of credit issued under generally;
(ii) except as otherwise agreed by the 2002 Administrative Agent and the Issuing Lender, such Letter of Credit Agreement and/or is in an initial stated amount less than $100,000, in the 2004 case of a commercial Letter of Credit, or $500,000, in the case of a standby Letter of Credit;
(iii) except as otherwise agreed by the Administrative Agent and the Issuing Lender, such Letter of Credit Agreement are as listed on Exhibit C hereto is to be denominated in a currency other than Dollars;
(iv) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or
(v) any Lender is at such time a Defaulting Lender hereunder, unless the Issuing Lender has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the Issuing Lender’s risk with respect to such Lender.
(j) Without in any way negating Sections 2.2(c) and such letters of credit (d) hereof, BoA shall be deemed under no obligation, as Issuing Lender hereunder, to beissue any Letters of Credit after the Closing Date, and hereby are converted into, outstanding letters any Letters of credit hereunderCredit issued by BoA on or after the date hereof may be made in its sole and absolute discretion.
Appears in 2 contracts
Samples: Loan and Security Agreement (ExamWorks Group, Inc.), Loan and Security Agreement (ExamWorks Group, Inc.)
Letters of Credit. Each Issuing Bank severally agrees, on the terms and conditions hereinafter set forth, to issue (aor cause its Affiliate that is a commercial bank to issue on its behalf) The Banks agree to make available to the Borrower letters of credit denominated in U.S. Dollars (such letters of credit, issued by together with the AgentExisting Letters of Credit, pursuant the “Letters of Credit”), for the account of the Borrower from time to their respective Commitments up to time on any Business Day during the period from the date hereof until 30 days before the Maturity Date in respect of the Revolving Credit Facility in an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to Available Amount (i) for all Letters of Credit not to exceed at any time the Agent being satisfied with the terms Letter of the letter of creditCredit Facility at such time, (ii) the Borrowerfor all Letters of Credit issued by such Issuing Bank not to exceed such Issuing Bank’s executing and delivering Letter of Credit Commitment at such letter of credit and reimbursement agreements and related documents as required by the Agenttime, and (iii) for each such Letter of Credit not to exceed the satisfaction Unused Revolving Credit Commitments of all conditions to the Revolving Credit Lenders at such time. The Existing Issuing Bank shall continue any Existing Letters of Credit, for the account of the Borrower; provided that no Existing Letter of Credit shall be renewed by the Existing Issuing Bank but shall be replaced by Citibank as the Issuing Bank upon submission by the Borrower obtaining to Citibank of a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee request for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon an issuance of each letter a Letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of creditCredit. No letter Letter of credit Credit shall be issued having have an expiration date after the Termination Date. All letters (including all rights of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled or the beneficiary to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less require renewal) later than the stated amount earlier of 30 days before the Maturity Date in respect of the letter of credit requested, Revolving Credit Facility and (A) in the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account case of a letter Standby Letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on Credit one year after the date of such issuance thereof, but may by its terms be renewable annually upon notice and, not later than 1:00 p.m. (Cleveland timea “Notice of Renewal”) on the date of such notice, each Bank will make available given to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If Issuing Bank that issued such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Standby Letter of Credit Request”). Each Letter and the Administrative Agent on or prior to any date for notice of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested renewal set forth in such Letter of Credit Request may be issued but in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as any event at least three Business Days prior to the aggregate principal amount date of all then outstanding Surety Bondsthe proposed renewal of such Standby Letter of Credit and upon fulfillment of the applicable conditions set forth in Article III unless such Issuing Bank has notified the Borrower (with a copy to the Administrative Agent) on or prior to the date for notice of termination set forth in such Letter of Credit but in any event at least 30 Business Days prior to the date of automatic renewal of its election not to renew such Standby Letter of Credit (a “Notice of Termination”) and (B) in the case of a Trade Letter of Credit, 60 days after the date of issuance thereof; provided, however, that the terms of each Standby Letter of Credit that is automatically renewable annually shall (x) require the Issuing Bank that issued such Standby Letter of Credit to give the beneficiary named in such Standby Letter of Credit notice of any Notice of Termination, (y) permit such beneficiary, upon receipt of such notice, to draw under such Standby Letter of Credit prior to the date such Standby Letter of Credit otherwise would have been automatically renewed and (z) not permit the expiration date (after giving effect to any renewal) of such Standby Letter of Credit in any event to be extended to a date later than 30 days before the Maturity Date in respect of the Revolving Credit Facility. The Agent shallIf either a Notice of Renewal is not given by the Borrower or a Notice of Termination is given by the applicable Issuing Bank pursuant to the immediately preceding sentence, such Standby Letter of Credit shall expire on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit on which it otherwise would have been delivered and automatically renewed; provided, however, that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted even in the absence of gross negligence or willful misconductreceipt of a Notice of Renewal the applicable Issuing Bank may in its discretion, shall not create any resulting liability for the Agent.
(g) Immediately prior unless instructed to the effectiveness contrary by the Administrative Agent or the Borrower, deem that a Notice of this AgreementRenewal had been timely delivered and in such case, the outstanding letters a Notice of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit Renewal shall be deemed to behave been so delivered for all purposes under this Agreement. Within the limits of the Letter of Credit Facility, and hereby are converted intosubject to the limits referred to above, outstanding letters the Borrower may request the issuance of credit hereunderLetters of Credit under this Section 2.01(b), repay any Letter of Credit Advances resulting from drawings thereunder pursuant to Section 2.04(c) and request the issuance of additional Letters of Credit under this Section 2.01(b).
Appears in 2 contracts
Samples: Credit Agreement (Hersha Hospitality Trust), Credit Agreement (Hersha Hospitality Trust)
Letters of Credit. (a) The Banks agree Borrower may request the Issuer to make available to the Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of issue letters of credit will be subject (the “Letters of Credit”; each, individually, a “Letter of Credit”) during the period from the Effective Date to the thirtieth Business Day prior to the Revolving Maturity Date, provided that immediately after the issuance of each Letter of Credit (i) the Agent being satisfied with Letter of Credit Exposure of all Lenders would not exceed the terms Letter of the letter of credit, Credit Commitment and (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by Aggregate Revolving Exposure would not exceed the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of creditAggregate Revolving Commitment. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of To request the issuance of each such letter a Letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In additionCredit, the Borrower shall pay notify the Administrative Agent and the Issuer by the delivery of a Credit Request, which shall be sent by facsimile and shall be irrevocable (confirmed promptly, and in any event within five Business Days, by the delivery to the Administrative Agent upon of a Credit Request manually signed by the Borrower), at least three Business Days prior to the requested date of issuance, specifying (A) the beneficiary of such Letter of Credit, (B) the Borrower’s proposal as to the conditions under which a drawing may be made under such Letter of Credit and the documentation to be required in respect thereof, (C) the maximum amount to be available under such Letter of Credit, and (D) the requested dates of issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of creditand expiration. No letter of credit Such Credit Request shall be issued having an expiration date after accompanied by a duly completed application for such Letter of Credit on such forms as may be made available from time to time by the Termination Date. All letters of credit shall be in Issuer and such form and substance as the Agentother certificates, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining documents (including a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements agreement) and other related documents information as may be required by the AgentIssuer in accordance with its customary procedures (collectively, the “Letter of Credit Documentation”). Upon receipt of such Credit Request from the Borrower, the Administrative Agent shall promptly notify each Lender thereof. Subject to the satisfaction of the terms and conditions of this Agreement, the Issuer shall issue each requested Letter of Credit. In the event of any conflict between the provisions of this Agreement and any Letter of Credit Documentation, the provisions of this Agreement shall control. The letters of credit issued and outstanding under the Original Credit Agreement on the Effective Date (the “Existing Letters of Credit”) and listed on Schedule 2.11 shall be deemed to be “Letters of Credit” for all purposes of this Agreement and the other Loan Documents. Each of the Credit Parties hereby acknowledges and agrees that the Existing Letters of Credit are Letters of Credit hereunder and the Lenders hereby assume and are jointly and severally obligated in accordance with the terms of this Section 2.11 with respect to (i) all Reimbursement Obligations related thereto and (ii) all other amounts owing by the Borrower to the issuer of the Existing Letters of Credit pursuant to the Original Credit Agreement and the Letter of Credit Documentation (as defined in the Original Credit Agreement) executed and delivered in connection therewith.
(b) In the event the Agent pays any amount under or on account Each Letter of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan Credit shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bankbe denominated in dollars, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, be issued for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained and in support of obligations, contingent or otherwise, of the Borrower or any Subsidiary arising in the ordinary course of business, and (iii) have an expiration date which shall be not later than one year from the date of issuance thereof, but in any event, with respect to all Letters of Credit, five Business Days before the AgentRevolving Loan Maturity Date, provided that the expiration date of such Letter of Credit may be extended or such Letter of Credit may be renewed, provided, further, that any renewal, or any extension of any expiry date, of a Letter of Credit shall constitute the issuance of such Letter of Credit for all purposes of this Agreement.
(c) So long as letters Immediately upon the issuance of credit are outstandinga Letter of Credit, the amount Issuer shall be deemed to have sold and transferred to each Lender, and each Lender shall be deemed to have irrevocably and unconditionally purchased and received from the Issuer, without recourse or warranty, an undivided interest and participation, to the extent of such Lender’s Revolving Loans that Percentage thereof, in such Letter of Credit and the obligations of the Borrower is entitled with respect thereto and any security therefor and any guaranty pertaining thereto at any time existing. Each Lender, with respect to obtain under Article II shall be reduced by each Existing Letter of Credit, hereby purchases, without recourse or warranty, an undivided interest and participation, to the LC Obligations then outstanding andextent of such Lender’s Revolving Percentage thereof, in addition to otherwise constituting part each Existing Letter of Credit and the obligations of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving LoansBorrower with respect thereto and any such security therefor and guaranty pertaining thereto at any time existing.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent Issuer shall promptly notify (i) each Bank Lender of each the Issuer’s receipt of a drawing request under any Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by Credit, stating the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on such Lender’s Revolving Percentage of such drawing request and the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank on which such request will be honored and (ii) the Administrative Agent and the Borrower written notice of the issuance amount of such drawing request and the date on which such request will be honored. Any failure of the Issuer to give or amendment any delay in the Issuer’s giving any such notice shall not release or modification to such letter diminish the obligations of credit.
(f) the Borrower or any Lender hereunder. In determining whether to pay under any letter Letter of creditCredit, the Agent Issuer shall not have no obligation to any obligation relative to Lender or the Banks Borrower other than to determine confirm that any documents required to be delivered under such letter Letter of credit Credit have been delivered and that they appear to comply on their face with the requirements of such Letter of Credit. In the letter absence of credit. Any gross negligence or willful misconduct on the part of the Issuer, the Issuer shall have no liability to any Lender or the Borrower for any action taken or omitted to be taken by it under or in connection with any Letter of Credit, including any such action negligently taken or negligently omitted to be taken by it.
(e) The Borrower shall pay to the Administrative Agent for the account of the Issuer on demand therefor, in dollars in immediately available funds, the amount of all Reimbursement Obligations then owing to the Issuer under any Letter of Credit, together with interest thereon as provided in Section 3.01, irrespective of any claim, setoff, defense or other right which the Borrower may have at any time against the Issuer or any other Person. In the event that the Issuer makes any payment under any Letter of Credit and the Borrower shall not have repaid such amount to the Issuer when due, the Issuer 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 Issuer, the amount of such Lender’s Revolving Percentage of such payment in dollars in immediately available funds on the Business Day the Issuer so notifies such Lender if such notice is given prior to 12:00 Noon or, if such notice is given after 12:00 Noon, such Lender shall make its Revolving Percentage of such payment available to the Issuer prior to 12:00 Noon on the next succeeding Business Day.
(f) If and to the extent any Lender shall not make such Lender’s Revolving Percentage of any Reimbursement Obligations available to the Issuer when due in accordance with Section 2.11(e), such Lender shall pay interest to the Issuer on such unpaid amount for each day from the date such payment is due until the date such amount is paid in full to the Issuer at the Federal Funds Rate until (and including) the third Business Day after the date due and thereafter at the Alternate Base Rate. The obligations of the Lenders under this Section 2.11(f) are several and not joint or joint and several, and the failure of any Lender to make available to the Issuer its Revolving Percentage of any Reimbursement Obligations when due in accordance with Section 2.11(e) shall not relieve any other Lender of its obligation hereunder to make its Revolving Percentage of such Reimbursement Obligations so available when so due, but no Lender shall be responsible for the failure of any other Lender to make such other Lender’s Revolving Percentage of such Reimbursement Obligations so available when so due.
(g) Whenever the Issuer receives a payment of a Reimbursement Obligation from or on behalf of the Borrower as to which the Issuer has received any payment from a Lender pursuant to Section 2.11(e), the Issuer shall promptly pay to such Lender an amount equal to such Lender’s Revolving Percentage of such payment from or on behalf of the Borrower. If any payment by or on behalf of the Borrower and received by the Issuer with respect to any Letter of Credit is rescinded or must otherwise be returned by the Issuer for any reason and the Issuer has paid to any Lender any portion thereof, each such Lender shall forthwith pay over to the Issuer an amount equal to such Lender’s Revolving Percentage of the amount which must be so returned by the Issuer.
(h) Each Lender, upon the demand of the Issuer, shall reimburse the Issuer, to the extent the Issuer has not been reimbursed by the Borrower after demand therefor, for the reasonable costs and expenses (including reasonable attorneys’ fees) incurred by the Issuer in connection with the collection of amounts due under, and the preservation and enforcement of any rights conferred by, any Letter of Credit or the performance of the Issuer’s obligations as issuer of the Letters of Credit under this Agreement in respect thereof, to the extent of such Lender’s Revolving Percentage of the amount of such costs and expenses provided, however, no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent the same result solely from the gross negligence or willful misconduct of the Issuer. The Issuer shall refund any costs and expenses reimbursed by such Lender that are subsequently recovered from the Borrower in an amount equal to such Lender’s Revolving Percentage thereof.
(i) The obligation of the Borrower to reimburse the Issuer pursuant to this Section 2.11, and the obligation of each Lender to make available to the Issuer the amounts set forth in this Section 2.11 shall be absolute, unconditional and irrevocable under any and all circumstances, shall be made without reduction for any set-off, counterclaim or other deduction of any nature whatsoever, may not be terminated, suspended or delayed for any reason whatsoever, shall not be subject to any qualification or exception and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including any of the following circumstances: (1) any lack of validity or enforceability of this Agreement or any of the other Loan Documents, (2) the existence of any claim, setoff, defense or other right which the Borrower may have at any time against a letter beneficiary named in a Letter of credit issued Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Issuer, any Lender or any other Person, whether in connection with this Agreement, any other Loan Document, any Letter of Credit, the transactions contemplated in the Loan Documents or any unrelated transactions (including any underlying transaction between the Borrower and the beneficiary named in any such Letter of Credit), (3) any draft, certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, (4) the surrender or impairment of any collateral for the performance or observance of any of the terms of any of the Loan Documents, (5) the occurrence of any Default or Event of Default or (6) 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 setoff against, the Borrower’s or such Lender’s obligations hereunder. The Issuer shall not have any liability or responsibility by it if taken reason of or omitted 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 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 Issuer. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct, shall not create any resulting liability for misconduct on the Agent.
part of the Issuer (g) Immediately prior to the effectiveness as finally determined by a court of this Agreementcompetent jurisdiction), the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit Issuer shall be deemed to behave exercised 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 which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuer may, in its sole discretion, either accept and hereby 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 converted into, outstanding letters not in strict compliance with the terms of credit hereundersuch Letter of Credit.
Appears in 2 contracts
Samples: Credit Agreement (Lifetime Brands, Inc), Credit Agreement (Lifetime Brands, Inc)
Letters of Credit. (a) The Banks agree to make available Until the Termination Date with respect to the Borrower letters Line of creditCredit and subject to the other terms and conditions of this Agreement, issued by the Agent, pursuant Borrowers may request Lender to their respective Commitments up to an aggregate amount at any issue one time outstanding or more of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of its standard standby letters of credit will be subject (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed to the Agent being satisfied reasonable satisfaction of Lender, together with the terms proposed form of the letter Letter of creditCredit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Borrower’s executing and delivering such letter Letter of credit and reimbursement agreements and related documents as required Credit Availability by giving effect to the Agentproposed Letter of Credit, and (iii) the satisfaction such other Letter of all conditions to the Borrower obtaining a Loan Credit Documents that Lender then customarily requires in the amount issuance of the requested letter letters of credit. The Borrower shall pay a fee for each letter of credit Lender, in addition to the Agent for other terms of this Agreement, will have no obligation to issue the Pro rata benefit proposed Letter of Credit if, after giving effect to the Banksproposed Letter of Credit, upon issuance there would exist a Letter of Credit Deficiency. The making of each letter Letter of credit andCredit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, thereafterand will not violate the terms of, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent2.3.
(b) Each Letter of Credit issued under this Agreement will, among other things, (i) be in such form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faith, (ii) be denominated in Dollars, and (iii) be issued to support Borrowers’ obligations that finance its business needs incurred in the ordinary course of Borrowers’ respective businesses as presently conducted by them. In no event will any Letter of Credit have a term of more than one year; furthermore, and, in addition to the event foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the Agent pays any amount under date that is 30 days prior to the stated Termination Date applicable to the Line of Credit. Each Letter of Credit Application and each Letter of Credit will set forth which rules or on account customs apply to the Letter of a letter of credit (Credit. Such rules and customs may include, but are not limited to, the payment International Standby Practices, as published by the Agent under International Chamber of Commerce (“ISP”) or on account the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of a letter of credit being herein called a “Draw”), a Revolving Loan Credit shall be deemed to be made to governed by (A) the Borrower by each Bank rules or customs set forth in the Letter of Credit and (B) the internal laws of the State of Ohio and the United States of America, except to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained laws are inconsistent with the Agentrules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) So long as letters Upon receipt of credit are outstandinga request from Borrowers to open any Letter of Credit and of all attendant Letter of Credit Documents completed to Lender’s reasonable satisfaction, Lender, within three (3) Business Days, may either (i) issue the amount requested Letter of Revolving Loans that Credit to the Borrower is entitled beneficiary thereof and transmit a copy to obtain under Article II shall be reduced by the LC Obligations then outstanding andBorrowers, or (ii) elect, in addition its discretion exercised in good faith, not to otherwise constituting part issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loansreason(s) why Lender has declined such request.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “All Letter of Credit Request”). Each Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Request shall include an application for such letter Documents. Borrowers jointly and severally promise to pay Lender the amount of credit and any all other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit RequestObligations immediately when due, irrespective of any claim, setoff, defense or other right which any Borrower may have at any time against Lender or any other Person. Subject to the terms of Section 6.6, Borrowers hereby irrevocably instruct Lender, on the same Business Day that Lender is obligated to fund a drawing or make any expenditure or any other payment under a Letter of Credit or incurs any cost or expense under any Letter of Credit, to reimburse Lender for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender debiting any Borrower’s loan account(s) with Lender as an advance of the Revolving Loans pursuant to Section 2.1. If the advance of a Revolving Loan to reimburse Lender for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender in respect of any Letter of Credit results (or to the extent that it results) in any Letter of Credit Deficiency, then Borrowers will immediately eliminate any Letter of Credit Deficiency in accordance with the terms of Section 2.1(a).
(e) The delivery of each All Letter of Credit Request shall Obligations will constitute part of the Obligations and be deemed a representation and warranty secured by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditLoan Collateral.
(f) In determining whether to pay under any letter Letter of creditCredit, the Agent shall not have any obligation relative Lender will be responsible only to the Banks other than to determine confirm in good faith that any documents required to be delivered under such letter of credit have been delivered and that they under a Letter of Credit appear to comply substantially on their face with the requirements of the letter Letter of credit. Any Credit, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject Lender to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve Lender of any liability it may have to Borrowers to the extent, but only to the extent, of any direct, as opposed to consequential, damages suffered by Borrowers from Lender’s gross negligence or willful misconduct. Lender shall not be obligated to cause any Letter of Credit to be taken extended or amended unless the requirements of this Section 2.3 are met as though a new Letter of Credit were being requested and issued.
(g) In addition to amounts payable as elsewhere provided in this Section 2.3, Borrowers will protect, indemnify, pay and save Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees) which Lender (provided that it acts (or omits to act) in good faith and except for Lender’s gross negligence or willful misconduct) may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit or the provision of any credit support or enhancement in connection therewith exclusive of claims, demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by the Agent gross negligence or willful misconduct of Lender. The agreement in this Section 2.3(g) shall survive repayment of all other Obligations.
(h) As between Borrowers and Lender, Borrowers assume all risks of the acts and omissions of, or misuse of any of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, Lender shall not be responsible for: (i) the existence of any claim, set-off, defense or other right which any Borrower may have at any time against any beneficiary, or any transferee, of any Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), Lender or any other Person, whether in connection with this Agreement or the other Loan Documents, the transactions contemplated in this Agreement, or any unrelated transaction; (ii) any statement or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iii) any default, negligence, misfeasance, suspension, insolvency, or bankruptcy of any shipper or any other Person involved in any transaction covered thereby or any correspondent or agent of Lender to whom any drafts, documents or instruments may be entrusted; (iv) any delay, interruption, omission or error in transmission or delivery of any document, certificate, draft, or message; (v) payment by Lender under any Letter of Credit against presentation of a letter draft or certificate which substantially complies with the terms of credit issued such Letter of Credit; (vi) the invalidity or unenforceability of the Letter of Credit; (vii) the examination of documents presented under a Letter of Credit exclusively by it electronic or electro-optical means; or (viii) any other circumstances or happening whatsoever, whether or not similar to any of the foregoing, including any act or omission, whether rightful or wrongful, of any present or future de jure or de facto governmental authority. None of the foregoing shall affect, impair or prevent the vesting of any rights or powers of Lender under this Section 2.3.
(i) In furtherance and extension, and not in limitation, of the specific provisions set forth above, any action taken or omitted by Lender under or in connection with any of the Letters of Credit or any related certificates, if taken or omitted in good faith in the absence of gross negligence or willful misconduct, shall not create put Lender under any resulting liability for the Agentto Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(gi) Immediately prior Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the effectiveness Applicable LOC Fee Percentage per annum on the amount available to be drawn under each Letter of Credit from, and including, the issuance date of the Letter of Credit to and including the expiry date thereof (or, if earlier, the date on which the Letter of Credit is returned to Lender and is canceled). In addition, Borrowers will pay to Lender, on its demand for payment, Lender’s then current issuance, opening, closing, transfer, amendment, draw, renewal, negotiation and other letter of credit administration fees, charges and out of pocket expenses with respect to each Letter of Credit. The LOC Fee is fully earned by Lender when paid and will be due and payable on the issuance of each Letter of Credit. The LOC Fee will be calculated on the basis of the actual number of days elapsed in a 360-day year. If any Letter of Credit is cancelled for any reason before the stated expiry date thereof, any LOC Fee paid in advance will not be refunded and will be retained by Lender solely for its account.
(ii) For purposes of determining the Applicable LOC Fee Percentage, the Fixed Charge Coverage Ratio will, on and after the First Pricing Grid Determination Date, be determined as of June 30th and December 31st of each Fiscal Year ending on and after the First Pricing Grid Determination Date (each such date being a “Determination Date”). The “First Pricing Grid Determination Date” occurring after the Effective Date will be December 31, 2010. On Lender’s receipt of the financial statements and Compliance Certificate required to be delivered to Lender pursuant to Sections 4.3(a), 4.3(b) and 4.3(d) (as applicable) of this Agreement for the applicable Fiscal Quarter or Fiscal Year then ended, the LOC Fee will be subject to adjustment in accordance with the table set forth in the definition of “Applicable LOC Fee Percentage” based on the Fixed Charge Coverage Ratio as of the end of such Fiscal Quarter or Fiscal Year then ended so long as no Event of Default is existing as of the applicable effective date of adjustment. The foregoing adjustment, if applicable, (A) will become effective with respect to all Letters of Credit that are issued or renewed on and after the first day of the first calendar month following delivery to Lender of the financial statements and Compliance Certificate required to be delivered to Lender pursuant to Sections 4.3(a), 4.3(b) and 4.3(d) (as applicable) of this Agreement for the applicable Fiscal Quarter or Fiscal Year then ended and (B) will remain in effect until the next succeeding effective date of adjustment pursuant to this clause (ii) of Section 2.3(j). Each of the financial statements and Compliance Certificate required to be delivered to Lender must be delivered to Lender in compliance with Section 4.3 of this Agreement. If, however, either the financial statements or the Compliance Certificate required to be delivered to Lender pursuant to Sections 4.3(a), 4.3(b) and 4.3(d) (as applicable) of this Agreement have not been delivered in accordance with Section 4.3 of this Agreement, then, at Lender’s option, commencing on the outstanding letters date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of credit issued under the 2002 Credit this Agreement and/or the 2004 Credit Agreement and continuing until such financial statements or Compliance Certificate are as listed on Exhibit C hereto and such letters actually delivered in accordance with Section 4.3 of credit this Agreement, it shall be deemed assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to be1.0 and the pricing associated therewith (i.e., and hereby are converted into, outstanding letters of credit hereunderPricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 2 contracts
Samples: Credit Agreement (Ceco Environmental Corp), Credit Agreement (Ceco Environmental Corp)
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions hereof, at any time and from time to time from the Effective Date through the Business Day immediately prior to the Maturity Date, the Issuing Lender shall issue such Letters of Credit under the Commitment as Borrower letters may request by a Request for Letter of creditCredit; PROVIDED that (i) giving effect to all such Letters of Credit, issued the Outstanding Obligations do not exceed the then applicable Commitment, and (ii) the Aggregate Effective Amount under all outstanding Letters of Credit shall not exceed $5,000,000. Each Letter of Credit shall be in a form reasonably acceptable to the Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the term of any Letter of Credit shall not exceed one year or extend beyond the Maturity Date.
(b) Each Request for Letter of Credit shall be submitted to the Issuing Lender, with a copy to the Administrative Agent, at least three Business Days prior to the date upon which the related Letter of Credit is proposed to be issued. The Administrative Agent shall promptly notify the Issuing Lender whether such Request for Letter of Credit, and the issuance of a Letter of Credit pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit, the Issuing Lender shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify the Lenders, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Lender shall be deemed to have purchased at par a pro rata participation in such Letter of Credit from the Issuing Lender in an amount equal to that Lender's Pro Rata Share. Without limiting the scope and nature of each Lender's participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed by Borrower for any payment required to be made by the AgentIssuing Lender under any Letter of Credit, each Lender shall, pro rata according to its Pro Rata Share, pay the purchase price for such participation to the Issuing Lender through the Administrative Agent promptly upon demand therefor. The obligation of each Lender to so pay the participation purchase price to the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such payment of the purchase price shall not relieve or otherwise impair the obligation of Borrower to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of Credit upon demand by the Issuing Lender therefor, together with interest on such amount from the date of any payment made by the Issuing Lender at the Default Rate. The principal amount of any such payment shall be used to reimburse the Issuing Lender for the payment made by it under the Letter of Credit and, to the extent that the Lenders have not reimbursed the Issuing Lender pursuant to Section 2.4(c), the interest amount of any such payment shall be for the account of the Issuing Lender. Each Lender that has paid the participation purchase price to the Issuing Lender pursuant to Section 2.4(c) shall thereupon acquire a pro rata participation, to the extent of such payment, in the claim of the Issuing Lender against Borrower for reimbursement of principal and interest under this Section 2.4(d) and shall share, in accordance with that pro rata participation, in any principal payment made by Borrower with respect to such claim and in any interest payment made by Borrower with respect to such claim.
(e) Borrower may, pursuant to a Request for Loan, request that Advances be made pursuant to Section 2.1(a) to provide funds for the payment required by Section 2.4(d) and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid directly to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit.
(f) If Borrower fails to make the payment required by Section 2.4(d) on a timely basis then, in lieu of the payment of the participation purchase price to the Issuing Lender under Section 2.4(c), the Issuing Lender may (but is not required to), without notice to or the consent of Borrower, instruct the Administrative Agent to cause Advances to be made by the Lenders under their respective Commitments up to Pro Rata Shares of the Commitment in an aggregate amount at equal to the amount paid by the Issuing Lender with respect to that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid directly to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit.
(g) The issuance of any one time outstanding supplement, modification, amendment, renewal, or extension to or of $100,000,000 minus any Letter of Credit shall be treated in all respects the aggregate principal same as the issuance of a new Letter of Credit.
(h) The obligation of Borrower to pay to the Issuing Lender the amount of all then outstanding Surety Bonds issued any payment made by a Surety on behalf the Issuing Lender under any Letter of Credit shall be absolute, unconditional, and irrevocable, subject only to performance by the Issuing Lender of its obligations to Borrower under Uniform Commercial Code Section 5109. Without limiting the foregoing, the obligations of Borrower to the Issuing Lender shall not be affected by any of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(iii) the existence of any claim, setoff, defense, or other rights which Borrower may have at any time against the Issuing Lender, the Administrative Agent or any Lender, any beneficiary of the Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being satisfied untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the terms of the letter Letter of credit, Credit;
(iiv) payment by the Issuing Lender in good faith under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the Letter of Credit;
(vi) the Borrower’s executing existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or any difference between any such Property and delivering the character, quality, quantity, condition, or value of such letter Property as described in such documents;
(vii) the time, place, manner, order or contents of credit shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the existence, nature and reimbursement agreements and related extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any documents as required in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any Property;
(x) any error in the transmission of any message relating to a Letter of Credit not caused by the AgentIssuing Lender, and or any delay or interruption in any such message;
(iiixi) any error, neglect or default of any correspondent of the satisfaction Issuing Lender in connection with a Letter of all Credit (but without prejudice to any claim by Borrower against such correspondent);
(xii) any consequence arising from acts of God, war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Issuing Lender;
(xiii) so long as the Issuing Lender in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Borrower obtaining Issuing Lender in connection with a Loan Letter of Credit; and
(xiv) where the Issuing Lender has acted in the amount of the requested letter of credit. good faith and observed general business usage, any other circumstances whatsoever.
(i) The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Issuing Lender shall be entitled to .125% of such fee prior the protection accorded to the distribution of the balance of such fee Pro rata Administrative Agent pursuant to the Banks. In additionArticle 10, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentMUTATIS MUTANDIS.
(bj) In the event the Agent pays any amount under or on account of a letter of credit (the payment The Uniform Customs and Practice for Documentary Credits, as published in its most current version by the Agent under or on account International Chamber of a letter of credit being herein called a “Draw”)Commerce, a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements part of this Section 3.01 and shall include a representation and warranty as apply to all Letters of Credit to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditextent not inconsistent with applicable Law.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 2 contracts
Samples: Loan Agreement (Wheeling Land Development Corp), Loan Agreement (Wdra Food Service Inc)
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters terms and conditions hereof, the Issuing Bank agrees to issue Letters of credit, issued by Credit hereunder from time to time before the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus eleventh day before its Termination Date upon the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf request of the Parent pursuant to an Indemnity Agreement. The availability Borrower; PROVIDED that, immediately after each Letter of letters of credit will be subject to Credit is issued (i) the Agent being satisfied with the terms aggregate amount of the letter Letter of credit, Credit Liabilities plus the aggregate outstanding amount of all Loans shall not exceed the aggregate amount of the Commitments and (ii) the Borrower’s executing and delivering such letter aggregate Letter of credit and reimbursement agreements and related documents as required Credit Liabilities shall not exceed $250,000,000. Upon the date of issuance by the Issuing Bank of a Letter of Credit, the Issuing Bank shall be deemed, without further action by any party hereto, to have sold to each Bank, and each Bank shall be deemed, without further action by any party hereto, to have purchased from the Issuing Bank, a participation in such Letter of Credit and the related Letter of Credit Liabilities in the proportion its Commitment bears to the aggregate Commitments; PROVIDED that if the scheduled Termination Date of a Bank falls prior to the expiry date of a Letter of Credit then outstanding, such Bank's participation in such Letter of Credit shall terminate on its Termination Date, and the participations of the other Banks therein shall be redetermined pro rata in proportion to their Commitments after giving effect to the termination of the Commitment of such former Bank.
(b) The Borrower shall give the Issuing Bank notice at least three Domestic Business Days prior to the requested issuance of a Letter of Credit specifying the date such Letter of Credit is to be issued, and describing the terms of such Letter of Credit and the nature of the transactions to be supported thereby (such notice, including any such notice given in connection with the extension of a Letter of Credit, a "NOTICE OF ISSUANCE"). Upon receipt of a Notice of Issuance, the Issuing Bank shall promptly notify the Administrative Agent, and (iii) the satisfaction Administrative Agent shall promptly notify each Bank of all conditions to the Borrower obtaining a Loan in contents thereof and of the amount of the requested letter such Bank's participation in such Letter of creditCredit. The Borrower shall pay a fee for issuance by the Issuing Bank of each letter Letter of credit Credit shall, in addition to the Agent for the Pro rata benefit of the Banksconditions precedent set forth in Article 3, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior subject to the distribution conditions precedent that such Letter of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit Credit shall be in such form and substance contain such terms as shall be reasonably satisfactory to the Issuing Bank and that the Borrower shall have executed and delivered such other instruments and agreements relating to such Letter of Credit as the Agent, the Banks and the Borrower agreeIssuing Bank shall have reasonably requested. The Borrower shall not be entitled also pay to obtain letters of credit from the Agent unless Issuing Bank for its own account issuance, drawing, amendment and extension charges in the amounts and at the times as agreed between the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter Issuing Bank. The extension or renewal of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account Letter of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan Credit shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date an issuance of such notice andLetter of Credit, not later than 1:00 p.m. (Cleveland time) on the date and if any Letter of such notice, each Bank will make available Credit contains a provision pursuant to the Agent its Pro rata portion of the Draw which it is deemed to be a Revolving Loan. All amounts shall be made available to extended unless notice of termination is given by the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Issuing Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Issuing Bank shall timely give such notice of termination unless it has theretofore timely received a Notice of Issuance and the other conditions to issuance of a Letter of Credit have also theretofore been met with respect to such extension.
(c) No Letter of Credit shall have a term extending or extendible beyond the tenth day preceding the Termination Date of the Issuing Bank.
(d) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Issuing Bank shall notify the Administrative Agent and the Administrative Agent shall promptly notify the BorrowerBorrower and each other Bank as to the amount to be paid as a result of such demand or drawing and the payment date. The Borrower shall be irrevocably and unconditionally obligated forthwith to reimburse the Issuing Bank for any amounts paid by the Issuing Bank upon any drawing under any Letter of Credit, without presentment, demand, protest or other formalities of any kind. All such amounts paid by the Issuing Bank and remaining unpaid by the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrowerbear interest, as the case may bepayable on demand, interest on such corresponding amount in respect of for each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent until paid at a rate per annum equal to (i) the Base Rate for such day plus, if paid by such amount remains unpaid for more than two Domestic Business Days, 1%. In addition, each Bank will pay to the Administrative Agent, for the account of the Issuing Bank, immediately upon the overnight Federal Funds Effective Rate or (ii) if paid Issuing Bank's demand at any time during the period commencing after such drawing until reimbursement therefor in full by the Borrower, the then applicable rate an amount equal to such Bank's ratable share of interest, calculated such drawing (in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed proportion to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Drawits participation therein), together with interest thereon, against any account on such amount for each day from the date of the Borrower maintained with Issuing Bank's demand for such payment (or, if such demand is made after 12:00 Noon (New York City time) on such date, from the Agent.
(cnext succeeding Domestic Business Day) So long as letters to the date of credit are outstanding, payment by such Bank of such amount at a rate of interest per annum equal to the amount of Revolving Loans that Federal Funds Rate. The Issuing Bank will pay to each Bank ratably all amounts received from the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding andfor application in payment of its reimbursement obligations in respect of any Letter of Credit, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable but only to the Agent) prior extent such Bank has made payment to the proposed date Issuing Bank in respect of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “such Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Requestpursuant hereto.
(e) The delivery obligations of the Borrower and each Bank under subsection 2.16(d) above shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including without limitation the following circumstances:
(i) the use which may be made of the Letter of Credit Request shall by, or any acts or omission of, a beneficiary of a Letter of Credit (or any Person for whom the beneficiary may be deemed a representation and warranty by acting);
(ii) the existence of any claim, set-off, defense or other rights that the Borrower that such letter may have at any time against a beneficiary of credit as requested a Letter of Credit (or any Person for whom the beneficiary may be acting), the Banks (including the Issuing Bank) or any other 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 statement or any 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 whatsoever;
(iv) payment under a Letter of Credit to the beneficiary of such Letter of Credit Request may be issued in accordance against presentation to the Issuing Bank of a draft or certificate that does not comply with and will the terms of the Letter of Credit; PROVIDED that the determination by the Issuing Bank to make such payment shall not violate have been the requirements result of its willful misconduct or gross negligence; or
(v) any other act or omission to act or delay of any kind by any Bank (including the Issuing Bank), the Administrative Agent or any other Person or any other event or circumstance whatsoever that might, but for the provisions of this Section 3.01 and shall include subsection (v), constitute a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of legal or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice equitable discharge of the issuance of Borrower's or amendment or modification to such letter of creditthe Bank's obligations hereunder.
(f) In determining whether The Borrower hereby indemnifies and holds harmless each Bank (including the Issuing Bank) and the Administrative Agent from and against any and all claims, damages, losses, liabilities, costs or expenses which such Bank or the Administrative Agent may incur (including, without limitation, any claims, damages, losses, liabilities, costs or expenses which the Issuing Bank may incur by reason of or in connection with the failure of any other Bank to fulfill or comply with its obligations to such Issuing Bank hereunder (but nothing herein contained shall affect any rights the Borrower may have against such defaulting Bank)), and none of the Banks (including the Issuing Bank) nor the Administrative Agent nor any of their officers or directors or employees or agents shall be liable or responsible, by reason of or in connection with the execution and delivery or transfer of or payment or failure to pay under any letter Letter of creditCredit, including without limitation any of the Agent circumstances enumerated in subsection 2.16(d) above, as well as (i) any error, omission, interruption or delay in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, (ii) any loss or delay in the transmission of any document required in order to make a drawing under a Letter of Credit, and (iii) any consequences arising from causes beyond the control of the Issuing Bank, including without limitation any government acts, or any other circumstances whatsoever in making or failing to make payment under such Letter of Credit; PROVIDED that the Borrower shall not be required to indemnify the Issuing Bank for any claims, damages, losses, liabilities, costs or expenses, and the Borrower shall have any obligation relative a claim for direct (but not consequential) damage suffered by it, to the Banks other than extent found by a court of competent jurisdiction to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face caused by (x) the willful misconduct or gross negligence of the Issuing Bank in determining whether a request presented under any Letter of Credit complied with the requirements terms of such Letter of Credit or (y) the Issuing Bank's failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of the letter Letter of creditCredit. Any action taken or omitted Nothing in this subsection 2.16(f) is intended to be taken by limit the Agent with respect to a letter obligations of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create Borrower under any resulting liability for the Agent.
(g) Immediately prior to the effectiveness other provision of this Agreement. To the extent the Borrower does not indemnify the Issuing Bank as required by this subsection, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed Banks agree to be, and hereby are converted into, outstanding letters of credit hereunderdo so ratably in accordance with their Commitments.
Appears in 2 contracts
Samples: Credit Agreement (Duke Energy Corp), Credit Agreement (Duke Capital Corp)
Letters of Credit. The Borrower shall give the Issuing Bank (awhich shall promptly notify the Lenders with Revolving Credit Commitments of such request and their Percentage Share of such Letter of Credit) The Banks agree advance notice to make available be received by the Issuing Bank not later than 11:00 a.m. (Central time) not less than three Business Days prior thereto of each request for the issuance, and at least the earlier of (A) 30 Business Days prior to the Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf date of the Parent pursuant renewal or extension, of a Letter of Credit hereunder or (B) 30 calendar days prior to an Indemnity Agreement. The availability the last date upon which the Issuing Bank is required to give notice of letters cancellation or non-renewal of credit will be subject to such Letter of Credit thereunder, which request shall specify (i) the Agent being satisfied with the terms amount of the letter such Letter of creditCredit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Business Day), which written notice shall be in the form of Exhibit E hereto (each, a “) such Letter of Credit Request”)is to be issued, renewed or extended, (iii) the duration thereof, (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 reasonably satisfactory to the Administrative Agent. Each Subject to the terms and conditions of this Agreement, 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 Request shall include an application for such letter of credit and any other documents that to the Agent customarily requires in connection therewithbeneficiary thereof. The Agent shall promptly notify each Bank In conjunction with the issuance of each Letter of Credit Request.
(e) The delivery of each Credit, the Borrower shall execute a Letter of Credit Request shall be deemed Agreement. In the event of any conflict between any provision of a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with Agreement and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters Borrower, the Issuing Bank, the Administrative Agent and the Lenders hereby agree that the provisions of credit issued under this Agreement shall govern. The Issuing Bank will send to the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto Borrower and each Lender, immediately upon issuance of any Letter of Credit, or an amendment thereto, a true and complete copy of such letters Letter of credit shall be deemed to beCredit, and hereby are converted into, outstanding letters of credit hereunderor such amendment thereto.
Appears in 2 contracts
Samples: Revolving Credit Agreement (Wca Waste Corp), First Lien Credit Agreement (Wca Waste Corp)
Letters of Credit. (a) The Banks agree From time to make available time, at the Issuing Bank’s discretion, and subject to the Borrower letters terms of creditthis Agreement, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus prior to the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of Revolving Maturity Date, the Parent pursuant to an Indemnity Agreement. The availability of Issuing Bank may issue letters of credit will for the account of the Borrower (each individually, a “Letter of Credit” and collectively, “Letters of Credit”), provided, however, the aggregate of outstanding amounts under the Letters of Credit shall not exceed the Letter of Credit Sublimit, and for purposes of determining availability under the Revolving Line, aggregate of outstanding amounts under the Letters of Credit (whether drawn or undrawn) shall decrease, on a dollar-for-dollar basis, the amount available for 30 ACTIVEUS 188979588v.10 other Advances; provided further that the form and substance of each Letter of Credit shall be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required approval by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan Issuing Bank in the amount of the requested letter of creditits sole discretion. The Borrower shall pay a fee immediately reimburse the Issuing Bank for each letter drawings made under Letters of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agreeCredit. The Borrower shall not indemnify, defend, protect, and hold the Issuing Bank harmless from any loss, cost, expense or liability, including, without limitation, reasonable attorneys’ fees, arising out of or in connection with any Letters of Credit, except for expenses caused by the Issuing Bank’s gross negligence or willful misconduct. The Issuing Bank shall have no commitment or obligation to issue or amend a Letter of Credit.
a) Subject to the Issuing Bank’s approval, each Letter of Credit shall be entitled to obtain letters of credit from the Agent unless issued for a term designated by the Borrower is then entitled or its authorized applicant acceptable to obtain Loans from the Banks Issuing Bank. To the extent that any Letter of Credit shall remain outstanding after any termination of this Agreement or any Event of Default thereunder, the Borrower agrees to promptly pledge sufficient cash security in an amount not less than equal to 110% of the stated aggregate amount of such Letter of Credit to the letter Issuing Bank’s satisfaction.
b) Each Letter of credit requested, Credit shall be subject to the other terms and conditions of Section 5.03 a Letter of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan Credit Agreement, application and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentIssuing Bank in connection with the issuance of such Letter of Credit.
(bc) In If the event Borrower does not reimburse the Agent pays any amount Issuing Bank for a drawing made under or on account a Letter of a letter of credit (Credit as required by this Section, the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan Borrower shall be deemed to be made to have requested an Advance in the amount of such drawing. The Administrative Agent shall notify the Lenders of such deemed request and three (3) Business Days after such notice, the Lenders shall make each such Advance in accordance with Section 2.1(a). No Credit Extension Request Form or other notice from the Borrower by each of any such Advance shall be required in connection with such deemed request, and the Lenders shall be obligated to make any such Advance regardless of whether the conditions in Section 3.2 are satisfied at the time of such deemed request or on the date of any such Advance. If for any reason this Agreement or Advances hereunder are not available, the Issuing Bank, at the Issuing Bank’s sole discretion, may debit the Borrower’s deposit account with the Issuing Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank any such drawing made under a Letter of the occurrence and payment Credit.
d) Until any drawing made under a Letter of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent Credit is reimbursed in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent full by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, refinanced in full as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstandingan Advance, the amount of Revolving Loans that the Borrower is entitled to obtain any unreimbursed or refinanced drawing shall accrue interest under Article II Section 2.3 as if such drawing were an Advance. Such interest shall be reduced by paid to the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving LoansIssuing Bank for its own account.
(de) Whenever Upon the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (issuance or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank amendment of each Letter of Credit Request.
(e) The delivery and upon the payment by the Issuing Bank of each draft under any Letter of Credit, the Borrower shall promptly pay to the Issuing Bank fees determined in accordance with the Issuing Bank’s standard fees and charges (including but not limited to correspondent and interest charges related to the Letter of Credit) at the time any Letter of Credit Request is issued or amended or any draft is paid. ACTIVEUS 188979588v.10
f) The obligation of the Borrower to reimburse the Issuing Bank for drawings made under Letters of Credit shall be deemed a representation absolute, unconditional and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may irrevocable, and shall be issued performed strictly in accordance with and will not violate the requirements terms of this Section 3.01 Agreement, and shall include a representation such Letters of Credit and warranty as to the aggregate principal amount of related documents, under all then outstanding Surety Bondscircumstances whatsoever. The Agent shallBorrower shall indemnify, on defend, protect, and hold the date of each issuance Issuing Bank harmless from any loss, cost, expense or liability, including, without limitation, reasonable attorneys’ fees, arising out of or amendment or modification to a letter in connection with any Letters of credit by itCredit, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken except for expenses caused by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of Issuing Bank’s gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 2 contracts
Samples: Loan and Security Agreement (TechTarget Inc), Loan and Security Agreement (TechTarget Inc)
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions hereof, each LC Issuing Bank agrees to issue Letters of Credit from time to time for the account of the Borrower letters of credit(or to extend the stated maturity thereof or to amend or modify the terms thereof), issued by the Agentin an aggregate stated amount not exceeding such LC Issuing Bank’s Fronting Commitment, pursuant to their respective Commitments up to an a maximum aggregate stated amount for all Letters of Credit at any one time outstanding equal to the LC Commitment Amount. With respect to Letters of $100,000,000 minus Credit that are not Bond Letters of Credit, such issuance shall occur on not less than two Business Days’ prior notice thereof by delivery of (x) a Request for Issuance for such Letter of Credit to the aggregate principal amount Administrative Agent and the LC Issuing Bank for such Letter of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the AgentCredit, and (iiiy) the satisfaction such LC Issuing Bank’s standard form of all conditions to the Borrower obtaining a Loan in the amount Letter of Credit application for the requested letter Letter of credit. The Borrower shall Credit (including, for direct pay a fee for each letter Letters of credit Credit, any reimbursement agreement or other standard form required by such LC Issuing Bank) to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requesteddepartment of such LC Issuing Bank for the account of the Borrower. With respect to each Bond Letter of Credit, such issuance shall occur after receipt of (x) a Request for Issuance for such Bond Letter of Credit to the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan Administrative Agent and the Borrower has executed and delivered LC Issuing Bank for such letter Bond Letter of creditCredit, reimbursement agreements and other related documents (y) the Xxxx XX Reimbursement Agreement for such Bond Letter of Credit, as may be required by the LC Issuing Bank for such Bond Letter of Credit, and (z) the documents required pursuant to Section 3.03 and such Xxxx XX Reimbursement Agreement; provided that in the case of any Request for Issuance for an extension of an outstanding Bond Letter of Credit, such Request for Issuance shall be delivered to the Administrative Agent and the applicable LC Issuing Bank at least 90 days prior to the then-current Stated Expiry Date of such Bond Letter of Credit. Each Letter of Credit shall be issued in a form acceptable to the applicable LC Issuing Bank. Each Request for Issuance shall specify (i) the identity of the applicable LC Issuing Bank, (ii) the date (which shall be a Business Day) of issuance of such Letter of Credit (or the date of effectiveness of such extension, modification or amendment) and the Stated Expiry Date thereof, (iii) the proposed stated amount of such Letter of Credit (which amount (A) shall not be less than $100,000 and (B) may be subject to any automatic increase and reinstatement provisions), (iv) the name and address of the beneficiary of such Letter of Credit and (v) a statement of drawing conditions applicable to such Letter of Credit. If such Request for Issuance relates to an amendment or modification of a Letter of Credit, it shall be accompanied by the consent of the beneficiary of the Letter of Credit thereto (except in the case of an extension of the Stated Expiry Date of any Bond Letter of Credit where no consent of the beneficiary is required for such extension). If so requested by the Borrower, a Letter of Credit that is not a Bond Letter of Credit may provide that it is automatically renewable for additional one-year periods if subject to an ability of the applicable LC Issuing Bank to not renew by giving notice of the same to the beneficiary of such Letter of Credit. Each Request for Issuance shall be irrevocable unless modified or rescinded by the Borrower prior to the issuance by the applicable LC Issuing Bank of the requested Letter of Credit or prior to the effectiveness of the requested extension, modification or amendment to a Letter of Credit, as applicable. Upon fulfillment of the applicable conditions precedent and the other requirements set forth herein, the relevant 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 that shall so request; provided that the LC Issuing Bank shall not issue or amend any Letter of Credit if such LC Issuing Bank has received notice from the Administrative Agent that the applicable conditions precedent have not been satisfied. Upon each issuance of a Letter of Credit by any LC Issuing Bank, each Lender shall be deemed, without further action by any party hereto, to have irrevocably and unconditionally purchased from such LC Issuing Bank without recourse a participation in such Letter of Credit equal to such Lender’s Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit. Upon each modification of a Letter of Credit by any LC Issuing Bank which modifies the aggregate amount available to be drawn under such Letter of Credit, such LC Issuing Bank and the Lenders shall be deemed, without further action by any party hereto, to have purchased or sold, as appropriate, participations in such Letter of Credit such that each Lender’s participation in such Letter of Credit shall equal such Lender’s Commitment Percentage of such modified aggregate amount available to be drawn under such Letter of Credit. Each Letter of Credit shall utilize the Commitment of each Lender by an amount equal to the amount of such participation. Without limiting the foregoing, any LC Issuing Bank that issues a Bond Letter of Credit agrees that (i) all Bonds pledged to such LC Issuing Bank pursuant to any applicable Pledge Agreement or otherwise registered in the name of such LC Issuing Bank pursuant to the other Related Documents will be held for the benefit of such LC Issuing Bank and the Lenders and (ii) to apply and/or remit all proceeds from the sale or remarketing of such Bonds in accordance with Section 2.17(f).
(b) In The Borrower may from time to time appoint one or more additional Lenders (with the event consent of any such Lender, which consent may be withheld in the Agent pays any amount under sole discretion of each Lender) to act, either directly or on account through an Affiliate of such Lender, as an LC Issuing Bank hereunder. Any such appointment and the terms thereof shall be evidenced in a letter of credit (the payment separate written agreement executed by the Agent under or on account of a letter of credit being herein called a “Draw”)Borrower and the relevant LC Issuing Bank, a Revolving Loan copy of which agreement shall be delivered by the Borrower to the Administrative Agent. The Administrative Agent shall give prompt notice of any such appointment to the other Lenders. Upon such appointment, if and for so long as such Lender shall have any obligation to issue any Letter of Credit hereunder or any Letter of Credit issued by such Lender shall remain outstanding, such Lender shall be deemed to be, and shall have all the rights and obligations of, an “LC Issuing Bank” under this Agreement.
(c) No Letter of Credit shall be made requested, issued or modified hereunder if, after the issuance or modification thereof, (i) the Outstanding Credits would exceed the Commitments then scheduled to be in effect until the latest Termination Date, (ii) that portion of the LC Outstandings arising from Letters of Credit issued by an LC Issuing Bank would exceed the amount of such LC Issuing Bank’s Fronting Commitment or (iii) the LC Outstandings would exceed the LC Commitment Amount. No LC Issuing Bank shall be under any obligation to issue any Letter of Credit if any order, judgment or decree of any Governmental Authority shall by its terms purport to enjoin or restrain such LC Issuing Bank from issuing such Letter of Credit, or any law applicable to such LC Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such LC Issuing Bank shall prohibit, or request that the LC Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the LC Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the LC Issuing Bank is not otherwise compensated or required to be compensated hereunder), which restriction, reserve or capital requirement was not in effect on the date hereof, or shall impose upon the LC Issuing Bank any loss, cost or expense (not reimbursed or required to be reimbursed) that was not applicable on the date hereof and that the LC Issuing Bank in good xxxxx xxxxx material to it.
(d) The Borrower hereby agrees to pay to the Administrative Agent for the account of each LC Issuing Bank and each Lender that has funded its participation in the reimbursement obligations of the Borrower pursuant to subsection (e) below, on demand made by each such LC Issuing Bank to the extent Borrower, on and after each date on which such 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”). Any Reimbursement Amount shall bear interest, payable on demand, from the date so paid by such LC Issuing Bank until repayment to such LC Issuing Bank in full at a fluctuating interest rate per annum equal to the interest rate applicable to Base Rate Loans 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 Pro rata share of obligation hereunder to repay the Total Revolving Loan Commitments Reimbursement Amount by requesting a Borrowing under Section 2.02 (and which Borrowing shall be subject to reimburse immediately the Agent for conditions in Section 2.02) in the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the BorrowerReimbursement Amount, and the Borrower shall immediately pay proceeds of such corresponding amount Borrowing may be applied to satisfy the Agent. The Agent shall also be entitled Borrower’s obligations to recover from the such LC Issuing Bank or the BorrowerLenders, as the case may be.
(e) If any LC Issuing Bank shall not have been reimbursed in full for any Reimbursement Amount in respect of 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 and each Lender prompt notice thereof (an “LC Payment Notice”) no later than 12:00 noon (New York City Time) on the Business Day immediately succeeding the date of such payment by such LC Issuing Bank. Each Lender shall fund the participation that such Lender purchased pursuant to Section 2.04(a) by paying to the Administrative Agent for the account of such LC Issuing Bank an amount equal to such Lender’s Commitment Percentage of such Reimbursement Amount paid by such LC Issuing Bank, plus interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to the Federal Funds Effective Rate, for the first three days from the date of the payment by such LC Issuing Bank, and, thereafter, until the date of payment to such LC Issuing Bank by such Lender, at a rate of interest equal to the rate applicable to Base Rate Loans. Each such payment by a Lender shall be made not later than 3:00 P.M. (New York City Time) on the later to occur of (i) if paid the Business Day immediately following the date of such payment by such Bank, the overnight Federal Funds Effective Rate or LC Issuing Bank and (ii) if paid the Business Day on which such Lender shall have received an LC Payment Notice from such LC Issuing Bank. Each Lender’s obligation to make each such payment to the Administrative Agent for the account of such LC Issuing Bank shall be several and shall not be affected by the Borrower, occurrence or continuance of a Default or the then applicable rate failure of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed any other Lender to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against make any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain payment under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”this Section 2.04(e). Each Letter of Credit Request shall include an application for Lender further agrees that each such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request payment shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shallmade without any offset, on the date of each issuance of abatement, withholding or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditreduction whatsoever.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 2 contracts
Samples: Credit Agreement (Pacificorp /Or/), Credit Agreement (Pacificorp /Or/)
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters terms and conditions hereof, each Issuing Lender agrees to issue Letters of creditCredit hereunder denominated in Dollars or in an Alternative Currency from time to time upon the request of any Borrower; provided that, immediately after each Letter of Credit is issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with Total Outstanding Amount shall not exceed the terms aggregate amount of the letter of credit, Commitments and (ii) the Borrower’s executing and delivering such letter aggregate Dollar Amount of credit and reimbursement agreements and related documents as required Letter of Credit Liabilities shall not exceed $200,000,000. Upon the date of issuance by the Issuing Lender of a Letter of Credit, the Issuing Lender shall be deemed, without further action by any party hereto, to have sold to each Lender, and each Lender shall be deemed, without further action by any party hereto, to have purchased from the Issuing Lender, a participation in such Letter of Credit and the related Letter of Credit Liabilities in the proportion their respective Commitments bear to the aggregate Commitments.
(b) The Borrower shall give the Issuing Lender notice at least five Euro-Currency Business Days prior to the requested issuance of a Letter of Credit specifying the date such Letter of Credit is to be issued, and describing the terms of such Letter of Credit and the nature of the transactions to be supported thereby (such notice, including any such notice given in connection with the extension , renewal or amendment of a Letter of Credit, a “Notice of Issuance”). Upon receipt of a Notice of Issuance, the Issuing Lender shall promptly notify the Administrative Agent, and (iii) the satisfaction Administrative Agent shall promptly notify each Lender of all conditions to the Borrower obtaining a Loan in contents thereof and of the amount of the requested letter such Lender’s participation in such Letter of creditCredit. The Borrower shall pay a fee for issuance by the Issuing Lender of each letter Letter of credit Credit shall, in addition to the Agent for the Pro rata benefit of the Banksconditions precedent set forth in Article 3, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior subject to the distribution conditions precedent that (i) such Letter of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit Credit shall be in such form and substance contain such terms as shall be satisfactory to the Agent, the Banks Issuing Lender and the Borrower agreeshall have executed and delivered such other instruments and agreements relating to such Letter of Credit as the Issuing Lender shall have reasonably requested and (ii) no Stop Issuance Notice shall be in effect. The Borrower shall not be entitled also pay to obtain letters of credit from the Agent unless Issuing Lender for its own account issuance, drawing, amendment and extension charges in the amounts and at the times as agreed between the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentIssuing Lender.
(bc) In the event the Agent pays The extension, renewal or amendment of any amount under or on account Letter of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan Credit shall be deemed to be made an issuance of such Letter of Credit, and if any Letter of Credit contains a provision pursuant to which it is deemed to be extended unless notice of termination is given by the Borrower by each Bank Issuing Lender, the Issuing Lender shall timely give such notice of termination unless it has theretofore timely received a Notice of Issuance and the other conditions to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment issuance of a Draw no later than 12:00 p.m. (Cleveland time) Letter of Credit have also theretofore been met with respect to such extension. 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, one year after such notice and, not later than 1:00 p.m. renewal or extension); provided that (Cleveland timei) on the date a Letter of such notice, each Bank will make available Credit may contain a provision pursuant to the Agent its Pro rata portion of the Draw which it is deemed to be extended on an annual basis unless notice of termination is given by the Issuing Bank and (ii) in no event will a Revolving Loan. All amounts shall be made available Letter of Credit expire (including pursuant to a renewal or extension thereof) on a date later than the Agent in U.S. Dollars and immediately available funds at its office listed on LC Termination Date.
(d) Upon receipt from the signature pages hereto. If beneficiary of any Letter of Credit of any notice of a drawing under such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand thereforLetter of Credit, the Issuing Lender shall notify the Administrative Agent and the Administrative Agent shall promptly notify the BorrowerBorrower and each other Lender as to the amount to be paid as a result of such demand or drawing and the payment date. The Borrower shall be irrevocably and unconditionally obligated forthwith to reimburse the Issuing Lender for any amounts paid by the Issuing Lender upon any drawing under any Letter of Credit in the currency of such payment (a “Reimbursement Obligation”) without presentment, demand, protest or other formalities of any kind. All such amounts paid by the Issuing Lender and remaining unpaid by the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrowerbear interest, as the case may bepayable on demand, interest on such corresponding amount in respect of for each day from the date such corresponding amount was made available by of payment under the Agent to the Borrower to the date such corresponding amount is recovered by the Agent Letter of Credit until paid at a rate per annum equal to the sum of 2% plus (i) if paid by such Bankamount is denominated in Dollars, the overnight Federal Funds Effective Base Rate or for such day and (ii) if paid such amount is denominated in an Alternative Currency, the sum of the Euro-Currency Margin plus the rate per annum at which one-day deposits in the relevant currency are offered by the principal London office of the Administrative Agent in the London interbank market for such day. In addition, each Lender will pay to the Administrative Agent, for the account of the Issuing Lender, immediately upon the Issuing Lender’s demand at any time during the period commencing after such drawing until reimbursement therefor in full by the Borrower, the then applicable rate an amount equal to such Lender’s ratable share of interest, calculated such drawing (in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed proportion to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Drawits participation therein), together with interest thereon, against any account on such amount for each day from the date of the Borrower maintained with Issuing Lender’s demand for such payment (or, if such demand is made after 12:00 Noon (New York City time) on such date, from the Agent.
next succeeding Domestic Business Day) to the date of payment by such Lender of such amount at a rate of interest per annum equal to the (ci) So long as letters of credit are outstandingif such amount is denominated in Dollars, the Federal Funds Rate and (ii) if such amount is denominated in an Alternative Currency, the rate per annum at which one-day deposits in the relevant currency are offered by the principal London office of Revolving Loans that the Administrative Agent in the London interbank market for such day. The Issuing Lender will pay to each Lender ratably all amounts received from the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding andfor application in payment of its reimbursement obligations in respect of any Letter of Credit, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable but only to the Agent) prior extent such Lender has made payment to the proposed date Issuing Lender in respect of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “such Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Requestpursuant hereto.
(e) The delivery obligations of the Borrower and each Lender under subsection 2.19(d) above shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including without limitation the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any Letter of Credit Request shall or any document related hereto or thereto;
(ii) any amendment or waiver of or any consent to departure from all or any of the provisions of this Agreement or any Letter of Credit or any document related hereto or thereto, provided by any party affected thereby;
(iii) the use which may be deemed made of the Letter of Credit by, or any acts or omission of, a representation and warranty by beneficiary of a Letter of Credit (or any Person for whom the beneficiary may be acting);
(iv) the existence of any claim, set-off, defense or other rights that the Borrower that such letter may have at any time against a beneficiary of credit as requested a Letter of Credit (or any Person for whom the beneficiary may be acting), the Lenders (including the Issuing Lender) or any other Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction;
(v) any statement or any 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 whatsoever;
(vi) payment under a Letter of Credit to the beneficiary of such Letter of Credit Request may be issued in accordance against presentation to the Issuing Lender of a draft or certificate that does not comply with and will not violate the requirements terms of the Letter of Credit;
(vii) any termination of the Commitments prior to, on or after the Payment Date for any Letter of Credit, whether at the scheduled termination thereof, by operation of Article 6 or otherwise; or
(viii) any other act or omission to act or delay of any kind by any Lender (including the Issuing Lender), the Administrative Agent or any other Person or any other event or circumstance whatsoever that might, but for the provisions of this Section 3.01 and shall include subsection (viii), constitute a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of legal or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice equitable discharge of the issuance of Borrower’s or amendment or modification to such letter of creditthe Lender’s obligations hereunder.
(f) In determining whether The Borrower hereby indemnifies and holds harmless each Lender (including the Issuing Lender) and the Administrative Agent from and against any and all claims, damages, losses, liabilities, costs or expenses which such Lender or the Administrative Agent may incur (including, without limitation, any claims, damages, losses, liabilities, costs or expenses which the Issuing Lender may incur by reason of or in connection with the failure of any other Lender to fulfill or comply with its obligations to such Issuing Lender hereunder (but nothing herein contained shall affect any rights the Borrower may have against such defaulting Lender)), and none of the Lenders (including the Issuing Lender) nor the Administrative Agent nor any of their officers or directors or employees or agents shall be liable or responsible, by reason of or in connection with the execution and delivery or transfer of or payment or failure to pay under any letter Letter of creditCredit, including without limitation any of the circumstances enumerated in subsection 2.19(e) above, as well as (i) any error, omission, interruption or delay in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, (ii) any loss or delay in the transmission of any document required in order to make a drawing under a Letter of Credit, and (iii) any consequences arising from causes beyond the control of the Issuing Lender, including without limitation any government acts, or any other circumstances whatsoever in making or failing to make payment under such Letter of Credit; provided that the Borrower shall not be required to indemnify the Issuing Lender for any claims, damages, losses, liabilities, costs or expenses, and the Borrower shall have a claim for direct (but not consequential) damage suffered by it, to the extent found by a court of competent jurisdiction to have been caused by (x) the willful misconduct or gross negligence of the Issuing Lender in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (y) the Issuing Lender’s failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of the Letter of Credit. Nothing in this subsection 2.19(f) is intended to limit the obligations of the Borrower under any other provision of this Agreement. To the extent the Borrower does not indemnify the Issuing Lender as required by this subsection, the Agent shall not have any obligation relative Lenders agree to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on do so ratably in accordance with their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the AgentCommitments.
(g) Immediately prior If the Required Lenders reasonably determine at any time that the conditions set forth in Section 3.02 would not be satisfied in respect of a Borrowing at such time, then the Required Lenders may request that the Administrative Agent issue a “Stop Issuance Notice”, and the Administrative Agent shall issue such notice to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit each Issuing Lender. Such Stop Issuance Notice shall be deemed to bewithdrawn upon a determination by the Required Lenders that the circumstances giving rise thereto no longer exist. No Letter of Credit shall be issued while a Stop Issuance Notice is in effect. The Required Lenders may request issuance of a Stop Issuance Notice only if there is a reasonable basis therefor, and hereby shall consider reasonably and in good faith a request from the Company for withdrawal of the same on the basis that the conditions in Section 3.02 are converted into, outstanding letters of credit hereundersatisfied; provided that the Administrative Agent and the Issuing Lenders may and shall conclusively rely upon any Stop Issuance Notice while it remains in effect.
Appears in 2 contracts
Samples: Credit Agreement (Johnson Controls Inc), Credit Agreement (Johnson Controls Inc)
Letters of Credit. (a) On the Closing Date, each of the Letters of Credit outstanding under the Existing Loan Agreement shall be deemed to have been issued hereunder. The Banks agree to make available Administrative Agent will inform the Lenders of the aggregate effective amount of all such Letters of Credit on the Closing Date, and will provide each of the Lenders with appropriate information regarding the amount, beneficiary, and tenor of any such Letter of Credit upon request. Subject to the Borrower letters of creditterms and conditions hereof, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time and from time to time from the Closing Date through the Maturity Date, the Issuing Lender shall issue such Letters of Credit under the Revolving Commitment as Borrower may request by a Request for Letter of Credit which do not result in the aggregate effective face amount of all outstanding Letters of Credit being in excess of $100,000,000 minus 25,000,000; provided that after giving effect to all such Letters of Credit, the sum of (i) the aggregate principal amount of the outstanding Revolving Loans plus (ii) the aggregate amount available for drawing under the outstanding Letters of Credit plus (iii) the aggregate amount of all unreimbursed draws with respect to all Letters of Credit, shall not exceed the then outstanding Surety Bonds issued by applicable Revolving Commitment. Each Letter of Credit shall be in a Surety on behalf form reasonably acceptable to the Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the terms of the Parent Letters of Credit shall not exceed 12 months from the date of issuance thereof (or, in the case of any renewal, 12 months from the date of such renewal) and no Letter of Credit or renewal thereof shall expire later than the Maturity Date. Borrower will not request any Letter of Credit which is not reasonably necessary in the ordinary course of business of Borrower.
(b) Each Request for Letter of Credit shall be submitted to the Issuing Lender, with a copy to the Administrative Agent, at least three Business Days prior to the date upon which the related Letter of Credit is proposed to be issued. The Administrative Agent shall promptly notify the Issuing Lender whether such Request for Letter of Credit, and the issuance of a Letter of Credit pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit, the Issuing Lender shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify the Lenders, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Lender shall be deemed to have purchased a pro rata participation from the Issuing Lender, in an amount equal to that Lender’s Pro Rata Share of the Revolving Commitment, of such Letter of Credit. Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed by Borrower for any payment required to be made by the Issuing Lender under any Letter of Credit, each Lender shall, pro rata according to its Pro Rata Share of the Revolving Commitment, reimburse the Issuing Lender promptly upon demand for the amount of such payment through the Administrative Agent. The obligation of each Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of Credit upon the date of each drawing thereunder, together with interest on such amount from the date of any payment made by the Issuing Lender at the Default Rate (provided that, subject to the terms and conditions hereof, Borrower may request a Base Rate Loan in accordance with this Agreement to finance such amounts at the rate ordinarily applicable to Base Rate Loans). The principal amount of any such payment shall be used to reimburse the Issuing Lender for the payment made by it under the Letter of Credit. Each Lender that has reimbursed the Issuing Lender pursuant to Section 2.4(c) for its Pro-Rata Share of any payment made by the Issuing Lender under a Letter of Credit shall thereupon acquire a pro-rata participation, to the extent of such reimbursement, in the claim of the Issuing Lender against Borrower under this Section 2.4(d) and shall share, in accordance with that pro-rata participation, in any payment (including any payment of interest with respect thereto) made by Borrower with respect to such claim, and the Administrative Agent shall remit to each such Lender its Pro Rata Share thereof in immediately available funds.
(e) If Borrower fails to make the payment required by Section 2.4(d) upon demand, in lieu of the reimbursement to the Issuing Lender under Section 2.4(c) the Issuing Lender may (but is not required to) without notice to or the consent of Borrower, instruct the Administrative Agent to cause Advances to be made by the Lenders under the Revolving Commitment in accordance with their Pro Rata Shares in an Indemnity Agreementaggregate amount equal to the amount paid by the Issuing Lender with respect to that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 10 shall not apply. The availability proceeds of letters such Advances shall be paid to the Issuing Lender to reimburse it for the payment made by it under the Letter of credit will Credit. Such Advances shall be payable upon demand and shall bear interest at the Default Rate.
(f) The issuance of any supplement, modification, amendment, renewal, or extension to or of any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit.
(g) The obligation of Borrower to pay to the Issuing Lender the amount of any payment made by the Issuing Lender under any Letter of Credit shall be absolute, unconditional, and irrevocable, subject only to performance by the Issuing Lender of its obligations to Borrower under Connecticut Uniform Commercial Code Section 42a-5-109. Without limiting the foregoing, Borrower’s obligations shall not be affected by any of the following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(iii) the existence of any claim, setoff, defense, or other rights which Borrower may have at any time against the Issuing Lender, the Administrative Agent or any Lender, any beneficiary of the Letter of Credit or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being satisfied untrue or inaccurate in any respect whatsoever;
(v) payment by the Issuing Lender in good faith under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the letter Letter of credit, Credit;
(iivi) the Borrower’s executing existence, character, quality, quantity, condition, packing, value or delivery of any property purported to be represented by documents presented in connection with any Letter of Credit or for any difference between any such property and delivering the character, quality, quantity, condition, or value of such letter property as described in such documents;
(vii) the time, place, manner, order or contents of credit shipments or deliveries of property as described in documents presented in connection with any Letter of Credit or the existence, nature and reimbursement agreements and related extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any documents as required in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any property;
(x) any error in the transmission of any message relating to a Letter of Credit not caused by the AgentIssuing Lender, and or any delay or interruption in any such message;
(iiixi) any error, neglect or default of any correspondent of the satisfaction Issuing Lender in connection with a Letter of all Credit;
(xii) any consequence arising from acts of God, war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Issuing Lender;
(xiii) so long as the Issuing Lender in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Borrower obtaining Issuing Lender in connection with a Loan Letter of Credit; and
(xiv) where the Issuing Lender has acted in the amount of the requested letter of credit. good faith and observed general banking usage, customs or practices, any other circumstances whatsoever.
(h) The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Issuing Lender shall be entitled to .125% of such fee prior the protection accorded to the distribution of the balance of such fee Pro rata Administrative Agent pursuant to the Banks. In additionSection 12.6, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agentmutatis mutandis.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 2 contracts
Samples: Loan Agreement (Mohegan Tribal Gaming Authority), Loan Agreement (Mohegan Tribal Gaming Authority)
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters of creditterms and conditions hereof, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding and from time to time from the Second Closing Date through the Banking Day immediately prior to the Maturity Date, the Issuing Bank shall issue such Letters of $100,000,000 minus Credit under the Commitment as Borrower may request by a Request for Letter of Credit; provided that (i) giving effect to all -------- such Letters of Credit, the sum of (A) the aggregate principal amount --- outstanding under the Notes, plus (B) the Aggregate Effective Amount of ---- all outstanding Letters of Credit plus (C) the Swing Line Outstandings ---- do not exceed the then applicable Commitment and (ii) the Aggregate Effective Amount under all outstanding Surety Bonds issued Letters of Credit shall not exceed $20,000,000. Each Letter of Credit shall be in a form reasonably acceptable to the Issuing Bank. Unless all the Banks otherwise consent in a writing delivered to the Administrative Agent, the term of any Letter of Credit shall not exceed one (1) year or extend beyond the Maturity Date.
(b) Each Request for Letter of Credit shall be submitted to the Issuing Bank, with a copy to the Administrative Agent, at least five (5) Banking Days prior to the date upon which the related Letter of Credit is proposed to be issued. The Administrative Agent shall promptly notify the Issuing Bank whether such Request for
(c) Upon the issuance of a Letter of Credit, each Bank shall be deemed to have purchased at par a pro rata participation in such Letter of Credit from the Issuing Bank in an amount equal to that Bank's Pro Rata Share. Without limiting the scope and nature of each Bank's participation in any Letter of Credit, to the extent that the Issuing Bank has not been reimbursed by a Surety on behalf Borrower for any payment required to be made by the Issuing Bank under any Letter of Credit, each Bank shall, pro rata according to its Pro Rata Share, pay the purchase price for such participation to the Issuing Bank through the Administrative Agent promptly upon demand therefor. The obligation of each Bank to so pay the participation purchase price to the Issuing Bank shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such payment of the Parent purchase price shall not relieve or otherwise impair the obligation of Borrower to reimburse the Issuing Bank for the amount of any payment made by the Issuing Bank under any Letter of Credit together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Bank through the Administrative Agent an amount equal to any payment made by the Issuing Bank with respect to each Letter of Credit within one (1) Banking Day after written demand made by the Issuing Bank therefor, together with interest on such amount from the date of any payment made by the Issuing Bank at the rate applicable to Base Rate Loans for three Banking Days and thereafter at the Default Rate. The principal amount of any such payment shall be used to reimburse the Issuing Bank for the payment made by it under the Letter of Credit and, to the extent that the Banks have not reimbursed the Issuing Bank pursuant to an Indemnity AgreementSection 2.4(c), the interest ------ amount of any such payment shall be for the account of the Issuing Bank. Each Bank that has paid the participation purchase price to the Issuing Bank pursuant to Section 2.4(c) shall thereupon acquire a pro rata ------ participation, to the extent of such payment, in the claim of the Issuing Bank against Borrower for reimbursement of principal and interest under this Section 2.4(d) and shall share, in accordance with ------ that pro rata participation, in any principal payment made by Borrower with respect to such claim and in any interest payment made by Borrower (but only with respect to periods
(e) Borrower may, pursuant to a Request for Loan, request that Advances be made pursuant to Section 2.1(a) to provide funds for the ------ payment required by Section 2.4(d) and, for this purpose, the conditions ------ precedent set forth in Article 8 shall not apply. The availability proceeds of letters such --------- Advances shall be paid directly to the Issuing Bank to reimburse it for the payment made by it under the Letter of credit will Credit.
(f) If Borrower fails to make the payment required by Section 2.4(d) on a timely basis then, in lieu of the payment of the ------ participation purchase price to the Issuing Bank under Section 2.4(c), ------ the Issuing Bank may (but is not required to), without notice to or the consent of Borrower, instruct the Administrative Agent to cause Advances to be made by the Banks under the Commitment in an aggregate amount equal to the amount paid by the Issuing Bank with respect to that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid --------- directly to the Issuing Bank to reimburse it for the payment made by it under the Letter of Credit.
(g) The issuance of any supplement, modification, amendment, renewal, or extension to or of any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit, except that the Issuing Bank's issuance fees shall be payable as set forth in the letter agreement referred to in Section 3.5. ---
(h) The obligation of Borrower to pay to the Issuing Bank the amount of any payment made by the Issuing Bank under any Letter of Credit shall be absolute, unconditional, and irrevocable, subject only to performance by the Issuing Bank of its obligations to Borrower under Uniform Commercial Code Section 5109. Without limiting the foregoing, Borrower's obligations to the Issuing Bank shall not be affected by any of the following circumstances: (i) any lack of validity or enforceability of the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; (ii) any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, with the consent of Borrower; (iii) the existence of any claim, setoff, defense, or other rights which Borrower may have at any time against the Issuing Bank, the Administrative Agent or any Bank, any beneficiary of the Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions; (iv) any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being satisfied untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the terms of the letter Letter of credit, Credit; (iiv) payment by the Issuing Bank in good faith under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the Letter of Credit; (vi) the Borrower’s executing existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or any difference between any such Property and delivering the character, quality, quantity, condition, or value of such letter of credit and reimbursement agreements and related documents Property as required by the Agent, and described in such documents; (iiivii) the satisfaction time, place, manner, order or contents of all conditions to shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the Borrower obtaining existence, nature and extent of any insurance relative thereto; (viii) the solvency or financial responsibility of any party issuing any documents in connection with a Loan Letter of Credit; (ix) any failure or delay in notice of shipments or arrival of any Property; (x) any error in the amount transmission of the requested letter any message relating to a Letter of credit. Credit not caused
(i) The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Issuing Bank shall be entitled to .125% of such fee prior the protection accorded to the distribution of the balance of such fee Pro rata Administrative Agent pursuant to the BanksArticle 10, mutatis mutandis. In addition---------- ------- --------
(j) The Uniform Customs and Practice for Documentary Credits, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services as published in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required its most current version by the Agent.
(b) In the event the Agent pays any amount under or on account International Chamber of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”)Commerce, a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements part of this Section 3.01 and shall include a representation and warranty as apply to all Letters of Credit to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditextent not inconsistent with applicable Law.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan Agreement (MGM Grand Inc)
Letters of Credit. (a) The Banks agree to make available Borrower may request the ------------------ issuance, extension or renewal of Letters of Credit, in a form reasonably acceptable to the Borrower letters Agent and the applicable Issuing Bank, appropriately completed, for the account of creditthe Borrower, at any time and from time to time during the Revolving Loan Availability Period; provided that any Letter of -------- Credit shall be issued only if, and each request by the AgentBorrower for the issuance of any Letter of Credit shall be deemed a representation and warranty of the Borrower that, pursuant to their respective Commitments up to an aggregate amount at immediately following the issuance of any one time outstanding such Letter of Credit, (i) the Letter of Credit Exposure shall not exceed $100,000,000 minus 75,000,000, (ii) the sum of the Letter of Credit Exposure and the aggregate principal amount of all outstanding Revolving Loans shall not exceed the then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, current Borrowing Base and (iii) the satisfaction sum of all conditions the Letter of Credit Exposure and the aggregate principal amount of outstanding Revolving Loans shall not exceed the aggregate Revolving Loan Commitments at the time.
(b) Each Letter of Credit shall expire at the close of business on the date that is five Domestic Business Days prior to the last day of the Revolving Loan Availability Period, unless such Letter of Credit expires by its terms (or is required by subsection (c) below to expire) on an earlier date. Each Letter of Credit shall provide for payments of drawings in dollars.
(c) Each issuance of any Letter of Credit shall be made on at least three Domestic Business Days' prior written or telex notice (or such shorter notice as shall be acceptable to the applicable Issuing Bank) from the Borrower to the Agent (which shall give prompt notice thereof to each Lender) and the applicable Issuing Bank specifying the date of issuance, the date on which such Letter of Credit is to expire (which shall not be later than the earlier of (i) the date that is five Domestic Business Days prior to the last day of the Revolving Loan Availability Period, and (ii) subject to extension, 180 days, in the case of documentary or trade Letters of Credit, and one year, in the case of standby Letters of Credit, after the date of any such Letter of Credit, or, if such Letter of Credit provides that the expiry thereof may be accelerated upon an Event of Default with respect to the Borrower obtaining a Loan specified in clause (h) or (i) of Section 6.01, any later date permitted under clause (i) above), the amount of such Letter of Credit, the requested letter name and address of creditthe beneficiary of such Letter of Credit, whether such Letter of Credit is a documentary or trade Letter of Credit or a standby Letter of Credit, and such other information as may be necessary or desirable to complete such Letter of Credit. The Each Issuing Bank will give the Agent prompt notice of the issuance and amount of such Letter of Credit and the expiration of such Letter of Credit. Each Issuing Bank also will give the Agent and the Borrower (i) daily notice of the amount available to be drawn under each outstanding Letter of Credit and (ii) a quarterly summary indicating, on a daily basis during such quarter, the issuance of any Letter of Credit and the amount thereof, the expiration of any Letter of Credit and any payment on drafts presented under Letters of Credit.
(d) Each Issuing Bank that issues a Letter of Credit, by the issuance of a Letter of Credit and without any further action on the part of such Issuing Bank or the Lenders in respect thereof, hereby grants to each Lender, and each Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender's Applicable 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 Lender hereby absolutely and unconditionally agrees to pay to the Agent, on behalf of such Issuing Bank, in accordance with Section 2.02(e), such Lender's Applicable Percentage of each Letter of Credit Disbursement made by such Issuing Bank and not reimbursed by the Borrower when due in accordance with subsection (g) of this Section; provided that the Lenders shall not be obligated to make any such payment with -------- respect to any wrongful Letter of Credit Disbursement made as a result of the gross negligence or wilful misconduct of the applicable Issuing Bank.
(e) Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to subsection (d) above 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, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever (subject only to the proviso in subsection (d) above).
(f) During the Revolving Loan Availability Period (and thereafter, so long as any Letter of Credit remains outstanding), the Borrower shall pay a fee for each letter of credit (i) to the Agent for the Pro rata benefit account of the Banks, upon issuance Lenders ratably in proportion to their Revolving Loan Commitments a fee on the amount available to be drawn under each outstanding Letter of each letter of credit and, thereafter, upon Credit at a rate per annum equal to the annual anniversary of the issuance of each such letter of credit remaining outstandingapplicable Euro- Dollar Margin from time to time in effect with respect to Revolving Euro-Dollar Loans (minus 0.25%, in the case of documentary or trade Letters of Credit), and (ii) to each Issuing Bank for its own account, a fee at the rate per annum specified in such Issuing Bank's Issuing Bank Agreement on the amount available to be drawn under each outstanding Letter of Credit issued by such Issuing Bank. Such fees shall accrue from and including the Effective Date to but excluding the last day of the Indicated Spread for Revolving Loans Loan Availability Period (provided that such fees shall continue to accrue so long as any Letter of Credit remains outstanding). Accrued fees under this subsection shall be calculated by the LIBOR Rate Option on the stated amount Agent as of each Quarterly Payment Date and as of the letter Termination Date. The Agent shall make such calculation and notify the Borrower of credit; provided thatthe amount so calculated within three Domestic Business Days after each date as of which such calculation is so required, and such fees shall be payable by the Borrower upon receipt of such notice. In addition to the foregoing, the Agent Borrower shall be entitled pay directly to .125% each Issuing Bank, for its own account, such Issuing Bank's customary processing and documentation fees in connection with the issuance or amendment of or payment on any Letter of Credit, payable within 15 days after demand therefor by such fee prior to the distribution Issuing Bank.
(g) If an Issuing Bank shall pay any draft presented under a Letter of the balance of such fee Pro rata to the Banks. In additionCredit, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters on behalf of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in such Issuing Bank, an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed equal to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of such draft before 12:00 Noon (New York City time), on the Drawday on which such Issuing Bank shall have notified the Borrower that payment of such draft will be made. The Agent will promptly pay any such amounts received by it to such Issuing Bank. If the Borrower shall notify fail to pay any amount required to be paid by it under this subsection when due, such unpaid amount shall bear interest, for each Bank of day from and including the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on due date to but excluding the date of such notice andpayment, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective interest rate applicable to overdue Base Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(dh) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior The Borrower's obligation to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “reimburse Letter of Credit Request”). Each Disbursements as provided in subsection (g) 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:
(i) any lack of validity or enforceability of any Letter of Credit Request shall include an application for such letter of credit and or any other Loan Document;
(ii) the existence of any claim, setoff, defense or other right which the Borrower, any Subsidiary or any other person may at any time have against the beneficiary under any Letter of Credit, any Issuing Bank, the Agent or any Lender or any other Person in connection with this Agreement, any other Loan Document or any other related or unrelated agreement or transaction;
(iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(iv) payment by any Issuing Bank under a Letter of Credit against presentation of a draft or other document which does not comply with the terms of such Letter of Credit; provided that such payment was not -------- wrongfully made as a result of the gross negligence or wilful misconduct of the applicable Issuing Bank; and
(v) any other act or omission or delay of any kind or any other circumstance or event whatsoever, whether or not similar to any of the foregoing and whether or not foreseeable, that might, but for the provisions of this subsection (h), constitute a legal or equitable discharge of the Borrower's obligations hereunder.
(i) It is expressly understood and agreed that, for purposes of determining whether a wrongful payment under a Letter of Credit resulted from an Issuing Bank's gross negligence or wilful misconduct, an Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary and, in making any payment under any Letter of Credit (i) an Issuing Bank's exclusive reliance on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect, if such document on its face appears to be in order, and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, be deemed not to constitute wilful misconduct or gross negligence of the applicable Issuing Bank. It is further understood and agreed that, notwithstanding the proviso to clause (iv) of subsection (h) above, the Borrower's obligation hereunder to reimburse Letter of Credit Disbursements will not be excused by the gross negligence or wilful misconduct of an Issuing Bank to the extent that such Letter of Credit Disbursement actually discharged a liability of, or otherwise benefited, or was recovered by, the Borrower; provided that the foregoing shall -------- not be construed to excuse an Issuing Bank from liability to the Borrower to the extent of any direct damages suffered by the Borrower that are caused by such Issuing Bank's gross negligence or wilful misconduct in determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.
(j) Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. Each Issuing Bank shall as promptly as possible give telephonic notification, confirmed by telex or telecopy, to the Agent customarily requires and the Borrower of such demand for payment and whether such Issuing Bank has made or will make a Letter of Credit Disbursement thereunder, provided that the failure to give such notice shall not relieve the Borrower of its obligation to reimburse any such Letter of Credit Disbursement in connection therewithaccordance with this Section. The Agent shall promptly notify give each Bank Lender notice thereof.
(k) In the event that the Borrower is required pursuant to the terms of each this Agreement or any other Loan Document to provide cash collateral in respect of the Letter of Credit Request.
(e) The delivery Exposure, the Borrower shall deposit in an account with the Security Agent, for the benefit of each the Lenders, an amount in cash equal to the Letter of Credit Request Exposure (or such lesser amount as shall be deemed a representation required hereunder or thereunder). Such deposit shall be held by the Security Agent as collateral for the payment and warranty performance of the Obligations. The Security 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 in Temporary Cash Investments, which investments shall be made as directed by the Borrower that (unless such letter investments shall be contrary to applicable law or regulation or a Default shall have occurred and be continuing, in which case investments shall be made at the option and sole but reasonable discretion of credit as requested the Security Agent), such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall automatically be applied by the Security Agent to reimburse each Issuing Bank for Letter of Credit Request may be issued in accordance with and will not violate Disbursements and, if the requirements maturity of this Section 3.01 and shall include the Loans has been accelerated, to satisfy the Obligations. If the Borrower is required to provide an amount of cash collateral hereunder as a representation and warranty as result of an Event of Default, such amount (to the aggregate principal extent not applied as aforesaid) shall be returned to the Borrower within three Domestic Business days after all Events of Default have been cured or waived. If the Borrower is required to provide an amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.cash collateral hereunder pursuant to
Appears in 1 contract
Samples: Credit Agreement (Brylane Inc)
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions hereof, each LC Issuing Bank agrees to issue Letters of Credit from time to time for the account of the Borrower letters of credit(or to extend the stated maturity thereof or to amend or modify the terms thereof), issued by the Agentin an aggregate stated amount not exceeding such LC Issuing Bank’s Fronting Commitment, pursuant to their respective Commitments up to an a maximum aggregate stated amount for all Letters of Credit at any one time outstanding equal to the LC Commitment Amount. With respect to Letters of $100,000,000 minus Credit that are not Bond Letters of Credit, such issuance shall occur on not less than two Business Days’ prior notice thereof by delivery of (x) a Request for Issuance for such Letter of Credit to the aggregate principal amount Administrative Agent and the LC Issuing Bank for such Letter of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the AgentCredit, and (iiiy) the satisfaction such LC Issuing Bank’s standard form of all conditions to the Borrower obtaining a Loan in the amount Letter of Credit application for the requested letter Letter of credit. The Borrower shall Credit (including, for direct pay a fee for each letter Letters of credit Credit, any reimbursement agreement or other standard form required by such LC Issuing Bank) to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requesteddepartment of such LC Issuing Bank for the account of the Borrower. With respect to each Bond Letter of Credit, such issuance shall occur after receipt of (x) a Request for Issuance for such Bond Letter of Credit to the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan Administrative Agent and the Borrower has executed and delivered LC Issuing Bank for such letter Bond Letter of creditCredit, reimbursement agreements and other related documents (y) the Xxxx XX Reimbursement Agreement for such Bond Letter of Credit, as may be required by the AgentLC Issuing Bank for such Bond Letter of Credit, and (z) the documents required pursuant to Section 3.03 and such Xxxx XX Reimbursement Agreement; provided that in the case of any Request for Issuance for an extension of an outstanding Bond Letter of Credit, such Request for Issuance shall be delivered to the Administrative Agent and the applicable LC Issuing Bank at least 90 days prior to the then-current Stated Expiry Date of such Bond Letter of Credit. Each Letter of Credit shall be issued in a form acceptable to the applicable LC Issuing Bank. Each Request for Issuance shall specify (i) the identity of the
(i) On the Closing Date with respect to all Existing Letters of Credit and (ii) upon the date of issuance with respect to all other Letters of Credit, each Lender shall be deemed, without further action by any party hereto, to have irrevocably and unconditionally purchased from such LC Issuing Bank without recourse a participation in such Letter of Credit equal to such Lender’s Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit. Each Lender’s participation obligations in respect of Existing Letters of Credit shall be governed by this Agreement. Upon each modification of a Letter of Credit by any LC Issuing Bank which modifies the aggregate amount available to be drawn under such Letter of Credit, such LC Issuing Bank and the Lenders shall be deemed, without further action by any party hereto, to have purchased or sold, as appropriate, participations in such Letter of Credit such that each Lender’s participation in such Letter of Credit shall equal such Lender’s Commitment Percentage of such modified aggregate amount available to be drawn under such Letter of Credit. Each Letter of Credit shall utilize the Commitment of each Lender by an amount equal to the amount of such participation. Without limiting the foregoing, any LC Issuing Bank that issues a Bond Letter of Credit agrees that (i) all Bonds pledged to such LC Issuing Bank pursuant to any applicable Pledge Agreement or otherwise registered in the name of such LC Issuing Bank pursuant to the other Related Documents will be held for the benefit of such LC Issuing Bank and the Lenders and (ii) to apply and/or remit all proceeds from the sale or remarketing of such Bonds in accordance with Section 2.17(f).
(b) In The Borrower may from time to time appoint one or more additional Lenders (with the event consent of any such Lender, which consent may be withheld in the Agent pays any amount under sole discretion of each Lender) to act, either directly or on account through an Affiliate of such Lender, as an LC Issuing Bank hereunder. Any such appointment and the terms thereof shall be evidenced in a letter of credit (the payment separate written agreement executed by the Agent under or on account of a letter of credit being herein called a “Draw”)Borrower and the relevant LC Issuing Bank, a Revolving Loan copy of which agreement shall be deemed to be made to the Borrower delivered by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date Administrative Agent. The Administrative Agent shall give prompt notice of any such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice appointment to the Borrower) the amount of each Drawother Lenders. Upon such appointment, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So if and for so long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled such Lender shall have any obligation to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “issue any Letter of Credit Request”). Each hereunder or any Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconductsuch Lender shall remain outstanding, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit Lender shall be deemed to be, and hereby are converted intoshall have all the rights and obligations of, outstanding an “LC Issuing Bank” under this Agreement.
(c) No Letter of Credit shall be requested, issued or modified hereunder if, after the issuance or modification thereof, (i) the Outstanding Credits would exceed the Commitments then scheduled to be in effect until the latest Termination Date, (ii) that portion of the LC Outstandings arising from Letters of Credit issued by an LC Issuing Bank would exceed the amount of such LC Issuing Bank’s Fronting Commitment or (iii) the LC Outstandings would exceed the LC Commitment Amount. No LC Issuing Bank shall be under any obligation to issue any Letter of Credit if any order, judgment or decree of any Governmental Authority shall by its terms purport to enjoin or restrain such LC Issuing Bank from issuing such Letter of Credit, or any law applicable to such LC Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such LC Issuing Bank shall prohibit, or request that the LC Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the LC Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the LC Issuing Bank is not otherwise compensated or required to be compensated hereunder), which restriction, reserve or capital requirement was not in effect on the date hereof, or shall impose upon the LC Issuing Bank any loss, cost or expense (not reimbursed or required to be reimbursed) that was not applicable on the date hereof and that the LC Issuing Bank in good xxxxx xxxxx material to it.
(d) The Borrower hereby agrees to pay to the Administrative Agent for the account of each LC Issuing Bank and each Lender that has funded its participation in the reimbursement obligations of the Borrower pursuant to subsection (e) below, on demand made by such LC Issuing Bank to the Borrower, on and after each date on which such 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”). Any Reimbursement Amount shall bear interest, payable on demand, from the date so paid by such LC Issuing Bank until repayment to such LC Issuing Bank in full at a fluctuating interest rate per annum equal to the interest rate applicable to Base Rate Loans 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 (and which Borrowing shall be subject to the conditions in Section 2.02) in the amount of such Reimbursement Amount, and the proceeds of such Borrowing may be applied to satisfy the Borrower’s obligations to such LC Issuing Bank or the Lenders, as the case may be. The Borrower’s obligation to pay any Reimbursement Amount in respect of Existing Letters of Credit shall be governed by the terms of this Agreement.
(e) If any LC Issuing Bank shall not have been reimbursed in full for any Reimbursement Amount in respect of a Letter of Credit issued by such LC Issuing Bank on the
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Borrowers may request the issuance of Letters of Credit, in a form reasonably acceptable to the Borrower letters Agent and the Issuing Bank, for the account of creditthe Borrowers at any time and from time to time during the Letter of Credit Availability Period; PROVIDED that any Letter of Credit shall be issued only if, issued and each request by the AgentBorrowers for the issuance of any Letter of Credit shall be deemed a representation and warranty of the Borrowers that, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding immediately following the issuance of such Letter of Credit, (i) the Letter of Credit Exposure shall not exceed $100,000,000 minus 70,000,000 and (ii) the sum of (A) the Letter of Credit Exposure and (B) the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of Loans shall not exceed the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the aggregate amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each Commitments at such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agenttime.
(b) In Each Letter of Credit (other than any Sunwest Letter of Credit) shall expire at the event close of business on the earlier of (i) 12 calendar months after the date of issuance of such Letter of Credit and (ii) the last day of the Letter of Credit Availability Period, unless such Letter of Credit expires by its terms on an earlier date. Each Letter of Credit shall provide for payments of drawings in dollars.
(c) Each issuance of any Letter of Credit shall be made on at least three Business Days' prior irrevocable written or telecopy notice (or such shorter notice as shall be acceptable to the Issuing Bank) from the Borrowers to the Agent pays any amount under or and the Issuing Bank specifying the date of issuance, the date on account which such Letter of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”Credit is to expire in accordance with Section 2.20(b), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of such Letter of Credit, the Drawname and address of the beneficiary of such Letter of Credit, and such other information as may be necessary or desirable to complete such Letter of Credit. The Issuing Bank will give the Agent prompt notice of the issuance and amount of such Letter of Credit and the expiration date of such Letter of Credit (and the Agent shall notify give prompt notice thereof to each Lender). During the Letter of Credit Availability Period, the Issuing Bank also will give the Agent (and, in the case of clause (ii) below, the Lenders)
(i) daily notice of the amount available to be drawn under each outstanding Letter of Credit and (ii) a quarterly summary indicating, on a daily basis during such quarter, the issuance of any Letter of Credit and the amount thereof, the expiration of any Letter of Credit and the amount thereof and the payment on any draft presented under any Letter of Credit.
(d) By the issuance of a Letter of Credit (including an Outstanding Letter of Credit) and without any further action on the part of the Issuing Bank, the Agent or the Lenders in respect thereof, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender's pro rata portion, as determined under Section 2.15, 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 Lender hereby absolutely and unconditionally agrees to pay to the Agent, on behalf of the Issuing Bank, in accordance with Section 2.03(d), such Lender's pro rata portion, as determined under Section 2.15, of each Letter of Credit Disbursement made by the Issuing Bank and not reimbursed by the Borrowers when due in accordance with Section 2.20(g); PROVIDED that the Lenders shall not be obligated to make any such payment with respect to any wrongful Letter of Credit Disbursement made as a result of the gross negligence or willful misconduct of the Issuing Bank.
(e) Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to Section 2.20(d) in respect of Letters of Credit (including Outstanding Letters of Credit) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and payment continuance of a Draw no later than 12:00 p.m. Default or Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever (Cleveland timesubject only to the proviso set forth in Section 2.20(d)).
(f) During the Letter of Credit Availability Period, the Borrowers shall pay to the Agent, on the last day of March, June, September and December in each year and on the date on which the Commitments shall be terminated as provided herein, (i) for the account of such notice andthe Lenders, not later than 1:00 p.m. (Cleveland time) ratably in proportion to their Commitments, a fee on the date of such notice, each Bank will make average daily aggregate amount available to be drawn under all outstanding Letters of Credit (including Outstanding Letters of Credit) during the Agent its Pro rata portion of preceding quarter (or shorter period commencing with the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent Effective Date) at a rate per annum equal to the Eurodollar Margin from time to time in effect during such period pursuant to Section 2.07 and (iii) if paid for the account of the Issuing Bank, a fee on the average daily aggregate amount available to be drawn under all outstanding Letters of Credit (including Outstanding Letters of Credit) of such Issuing Bank during the preceding quarter (or shorter period commencing with the Effective Date) at a rate per annum equal to 0.125%. Such fees shall be computed on the basis of the actual number of days elapsed in a year of 360 days. Such fees shall accrue from and including the Effective Date to but excluding the last day of the Letter of Credit Availability Period. In addition to the foregoing, the Borrowers shall pay directly to the Issuing Bank, for its account, payable within 15 days after demand therefor by such the Issuing Bank, the overnight Federal Funds Effective Rate Issuing Bank's customary processing and documentation fees in connection with the issuance or amendment of or payment on any Letter of Credit, including any trade or documentary Letter of Credit.
(iig) if paid by If the BorrowerIssuing Bank shall pay any draft presented under a Letter of Credit (including an Outstanding Letter of Credit), the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice Borrowers shall pay to the Borrower) Agent, on behalf of the Issuing Bank, an amount equal to the amount of each Drawsuch draft before 12:00 noon, together with interest thereonDallas time, against any account on the day on which the Issuing Bank shall have notified the Borrowers that payment of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall such draft will be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewithmade. The Agent shall promptly notify pay any such amounts received by it to the Issuing Bank. If the Borrowers shall fail to pay any amount required to be paid under this Section 2.20(g) when due, such unpaid amount shall bear interest, for each Bank day from and including the due date to but excluding the date of each payment, at a rate per annum equal to the rate applicable to ABR Revolving Loans during such period pursuant to Section 2.07, plus 2.00%, but in no event to exceed the Highest Lawful Rate.
(h) To the fullest extent permitted under applicable law, the Borrowers' obligations to reimburse Letter of Credit RequestDisbursements as provided in Section 2.20(g) shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Amended Agreement under any and all circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit (including any Outstanding Letter of Credit) or any other Loan Document;
(ii) the existence of any claim, setoff, defense or other right which Horizon, Continental, any Subsidiary or any other person may at any time have against the beneficiary under any Letter of Credit (including any Outstanding Letter of Credit), the Issuing Bank, the Agent, any Lender or any other person in connection with this Amended Agreement, any other Loan Document or any other related or unrelated agreement or transaction;
(iii) any draft or other document presented under a Letter of Credit (including an Outstanding Letter of Credit) proving to be forged, fraudulent, invalid or insufficient in any respect or failing to comply with the Uniform Customs and Practices for Documentary Credits, as in effect from time to time, or any statement therein being untrue or inaccurate in any respect, except to the extent the same is attributable to the gross negligence or willful misconduct of the Issuing Bank;
(iv) payment by the Issuing Bank under a Letter of Credit (including an Outstanding Letter of Credit) against presentation of a draft or other document which does not comply with the terms of such Letter of Credit; PROVIDED that such payment was not wrongfully made as a result of the gross negligence or willful misconduct of the Issuing Bank; and
(v) any other act or omission or delay of any kind or any other circumstance or event whatsoever, whether or not similar to any of the foregoing and whether or not foreseeable, that might, but for the provisions of this Section 2.20(h), constitute a legal or equitable discharge of the Borrowers' obligations hereunder, except to the extent the same is attributable to the gross negligence or willful misconduct of the Issuing Bank.
(ei) The delivery To the fullest extent permitted under applicable law, it is expressly understood and agreed that, for purposes of each determining whether a wrongful payment under a Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such (including an Outstanding Letter of Credit Request may be issued in accordance with and will not violate Credit) resulted from the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of Issuing Bank's gross negligence or willful misconduct, (i) the Issuing Bank's acceptance of documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, (ii) the Issuing Bank's exclusive reliance on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect (so long as such document on its face appears to be in order), and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever and (iii) any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, be deemed not to constitute willful misconduct or gross negligence of the Issuing Bank. It is further understood and agreed that, notwithstanding the proviso to clause (iv) of Section 2.20(h), the Borrowers' obligations hereunder to reimburse Letter of Credit Disbursements will not be excused by the gross negligence or willful misconduct of the Issuing Bank to the extent that such Letter of Credit Disbursement actually discharged a liability of, or otherwise benefited, or was recovered by, either Borrower; PROVIDED that the foregoing shall not create be construed to excuse the Issuing Bank from liability to the Borrowers to the extent of any resulting liability for direct damages suffered by the AgentBorrowers that are caused by the Issuing Bank's gross negligence or willful misconduct in determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.
(gj) Immediately prior 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 as promptly as possible give telephonic notification, confirmed by telex or telecopy, to the effectiveness Agent and the Borrowers of such demand for payment and whether the Issuing Bank has made or will make a Letter of Credit Disbursement thereunder; PROVIDED that the failure to give such notice shall not relieve the Borrowers of their obligation to reimburse any such Letter of Credit Disbursement in accordance with this Section 2.20. The Agent shall promptly give each Lender notice thereof.
(k) In the event that the Borrowers are required pursuant to the terms of this AgreementAmended Agreement or any other Loan Document to provide cash collateral in respect of the Letter of Credit Exposure, the outstanding letters Borrowers shall deposit in an account with the Agent, for the benefit of credit issued under the 2002 Lenders, an amount in cash equal to the Letter of Credit Agreement and/or the 2004 Credit Agreement are Exposure (or such lesser amount as listed on Exhibit C hereto and such letters of credit shall be deemed required hereunder or thereunder). Such deposit shall be held by the Agent as collateral for the payment and performance of the Obligations. The 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 in Cash Equivalents, which investments shall be made as directed by the Borrowers (unless such investments shall be contrary to beapplicable law or regulation or a Default or Event of Default shall have occurred and be continuing, in which case the determination of whomever to make investments shall be made at the option and hereby in the discretion of the Agent), such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall automatically be applied by the Agent to reimburse the Issuing Bank for Letter of Credit Disbursements and, if the maturity of the Loans has been accelerated, to satisfy the Obligations. If the Borrowers are converted intorequired to provide an amount of cash collateral hereunder as a result of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three Business Days after all Events of Default have been cured or waived. If the Borrowers are required to provide an amount of cash collateral hereunder pursuant to Section 2.11(b), such amount (to the extent not applied as aforesaid) shall be returned to the Borrowers upon demand; PROVIDED that, after giving effect to such return, (i) the sum of (A) the aggregate amount of the Letter of Credit Exposure plus (B) the aggregate outstanding letters principal amount of credit hereunderLoans would not exceed the aggregate Commitments and (ii) no Default or Event of Default shall have occurred and be continuing.
Appears in 1 contract
Letters of Credit. (a) The Banks agree Subject to make available to and upon the terms and conditions contained herein and in the Letter of Credit Documents, at the request of a Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety (or Administrative Borrower on behalf of such Borrower), Agent agrees to provide or arrange for the Parent account of such Borrower one or more Letters of Credit, for the ratable risk of each Lender according to its Pro Rata Share, containing terms and conditions acceptable to Agent and the issuer thereof.
(b) The Borrower requesting such Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall give Agent three (3) Business Days' prior written notice of such Borrower's request for the issuance of a Letter of Credit, or such lesser number of Business Days as is reasonably practical for Agent. Such notice shall be irrevocable (provided that Agent shall use its reasonable efforts to stop the issuance of a Letter of Credit if so requested by Borrower) and shall specify the original face amount of the Letter of Credit requested, the effective date (which date shall be a Business 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 year from the date of issuance), the purpose for which such Letter of Credit is to be issued, and the beneficiary of the requested Letter of Credit. The Borrower requesting the Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall attach to such notice the proposed terms of the Letter of Credit. The 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 the proposed issuer of such Letter of Credit at such times and in such manner as such proposed issuer may require, an application, in form and substance satisfactory to such proposed issuer and Agent, for the issuance of the Letter of Credit and such other Letter of Credit Documents as may be required pursuant to an Indemnity Agreement. The availability the terms thereof, and the form and terms of the proposed Letter of Credit shall be satisfactory to Agent and such proposed issuer; (ii) as of the date of issuance, no order of any court, arbitrator or other 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, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that the proposed issuer of such Letter of Credit refrain from, the issuance of letters of credit will be subject to (i) generally or the Agent being satisfied with the terms issuance of the letter such Letters of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and Credit; (iii) after giving effect to the satisfaction issuance of such Letter of Credit, the Letter of Credit Obligations shall not exceed the Letter of Credit Limit; and (iv) the Excess Availability, prior to giving effect to any Reserves with respect to such Letter of Credit, on the date of the proposed issuance of any Letter of Credit, shall be equal to or greater than an amount equal to one hundred (100%) percent of the Letter of Credit Obligations with respect thereto. Effective on the issuance of each Letter of Credit, a Reserve shall be established in the applicable amount set forth in this Section 2.2(c).
(d) Each Borrower shall reimburse immediately the issuer of a Letter of Credit for any draw under any Letter of Credit issued for the account of such Borrower by such issuer and pay such issuer the amount of all conditions other charges and fees payable to issuer in connection with any Letter of Credit issued for the account of such Borrower immediately when due, irrespective of any claim, setoff, defense or other right which such Borrower may have at any time against the issuer or any 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 obtaining for whose account such Letter of Credit was issued to Agent for a Prime Rate Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the drawing or other amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent then due and shall be entitled to .125% made by Agent on behalf of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance Lenders as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the or Special Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the BorrowerAdvance, as the case may be, interest on ). The date of such corresponding amount in respect of each day from Loan shall be the date such corresponding amount was made available by of the Agent drawing or as to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bankother amounts, the overnight Federal Funds Effective Rate due date therefor. Any payments made by or (ii) if paid by the Borrower, the then applicable rate on behalf of interest, calculated Agent or any Lender to an issuer and/or related parties in accordance connection with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”shall constitute additional Revolving Loans pursuant to this Section 2 (or Special Agent Advances as the case may be). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Borrowers and Guarantors shall indemnify and hold Agent and Lenders harmless from and against any and all losses, claims, damages, liabilities, and reasonable costs and expenses which Agent or any Lender may suffer or incur in connection with any Letter of Credit Request and any documents, drafts or acceptances relating thereto, including any losses, claims, damages, liabilities, costs and expenses due to any action taken by any issuer 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 wilful 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 beneficiary shall be deemed a representation such Borrower's agent. Each Borrower and warranty by the Borrower that such letter of credit as requested in such Guarantor assumes all risks for, and agrees to pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter of Credit Request may be issued in accordance or any documents, drafts or 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 and will not violate respect to or relating to any Letter of Credit, except for the requirements gross negligence or wilful misconduct of Agent or any Lender as determined pursuant to a final, non-appealable order of a court of competent jurisdiction. The provisions of this Section 3.01 and 2.2(f) shall include a representation and warranty as to survive the aggregate principal amount payment of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank Obligations and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness termination of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan and Security Agreement (Commerce Energy Group Inc)
Letters of Credit. (a) The Banks agree to make available Concessionaire shall deliver no later than the first day of the Lease Year that is five (5) years prior to the Borrower letters final Lease Year of creditthe Term, issued by a Letter of Credit in the Agent, amount then to be calculated equal to the amount that the Engineering Firm reasonably determines is appropriate to cover all costs of capital improvements for the remainder of the Term as set forth in the Concessionaire’s capital improvement program required pursuant to their respective Commitments up to an aggregate amount at any one time outstanding the Operating Standards.
(b) Such Letter of $100,000,000 minus Credit shall be replaced on every anniversary of such Lease Year until the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to date that is two years after (i) the Agent being satisfied with the terms expiration of the letter of credit, Term and (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents time as required by the Agent, and (iii) the satisfaction of all conditions there being no unresolved disputes with respect to the Borrower obtaining Concessionaire complying with, performing, or observing any obligation, covenant, agreement, term, or condition in this Agreement with a Loan Replacement Letter of Credit in the amount of the requested letter undrawn balance of creditsuch Letter of Credit plus the amount of interest that would have been earned on such balance if invested for the next 12- month period at the Bank Rate. The Borrower shall pay Subject to Approval, the required amount of any Letter of Credit with respect to a fee Lease Year (but only with respect to such Lease Year) may be reduced from time to time (at intervals that may be shorter than one year) by the amount that the Engineering Firm reasonably determines is appropriate such that the amount of the Letter of Credit remains sufficient to cover all costs of capital improvements for each letter the remainder of credit the Term in light of the condition of the Parking Garage System (including the Engineering Firm’s assessment of the present and future condition of the Parking Garage System, and all costs and expenses of capital improvements to be performed in connection therewith, during the remaining years of the Term) and the Concessionaire’s compliance with this Agreement in connection therewith. Upon the occurrence and during the continuance of a Concessionaire Default (or if there is a dispute as to the Agent for the Pro rata benefit occurrence of the Banks, upon issuance of each letter of credit and, thereaftera Concessionaire Default, upon the annual anniversary final decision of the issuance arbitral panel pursuant to ARTICLE 19 that a Concessionaire Default has occurred), the Authority shall have the right (in addition to all other rights and remedies provided in this Agreement, but with the understanding that any other monetary damages that the Authority may recover will be reduced by the amount so drawn, and without the Authority’s exercise of each such letter right being deemed a waiver or a cure of credit remaining outstandingthe Concessionaire’s failure to perform and whether or not this Agreement is thereby terminated), with three Business Days’ prior notice to the Concessionaire, to draw against such Letter of Credit or any replacement thereof, upon presentation of a sight draft and a certificate confirming that the Authority has the right to draw under such Letter of Credit in the amount of such sight draft, up to the Indicated Spread for Revolving Loans under amount due to the LIBOR Rate Option on Authority with respect to such Concessionaire Default.
(c) The Concessionaire shall replace each Letter of Credit with a replacement Letter of Credit (the stated “Replacement Letter of Credit”) at least thirty (30) days prior to the expiry date of a Letter of Credit which is expiring. If the Concessionaire does not deliver to the Authority a Replacement Letter of Credit within such time period, the Authority shall have the right (in addition to all other rights and remedies provided in this Agreement and without the Authority’s exercise of such right being deemed a waiver or a cure of the Concessionaire’s failure to perform and whether or not this Agreement is thereby terminated) to immediately draw the full amount of the letter Letter of credit; provided thatCredit upon presentation of a sight draft and a certificate confirming that the Authority has the right to draw under such Letter of Credit in the amount of such sight draft. After the Concessionaire delivers to the Authority a Replacement Letter of Credit complying with the provisions of this Agreement, the Agent Authority shall be entitled to .125% deliver in accordance with the Concessionaire’s instructions the Letter of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
Credit being replaced (b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank except to the extent that at such time no sight draft under such Letter of its Pro rata share Credit is outstanding and unpaid). Any Replacement Letter of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts Credit shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, same terms and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, conditions as the case may beLetter of Credit replaced and satisfy the requirements for a Letter of Credit, interest on such corresponding amount but in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to any event (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each DrawReplacement Letter of Credit, together with interest thereonexcept as provided in Section 16.3(b), against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, shall equal or exceed the amount of Revolving Loans that the Borrower is entitled to obtain under Article II Letter of Credit being replaced at the time of replacement and (ii) the date of the Replacement Letter of Credit shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part its date of issuance. The expiry date of the Revolving LoansReplacement Letter of Credit, except as otherwise expressly stated hereinreferred to in the opening paragraph of such Replacement Letter of Credit, shall be not earlier than one year later than the stated amount expiry date of the letters Letter of credit shall be treated as principal of the Revolving LoansCredit being replaced.
(d) Whenever If this Agreement is terminated by the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) Authority prior to the proposed date expiration of issuance the Term as a result of a Concessionaire Default, the Authority shall have the right (which shall be in addition to all other rights and remedies provided in this Agreement and without the Authority’s exercise of such right being deemed a Cleveland Banking Daywaiver or a cure of the Concessionaire’s failure to perform), which written with three Business Days’ prior notice shall be in to the form of Exhibit E hereto (eachConcessionaire, a “to draw against any Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.Credit,
Appears in 1 contract
Samples: Concession and Lease Agreement
Letters of Credit. (a) The Banks agree to make available Upon receipt by the Administrative Agent of at least three (3) Business Days' written notice from the Borrower in the form of a Request for Issuance of Letter of Credit, the Administrative Agent shall promptly forward such notice to the Borrower letters of creditIssuing Bank or, issued if requested by the AgentBorrower, pursuant to their respective Commitments up another Lender agreeing to act as an aggregate Issuing Bank (and if such Lender shall accept and countersign such Request for Issuance of Letter of Credit, such Lender shall become the Issuing Bank with respect to such Letter of Credit), and the applicable Issuing Bank will issue a Letter of Credit in the amount at any one time outstanding requested subject to the terms and conditions of $100,000,000 minus this Agreement and further subject to the following: (i) after giving effect to the requested issuance, the aggregate principal face amount of all Letters of Credit outstanding hereunder would not exceed the Letter of Credit Committed Amount; and (ii) after giving effect to the requested issuance, the aggregate amount of all L/C Obligations then outstanding, plus the aggregate amount of Swing Loans then outstanding, plus the aggregate amount of all Revolving Loans then outstanding Surety Bonds issued by shall not exceed the Revolving Loan Commitment. No Letter of Credit shall have a Surety on behalf maturity extending beyond the earlier of (x) a term of one (1) year from the date of issuance or (y) the Initial Maturity Date. Subject to the maturity limitations provided herein and so long as no Default or Event of Default then exists or would be caused thereby, Letters of Credit shall be renewable annually upon the request of the Parent pursuant to an Indemnity Agreement. The availability Borrower and with the consent of letters of credit will the applicable Issuing Bank, which consent shall not be unreasonably withheld but shall be subject to compliance with customary letter of credit practices at the times of any proposed renewal. Each Request for Issuance of Letter of Credit from the Borrower shall specify in reasonable detail the documents which must be presented to draw under such Letter of Credit, which specification shall include all documents which the applicable Issuing Bank may reasonably require.
(ib) If a Letter of Credit provides that it is automatically renewable unless notice is given by the Issuing Bank with respect thereto that it will not be renewed, such Issuing Bank and the Borrower shall give notice of non-renewal to the Administrative Agent being satisfied at least ten (10) Business Days prior to the last date on which a notice of non-renewal may be given to the beneficiary of such Letter of Credit. The Administrative Agent shall promptly notify the Lenders and, unless so directed by the Majority Lenders at least three (3) Business Days prior to the last date on which a notice of non-renewal may be given to the beneficiary of such Letter of Credit, the Issuing Bank with respect to such Letter of Credit shall not be bound to give notice of non-renewal to the beneficiary of such Letter of Credit.
(c) Provided that no Default or Event of Default then exists or would be caused thereby, each Lender irrevocably authorizes each Issuing Bank to issue, reconfirm, reissue and extend each Letter of Credit issued by such Issuing Bank in accordance with the terms of the letter of creditthis Agreement. Each Issuing Bank hereby sells, and each other Lender that has issued a Revolving Loan Commitment hereby purchases, on a continuing basis, a participation and an undivided interest in (iiA) the Borrower’s executing and delivering obligations of such letter Issuing Bank to honor any draws under the Letters of credit and reimbursement agreements and related documents as required by the AgentCredit issued pursuant to this Agreement, and (iiiB) the satisfaction Indebtedness of all conditions to the Borrower obtaining to such Issuing Bank under this Agreement in respect of Letters of Credit issued by it, such participation being in the amount of such Lender's pro rata share of such obligations and Indebtedness based on such Lender's Revolving Commitment Percentage, in each case without further action by any party.
(d) Upon receipt of a draw certificate from the beneficiary of a Letter of Credit, the applicable Issuing Bank shall promptly notify the Administrative Agent, which shall in turn notify the Borrower and each Lender that has issued a Revolving Loan in Commitment, by telephone or telecopy, of the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit draw and, thereafter, upon in the annual anniversary of the issuance case of each such letter of credit remaining outstandingLender, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% such Lender's portion of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance draw amount as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the its Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit RequestCommitment Percentage.
(e) The delivery of Borrower hereby irrevocably requests, and the Lenders that have issued Revolving Loan Commitments hereby severally agree to make, a Base Rate Advance to the Borrower (notwithstanding the minimum amount requirements otherwise applicable to Base Rate Advances) on each day on which a draw is made under any Letter of Credit Request and in the amount of such draw, and each such Lender shall fund such Lender's share of such Base Rate Advance by payment to the Administrative Agent in accordance with Section 2.2(e) hereof and its Revolving Commitment Percentage, without reduction for any set-off counterclaim of any nature whatsoever. The obligation of each such Lender to make payments to the Administrative Agent, for the account of each Issuing Bank, in accordance with this Section 2.15 shall be deemed a representation absolute and warranty unconditional, and no such Lender shall be relieved of its obligations to make such payments by reason of non-compliance by any other Person with the Borrower that such letter terms of credit as requested in such any Letter of Credit Request may be issued in accordance with and will not violate or for any other reason other than the requirements gross negligence or willful misconduct of this Section 3.01 and the Administrative Agent or the applicable Issuing Bank. The Administrative Agent shall include a representation and warranty as promptly remit to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on applicable Issuing Bank the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and amounts so received from the Borrower written notice of the issuance of or amendment or modification to such letter of creditapplicable Lenders.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine The Borrower agrees that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by any Issuing Bank in connection with any Letter of Credit issued by it, except for such actions or omissions as shall constitute gross negligence or willful misconduct on the Agent part of such Issuing Bank or such Issuing Bank's willful failure to pay under any such Letter of Credit after presentation to it of documents complying with the terms of such Letter of Credit, shall be binding on the Borrower as between the Borrower and such Issuing Bank, and shall not result in any liability of the Issuing Bank to the Borrower. The obligation of the Borrower to reimburse the Lenders for Advances made to reimburse any Issuing Bank for draws under the Letters of Credit issued by it shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances whatsoever, including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any Loan Document;
(ii) Any amendment or waiver of or consent to any departure from any or all of the Loan Documents;
(iii) Any improper use which may be made of any Letter of Credit or any improper acts or omissions of any beneficiary or transferee of any Letter of Credit in connection therewith;
(iv) The existence of any claim, set-off, defense or any right which the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or Persons for whom any such beneficiary or any such transferee may be acting) or any Lender (other than the defense of payment to such Lender in accordance with the terms of this Agreement) or any other Person, whether in connection with any Letter of Credit, any transaction contemplated by any Letter of Credit, this Agreement, any other Loan Document, or any unrelated transaction;
(v) Any statement or any other documents presented under any Letter of Credit proving to be insufficient, forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever, provided that such payment shall not have constituted gross negligence of willful misconduct of the applicable Issuing Bank;
(vi) The insolvency of any Person issuing any documents in connection with any Letter of Credit;
(vii) Any breach of any agreement between the Borrower and any beneficiary or transferee of any Letter of Credit;
(viii) Any irregularity in the transaction with respect to which any Letter of Credit is issued, including any fraud by the beneficiary or any transferee of such Letter of Credit;
(ix) Any errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, wireless or otherwise, whether or not they are in code;
(x) Any act, error, neglect or default, omission, insolvency or failure of business of any of the correspondents of the applicable Issuing Bank, provided that the same shall not have constituted the gross negligence or willful misconduct of such Issuing Bank;
(xi) Any other circumstances arising from causes beyond the control of the applicable Issuing Bank;
(xii) Payment by the applicable Issuing Bank under any Letter of Credit against presentation of a letter sight draft or a certificate which does not comply with the terms of credit issued by it if taken such Letter of Credit, provided that such payment shall not have constituted gross negligence or omitted in willful misconduct of the absence Issuing Bank; and
(xiii) Any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, provided that such other circumstances or happenings shall not have been the result of gross negligence or willful misconduct, shall not create misconduct of the applicable Issuing Bank or any resulting liability for the AgentLender.
(g) Immediately prior to If, after the effectiveness Agreement Date, any change in Applicable Law, any change in the interpretation or administration thereof, or any change in compliance with Applicable Law by any Issuing Bank or any other Lender as a result of this Agreementany request or directive of any governmental authority, central bank or comparable agency (whether or not having the outstanding force of law) shall (i) impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit, capital adequacy, assessment or other requirements or conditions against letters of credit issued under by any Issuing Bank or against participations by any other Lender in the 2002 Letters of Credit Agreement and/or or (ii) impose on any Issuing Bank or any other Lender any other condition regarding any Letter of Credit or any participation therein, and the 2004 result of any of the foregoing in the reasonable determination of such Issuing Bank or such Lender, as the case may be, is to increase the cost to such Issuing Bank or such Lender of issuing or maintaining any Letter of Credit Agreement are or purchasing or maintaining any participation therein, as listed on Exhibit C hereto and such letters of credit the case may be, by an amount (which amount shall be reasonably determined) deemed by such Issuing Bank or such Lender to be material, and the designation of a different lending office will not avoid the need for (or reduce the amount of) additional compensation, then, on the earlier of ten (10) days following the date of demand (which demand shall be made not later than six (6) months following such Issuing Bank's or such Lender's determination of a need for additional compensation) by such Issuing Bank or such Lender or the Initial Maturity Date, the Borrower shall promptly pay such Issuing Bank or such Lender, as the case may be, such additional amount or amounts as such Issuing Bank or such Lender, as the case may be, determines will compensate it for such increased costs. Within sixty (60) days of such written demand by such Issuing Bank or such Lender, the Borrower may, in its discretion, provide a replacement bank or banks for such Issuing Bank or such Lender, which replacement bank or banks will be subject to the approval of the Arranger Banks and hereby are converted intothe Majority Lenders (which approval, outstanding letters in each case, will not be unreasonably withheld), and shall take all necessary actions to transfer the rights, duties and obligations of credit such Issuing Bank or such Lender to such replacement bank or banks within such 60-day period. A certificate of such Lender setting forth the amount, and in reasonable detail the basis for such Issuing Bank's or such Lender's determination of such amount, to be paid to such Issuing Bank or such Lender by the Borrower as a result of any event referred to in this paragraph shall, absent manifest error, be conclusive. Such certificate shall be delivered to the Borrower with each written demand for payment referenced above. Each Issuing Bank and each Lender further agree that they shall use their best efforts to give the Borrower thirty (30) days' prior notice, and in any event shall give prompt notice, of any event referred to in this paragraph which may have the effect of materially increasing the cost to such Issuing Bank or such Lender of issuing or maintaining the Letter of Credit or purchasing or maintaining any participation therein.
(h) Each Lender shall be responsible for its pro rata share (based on such Lender's Revolving Commitment Percentage) of any and all reasonable out-of-pocket costs, expenses (including reasonable legal fees) and disbursements which may be incurred or made by any Issuing Bank in connection with the collection of any amounts due under, the administrative of, or the presentation or enforcement of any rights conferred by any Letter of Credit issued by such Issuing Bank, the Borrower's or any Guarantor's obligations to reimburse or otherwise. In the event the Borrower shall fail to pay such expenses of any Issuing Bank within thirty (30) days of demand for payment by such Issuing Bank, provided that such Issuing Bank has, during such 30-day period, made a diligent collection effort with respect to such expenses, and provided that such costs will not result from the gross negligence or willful misconduct of such Issuing Bank, each Lender shall thereupon pay to such Issuing Bank its pro rata share (based on such Lender's Revolving Commitment Percentage) of such expenses within ten (10) days from the date of such Issuing Bank's notice to the Lenders of the Borrower's failure to pay; provided, however, that if the Borrower or any Guarantor shall thereafter pay such expense, such Issuing Bank will repay to each Lender the amounts received from such Lender hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree . With respect to make available to any obligations of Sellers or their Affiliates (other than the Borrower Transferred Companies) under any guaranties, letters of credit, issued letters of comfort, bid bonds or performance or surety bonds or cash or other collateral obtained or given by Sellers relating to the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf business of the Parent pursuant Transferred Companies (“Affiliate Obligations”) listed on Schedule 5.12, Buyers shall use reasonable best efforts to an Indemnity Agreementhave Sellers and their Affiliates irrevocably and unconditionally released and discharged as guarantors, obligors or parties having any other obligation in respect of such Affiliate Obligation prior to or at Closing, through arrangements reasonably satisfactory to the Sellers and none of Sellers or their Affiliates will have any further obligation or liability in connection therewith. The availability With respect to any Affiliate Obligations other than those listed on Schedule 5.12, Sellers shall, and Sellers shall cause their Affiliates to, keep in place all such Affiliate Obligations until the earlier of letters of credit will be subject to (i) the Agent being satisfied with the earliest possible expiration by its terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loanssuch time as such Affiliate Obligation is terminated pursuant to mutually acceptable arrangements between Buyers and Sellers. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit Sellers and their Affiliates are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof not released and discharged prior to 1:00 p.m. (Cleveland time) or at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and Closing from any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued Affiliate Obligations in accordance with and will not violate the requirements of this Section 3.01 5.12 (whether or not listed on Schedule 5.12), Buyers shall use reasonable best efforts to have Sellers and shall include a representation their Affiliates released and warranty discharged as to promptly as practicable after the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank Closing and the Borrower written notice of Transferred Companies and Buyers shall indemnify and hold harmless Sellers and their Affiliates for all payments Sellers or their Affiliates make after the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay Closing Date under any letter Affiliate Obligation. With respect to any obligations of any Transferred Company under any guaranties, letters of credit, the Agent shall not have letters of comfort, bid bonds or performance or surety bonds or cash or other collateral obtained or given by any obligation relative Transferred Company relating to the Banks any business of Sellers or their Affiliates other than to determine that any documents required the business of the Transferred Companies, Sellers shall cause each Transferred Company to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements fully released, in each case, effective as of the letter of credit. Any action taken or omitted to be taken by the Agent Closing, with respect to a letter all obligations of credit issued by it if taken or omitted in the absence such Transferred Company and any of gross negligence or willful misconduct, shall not create its Subsidiaries under any resulting liability for the Agentsuch guaranties.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Securities Purchase Agreement (Compx International Inc)
Letters of Credit. (a) Subject to and upon the terms and conditions contained herein and in the Letter of Credit Documents, at the request of Borrower, Lender agrees to issue, for the account of Borrower or any Guarantor, one or more Letters of Credit denominated in US Dollars, containing terms and conditions acceptable to Lender.
(b) The Banks agree to make available Borrower shall give Lender three (3) Business Days’ prior written notice of Borrower’s request for the issuance of a Letter of Credit. Such notice shall be irrevocable and shall specify the original face amount of the Letter of Credit requested, the effective date (which date shall be a Business 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 year from the date of issuance), the purpose for which such Letter of Credit is to be issued, and the beneficiary of the requested Letter of Credit. The Borrower shall attach to such notice the proposed terms of the Letter of Credit. The 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 Lender: (i) the Borrower shall have delivered to Lender at such times and in such manner as Lender may require, an application, in form and substance reasonably satisfactory to Lender, 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 reasonably satisfactory to Lender, (ii) as of the date of issuance, no order of any court, arbitrator or other Governmental Authority shall purport by its terms to enjoin or restrain money center banks generally from issuing letters of credit, issued by credit of the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus type and in the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf the proposed Letter of Credit, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the Parent pursuant to an Indemnity Agreement. The availability force of law) from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that Lender refrain from, the issuance of letters of credit will be subject to (i) generally or the Agent being satisfied with the terms issuance of the letter such Letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the AgentCredit, and (iii) the satisfaction of all conditions except in Lender’s sole discretion, after giving effect to the issuance of such Letter of Credit, the Letter of Credit Obligations shall not exceed the Letter of Credit Limit.
(d) Borrower obtaining shall reimburse Lender immediately in US Dollars, with respect to any draw on any Letter of Credit. Each drawing under any Letter of Credit or other amount payable in connection therewith, if not immediately repaid from the Payment Account, shall constitute a request by Borrower for a Revolving Loan in the amount of the requested letter of creditsuch drawing or other amount then due. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% date of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available drawing or as to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand thereforother amounts, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the due date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Requesttherefor.
(e) The delivery of each Borrower shall indemnify and hold Lender harmless from and against any and all losses, claims, damages, liabilities, costs and expenses which Lender may suffer or incur in connection with any Letter of Credit Request and any documents, drafts or acceptances relating thereto, including any losses, claims, damages, liabilities, costs and expenses due to any action taken by Lender 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 Lender as determined pursuant to a final non-appealable order of a court of competent jurisdiction. Borrower 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 beneficiary shall be deemed a representation Borrower’s agent. Borrower assumes all risks for, and warranty by the Borrower that such letter of credit as requested in such agrees to pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter of Credit Request may be issued in accordance or any documents, drafts or acceptances thereunder. Borrower hereby releases and holds Lender harmless from and against any acts, waivers, errors, delays or omissions with and will not violate respect to or relating to any Letter of Credit, except for the requirements gross negligence or willful misconduct of Lender as determined pursuant to a final, non-appealable order of a court of competent jurisdiction. The provisions of this Section 3.01 and subsection (e) shall include a representation and warranty as to survive the aggregate principal amount payment of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank Obligations and the Borrower written notice termination of the issuance of or amendment or modification to such letter of creditthis Agreement.
(f) In determining whether connection with Inventory purchased pursuant to pay under any letter Letter of creditCredit, the Agent shall not have any obligation relative to the Banks other than to determine Borrower shall, at Lender’s request, instruct all suppliers, carriers, forwarders, Customs Brokers, warehouses or others receiving or holding cash, checks, Inventory, documents or instruments in which Lender holds a security interest that any documents required upon Lender’s request, such items are to be delivered under to Lender and/or subject to Lender’s order, and if they shall come into such letter of credit have been delivered and that they appear Borrower’s possession, to comply on deliver them, upon Lender’s request, to Lender in their face with the requirements of the letter of creditoriginal form. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconductExcept as otherwise provided herein, Lender shall not create any resulting liability for 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 Lender may otherwise specify, Borrower shall designate Lender as the Agentconsignee on all bills of lading and other negotiable and non-negotiable documents.
(g) Immediately prior The obligations of Borrower to pay Letter of Credit Obligations shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the effectiveness terms of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) Subject to the terms and conditions hereof, at any time and from time to time from the Closing Date through the day prior to the Maturity Date, the Issuing Bank shall issue such Letters of Credit under the Commitment as Borrower may request by a Request for Letter of Credit; provided that giving effect to all such Letters of Credit, (i) the Outstanding Obligations shall not exceed the Commitment, and (ii) the Aggregate Effective Amount under all outstanding Letters of Credit shall not exceed $100,000,000. Each Letter of Credit shall be in a form reasonably acceptable to the Issuing Bank. Unless all the Banks otherwise consent in a writing delivered to the Administrative Agent, no Letter of Credit shall have a term which exceeds one year or which extends beyond the Maturity Date.
(b) Each Request for Letter of Credit shall be submitted to the Issuing Bank, with a copy to the Administrative Agent, at least five (5) Banking Days prior to the date upon which the related Letter of Credit is proposed to be issued. The Administrative Agent shall promptly notify the Issuing Bank whether such Request for Letter of Credit, and the issuance of a Letter of Credit pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit, the Issuing Bank shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify the Banks, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Bank shall be deemed to have purchased a pro rata participation in such Letter of Credit from the Issuing Bank in an amount equal to that Bank's Pro Rata Share. Without limiting the scope and nature of each Bank's participation in any Letter of Credit, to the extent that the Issuing Bank has not been reimbursed by Borrower for any payment required to be made by the Issuing Bank under any Letter of Credit, each Bank shall, pro rata according to its Pro Rata Share, reimburse the Issuing Bank promptly upon demand for the amount of such payment. The obligation of each Bank to so reimburse the Issuing Bank shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to reimburse the Issuing Bank for the amount of any payment made by the Issuing Bank under any Letter of Credit together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Bank an amount equal to any payment made by the Issuing Bank with respect to each Letter of Credit within one (1) Banking Day after demand made by the Issuing Bank therefor (which demand the Issuing Bank shall make promptly and in any event shall make upon the request of the Requisite Banks), together with interest on such amount from the date of any payment made by the Issuing Bank at the rate applicable to Base Rate Loans for three Banking Days and thereafter at the Default Rate. The principal amount of any such payment shall be used to reimburse the Issuing Bank for the payment made by it under the Letter of Credit and, to the extent that the Banks agree have not reimbursed the Issuing Bank pursuant to Section 2.4(c), the interest amount of any such payment shall be for the account of the Issuing Bank. Each Bank that has reimbursed the Issuing Bank pursuant to Section 2.4(c) for its Pro Rata Share of any payment made by the Issuing Bank under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of such reimbursement, in the claim of the Issuing Bank against Borrower for reimbursement of principal and interest under this Section 2.4(d) and shall share, in accordance with that pro rata participation, in any principal payment made by Borrower with respect to such claim and in any interest payment made by Borrower (but only with respect to periods subsequent to the date such Bank reimbursed the Issuing Bank) with respect to such claim. The Issuing Bank shall promptly make available to the Administrative Agent, which will thereupon remit to the appropriate Banks, in immediately available funds, any amounts due to the Banks under this Section.
(e) Borrower letters of credit, issued by the Agentmay, pursuant to their respective Commitments up a Request for Loan, request that Advances be made pursuant to Section 2.1(a) to provide funds for the payment required by Section 2.4(d) and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid directly to the Issuing Bank to reimburse it for the payment made by it under the Letter of Credit.
(f) If Borrower fails to make the payment required by Section 2.4(d) within the time period therein set forth, in lieu of the reimbursement to the Issuing Bank under Section 2.4(c) the Issuing Bank may (but is not required to), without notice to or the consent of Borrower, cause Advances to be made by the Banks under the Commitment in an aggregate amount at equal to the amount paid by the Issuing Bank with respect to that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid directly to the Issuing Bank to reimburse it for the payment made by it under the Letter of Credit.
(g) The issuance of any one time outstanding supplement, modification, amendment, renewal, or extension to or of $100,000,000 minus any Letter of Credit shall be treated in all respects the aggregate principal same as the issuance of a new Letter of Credit.
(h) The obligation of Borrower to pay to the Issuing Bank the amount of all then outstanding Surety Bonds issued any payment made by a Surety on behalf the Issuing Bank under any Letter of Credit shall be absolute, unconditional, and irrevocable. Without limiting the foregoing, Borrower's obligations shall not be affected by any of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to following circumstances: (i) any lack of validity or enforceability of the Agent Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; (ii) any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; (iii) the existence of any claim, setoff, defense, or other rights which Borrower may have at any time against the Issuing Bank or any other Creditor, any beneficiary of the Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions; (iv) any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being satisfied untrue or inaccurate in any respect whatsoever; (v) payment by the Issuing Bank under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the letter Letter of credit, Credit; (iivi) the Borrower’s executing existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or any difference between any such Property and delivering the character, quality, quantity, condition, or value of such letter Property as described in such documents; (vii) the time, place, manner, order or contents of credit shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the existence, nature and reimbursement agreements and related extent of any insurance relative thereto; (viii) the solvency or financial responsibility of any party issuing any documents as required in connection with a Letter of Credit; (ix) any failure or delay in notice of shipments or arrival of any Property; (x) any error in the transmission of any message relating to a Letter of Credit not caused by the AgentIssuing Bank, or any delay or interruption in any such message; (xi) any error, neglect or default of any correspondent of the Issuing Bank in connection with a Letter of Credit; (xii) any consequence arising from acts of God, war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Issuing Bank; (xiii) so long as the Issuing Bank in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit (and no payment is made by the Issuing Bank after the expiration date of the Letter of Credit or in amounts greater than the amount thereof), the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Issuing Bank in connection with a Letter of Credit; (xiv) so long as the Issuing Bank in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Issuing Bank in connection with a Letter of Credit; and (iiixv) where the satisfaction of all conditions to the Borrower obtaining a Loan Issuing Bank has acted in the amount of the requested letter of credit. good faith and observed general banking usage, any other circumstances whatsoever.
(i) The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Issuing Bank shall be entitled to .125% of such fee prior the pro- tection accorded to the distribution of the balance of such fee Pro rata Administrative Agent pursuant to the Banks. In additionSection 10.6, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agentmutatis mutandis.
(bj) In Each Letter of Credit which is outstanding under the event Existing Loan Agreement as of the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan Closing Date shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence have been issued under, and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain outstanding under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 Agreement and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditconstitute an Obligation.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Borrower may request the issuance of (i) Letters of Credit in dollars, in form and substance reasonably acceptable to the Administrative Agent and the Issuing Bank, for the account of the Borrower letters or any Subsidiary, at any time and from time to time during the Letter of creditCredit Availability Period; PROVIDED, THAT, any such Letter of Credit shall be issued only if, and each request by the Borrower for the issuance of any Letter of Credit shall be deemed a representation and warranty of the Borrower that, immediately following the issuance of such Letter of Credit, (A) the aggregate Dollar Amount of Letter of Credit Exposure resulting from Letters of Credit issued by Bank One, N.A., does not exceed $25,000,000, and (B) the Agentsum of the Dollar Amount of all aggregate Letter of Credit Exposure, pursuant to their respective Commitments up to an the aggregate amount at any one time outstanding of $100,000,000 minus Swingline Exposure and the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf Revolving Loans does not exceed the aggregate amount of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of creditRevolving Credit Commitments at such time, (ii) Bank One Foreign Currency Letters of Credit, in form and substance reasonably acceptable to the Borrower’s executing Administrative Agent and delivering the Issuing Bank, for the account of the Borrower or any Subsidiary, at any time and from time to time during the Letter of Credit Availability Period; PROVIDED, THAT, any such letter Bank One Foreign Currency Letter of credit Credit shall be issued only if, and reimbursement agreements and related documents as required each request by the AgentBorrower for the issuance of any such Bank One Foreign Currency Letter of Credit shall be deemed a representation and warranty of the Borrower that, immediately following the issuance of such Bank One Foreign Currency Letter of Credit (A) the aggregate Dollar Amount of aggregate Letter of Credit Exposure resulting from Letters of Credit issued by Bank One, N.A., does not exceed $25,000,000 and (B) the sum of the Dollar Amount of all aggregate Letter of Credit Exposure, the aggregate Swingline Exposure and the aggregate principal amount of outstanding Revolving Loans does not exceed the aggregate amount of the Revolving Credit Commitments at such time, and (iii) ABN AMRO Foreign Currency Letters of Credit, in form and substance reasonably acceptable to the satisfaction Administrative Agent and the Issuing Bank, for the account of the Borrower or any Subsidiary, at any time and from time to time during the Letter of Credit Availability Period; PROVIDED, THAT, any such ABN AMRO Foreign Currency Letter of Credit shall be issued only if, and each request by the Borrower for the issuance of any such ABN AMRO Foreign Currency Letter of Credit shall be deemed a representation and warranty of the Borrower that, immediately following the issuance of such ABN AMRO Foreign Currency Letter of Credit, (A) the aggregate Dollar Amount of Foreign Currency Letter of Credit Exposure resulting from the ABN AMRO Foreign Currency Letters of Credit does not exceed $46,500,000 and (B) the sum of the Dollar Amount of all conditions aggregate Letter of Credit Exposure, the aggregate Swingline Exposure and the aggregate principal amount of outstanding Revolving Loans does not exceed the aggregate amount of the Revolving Credit Commitments at such time. For purposes hereof, the "issuance" of a Letter of Credit includes the amendment, renewal or extension of a Letter of Credit.
(b) Each Letter of Credit shall expire no later than the earlier of (i)(A) in the case of standby Letters of Credit, three years after the date of issuance of such Letter of Credit, subject to extension (including pursuant to an automatic renewal provision in customary form), and (B) in the case of trade Letters of Credit, 270 days after the date of issuance of such Letter of Credit and (ii) the fifth Business Day prior to the Revolving Credit Maturity Date.
(c) Each issuance of any Letter of Credit shall be made on at least two Business Days' prior irrevocable written or telecopy notice (such notice to be delivered by 12:00 noon, Eastern Standard Time) from the Borrower obtaining (or such shorter notice as shall be acceptable to the Issuing Bank) to the Administrative Agent and the Issuing Bank specifying whether such Letter of Credit is a Loan in standby Letter of Credit or a trade Letter of Credit, the date of issuance, the date on which such Letter of Credit is to expire, the amount of such Letter of Credit, whether such Letter of Credit is to be issued in dollars or a Foreign Currency (and if such Letter of Credit is to be issued in a Foreign Currency, the requested letter applicable Foreign Currency and whether such Letter of creditCredit is to be a Bank One Foreign Currency Letter of Credit or an ABN AMRO Foreign Currency Letter of Credit), the name and address of the beneficiary of such Letter of Credit, and such other information as may be necessary or desirable to complete such Letter of Credit; PROVIDED, THAT, with respect to ABN AMRO Foreign Currency Letters of Credit any such Letter of Credit issued in the same Foreign Currency shall be issued in amounts that shall not be less than the approximate Dollar Equivalent of US $2,000,000 or multiples thereof (or such other amounts as agreed to by the Issuing Bank in its sole discretion), however, with respect to ABN AMRO Letters of Credit to be issued in Singapore dollars, no such Letter of Credit shall be issued in an amount that is less than the approximate Dollar Equivalent of U.S. $250,000 or multiples thereof. The Issuing Bank will give the Administrative Agent prompt notice of the issuance and amount of such Letter of Credit and the expiration date of such Letter of Credit (and the Administrative Agent shall give prompt notice thereof to the Syndication Agent and each Lender). During the Letter of Credit Availability Period, the Issuing Bank also will give the Administrative Agent (i) if and when requested, notice of the amount available to be drawn under each outstanding Letter of Credit and (ii) prompt notice of any payment or disbursement that has been or will be made under any Letter of Credit. Each Letter of Credit (other than Foreign Currency Letters of Credit) issued hereunder will be subject to the Uniform Customs and Practices for Documentary Credits, as in effect from time to time. Each Foreign Currency Letter of Credit issued hereunder shall be subject to and incorporate the Uniform Customs and Practice for Documentary Credits, 1993 Revision, International Chamber of Commerce Publication No. 500 (the "UCP") (other than Articles 41 and 43 thereof with respect to standby Letters of Credit); to the extent not inconsistent with the UCP, Article 5 of the Uniform Commercial Code as adopted in Ohio ("ARTICLE 5"); and Section 5-102(a)(10) of the 1995 Official Text with comments of the Uniform Commercial Code Revised Article 5, as promulgated by the American Law Institute and National Conference of Commissioners on Uniform State Laws ("REVISED ARTICLE 5"), which section of Revised Article 5 shall govern and control over any inconsistent provision of the UCP or Article 5.
(d) By the issuance of a Letter of Credit and without any further action on the part of the Issuing Bank, the Agents or the Lenders in respect thereof, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender's Applicable 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 Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, on behalf of the Issuing Bank, in accordance with Section 2.03(e), such Lender's Applicable Percentage of the amount of each Letter of Credit Disbursement in the currency of such disbursement made by the Issuing Bank and not reimbursed by the Borrower when due in accordance with Section 2.23(g).
(e) Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to Section 2.23(d) 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 Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(f) The Borrower shall pay a fee for each letter of credit to the Agent Administrative Agent, for the Pro rata benefit account of the BanksLenders and the Issuing Bank, upon issuance as applicable, a nonrefundable Letter of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, Credit Fee and Fronting Fee in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior accordance with Section 2.06(b). In addition to the distribution of the balance of such fee Pro rata to the Banks. In additionforegoing fees and commissions, the Borrower shall pay to or reimburse the Agent upon issuance Issuing Bank for such normal and customary costs and expenses, including, without limitation, administrative, issuance, amendment, payment and negotiation charges, as are incurred or charged by the Issuing Bank in issuing, effecting payment under, amending or otherwise administering any Letter of each letter Credit (including any Letter of credit provided for under this Section 3.01 an issuance fee of $500 Credit issued for the Agent’s services in issuing the letter account of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentSubsidiary).
(bg) In The Borrower hereby agrees to reimburse the event Issuing Bank for any payment or disbursement made by the Agent pays Issuing Bank under any amount under or on Letter of Credit (including any Letter of Credit issued for the account of a letter Subsidiary), by making payment in immediately available funds, to the Administrative Agent on the same Business Day after receipt of credit notice of such payment or disbursement (or notice that such payment or disbursement will be made), in the amount and currency of such payment or disbursement, plus interest on the amount so paid or disbursed by the Agent under or on account of a letter of credit being herein called a “Draw”)Issuing Bank, a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to the greater of (i) if paid by such Bank, the overnight Federal Funds Effective Rate rate applicable to ABR Loans pursuant to Section 2.07 or (ii) the cost on a per annum basis to the Issuing Bank of the funds so paid or disbursed under the Letter of Credit plus the Applicable LIBOR Margin (such cost plus such margin being referred to herein as the "Cost of Funds"); PROVIDED, THAT, if paid such amount is not reimbursed prior to 2:00 p.m., Eastern Standard Time, on the same Business Day after receipt by the Borrower of the notice of such payment or disbursement (or notice that such payment or disbursement will be made), interest shall thereafter accrue on such unreimbursed amount at a rate per annum equal to the greater of (i) the rate applicable to ABR Loans during such period pursuant to Section 2.07, plus 2.00% or (ii) the Cost of Funds plus 2.00%. The Administrative Agent shall promptly pay any such amounts received by it to the Issuing Bank. Borrower hereby agrees to indemnify and hold harmless each Agent, each Issuing Bank, and each Lender (in any capacity hereunder) from and against any and all loss, liability, cost, and expense arising at any time or times from the exchange of one or more currencies for one or more other currencies hereunder.
(h) The Borrower's obligation to reimburse Letter of Credit Disbursements as provided in Section 2.23(g) shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Amended Agreement under any and all circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or any other Loan Document or any term or provision therein;
(ii) the existence of any claim, setoff, defense or other right which the Borrower, any Subsidiary or any other person may at any time have against the then applicable rate beneficiary under any Letter of interestCredit, calculated the Issuing Bank, the Agents, any Lender or any other person, whether in accordance connection with Article IVthis Amended Agreement, any other Loan Document or any other related or unrelated agreement or transaction;
(iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or failing to comply with the Uniform Customs and Practices for Documentary Credits, as in effect from time to time, 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 which does not comply with the terms of such Letter of Credit;
(v) any amendment, waiver or consent in respect of this Amended Agreement or any other Loan Document; and
(vi) any other act or omission or delay of any kind or any other circumstance or event whatsoever, whether or not similar to any of the foregoing and whether or not foreseeable, that might, but for the Revolving Loans. In the event no Revolving Loan provisions of this Section 2.23(h), constitute a legal or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to equitable discharge of the Borrower's obligations hereunder.
(i) Without limiting the amount generality of each Drawthe provisions of the foregoing paragraph (h), together with interest thereon, against any account it is expressly understood and agreed that the absolute and unconditional obligation of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled hereunder to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “reimburse Letter of Credit Request”)Disbursements will not be excused by the gross negligence or willful misconduct of the Issuing Bank. Each Letter However, the preceding sentence and the provisions of Credit Request Section 2.23(h) shall include an application for such letter not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of credit and any other documents that direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(eBorrower to the extent permitted by applicable law) The delivery of each Letter of Credit Request shall be deemed a representation and warranty suffered by the Borrower that such letter are caused by the Issuing Bank's bad faith, gross negligence or willful misconduct in determining whether drafts and other documents presented under a Letter of credit as requested Credit comply with the terms thereof. It is understood that the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary and, in making any payment under any Letter of Credit (i) the Issuing Bank's exclusive reliance in good faith on the documents presented to it under such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to any and all matters set forth therein, including reliance on the aggregate principal amount of all then outstanding Surety Bonds. The Agent shallany draft presented under such Letter of Credit, if such document on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required its face appears to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.order,
Appears in 1 contract
Letters of Credit. (a) The Banks agree During the Availability Period, at the request of the Borrower, the L/C Lenders, pro rata according to make available to the Borrower their Line of Credit Commitment Percentages, will issue:
(i) commercial letters of credit, issued by credit with a maximum maturity not to extend beyond the Agent, pursuant L/C Expiration Date. Each commercial letter of credit will require drafts payable at sight.
(ii) standby letters of credit with a maximum maturity not to their respective Commitments up to an aggregate extend beyond the L/C Expiration Date.
(b) The amount of the letter[s] of credit outstanding at any one time outstanding (including the drawn and unreimbursed amounts of the letter[s] of credit) may not exceed Two Million Dollars ($100,000,000 minus 2,000,000).
(c) In calculating the aggregate principal amount outstanding under the Line of all then outstanding Surety Bonds issued by a Surety on behalf Credit Loan, the calculation shall include the amount of the Parent pursuant to an Indemnity Agreement. The availability of any letters of credit will be subject to outstanding, including amounts drawn on any letters of credit and not yet reimbursed.
(d) The Borrower agrees:
(i) the Agent being satisfied with the terms of the Any sum drawn under a letter of credit, credit shall be added to the principal amount outstanding under the L/C Note and will bear interest and be due as described in the L/C Note.
(ii) If there is a default under this Agreement, upon written demand from Agent to immediately prepay and make the Borrower’s executing and delivering such L/C Lenders whole for any outstanding letters of credit.
(iii) The issuance of any letter of credit and reimbursement agreements any amendment to a letter of credit is subject to the Agent's written approval, which approval shall not be unreasonably withheld, conditioned or delayed and related documents as required by must be in form and content reasonably satisfactory to the Agent and in favor of a beneficiary acceptable to the Agent, in its reasonable discretion.
(iv) To sign the Agent's then current form Application and Agreement for Commercial Letter of Credit. Borrower acknowledges that Agent has previously delivered to Borrower the form of such agreements in effect on the date hereof.
(iiiv) To pay: (x) a fronting fee to Agent for issuance of a letter of credit equal to 0.125% of the satisfaction of all conditions to the Borrower obtaining a Loan in the face amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banksissued, payable upon issuance of each letter of credit andcredit, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, plus Agent’s other customary fees that the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, notifies the Borrower shall pay to the Agent upon issuance of each letter of credit provided will be charged for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All and processing letters of credit shall be in such form for the Borrower, payable within ten Business Days after demand by Agent and substance as (y) a fee equal to 2.00% per annum on the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated aggregate amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter all outstanding letters of credit, reimbursement agreements payable quarterly, in arrears on the tenth Business Day after the end of each March, June, September and other related documents as may be required by December, commencing with the Agent.
(b) In first such date to occur after the event the Agent pays any amount under or on account issuance of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. In order to assist the Borrowers in establishing or opening (ai) The Banks agree documentary Letters of Credit with an Issuing Bank to make available cover the purchase and importation of Inventory and (ii) standby Letters of Credit with an Issuing Bank to cover such other matters as the Borrowers may so decide (provided, however, that such Standby Letters of Credit may not be used for the purchase of Inventory or to secure present or future Trade Accounts Payable), the Borrowers have requested the Agent, acting on behalf of the Lenders, to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts or acceptances thereunder through the issuance of the Letters of Credit Guaranty, thereby lending the Lenders' credit to the Borrower letters of creditBorrowers and the Lenders, issued acting through the Agent, have agreed to do so. These arrangements shall be handled by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety acting on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be Lenders, subject to (i) the terms and conditions set forth below.
5.1 Within the Line of Credit and Availibility, the Agent being satisfied with the terms on behalf of the letter Lenders shall assist each of creditthe Borrowers in obtaining Letters of Credit in an amount outstanding not to exceed, (ii) at any time, the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the outstanding amount of the requested letter Letter of creditCredit Sub-Line. The Borrower shall pay a fee for each letter of credit to It is understood that the Agent for the Pro rata benefit of the Banksterm, upon issuance form and purpose of each letter Letter of credit andCredit and all documentation in connection therewith, thereafterand any amendments, upon the annual anniversary of the issuance of each such letter of credit remaining outstandingmodifications or extensions thereof, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall must be entitled mutually acceptable to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks Issuing Bank and the Borrower agreeBorrowers. The Any and all outstanding Letters of Credit issued hereunder for any Borrower shall not be entitled reserved dollar for dollar from Borrowers' Availability as part of the Availability Reserve. Notwithstanding anything herein to obtain letters the contrary, upon the occurrence of credit from a Default and/or an Event of Default, the Agent's assistance with respect to any Letters of Credit shall be in the Agent's sole discretion unless such Event of Default is waived by the Agent unless in writing, or such Default is cured to the Borrower is then entitled Agent's satisfaction in the exercise of its reasonable business judgment during any applicable grace period.
5.2 The Agent, acting on behalf of the Lenders, shall have the right, without notice to obtain Loans from any of the Banks in an amount not less than Borrowers, to charge the stated Borrowers' Revolving Loan Account with the amount of the letter any and all indebtedness, liability or obligation of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required any kind paid or incurred by the Agent.
Agent and/or the Lenders under the Letters of Credit Guaranty at the earlier of (ba) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under the Letters of Credit Guaranty; or on account (b) the termination of a letter of credit being herein called a “Draw”), a this Financing Agreement. Any amount charged to the Borrowers' Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request Accounts shall be deemed a representation Revolving Loan hereunder and warranty by shall incur interest at the Borrower that such letter of credit as requested rate provided in such Letter of Credit Request may be issued in accordance with and will not violate the requirements Section 8.1 of this Section 3.01 Financing Agreement.
5.3 Each of the Borrowers jointly and shall include a representation and warranty as to severally unconditionally indemnifies the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, Lenders and holds the Agent shall not have and the Lenders harmless from any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken all loss, claim or omitted to be taken liability incurred by the Agent with respect arising from any transactions or occurrences relating to a letter Letters of credit issued Credit established or opened for any Borrower's account, the collateral relating thereto and any drafts or acceptances thereunder, and all Obligations thereunder, including any such loss or claim due to any errors, omissions, negligence, misconduct or action taken by it if taken any Issuing Bank, other than for any such loss, claim or omitted in liability arising out of the absence of gross negligence or willful misconduct, shall not create any resulting liability for misconduct by the Agent.
(g) Immediately prior to Agent and/or the effectiveness of this Agreement, the outstanding letters of credit issued Lenders under the 2002 Letters of Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters Guaranty. This indemnity shall survive termination of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.this
Appears in 1 contract
Samples: Financing Agreement (Gart Sports Co)
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions set forth herein, the Borrower letters may request the issuance of creditLetters of Credit on a sight basis for its own account or for the account of any of its subsidiaries, issued by in a form reasonably acceptable to the AgentAdministrative Agent and the relevant Issuing Bank, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding and from time to time on or after the Effective Date and prior to the earlier to occur of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied termination of its L/C Commitment and (ii) the date that is five Business Days prior to the latest 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 violates the terms and conditions of this Agreement or if any Letter of Credit requested to be issued (or amended, as applicable) would have a stated expiry date after the latest Revolving Credit Maturity Date and the aggregate face amount of all Letters of Credit having stated expiry dates after such Revolving Credit Maturity Date would exceed the amount of the Revolving Credit Commitments that have maturities after such Revolving Credit Maturity Date, unless, with the terms consent of the letter relevant Issuing Bank, the Borrower provides an L/C Backstop in form and substance reasonably satisfactory to such Issuing Bank from a financial institution in respect of creditsuch overage on or prior to the date that is five (5) Business Days prior to the Revolving Credit Maturity Date; provided that, notwithstanding the foregoing, such Issuing Bank may require cash collateralization in lieu of an L/C Backstop in its sole discretion. Letters of Credit may be denominated in one or more Available Currencies. On the Effective Date, each Existing Letter of Credit shall be deemed to be a Letter of Credit issued hereunder for all purposes of this Agreement and the other Loan Documents and for all purposes hereof will be deemed to have been issued on the Effective 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 Borrower shall deliver a written notice (a “Letter of Credit Application”) to the relevant Issuing Bank and the Administrative Agent (unless waived by the relevant Issuing Bank, no later than three Business Days in advance of the requested date of 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 Borrower’s executing and delivering date on which such letter Letter of credit and reimbursement agreements and related documents as required by the AgentCredit is to expire (which shall comply with paragraph (c) below), and (iii) the satisfaction amount of all such Letter of Credit, if applicable pursuant to Section 1.10, (iv) the Available 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 Borrower shall be deemed to represent and warrant that, after giving effect to such issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed $100,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not exceed the Total Revolving Credit Commitment. 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 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 Borrower obtaining and the Administrative Agent a Loan in true and complete copy of such Letter of Credit or amendment.
(c) Each Letter of Credit shall expire at the amount close of business on the earlier of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to date one year after the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary date of the issuance of each such letter Letter of credit remaining outstanding, in Credit and the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee date that is five Business Days prior to the distribution latest Revolving Credit Maturity Date, unless such Letter of Credit expires by its terms on an earlier date (such date of expiration, the “Letter of Credit Expiration Date”) or an L/C Backstop exists with respect to such Letter of Credit; provided, however, that a Letter of Credit may, upon the request of the balance 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 five Business Days prior to the latest Revolving Credit Maturity Date unless an L/C Backstop exists with respect to Letter of Credit) 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 fee 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 be under any obligation to 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 2.25(l) or otherwise) or (ii) 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 (or an amendment to a Letter of Credit increasing the amount or extending the term thereof) and without any further action on the part of a Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Revolving Credit Lender, and each Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Pro rata 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 BanksAdministrative Agent, for the account of such Issuing Bank, such Xxxxxx’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(g). In additionEach 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 2.22 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 2.25(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 upon issuance an amount equal to such L/C Disbursement not later than 12:00 noon on the immediately following Business Day; provided that the Borrower may, subject to satisfaction of each letter of credit provided for under this the conditions specified in Section 3.01 4.01, request in accordance with Section 2.03 or 2.23 that such payment be financed with an issuance fee of $500 for ABR Revolving Credit Borrowing or Swingline Loan in an equivalent amount, and to the Agentextent so financed, the Borrower’s services in issuing the letter of credit. No letter of credit obligation to make such payment shall be issued having an expiration date after discharged and replaced by the Termination Dateresulting ABR Revolving Credit Borrowing or Swingline Loan, as applicable. All letters of credit Notwithstanding the foregoing, each Revolving Credit Lender’s obligations specified in Section 2.25(e) shall be in such form and substance as continue to the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and extent that the Borrower has executed and delivered not reimbursed such letter of credit, L/C Disbursement or such reimbursement agreements and other related documents as may be required by the Agent.
(b) obligation has not been converted to a Revolving Loan. In the event the Agent pays any amount under or on account case of a letter Letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”)Credit denominated in an Alternate Currency, a Revolving Loan shall be deemed to be made to the Borrower by each shall reimburse the relevant Issuing Bank to in the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) relevant Alternate Currency on the date of such notice andL/C Disbursement. The Issuing Bank shall notify the Borrower of the amount of the drawing promptly following the determination thereof.
(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 in accordance with the terms of this Agreement, under any and all circumstances whatsoever, and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, this Agreement, or any term or provision therein, (ii) 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, (iii) payment by the respective Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not later than 1:00 p.m. comply with the terms of such Letter of Credit, (Cleveland timeiv) 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 date failure of any draft or other document presented under a Letter of Credit to comply with the terms of such noticeLetter of Credit or (v) any other event or circumstance whatsoever, each Bank will make available whether or not similar to the Agent its Pro rata portion any of the Draw deemed to be foregoing, that might, but for the provisions of this Section 2.25(f), constitute a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand thereforlegal or equitable discharge of, or provide a right of setoff against, the Agent Borrower’s obligations hereunder. Neither the Administrative Agent, the Revolving Credit Lenders nor any Issuing Bank, nor any of their respective Related Parties, shall promptly notify have any liability or responsibility by reason of or in connection with the Borrowerissuance 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 in the preceding sentence), and or any error, omission, interruption, loss or delay in transmission or delivery of any draft, document, 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, any error in translation or any consequence arising from causes beyond the Borrower control of the respective Issuing Bank, provided that the foregoing shall immediately pay not be construed to excuse such corresponding amount to the Agent. The Agent shall also be entitled to recover Issuing Bank from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent liability to the Borrower to the date such corresponding amount is recovered extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice Borrower to the Borrowerextent permitted by applicable law) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty suffered by the Borrower that are caused by such letter Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of credit Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence, bad faith or willful misconduct on the part of an Issuing Bank (as requested determined by a final non-appealable judgment of a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised 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 which appear on their face to be in substantial compliance with the terms of a Letter of Credit, an 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 Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank Credit.
(ii) Each Lender and the Borrower written notice agree that, in paying any drawing under a Letter of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of creditCredit, the Agent relevant Issuing Bank shall not have any obligation relative 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 Banks other than to determine that validity or accuracy of any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with document or the requirements authority of the letter Person executing or delivering any such document. None of credit. Any the Issuing Banks, any Related Party of such Issuing Bank 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 to be taken by in connection herewith at the Agent request or with respect to a letter the approval of credit issued by it if the Lenders or the Required Lenders, as applicable, (y) any action taken or omitted in the absence of gross negligence or willful misconductmisconduct or (z) the due execution, shall not create effectiveness, validity or enforceability of any resulting liability for the Agent.
(g) Immediately prior document or instrument related to the effectiveness any Letter of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.or
Appears in 1 contract
Samples: Credit Agreement (Dayforce, Inc.)
Letters of Credit. (a) The Banks agree to make available Upon the terms and subject to the Borrower letters conditions of creditthis Agreement, issued by the AgentIssuing Bank shall, pursuant from time to their respective Commitments up to an aggregate amount at any time during the period from the Restated Agreement Date through the tenth Business Day preceding the Maturity Date, issue one time outstanding or more Letters of $100,000,000 minus Credit for the account of the Borrower; provided, that the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf Letter of Credit Participations shall not exceed at any time the Parent pursuant to an Indemnity Agreement. The availability lesser of letters of credit will be subject to (iA) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the aggregate amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to Commitments at such time minus the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the aggregate unpaid principal amount of the Indicated Spread for Revolving all Loans under the LIBOR Rate Option on the stated amount and Swing Loans outstanding at such time and (B) $15,000,000. Each Letter of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit Credit shall be in such a form and substance shall contain such terms as shall be reasonably satisfactory to the Agent, Issuing Bank. Upon the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount effectiveness of the letter of credit requested, the other conditions of Section 5.03 amendment and restatement of this Agreement have been satisfied as if of the Borrower was obtaining a Revolving Loan Restated Agreement Date, all outstanding Letters of Credit (as defined in this Agreement prior to such amendment and the Borrower has executed and delivered such letter restatement) shall be deemed to be Letters of credit, reimbursement agreements and other related documents as may be required by the AgentCredit issued hereunder.
(b) In Each Letter of Credit shall be denominated only in Dollars and shall expire on or before the first anniversary of the issuance thereof (provided, that, any Letter of Credit may include terms that provide for the automatic renewal thereof for successive one-year periods so long as such terms include a provision whereby the Issuing Bank shall be entitled to elect that any such renewal shall not occur if the conditions set forth in Section 2.02(b) and (c) could not be fulfilled at such time, and the Issuing Bank shall give notice of such election to the beneficiary thereof) and in any event not later than the Agent pays any amount under Business Day preceding the Maturity Date. Any extension of the expiry date, or on account automatic renewal, of a letter Letter of credit Credit to a date beyond the first anniversary of the issuance thereof shall constitute an "issuance" of such 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.
(c) Letters of Credit shall be issued only on a Business Day, and shall be used for the payment by corporate purposes of the Agent under Borrower or on account the Subsidiaries.
(d) The Borrower shall request the issuance of a letter Letter of credit being herein called a “Draw”)Credit by furnishing to the Administrative Agent and the Issuing Bank, a Revolving Loan at least five Business Days before the requested date of such issuance, notice thereof in the form of Schedule 1.02 or such other notice as shall be reasonably satisfactory to the Issuing Bank (and, in the case of any such notice, the Borrower shall be deemed to have 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 Letter of 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 to the Borrower by each Bank thereunder, to the extent of such Bank's Participating Bank Percentage thereof.
(f) The Issuing Bank shall promptly notify the Borrower of its Pro rata share receipt of each Drawing request with respect to a Letter of Credit, stating the date and amount of the Total Revolving Loan Commitments 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 the Agent for available funds the amount of the Draw. The Agent shall notify each payment made by the Issuing Bank of the occurrence and payment of a Draw no later than 12:00 p.m. with respect to such Drawing, together (Cleveland time) but only if such Drawing is not reimbursed on the date of such day notice and, not later than 1:00 p.m. (Cleveland timeis received) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, with interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent thereon at a rate per annum equal to (i) if paid by the Base Rate as in effect from time to time plus the applicable Base Rate Margin until the day such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loansreimbursement is made. In the event no Revolving Loan or only a partial Revolving Loan is deemed that the Borrower shall fail to make any such payment when due and for so long as such failure shall be madecontinuing, the Agent is hereby authorized to charge (without prior Issuing Bank may give notice of such failure to the Borrower) Administrative Agent and each Participating Bank, which notice shall include, in the amount case of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstandinga Participating Bank, the amount of Revolving Loans that such Participating Bank's Participating Bank Percentage of such Drawing, whereupon each such Participating Bank (other than the Borrower is entitled Issuing Bank) shall promptly remit such amount to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part Administrative Agent for the account of the Revolving Loans, except Issuing Bank as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loansprovided in Section 1.03(h).
(dh) Whenever Each Participating Bank (other than the Issuing Bank) shall, in the event it receives the notice from the Issuing Bank pursuant to Section 1.03(g) at or before 12:00 noon (New York time) on any Business Day, fund its participation in any unreimbursed Drawing by remitting to the Administrative Agent, no later than 2:00 p.m. (New York time) on such day, 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 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 under this Section 1.03(h), and any amount payable by the Administrative Agent to the Issuing Bank 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 payment by a Participating Bank to the Administrative Agent, or 4:00 p.m. (New York time), in the case of any such payment by the Administrative Agent to the Issuing Bank, on such day) in accordance with this Section 1.03(h) until the date it is received by the Issuing Bank at a rate equal to the Federal Funds Rate until (and including) the third Business Day after the date due and thereafter at the Base Rate. Each Participating Bank shall, upon the demand of the Issuing Bank, reimburse the Issuing Bank, to the extent the Issuing Bank has not been reimbursed by the Borrower desires after demand therefor, for the 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 collection of amounts due under, the administration of, and the preservation and enforcement of any rights conferred by, the Letters of Credit or the performance of the Issuing Bank's obligations under this Agreement in respect thereof (other than its obligation to make Loans in its capacity as a Bank or Swing Loans in its capacity as the Swing Loan Lender), to the extent of such Participating Bank's Participating Bank Percentage (as of the time such costs and expenses are incurred) of the amount of such costs and expenses. The Issuing Bank shall refund any costs and expenses reimbursed by such Participating Bank that are subsequently recovered from the Borrower in an amount equal to such Participating Bank's Participating Bank Percentage thereof.
(i) The obligation of each Participating Bank to 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 made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary may have at any time against a letter beneficiary named in a Letter of credit Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be issuedacting), the Administrative Agent, the Issuing Bank, any Participating Bank or any other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between the Borrower or any Subsidiary and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under 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) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Loan Documents; or
(v) the occurrence of any Default.
(i) Without affecting any rights the Participating Banks may have under Applicable Law, the Borrower agrees that none of the Participating Banks, the Issuing Bank, the Administrative Agent or their respective officers or directors shall give be liable or responsible for, and the obligations of the Borrower to the Participating Banks, the Issuing Bank and the Administrative Agent written notice hereunder shall not in any manner be affected by: (including by way of facsimile transmissionA) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as the use that may be acceptable to the Agent) prior to the proposed date made of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “any Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and or the proceeds thereof by the beneficiary thereof or any other Person or any acts or omissions of such beneficiary or any other Person; (B) the validity or genuineness of documents that the Agent customarily requires presented in connection therewith. The Agent shall promptly notify each Bank with any Drawing, or of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that any endorsements thereon, even if such letter of credit as requested documents should, in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shallfact, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required prove to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken in any or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken all respects, invalid, fraudulent or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.forged; or
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters terms and conditions of creditthis Agreement, issued by the AgentRevolving Loan Line Portions may be utilized, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus upon the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf request of the Parent pursuant Company, in addition to the Revolving Loans provided for by Section 2.01 hereof, for the Issuing Banks to consider the issuance, on an Indemnity Agreement. The availability UNCOMMITTED AND ABSOLUTELY DISCRETIONARY basis, of letters of credit will be subject to (collectively, “Letters of Credit”) for account of the Company, provided that in no event shall: (i) the Agent being satisfied aggregate amount of all Credit Exposure exceed the lesser of (x) the Borrowing Base plus, with respect to any commercial Letter of Credit to be issued to secure the terms purchase price of Inventory, 80% of the letter cost of creditsuch Inventory that will be Eligible Inventory Ordered Under L/C once such Letter of Credit is issued, and (y) the aggregate amount of the Revolving Loan Line Portions as in effect from time to time, (ii) the Borrower’s executing and delivering such letter outstanding aggregate amount of credit and reimbursement agreements and related documents as required by all Letter of Credit Liabilities exceed $35,000,000 (the Agent“L/C Cap”), and (iii) the satisfaction outstanding aggregate amount of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Liabilities arising out of standby Letters of Credit exceed $3,500,000, and (iv) the expiration date of any Letter of Credit Request shall include an application for such letter extend beyond the Revolving Credit Line Portion Termination Date, provided, that Letters of credit and any other documents that Credit with respect to which the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery Liabilities in respect thereof are not in excess of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request $20,000,000 may be issued that expire after the Revolving Credit Line Termination Date then in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shalleffect, on but before the date of each issuance of or amendment or modification to a letter of credit by itthat is ninety (90) days thereafter. NEITHER ANY ISSUING BANK NOR ANY BANK SHALL HAVE ANY COMMITMENT OR OBLIGATION TO PARTICIPATE IN ANY LETTER OF CREDIT AND/OR ISSUE ANY LETTER OF CREDIT UNLESS AND UNTIL SUCH ISSUING BANK OR SUCH BANK AFFIRMATIVELY COMMITS OR IS DEEMED TO HAVE COMMITTED UNDER SECTION 2.03(u) TO SUCH REQUESTED LETTER OF CREDIT. NOTHING CONTAINED HEREIN SHALL OTHERWISE COMMIT OR OBLIGATE ANY ISSUING BANK OR SUCH BANK, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditOR BE INTERPRETED AS A PROMISE OR COMMITMENT BY ANY ISSUING BANK OR SUCH BANK TO ISSUE OR ELECT TO ISSUE ANY SUCH LETTER OF CREDIT OR PARTICIPATE OR ELECT TO PARTICIPATE IN ANY SUCH LETTER OF CREDIT UNLESS AND UNTIL SUCH ISSUING BANK OR SUCH BANK AFFIRMATIVELY COMMITS OR IS DEEMED TO HAVE COMMITTED UNDER SECTION 2.03(u) TO SUCH REQUESTED LETTER OF CREDIT.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters terms and conditions of creditthis Agreement, and provided that no Default or Event of Default has occurred and is continuing, Lender will, upon Borrower's request, issue one or more Letters of Credit during the Revolving Credit Commitment Period for the account of Borrower; provided that the aggregate face amount of such Letters of Credit to be issued by shall not exceed the Agent, Revolving Credit Available Loan Amount; and further provided that the aggregate face amount of all Letters of Credit issued pursuant to their respective Commitments up to an aggregate amount this Section 2.08 shall not exceed $1,500,000.00 at any one time outstanding of $100,000,000 minus time. During the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety Revolving Credit Commitment Period Borrower shall give Lender written notice executed on behalf of Borrower by any Authorized Financial Officer of Borrower (the Parent pursuant to an Indemnity Agreement. The availability "Notice of letters Credit Issuance") of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon any proposed issuance of each letter a Letter of credit and, thereafter, upon Credit. Such Notice of Credit Issuance shall be in substantially the annual anniversary form of Exhibit D attached hereto. Such Notice of Credit Issuance shall be revocable prior to the issuance of each the Letter of Credit; provided, however, if such letter of credit remaining outstandingnotice is revoked, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance Lender a fee of $500 for 300.00. Each Notice of Credit Issuance, except with respect to Letters of Credit to be opened on the Agent’s services in issuing the letter of credit. No letter of credit Closing Date, shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled delivered to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount Lender not less than two (2) Business Days before the stated amount requested date of the letter issuance thereof. Additionally, each Notice of credit requested, the other conditions Letter of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has Credit Issuance shall be accompanied by an Application executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made Company relating to the Borrower by each Bank to the extent subject Letter of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages heretoCredit. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date issuance of issuance (which any Letter of Credit, Lender shall be a Cleveland Banking Day)request that Borrower provide additional information on or confirmation of the Borrowing Base, which written notice Borrower agrees to provide same and Lender shall be in the form of Exhibit E hereto (each, a “not issue any Letter of Credit Request”)covered by the Notice of Letter of Credit Issuance until Lender is satisfied with Borrower's determination of the Borrowing Base. Each Letter of Credit Request shall include an application for be on substantially such letter of credit terms as Borrower may specify in the relevant Application and any other documents that must be in form and substance satisfactory to Lender and shall have a fixed expiration date no later than 1:00 P.M. (Houston, Texas time) one (1) year from the Agent customarily requires in connection therewithissuance thereof. The Agent shall promptly notify each Bank of each Letter Existing Letters of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of for all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall purposes be deemed to be, and hereby are converted into, outstanding letters of credit hereunderhave been issued pursuant to this Section 2.08.
Appears in 1 contract
Samples: Credit Agreement (Dril-Quip Inc)
Letters of Credit. In order to assist the Borrowers in establishing or opening (ai) The Banks agree documentary Letters of Credit with an Issuing Bank to make available cover the purchase and importation of Inventory and (ii) standby Letters of Credit with an Issuing Bank to cover such other matters as the Borrowers may so decide (provided, however, that such Standby Letters of Credit may not be used for the purchase of Inventory or to secure present or future Trade Accounts Payable), the Borrowers have requested the Agent, acting on behalf of the Lenders, to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts or acceptances thereunder through the issuance of the Letters of Credit Guaranty, thereby lending the Lenders' credit to the Borrower letters of creditBorrowers and the Lenders, issued acting through the Agent, have agreed to do so. These arrangements shall be handled by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety acting on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be Lenders, subject to (i) the terms and conditions set forth below.
5.1 Within the Line of Credit and Availibility, the Agent being satisfied with the terms on behalf of the letter Lenders shall assist each of creditthe Borrowers in obtaining Letters of Credit in an amount outstanding not to exceed, (ii) at any time, the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the outstanding amount of the requested letter Letter of creditCredit Sub-Line. The Borrower shall pay a fee for each letter of credit to It is understood that the Agent for the Pro rata benefit of the Banksterm, upon issuance form and purpose of each letter Letter of credit andCredit and all documentation in connection therewith, thereafterand any amendments, upon the annual anniversary of the issuance of each such letter of credit remaining outstandingmodifications or extensions thereof, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall must be entitled mutually acceptable to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks Issuing Bank and the Borrower agreeBorrowers. The Any and all outstanding Letters of Credit issued hereunder for any Borrower shall not be entitled reserved dollar for dollar from Borrowers' Availability as part of the Availability Reserve. Notwithstanding anything herein to obtain letters the contrary, upon the occurrence of credit from a Default and/or an Event of Default, the Agent's assistance with respect to any Letters of Credit shall be in the Agent's sole discretion unless such Event of Default is waived by the Agent unless in writing, or such Default is cured to the Borrower is then entitled Agent's satisfaction in the exercise of its reasonable business judgment during any applicable grace period.
5.2 The Agent, acting on behalf of the Lenders, shall have the right, without notice to obtain Loans from any of the Banks in an amount not less than Borrowers, to charge the stated Borrowers' Revolving Loan Account with the amount of the letter any and all indebtedness, liability or obligation of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required any kind paid or incurred by the Agent.
Agent and/or the Lenders under the Letters of Credit Guaranty at the earlier of (ba) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under the Letters of Credit Guaranty; or on account (b) the termination of a letter of credit being herein called a “Draw”), this Financing Agreement. Any amount charged to the Borrowers' Revolving Loan Accounts shall be deemed a Revolving Loan hereunder and shall incur interest at the rate provided in Section 8.1 of this Financing Agreement.
5.3 Each of the Borrowers jointly and severally unconditionally indemnifies the Agent and the Lenders and holds the Agent and the Lenders harmless from any and all loss, claim or liability incurred by the Agent arising from any transactions or occurrences relating to Letters of Credit established or opened for any Borrower's account, the collateral relating thereto and any drafts or acceptances thereunder, and all Obligations thereunder, including any such loss or claim due to any errors, omissions, negligence, misconduct or action taken by any Issuing Bank, other than for any such loss, claim or liability arising out of the gross negligence or willful misconduct by the Agent and/or the Lenders under the Letters of Credit Guaranty. This indemnity shall survive termination of this Financing Agreement. The Borrowers agree that any charges incurred by the Agent for any of the Borrowers' account by the Issuing Bank shall be conclusive on the Agent and may be charged to the Borrowers' Revolving Loan Account.
5.4 In connection with any Letter of Credit or Letter of Credit Guaranty, neither the Agent nor any Lender shall be responsible for: (a) the existence, character, quality, quantity, condition, packing, value or delivery of the goods purporting to be represented by any documents; (b) any difference or variation in the character, quality, quantity, condition, packing, value or delivery of the goods from that expressed in the documents; (c) the validity, sufficiency or genuineness of any documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; (d) the time, place, manner or order in which shipment is made; (e) partial or incomplete shipment, or failure or omission to ship any or all of the goods referred to in the Letters of Credit or documents; (f) any deviation from instructions; (g) delay, default, or fraud by the shipper and/or anyone else in connection with the goods or the shipping thereof; or (h) any breach of contract between the shipper or vendors and the Borrowers. Furthermore, without being limited by the foregoing, neither the Agent nor any Lender shall be responsible for any act or omission with respect to or in connection with any Inventory which is the subject of any Letter of Credit, except to the extent that such act or omission is the result of the gross negligence or willful misconduct of the Agent and/or any Lender.
5.5 In connection with any Letter of Credit or Letter of Credit Guaranty, the Borrowers agree that any action taken by the Agent and/or the Lenders, if taken in good faith, or any action taken by any Issuing Bank, under or in connection with the Letters of Credit, the Letter of Credit Guaranties, the drafts or acceptances, or the Collateral, shall be binding on each of the Borrowers and shall not put the Agent and/or the Lenders in any resulting liability to the Borrowers other than as a result of the gross negligence or willful misconduct of the Agent or such Lender. After the occurrence of an Event of Default which is not waived, the Agent shall have the full right and authority to: (a) clear and resolve any questions of non-compliance of documents; (b) give any instructions as to acceptance or rejection of any documents or goods; (c) execute any and all steamship or airways guaranties (and applications therefore), indemnities or delivery orders; (d) grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances, or documents; and (e) agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or acceptances; all in the Agent's sole name. The Issuing Bank shall be entitled to comply with and honor any and all such documents or instruments executed by or received solely from the Agent, all without any notice to or any consent from the Borrowers or any one of them, provided, however, that the Agent shall give the Borrowers notice of the acceptance or rejection of any goods. Notwithstanding any prior course of conduct or dealing with respect to the foregoing including amendments and non-compliance with documents and/or any of the Borrower's instructions with respect thereto, the Agent may exercise its rights hereunder in its sole and reasonable business judgement. In addition, without the Agent's express consent and endorsement in writing, the Borrowers agree: (a) not to (i) execute any and all applications for steamship or airway guaranties, indemnities or delivery orders; (ii) grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; or (iii) agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or acceptances; and (b) after the occurrence of an Event of Default which is not cured within any applicable grace period, if any, or waived by the Agent, not to (i) clear and resolve any questions of non-compliance of documents, or (ii) give any instructions as to acceptances or rejection of any documents or goods.
5.6 In connection with any Letter of Credit or Letter of Credit Guaranty, the Borrowers agree that: (a) any necessary import, export or other licenses or certificates for the import or handling of the Collateral will have been promptly procured; (b) all foreign and domestic governmental laws and regulations in regard to the shipment and importation of the Collateral, or the financing thereof will have been promptly and fully complied with, except to the extent that any such non-procurement or non-compliance will not have a material adverse effect on such Inventory; and (c) any certificates in that regard that the Agent may at any time reasonably request will be promptly furnished. In connection herewith, the Borrowers warrant and represent that all shipments made under any such Letters of Credit are in accordance with the laws and regulations of the countries in which the shipments originate and terminate, and are not prohibited by any such laws and regulations, except to the extent that any failure to so comply will not have a material adverse effect on such shipments. Each of the Borrowers assume all risk, liability and responsibility for, and agrees to pay and discharge, all present and future local, state, federal or foreign Taxes, duties, or levies. Any embargo, restriction, laws, customs or regulations of any country, state, city, or other political subdivision, where the Collateral is or may be located, or wherein payments are to be made, or wherein drafts may be drawn, negotiated, accepted, or paid, shall be solely the Borrowers' risk, liability and responsibility.
5.7 Upon any payments made to the Issuing Bank under the Letter of Credit Guaranty, the Agent on behalf of the Lenders shall acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Borrowers or any one of them to the Issuing Bank in any application for Letters of Credit, any standing agreement relating to Letters of Credit or otherwise, all of which shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available have been granted to the Agent its Pro rata portion on behalf of the Draw deemed to be a Revolving Loan. All amounts shall be made available Lenders and apply in all respects to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loansany rights, except as otherwise expressly stated remedies, duties or obligations contained herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be 5.8 Nothing in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as 5 is intended to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification relieve any Issuing Bank from any liability to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditany Person.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Each Issuing Bank agrees, subject to the Borrower letters terms and conditions of creditthis Agreement, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf upon request of the Parent pursuant Borrower to issue from time to time for the account of the Borrower, or jointly for the account of the Borrower and a Designated Subsidiary, Letters of Credit upon delivery to such Issuing Bank of an Indemnity Agreement. The availability Application and Agreement for Letter of letters of credit will be subject Credit relating thereto in form and content acceptable to such Issuing Bank; provided, that (i) no Issuing Bank shall be obligated to issue any Letter of Credit if it has been notified by the Agent being satisfied with the terms or has actual knowledge that a Default or Event of the letter of creditDefault has occurred and is continuing, (ii) the Borrower’s executing and delivering such letter Dollar Equivalent Amount of credit and reimbursement agreements and related documents as required by Commercial Letter of Credit Outstandings shall not exceed the AgentTotal Commercial Letter of Credit Commitment, and (iii) the satisfaction Dollar Equivalent Amount of all conditions to Standby Letter of Credit Outstandings shall not exceed the Borrower obtaining a Loan in the amount Total Standby Letter of the requested letter Credit Commitment, and (iv) no Letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit Credit shall be issued having an expiration date if, after giving effect thereto, (a) the Termination Date. All letters Dollar Equivalent Amount of credit Letter of Credit Outstandings plus Tranche B Outstandings shall be in such form and substance as exceed the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
Total Tranche B Commitment or (b) In the event the Agent pays any amount under or on account Dollar Equivalent Amount of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent Tranche B Outstandings in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Offshore Currencies plus Letter of Credit Request”)Outstandings in Offshore Currencies shall exceed the Total Offshore Currency Sublimit. Each Letter of Credit Request shall include an application for such be issued upon the irrevocable written request of the Borrower received by the Applicable Issuing Bank three Business Days prior to the proposed Date of Issuance; provided, however, that if a request is received via the Applicable Issuing Bank's electronic letter of credit and system on any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Business Day, such Letter of Credit Request.
(e) The delivery of each shall be issued on the next succeeding Business Day on or prior to the hour the request was received on the preceding Business Day. No Letter of Credit Request shall be deemed a representation and warranty by have an expiry date (including all rights of the Borrower that such letter of credit as requested or any beneficiary named in such Letter of Credit Request may be issued in accordance with and will not violate to require renewal) or payment date occurring later than the requirements earlier to occur of this Section 3.01 and shall include a representation and warranty as one year after the date of its issuance or the seventh Business Day prior to the aggregate principal amount Tranche B Stated Termination Date; provided, however, that Commercial Letters of all then outstanding Surety Bonds. The Agent Credit may have an expiration date of up to 120 days after the Tranche B Stated Termination Date so long as the Borrower shall, on the date of each issuance of or amendment or modification to a letter of credit by itTranche B Stated Termination Date, give each Bank and deposit cash with the Borrower written notice Agent in the Dollar Equivalent Amount of the issuance Commercial Letter of Credit Outstandings as collateral security for the repayment of any future drawings or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered repayments under such letter Letters of credit have been delivered Credit, and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to such amounts shall be taken held by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior pursuant to the effectiveness terms of this the LC Account Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Credit Agreement (Kellwood Co)
Letters of Credit. (a) The Banks agree Subject to the terms and conditions set forth herein, the Issuing Lender agrees, in reliance upon the agreements of Lenders set forth in this Section 2.4, to issue, supplement, modify, amend, renew, or extend such Letters of Credit for the account of Borrowers, jointly and severally, under the Commitments as Borrowers may request; provided that the Issuing Lender shall not be obligated to make available any Letter of Credit Extension with respect to the Borrower letters any Letter of creditCredit, issued by the Agent, pursuant and no Lender shall be obligated to their respective Commitments up to an aggregate amount at participate in any one time outstanding Letter of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf Credit if as of the Parent pursuant to an Indemnity Agreement. The availability date of letters such Letter of credit will be subject to Credit Extension, (i) the Outstanding Amount of all Letter of Credit Usage and all Loans would exceed the Aggregate Commitments, (ii) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Letter of Credit Usage, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans would exceed such Lender’s Commitment, or (iii) the Outstanding Amount of the Letter of Credit Usage would exceed the Letter of Credit Sublimit. Each Letter of Credit shall be in a form acceptable to the Issuing Lender. Unless all Lenders, Administrative Agent, and the Issuing Lender otherwise consent in a writing delivered to Administrative Agent, the term of any Letter of Credit shall not exceed the Maturity Date. Each commercial Letter of Credit will require drafts drawn at sight.
(b) Borrowers may irrevocably request the issuance, supplement, modification, amendment, renewal, or extension of a Letter of Credit by delivering a duly completed Letter of Credit Application therefor to the Issuing Lender, with a copy to Administrative Agent, by Requisite Notice not later than the Requisite Time therefor; provided, however, that for such requests the Requisite Notice must be in writing. Administrative Agent shall promptly notify the Issuing Lender whether such Letter of Credit Application, and the action requested pursuant thereto, conforms to the requirements of this Agreement. Upon the issuance, supplement, modification, amendment, renewal, or extension of a Letter of Credit, the Issuing Lender shall promptly notify Administrative Agent of such action and the amount and terms thereof. Letters of Credit may have automatic extension or renewal provisions (“evergreen” Letters of Credit) so long as the Issuing Lender has the right to terminate such evergreen Letters of Credit no less frequently than annually within a notice period (the “Letter of Credit Evergreen Notice Period”) to be agreed upon at the time each such Letter of Credit is issued. This Agreement shall control in the event of any conflict with any Letter of Credit Application.
(c) Upon the issuance of a Letter of Credit, each Lender shall be deemed to have purchased a pro rata participation in such Letter of Credit, as from time to time supplemented, amended, renewed, or extended, from the Issuing Lender in an amount equal to that Lender’s Pro Rata Share. Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed by Borrowers for any payment required to be made by the Issuing Lender under any Letter of Credit within the time specified in Section 2.4(d) below, each Lender shall, pro rata according to its Pro Rata Share, reimburse the Issuing Lender through Administrative Agent promptly upon demand for the amount of such payment. The obligation of each Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrowers, jointly and severally, to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit together with interest as hereinafter provided.
(d) Borrowers agree to pay to the Issuing Lender an amount equal to any payment made by the Issuing Lender with respect to each Letter of Credit within one Business Day after demand made by the Issuing Lender therefor, together with interest on such amount from the date of any payment made by the Issuing Lender at the Default Rate. The principal amount of any such payment shall be used to reimburse the Issuing Lender for the payment made by it under the Letter of Credit. Each Lender that has reimbursed the Issuing Lender for its Pro Rata Share of any payment made by the Issuing Lender under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of such reimbursement, in the claim of the Issuing Lender against Borrowers under this Section and shall share, in accordance with that pro rata participation, in any payment made by Borrowers with respect to such claim.
(e) If Borrowers fail to make the payment required by subsection (d) above within the time period therein set forth, the Issuing Lender shall notify Administrative Agent of such fact and the amount of such unreimbursed drawing. Administrative Agent shall promptly notify each Lender of its Pro Rata Share of such amount by Requisite Notice. Each Lender shall make funds in an amount equal to its Pro Rata Share of such amount available to Administrative Agent at Administrative Agent’s Office not later than the Requisite Time on the Business Day specified by Administrative Agent. Such funds shall be paid to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit. If the conditions precedent set forth in Section 4 could be satisfied (except for the giving of a Request for Extension of Credit) on the date such funds are made available by Lenders, such funds shall be deemed a Borrowing of Base Rate Loans (without regard to the Minimum Amount therefor) requested by Borrowers. If the conditions precedent set forth in Section 4 could not be satisfied on the date such funds are made available by Lenders, such funds shall be deemed a funding of each Lender’s participation in such Letter of Credit, and such funds shall be payable by Borrowers upon demand and shall bear interest at the Default Rate.
(f) Once an evergreen Letter of Credit is issued, Borrowers shall not be required to request that the Issuing Lender permit the renewal thereof. If such Letter of Credit could be issued within the Letter of Credit Evergreen Notice Period, the Issuing Lender shall permit the renewal of such evergreen Letter of Credit at such time; provided that the Issuing Lender shall not permit the renewal of an evergreen Letter of Credit if such evergreen Letter of Credit would expire after the Maturity Date.
(g) The obligation of Borrowers to pay to the Issuing Lender the amount of any payment made by the Issuing Lender under any Letter of Credit shall be joint and several, absolute, unconditional, and irrevocable. Without limiting the foregoing, Borrowers’ obligations shall not be affected by any of the following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, with the consent of Borrowers;
(iii) the existence of any claim, set-off, defense, or other rights which Borrowers may have at any time against the Issuing Lender, Administrative Agent or any Lender, any beneficiary of the Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being satisfied untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the terms of the letter Letter of creditCredit;
(v) payment by the Issuing Lender in good faith under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the Letter of Credit;
(vi) the existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or for any difference between any such Property and the character, quality, quantity, condition, or value of such Property as described in such documents;
(vii) the time, place, manner, order or contents of shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the existence, nature and extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any Property;
(x) any error in the transmission of any message relating to a Letter of Credit not caused by the Issuing Lender, or any delay or interruption in any such message;
(xi) any error, neglect or default of any correspondent of the Issuing Lender in connection with a Letter of Credit;
(xii) any consequence arising from acts of God, wars, insurrections, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Issuing Lender;
(xiii) so long as the Issuing Lender in good faith determines that the document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Issuing Lender in connection with a Letter of Credit; and
(xiv) where the Issuing Lender has acted in good faith and observed general banking usage, any other circumstances whatsoever.
(h) Unless otherwise expressly agreed by the Issuing Lender and Borrowers when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the Borrower’s executing rules of the Uniform Customs and delivering such letter of credit and reimbursement agreements and related documents Practice for Documentary Credits, as required most recently published by the Agent, and International Chamber of Commerce at the time of issuance shall apply to each commercial Letter of Credit.
(iiii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of Concurrently with the issuance of each such Letter of Credit, Borrowers shall pay a letter of credit remaining outstandingissuance fee to the Issuing Lender, for the sole account of the Issuing Lender, in an amount set forth in the Fee Letter. Borrowers shall also pay to Administrative Agent, for the ratable account of Lenders in accordance with their Pro Rata Share, a Letter of Credit fee in an amount equal to the Applicable Margin times the average daily maximum amount available to be drawn on such outstanding Letter of the Indicated Spread for Revolving Loans under the LIBOR Rate Option Credit, computed and payable in arrears on the stated amount last day of each calendar quarter, commencing June 30, 2005, through the letter date upon which the outstanding Letter of credit; Credit shall expire, with the final payment to be made on such expiration date (provided that, that the Agent minimum fee for each Letter of Credit shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks$500 per annum). In addition, the Borrower Borrowers shall also pay to the Agent upon issuance Issuing Lender for its own account, from time to time on demand, the Issuing Lender’s standard processing fees, costs and charges with respect to Letters of each letter Credit. The Letter of credit provided for under this Section 3.01 an Credit issuance fee and the Letter of $500 Credit fee are nonrefundable.
(j) As of the Closing Date, Bank of America has issued for the Agent’s services in issuing the letter account of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All RSA certain existing letters of credit shall be in such form and substance as the Agentlisted on Schedule 2.4 hereto (collectively, the Banks “Existing Letters of Credit”). On the Closing Date, each Lender will purchase a participation in the Existing Letters of Credit in the same manner as if the Existing Letters of Credit had been a Letter of Credit issued hereunder. With respect to the Existing Letters of Credit, from and after the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of Closing Date the letter of credit requested, fee for the other conditions ratable account of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan Lenders will accrue and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any undrawn amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan thereof shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “constitute Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit RequestUsage.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters of creditterms and conditions hereof, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding and from time to time from the Closing Date through the day prior to the Maturity Date, the Issuing Lender shall issue such Letters of $100,000,000 minus Credit under the aggregate principal amount of all then outstanding Surety Bonds issued Commitment as Borrower may request by a Surety on behalf Request for Letter of the Parent pursuant Credit; PROVIDED that giving effect to an Indemnity Agreement. The availability all such Letters of letters of credit will be subject to Credit, (i) the Agent being satisfied with Outstanding Obligations shall not exceed the terms of the letter of creditCommitment, and (ii) the Borrower’s executing and delivering such letter Aggregate Effective Amount under all outstanding Letters of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction Credit shall not exceed $10,000,000. Each Letter of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit Credit shall be in such a form and substance as acceptable to the Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, no Letter of Credit shall have a term which exceeds one year or which extends beyond the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentMaturity Date.
(b) In the event the Agent pays any amount under or on account Each Request for Letter of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan Credit shall be deemed submitted to the Issuing Lender, with a copy to the Administrative Agent, at least five Business Days prior to the date upon which the related Letter of Credit is proposed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Drawissued. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Administrative Agent shall promptly notify the BorrowerIssuing Lender whether such Request for Letter of Credit, and the Borrower shall immediately pay such corresponding amount issuance of a Letter of Credit pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit, the Issuing Lender shall promptly notify the Administrative Agent. The , and the Administrative Agent shall also be entitled to recover from promptly notify the Bank or the BorrowerLenders, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agentand terms thereof.
(c) So long as letters Upon the issuance of credit are outstandinga Letter of Credit, each Lender shall be deemed to have purchased a pro rata participation in such Letter of Credit from the Issuing Lender in an amount equal to that Lender's Pro Rata Share. Without limiting the scope and nature of each Lender's participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed by Borrower for any payment required to be made by the Issuing Lender under any Letter of Credit, each Lender shall, pro rata according to its Pro Rata Share, reimburse the Issuing Lender promptly upon demand for the amount of Revolving Loans that such payment. The obligation of each Lender to so reimburse the Borrower is entitled to obtain under Article II Issuing Lender shall be reduced absolute and unconditional and shall not be affected by the LC Obligations then outstanding and, in addition occurrence of an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to otherwise constituting part of reimburse the Revolving Loans, except as otherwise expressly stated herein, Issuing Lender for the stated amount of any payment made by the letters Issuing Lender under any Letter of credit shall be treated Credit together with interest as principal of the Revolving Loanshereinafter provided.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior agrees to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable pay to the Agent) prior Issuing Lender an amount equal to any payment made by the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of Issuing Lender with respect to each Letter of Credit Request.
within one (e1) Business Day after demand made by the Issuing Lender therefor (which demand the Issuing Lender shall make promptly and in any event shall make upon the request of the Requisite Lenders), together with interest on such amount from the date of any payment made by the Issuing Lender at the rate applicable to Base Rate Loans for three Business Days and thereafter at the Default Rate. The delivery principal amount of each any such payment shall be used to reimburse the Issuing Lender for the payment made by it under the Letter of Credit Request and, to the extent that the Lenders have not reimbursed the Issuing Lender pursuant to Section 2.4(c), the interest amount of any such payment shall be deemed a representation and warranty by for the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice account of the issuance of or amendment or modification Issuing Lender. Each Lender that has reimbursed the Issuing Lender pursuant to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.Section 2.4
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions hereof, at any time and from time to time from the Closing Date through the Business Day immediately prior to the Maturity Date, the Issuing Lender shall issue such Letters of Credit under the Commit ment as Borrower letters may request by a Request for Letter of creditCredit; provided that (i) giving effect to all such -------- Letters of Credit, issued the Outstanding Obligations do not exceed the then applicable Commitment, and (ii) the Aggregate Effective Amount under all outstanding Letters of Credit shall not exceed $20,000,000. Each Letter of Credit shall be in a form reasonably acceptable to the Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the term of any Letter of Credit shall not exceed one year or extend beyond the Maturity Date.
(b) Each Request for Letter of Credit shall be submitted to the Issuing Lender, with a copy to the Administrative Agent, at least five Business Days prior to the date upon which the related Letter of Credit is proposed to be issued. The Administrative Agent shall promptly notify the Issuing Lender whether such Request for Letter of Credit, and the issuance of a Letter of Credit pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit, the Issuing Lender shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify the Lenders, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Lender shall be deemed to have purchased at par a pro rata participation in such Letter of Credit from the Issuing Lender in an amount equal to that Lender's Pro Rata Share. Without limiting the scope and nature of each Lender's participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed by Borrower for any payment required to be made by the AgentIssuing Lender under any Letter of Credit, each Lender shall, pro rata according to its Pro Rata Share, pay the purchase price for such participation to the Issuing Lender through the Administrative Agent promptly upon demand therefor. The obligation of each Lender to so pay the participation purchase price to the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such payment of the purchase price shall not relieve or otherwise impair the obligation of Borrower to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of Credit within one Business Day after written demand made by the Issuing Lender therefor, together with interest on such amount from the date of any payment made by the Issuing Lender at the rate applicable to Base Rate Loans for three Business Days and thereafter at the Default Rate. The principal amount of any such payment shall be used to reimburse the Issuing Lender for the payment made by it under the Letter of Credit and, to the extent that the Lenders have not reimbursed the Issuing Lender pursuant to Section 2.4(c), the interest amount of any such payment shall be for the account of the Issuing Lender. Each Lender that has paid the participation purchase price to the Issuing Lender pursuant to Section 2.4(c) shall thereupon acquire a pro rata participation, to the extent of such payment, in the claim of the Issuing Lender against Borrower for reimbursement of principal and interest under this Section 2.4(d) and shall share, in accordance with that pro rata participation, in any principal payment made by Borrower with respect to such claim and in any interest payment made by Borrower (but only with respect to periods subsequent to the date such Lender paid the participation purchase price to the Issuing Lender) with respect to such claim.
(e) Borrower may, pursuant to a Request for Loan, request that Advances be made pursuant to Section 2.1(a) to provide funds for the payment required by Section 2.4(d) and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid directly to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit.
(f) If Borrower fails to make the payment required by Section 2.4(d) on a timely basis then, in lieu of the payment of the participation purchase price to the Issuing Lender under Section 2.4(c), the Issuing Lender may (but is not required to), without notice to or the consent of Borrower, instruct the Administrative Agent to cause Advances to be made by the Lenders under their respective Commitments up to Pro Rata Shares of the Commitment in an aggregate amount at equal to the amount paid by the Issuing Lender with respect to that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid directly to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit.
(g) The issuance of any one time outstanding supplement, modification, amendment, renewal, or extension to or of $100,000,000 minus any Letter of Credit shall be treated in all respects the aggregate principal same as the issuance of a new Letter of Credit, except that the Issuing Lender's issuance fees shall be payable as set forth in the letter agreement referred to in Section 3.5.
(h) The obligation of Borrower to pay to the Issuing Lender the amount of all then outstanding Surety Bonds issued any payment made by a Surety on behalf the Issuing Lender under any Letter of Credit shall be absolute, unconditional, and irrevocable, subject only to performance by the Issuing Lender of its obligations to Borrower under Uniform Commercial Code Section 5109. Without limiting the foregoing, the obligations of Borrower to the Issuing Lender shall not be affected by any of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, with the consent of Borrower;
(iii) the existence of any claim, setoff, defense, or other rights which Borrower may have at any time against the Issuing Lender, the Administrative Agent or any Lender, any beneficiary of the Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being satisfied untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the terms of the letter Letter of credit, Credit;
(iiv) payment by the Issuing Lender in good faith under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the Letter of Credit;
(vi) the Borrower’s executing existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or any difference between any such Property and delivering the character, quality, quantity, condition, or value of such letter Property as described in such documents;
(vii) the time, place, manner, order or contents of credit shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the existence, nature and reimbursement agreements and related extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any documents as required in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any Property;
(x) any error in the transmission of any message relating to a Letter of Credit not caused by the AgentIssuing Lender, and or any delay or interruption in any such message;
(iiixi) any error, neglect or default of any correspondent of the satisfaction Issuing Lender in connection with a Letter of all Credit (but without prejudice to any claim by Borrower against such correspondent);
(xii) any consequence arising from acts of God, war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Issuing Lender;
(xiii) so long as the Issuing Lender in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Borrower obtaining Issuing Lender in connection with a Loan Letter of Credit; and
(xiv) where the Issuing Lender has acted in the amount of the requested letter of credit. good faith and observed general banking usage, any other circumstances whatsoever.
(i) The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Issuing Lender shall be entitled to .125% of such fee prior the protection accorded to the distribution of the balance of such fee Pro rata Administrative Agent pursuant to the BanksArticle 10, mutatis ------- mutandis. In addition--------
(j) The Uniform Customs and Practice for Documentary Credits, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services as published in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required its most current version by the Agent.
(b) In the event the Agent pays any amount under or on account International Chamber of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”)Commerce, a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements part of this Section 3.01 and shall include a representation and warranty as apply to all Letters of Credit to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditextent not inconsistent with applicable Law.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan Agreement (MGM Grand Inc)
Letters of Credit. (a) The Banks agree to make available to Borrower may request the Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability issuance of letters of credit will by JPMorgan Chase Bank, N.A., in a form reasonably acceptable to the Administrative Agent and such Issuing Bank, appropriately completed, for the account of the Borrower or one or more of its Subsidiaries, at any time and from time to time during the Revolving Credit Period; provided that any Letter of Credit shall be subject issued only if, and each request by the Borrower for the issuance of any Letter of Credit shall be deemed a representation and warranty of the Borrower that, immediately following the issuance of any such Letter of Credit the Committed Exposure shall not exceed the amount of Total Availability.
(b) Each issuance of any Letter of Credit shall be made on such prior notice from the Borrower to JPMorgan Chase Bank, N.A. as shall be acceptable to such Issuing Bank specifying the date of issuance, the date on which such Letter of Credit is to expire (which shall not be later than the earlier of (i) the Agent being satisfied with date that is one Domestic Business Day prior to the terms of the letter of creditTermination Date, and (ii) subject to renewal, the Borrower’s executing date one year after the date of such Letter of Credit, or, if such Letter of Credit is issued to a beneficiary outside the United States, the date that is five Domestic Business Days prior to the Termination Date), the amount and delivering currency of such letter Letter of credit Credit, the name and reimbursement agreements address of the beneficiary of such Letter of Credit, whether such Letter of Credit is a documentary or stand–by Letter of Credit, the purpose of such Letter of Credit, and related documents such other information as required may be necessary or desirable to complete such Letter of Credit. Each Issuing Bank will give the Administrative Agent prompt notice of the issuance and amount of each Letter of Credit issued by it, the currency thereof and the expiration of such Letter of Credit. Each Issuing Bank will give the Administrative Agent and the Borrower daily notice of the aggregate amount available to be drawn under all outstanding Letters of Credit issued by it a quarterly summary indicating, on a daily basis during such quarter, the issuance of any Letter of Credit issued by it and the amount thereof, the expiration of any such Letter of Credit and any payment on drafts presented under such Letters of Credit.
(c) Each Issuing Bank that issues a Letter of Credit, by the issuance of such Letter of Credit and without any further action on the part of such Issuing Bank or the Banks in respect thereof, hereby grants to each Bank, and each Bank hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Bank’s Applicable 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 Bank hereby absolutely and unconditionally agrees to pay to the Administrative Agent, on behalf of such Issuing Bank, in accordance with Section 2.04(b), such Bank’s Applicable Percentage of each Letter of Credit Disbursement made by such Issuing Bank and not reimbursed by the Borrower when due in accordance with subsection (iiif) of this Section; provided that the satisfaction Banks shall not be obligated to make any such payment with respect to any wrongful Letter of all conditions Credit Disbursement made as a result of the gross negligence or willful misconduct of such Issuing Bank.
(d) Each Bank acknowledges and agrees that its obligation to acquire participations pursuant to subsection (c) above in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any circumstance described in Section 2.03(d), any amendment, renewal or extension of a Letter of Credit or the occurrence and continuance of a Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever (subject only to the proviso in subsection (c) above).
(e) Upon each issuance of a Letter of Credit, Borrower obtaining agrees to pay the Applicable Letter of Credit Fee to the Banks, and a Loan fronting fee to be determined by the Issuing Bank. Fees under this subsection shall be calculated by the applicable Issuing Bank and shall be payable quarterly in advance on the third Domestic Business Day following the last day of March, June, September and December in each year and on the Termination Date (or any earlier date on which the Commitments are terminated). The applicable Issuing Bank will notify the Borrower of the amount of the requested letter of creditaccrued fees payable hereunder on each payment date. The Borrower shall pay a fee for each letter of credit In addition to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In additionforegoing, the Borrower shall pay directly to each Issuing Bank, for its account, such Issuing Bank’s customary processing and documentation fees in connection with the issuance or amendment of or payment on any Letter of Credit, payable within fifteen (15) days after demand therefor by such Issuing Bank.
(f) If an Issuing Bank shall pay any draft presented under a Letter of Credit, the Borrower shall pay directly to such Issuing Bank an amount equal to the Agent upon issuance amount of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for such draft before 2:00 p.m. (New York City time), on the Agent’s services in issuing the letter of credit. No letter of credit day on which such Issuing Bank shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and have notified the Borrower agree. The (as provided in subsection (j) below) that payment of such draft will be made; provided that, if the Borrower shall not be entitled to obtain letters have received notice of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
draft before 10:00 a.m. (b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland New York City time) on the date that payment of such notice anddraft is made, not later than 1:00 p.m. (Cleveland time) then such payment may be made by the Borrower to such Issuing Bank on the Domestic Business Day immediately following the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent receipt by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay of notice of such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrowerpayment, as the case may be, together with interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent (at a rate per annum equal to (ithe sum of the Applicable Margin for LIBOR Loans at the time plus the rate determined by such Issuing Bank to be equal to the rate per annum at which deposits in the same currency as such draft are then being offered to such Issuing Bank in the London interbank market for a period of one month) if on the amount of such draft from and including the date such draft was paid by such Bank, Issuing Bank to but excluding such next Domestic Business Day. If the overnight Federal Funds Effective Rate or (ii) if Borrower shall fail to pay any amount required to be paid by the Borrowerit under this subsection when due, the then applicable rate of such unpaid amount shall bear interest, calculated in accordance with Article IVfor each day from and including the due date to but excluding the date of payment, for the Revolving Loans. In the event no Revolving Loan or only at a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice rate per annum equal to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled rate applicable to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving overdue Base Rate Loans.
(dg) Whenever The Borrower’s obligation to reimburse Letter of Credit Disbursements as provided in subsection (f) above shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the Borrower desires terms of this Agreement under any and all circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or any Loan Document;
(ii) the existence of any claim, setoff, defense or other right which the Borrower, any Subsidiary or any other Person may at any time have against the beneficiary under any Letter of Credit, any Issuing Bank, the Administrative Agent, the Collateral Agent or any Bank or any other Person in connection with this Agreement, any other Loan Document or any other related or unrelated agreement or transaction;
(iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(iv) payment by any Issuing Bank under a Letter of Credit against presentation of a draft or other document which does not comply with the terms of such Letter of Credit, subject to subsection (i) below; and
(v) any other act or omission or delay of any kind or any other circumstance or event whatsoever, whether or not similar to any of the foregoing and whether or not foreseeable, that might, but for the provisions of this subsection (g), constitute a letter legal or equitable discharge of credit the Borrower’s obligations hereunder.
(h) None of the Banks (including any Issuing Bank) nor the Administrative Agent nor any of their officers or directors or employees or agent shall be issued, liable or responsible by reason of or in connection with (and the Borrower shall give indemnify and hold harmless each of the Banks, the Issuing Banks, the Administrative Agent written notice and their officers, directors, employees and agent from and against any and all liabilities, losses, damages, costs and expenses, including, without limitation, reasonable fees and disbursements of counsel, arising by reason of or in connection with) the execution and delivery or transfer of or payment or failure to pay under any Letter of Credit, including without limitation any of the circumstances enumerated in subsection (including g) above, as well as (i) any error, omission, interruption or delay in transmission or delivery of any messages, by way mail, cable, telegraph, telex or otherwise, (ii) any error in interpretation of facsimile transmissiontechnical terms, (iii) thereof prior any loss or delay in the transmission of any document required in order to 1:00 p.m. make a drawing under a Letter of Credit, or (Cleveland timeiv) at least five Cleveland Banking Days any consequences arising from causes beyond the control of any Issuing Bank, including, without limitation, any government acts, or any other circumstances whatsoever in making or failing to make payment under any Letter of Credit; provided that the Borrower shall not be required to indemnify any Issuing Bank for any claims, damages, losses, liabilities, costs or expenses, and the Borrower shall have a claim for direct (or such shorter period as may be acceptable but not consequential) damage suffered by it, to the Agentextent found by a court of competent jurisdiction to have been caused by (x) prior to the proposed date willful misconduct or gross negligence of issuance (which shall be an Issuing Bank in determining whether a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “request presented under any Letter of Credit Request”). Each Letter issued by it complied with the terms of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(fy) In determining whether an Issuing Bank’s failure to pay under any letter Letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit Credit issued by it if taken or omitted after the presentation to it of a request strictly complying with the terms and conditions of such Letter of Credit. Nothing in this subsection (h) is intended to limit the absence obligations of the Borrower under any other provision of this Agreement. To the extent the Borrower does not indemnify an Issuing Bank as required by this subsection, the Banks agree to do so in accordance with their Applicable Percentage. It is expressly understood and agreed that, for purposes of determining whether a wrongful payment under a Letter of Credit resulted from an Issuing Bank’s gross negligence or willful misconduct, shall such Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary and, in making any payment under any Letter of Credit (A) an Issuing Bank’s exclusive reliance on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, whether or not create the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any resulting liability for document presented pursuant to such Letter of Credit proves to be insufficient in any material respect, if such document on its face appears to be in order, and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever and (B) any noncompliance in any immaterial respect of the Agentdocuments presented under such Letter of Credit with the terms thereof shall, in each case, be deemed not to constitute willful misconduct or gross negligence of such Issuing Bank.
(gi) Immediately Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit issued by such Issuing Bank. Such Issuing Bank shall as promptly as possible give telephonic notification, confirmed by telex or telecopy, to the Administrative Agent, the Borrower of such demand for payment and whether such Issuing Bank has made or will make a Letter of Credit Disbursement thereunder, provided that the failure to give such notice shall not relieve the Borrower of its obligation to reimburse any such Letter of Credit Disbursement in accordance with this Section. The Administrative Agent shall promptly give each Bank notice thereof.
(j) If at any time the Committed Exposure exceeds the Total Availability, then the Borrower shall provide cash collateral in respect of the Letter of Credit Exposure as provided below in an amount equal to such excess; provided that, solely for purposes of determining whether the Borrower is in compliance with the foregoing requirements of this subsection (j), the Total Availability shall be increased by the amount of any cash collateral then held by the Administrative Agent pursuant to this subsection (j). In the event that the Borrower is required pursuant to the terms of this Agreement to provide cash collateral in respect of the Letter of Credit Exposure, the Borrower shall deposit in an account with the Administrative Agent, for the benefit of the Banks (including the Issuing Banks), an amount in cash equal to (x) in the case of a deposit required pursuant to the first sentence of this subsection (j), the amount specified therein, or (y) in the case of a deposit required as a result of an Event of Default, the entire Letter of Credit Exposure. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. If the Borrower is required to provide an amount of cash collateral hereunder pursuant to the first sentence of this subsection (j), the Administrative Agent shall return such amount (to the extent not applied as aforesaid) to the Borrower, from time to time, to the extent that doing so would not give rise to an THIRD AMENDED AND RESTATED CREDIT AGREEMENT, Page 38 obligation on the part of the Borrower to provide additional cash collateral pursuant to such sentence. If the Borrower is required to provide an amount of cash collateral hereunder as a result of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Domestic Business days after all Events of Default have been cured or waived, and if prior to such return the effectiveness amount of this Agreementthe Letter of Credit Exposure is reduced, any excess of the amount deposited (to the extent not applied as aforesaid and disregarding interest or profits on investments) over the reduced amount of the Letter of Credit Exposure shall be returned to the Borrower promptly after such reduction gives rise to such excess. Notwithstanding the foregoing, if any Obligation payable by the Borrower hereunder is due and payable but remains unpaid at the time that the Administrative Agent would otherwise be required to return any amount of cash collateral to the Borrower hereunder, the outstanding letters Administrative Agent may retain such cash collateral and apply the amounts retained to the payment of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunderunpaid Obligation.
Appears in 1 contract
Letters of Credit. (a) The Banks agree Subject to make available and upon the terms and conditions contained herein and in the Letter of Credit Documents, at the request of a Borrower (or the Company on behalf of such Borrower), the Issuing Bank agrees to issue, for the account of such Borrower, one or more Letters of Credit in Dollars for the ratable risk of each Lender according to its Pro Rata Share, containing terms and conditions acceptable to the Agent and the Issuing Bank. The Borrowers’ reimbursement obligations in respect of each Existing Letter of Credit, and each Lender’s participation obligations in connection therewith, shall be governed by the terms of this Agreement.
(b) Each Borrower letters requesting such Letter of creditCredit (or the Company on behalf of such Borrower) shall give the Agent and the Issuing Bank three (3) Business Days’ prior written notice of such Borrower’s request for the issuance of a Letter of Credit. Such notice shall be irrevocable and shall specify the original face amount of the Letter of Credit requested, issued the effective date (which date shall be a Business Day and in no event shall be a date less than ten (10) days prior to the Termination Date) 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 year from the date of issuance nor after the Termination Date), the purpose for which such Letter of Credit is to be issued, and the beneficiary of the requested Letter of Credit. The applicable Borrower requesting the Letter of Credit (or the Company on behalf of such Borrower) shall attach to such notice the proposed terms of the Letter of Credit. At the Borrower’s request, a Letter of Credit may contain a provision pursuant to which it is deemed to be automatically renewed unless notice of termination is given by the Issuing Bank (provided, no such Letter of Credit may be renewed if the expiration date would be extended beyond the Termination Date, unless such Letter of Credit is cash collateralized on terms acceptable to the Issuing Bank). The 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: (i) the Borrower requesting such Letter of Credit (or the Company on behalf of such Borrower) shall have delivered to the Issuing Bank at such times and in such manner as the Issuing Bank may reasonably require, an application, in form and substance reasonably satisfactory to the Issuing Bank and the Agent, for the issuance of the Letter of Credit and such other Letter of Credit Documents as may be required pursuant to their respective Commitments up the terms thereof, and the form and terms of the proposed Letter of Credit shall be reasonably satisfactory to an aggregate the Agent and the Issuing Bank and (ii) as of the date of issuance, no order of any court, arbitrator or other 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 at of the proposed Letter of Credit, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the force of law) from any one time outstanding Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that the Issuing Bank refrain from, the issuance of $100,000,000 minus letters of credit generally or the issuance of such Letter of Credit.
(d) After giving effect to any Letter of Credit requested hereunder, except in the Agent’s discretion, with the consent of all Lenders, or as otherwise provided herein, (i) the Letter of Credit Obligations shall not exceed the Letter of Credit Limit, and (ii) the aggregate principal amount of all then the Loans and the Letter of Credit Obligations outstanding Surety Bonds issued by a Surety on behalf shall not exceed the lesser of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i1) the Agent being satisfied with the terms of the letter of credit, Maximum Credit and (ii2) the Borrower’s executing Borrowing Base at such time.
(e) Each Borrower shall reimburse the Issuing Bank for any draw under any Letter of Credit issued for the account of a Borrower on the Business Day immediately succeeding notice of such draw and delivering such letter pay the Issuing Bank the amount of credit all other charges and reimbursement agreements and related documents as required fees payable to the Issuing Bank in connection with any Letter of Credit issued for the account of a Borrower immediately when due, irrespective of any claim, setoff, defense or other right which any Borrower may have at any time against the Issuing Bank or any other Person. Each drawing under any Letter of Credit or other amount payable in connection therewith when due shall constitute a request by the Agent, and (iii) the satisfaction Borrower for whose account such Letter of all conditions Credit was issued to the Borrower obtaining Agent for a Prime Rate Loan in the amount of such drawing or other amount then due, and shall be made by the requested letter Agent on behalf of creditthe Lenders as a Revolving Loan (or Special Agent Advance, as the case may be) notwithstanding (i) the amount of such Revolving Loan may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (ii) whether any conditions specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) failure for any such request or deemed request for Revolving Loan to be made by the time otherwise required in Section 2.1, (v) the date of such Revolving Loan or (vi) any reduction in the Maximum Credit or Borrowing Base after any such Letter of Credit may have been drawn upon. The Borrower 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 the Agent or any Lender to the Issuing Bank and/or related parties in connection with any Letter of Credit shall constitute additional Revolving Loans to the Borrowers pursuant to this Section 2 (or Special Agent Advances as the case may be).
(f) The Loan Parties shall, jointly and severally, indemnify and hold the Agent and the Lenders harmless from and against any and all losses, claims, damages, liabilities, costs and expenses which the 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 the Issuing Bank or correspondent with respect to any Letter of Credit, except for such losses, claims, damages, liabilities, costs or expenses that are a result of (a) the willful misconduct, bad faith, fraud or gross negligence of the Agent or any Lender or (b) any dispute solely among Lenders or the Agent and any Lenders, other than claims against the Agent in its capacity or in fulfilling its role as the Agent under this Agreement, in each case as determined pursuant to a final non-appealable order of a court of competent jurisdiction. Each Loan Party 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 beneficiary shall be deemed such Borrower’s agent. Each Loan Party assumes all risks for, and agrees to pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter of Credit or any documents, drafts or acceptances thereunder. Each Loan Party hereby releases and holds the Agent and the Lenders harmless from and against any acts, waivers, errors, delays or omissions with respect to or relating to any Letter of Credit, except for the gross negligence or willful misconduct of the Agent or any Lender as determined pursuant to a final, non-appealable order of a court of competent jurisdiction. The provisions of this Section 2.2(f) shall survive the payment of Obligations and the termination of this Agreement.
(g) Each Loan Party hereby irrevocably authorizes and directs the Issuing Bank to name such Loan Party as the account party in any Letter of Credit and to deliver to the Agent all instruments, documents and other writings and property received by the Issuing Bank pursuant to the Letter of Credit and to accept and rely upon the Agent’s instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the Letter of Credit Documents with respect thereto. Nothing contained herein shall be deemed or construed to grant any Loan Party any right or authority to pledge the credit of the Agent or any Lender in any manner. The Loan Parties shall be bound by any commercially reasonable interpretation made in good faith by the Agent, or the Issuing Bank under or in connection with any Letter of Credit or any documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of any Loan Party.
(A) On the Closing Date with respect to each Existing Letter of Credit and (B) immediately upon the issuance or amendment of any other Letter of Credit, each Lender shall be deemed to have irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided interest and participation to the extent of such Lender’s Pro Rata Share of the liability with respect to such Letter of Credit and the obligations of the Borrowers with respect thereto (including all Letter of Credit Obligations with respect thereto). Each Lender shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Issuing Bank therefor and discharge when due, its Pro Rata Share of all of such 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 extent that the Issuing Bank has not been reimbursed or otherwise paid as required hereunder or under any such Letter of Credit, each such Lender shall pay a fee for to the Issuing Bank its Pro Rata Share of such unreimbursed drawing or other amounts then due to the Issuing Bank in connection therewith.
(i) The obligations of the Borrowers to pay each letter Letter of credit Credit Obligations and the obligations of the Lenders to make payments to the Agent for the Pro rata benefit account of the Banks, upon issuance Issuing Bank with respect to Letters of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Credit shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In additionabsolute, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit unconditional and irrevocable and shall be issued having an expiration date after performed strictly in accordance with the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 terms of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan under any and the Borrower has executed and delivered such letter of creditall circumstances whatsoever, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of notwithstanding the occurrence and payment or continuance of a Draw no later than 12:00 p.m. (Cleveland time) on any Default, Event of Default, the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available failure to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent satisfy any other condition set forth in U.S. Dollars and immediately available funds at its office listed on the signature pages heretoSection 4 or any other event or circumstance. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank a Lender when due, the Agent shall be entitled to recover such corresponding amount on demand from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand thereforLender with interest thereon, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of for each day from the date such corresponding amount was made available by the Agent to the Borrower to due until the date such corresponding amount is recovered by paid to the Agent at a the interest rate per annum equal to (i) if paid then payable by such Bank, the overnight Federal Funds Effective any Borrower in respect of Loans that are Prime Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In Any such reimbursement shall not relieve or otherwise impair the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account obligation of the Borrower maintained with Borrowers to reimburse the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain Issuing Bank under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “any Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and or make any other documents that the Agent customarily requires payment in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Abl Loan and Security Agreement (U.S. Silica Holdings, Inc.)
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters of creditterms and conditions hereof, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding and from time to time from the Closing Date through the Maturity Date (or such earlier date upon which the Combined Commitments are terminated in accordance with the terms of $100,000,000 minus this Agreement), the Issuing Lender shall take such Letter of Credit Actions as Borrower may request; provided, however, that the Issuing Lender shall not be obligated to take any Letter of Credit Action with respect to any Letter of Credit, and no Lender shall be obligated to participate in any Letter of Credit if as of the date of such Letter of Credit Action, the aggregate outstanding principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of Loans plus the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”Usage would exceed the Combined Commitments or if the requested Letter of Credit would result in a violation of the limitations expressed in Section 2.01(c)(ii). Each Letter of Credit Request Action shall include be in a form acceptable to Issuing Lender and shall not violate any policies of Issuing Lender. Standby Letters of Credit shall be issued only for the purpose of (i) securing workers’ compensation and other insurance coverages for Borrower and its Subsidiaries in an application for such amount not at any time to exceed the minimum amount required by Holdings’, Borrower’s, or any of Borrower’s Subsidiaries’ insurance carriers or applicable regulatory agencies and (ii) supporting obligations of Borrower and its Subsidiaries incurred in the construction of distribution centers, stores and related shopping centers (including without limitation a proposed $11,000,000 standby letter of credit supporting construction of Borrower’s proposed distribution center). Commercial Letters of Credit shall only be issued for the purpose of supporting the purchase of inventory by Borrower and any other documents that the Agent customarily requires in connection therewithits Subsidiaries. The Agent shall promptly notify each Bank obligation of each the Issuing Lender to take any Letter of Credit Request.
(e) The delivery Action and the obligation of each the Lenders to participate in the Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in subject to such Letter of Credit Request may Action shall be subject to the following limitations:
(i) The Letter of Credit Usage in respect of standby Letters of Credit issued to support obligations of Borrower and its Subsidiaries incurred in the construction of stores and related shopping centers shall not exceed $2,000,000;
(ii) The Letter of Credit Usage in respect of all Letters of Credit other than Permitted Workers Compensation Letters of Credit shall not exceed $16,000,000; and
(iii) No standby Letter of Credit shall expire more than 12 months after the issuance thereof. No commercial Letter of Credit shall expire more than 180 days after the issuance thereof. If any Letter of Credit Usage remains outstanding after the Maturity Date or any earlier date upon which the Combined Commitments are terminated in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness terms of this Agreement, the outstanding letters Borrower shall immediately deposit cash in an amount equal to such Letter of credit issued under the 2002 Credit Agreement and/or the 2004 Usage in a Letter of Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunderCash Collateral Account.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions hereof, at any time and from time to time from the Closing Date through the Maturity Date, the Issuing Bank shall issue, supplement, modify, amend, renew, or extend such Letters of Credit denominated in Dollars or Offshore Currencies under the Commitments as Borrower letters may request; PROVIDED, HOWEVER, that (i) the aggregate outstanding Letter of creditCredit Usage shall not exceed $20,000,000 at any time; PROVIDED, issued by HOWEVER, that Letter of Credit Usage not relating to the AgentTeleCine Cell Letters of Credit shall not exceed $2,500,000 in the aggregate; PROVIDED, pursuant FURTHER, that such limit shall be permanently reduced from time to their respective Commitments up time to an amount equal to the aggregate remaining outstanding balance of the TeleCine Cell Loan Notes but not less than an amount equal to $2,500,000, (ii) the aggregate unpaid principal amount of all Loans and Letter of Credit Usage at any one time outstanding of $100,000,000 minus shall not exceed the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agentcombined Commitments, and (iii) the satisfaction aggregate unpaid principal amount of all conditions to Offshore Currency Loans and Letter of Credit Usage denominated in Offshore Currencies at any one time outstanding shall not exceed the Borrower obtaining a Loan in the amount combined Offshore Currency Commitments. Each Letter of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit Credit shall be in such a form and substance as acceptable to the Issuing Bank. Unless all the Banks otherwise consent in a writing delivered to the Administrative Agent, the Banks and the Borrower agree. The Borrower term of any Letter of Credit shall not be entitled to obtain letters of credit from exceed the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentMaturity Date.
(b) In Borrower may irrevocably request the event the Agent pays any amount under issuance, supplement, modification, amendment, renewal, or on account extension of a letter Letter of credit (the payment Credit by the Agent under or on account delivering a duly completed Letter of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made Credit Application therefor to the Borrower by each Bank Issuing Bank, with a copy to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice andAdministrative Agent, by Requisite Notice not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving LoanRequisite Time therefor. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the The Administrative Agent shall promptly notify the BorrowerIssuing Bank whether such Letter of Credit Application, and the Borrower shall immediately pay such corresponding amount action requested pursuant thereto, conforms to the requirements of this Agreement. Upon the issuance, supplement, modification, amendment, renewal, or extension of a Letter of Credit, the Issuing Bank shall promptly notify the Administrative Agent. The , and the Administrative Agent shall also be entitled to recover from promptly notify the Bank Banks, of such action and the amount and terms thereof. Letters of Credit may have automatic extension or the Borrower, renewal provisions ("EVERGREEN" Letters of Credit) so long as the case may be, interest on Issuing Bank has the right to terminate such corresponding amount evergreen Letters of Credit no less frequently than annually within a notice period to be agreed upon at the time each such Letter of Credit is issued. This Agreement shall control in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together any conflict with interest thereon, against any account Letter of the Borrower maintained with the AgentCredit Application.
(c) So long Upon the issuance of a Letter of Credit, each Bank shall be deemed to have purchased a pro rata participation in such Letter of Credit, as letters from time to time supplemented, amended, renewed, or extended, from the Issuing Bank in an amount equal to that Bank's Pro Rata Share. Without limiting the scope and nature of credit are outstandingeach Bank's participation in any Letter of Credit, to the extent that the Issuing Bank has not been reimbursed by Borrower for any payment required to be made by the Issuing Bank under any Letter of Credit, each Bank shall, pro rata according to its Pro Rata Share, reimburse the Issuing Bank through the Administrative Agent promptly upon demand for the amount of Revolving Loans that such payment. The obligation of each Bank to so reimburse the Borrower is entitled to obtain under Article II Issuing Bank shall be reduced absolute and unconditional and shall not be affected by the LC Obligations then outstanding and, in addition occurrence of an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to otherwise constituting part of reimburse the Revolving Loans, except as otherwise expressly stated herein, Issuing Bank for the stated amount of any payment made by the letters Issuing Bank under any Letter of credit shall be treated Credit together with interest as principal of the Revolving Loanshereinafter provided.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior agrees to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable pay to the Agent) prior Issuing Bank through the Administrative Agent an amount equal to any payment made by the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Issuing Bank of with respect to each Letter of Credit Requestwithin one Business Day after demand made by the Issuing Bank therefor, together with interest on such amount from the date of any payment made by the Issuing Bank at the Default Rate. The principal amount of any such payment shall be used to reimburse the Issuing Bank for the payment made by it under the Letter of Credit. Each Bank that has reimbursed the Issuing Bank for its Pro Rata Share of any payment made by the Issuing Bank under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of such reimbursement, in the claim of the Issuing Bank against Borrower under this Section and shall share, in accordance with that pro-rata participation, in any payment made by Borrower with respect to such claim.
(e) The delivery If Borrower fails to make the payment required by subsection (d) above within the time period therein set forth, in lieu of each the reimbursement to the Issuing Bank under such subsection, the Issuing Bank may (but is not required to), without notice to or the consent of Borrower, instruct the Administrative Agent to cause Loans to be made by the Banks in an aggregate amount equal to the amount paid by the Issuing Bank with respect to that Letter of Credit Request and, for this purpose, the conditions precedent set forth in Section 4 shall not apply. The proceeds of such Loans shall be deemed a representation and warranty paid to the Issuing Bank to reimburse it for the payment made by it under the Borrower that such letter of credit as requested in such Letter of Credit Request may Credit. Such Loans shall be issued in accordance with and will not violate the requirements of this Section 3.01 payable upon demand and shall include a representation and warranty as to bear interest at the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditDefault Rate.
(f) In determining whether Once an evergreen Letter of Credit is issued, Borrower shall not be required to pay under any letter of creditannually request that the Issuing Bank permit the renewal thereof. Borrower, the Agent shall not have any obligation relative to and the Banks other than to determine that any documents required to authorize (but may not require) the Issuing Bank to, in its sole discretion, permit the renewal such evergreen Letter of Credit if such Letter of Credit could be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agentfirst instance at such time.
(g) Immediately prior The obligations of Borrower under this Agreement with respect to any Letter of Credit shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the effectiveness terms of this Agreement and of any application for Letter of Credit, including without limitation, the following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit, this Agreement, any application for Letter of Credit or any other agreement or instrument relating to any of the outstanding letters foregoing;
(ii) the existence of credit issued any claim, setoff, defense or other rights that Borrower may have at any time against any beneficiary or transferee of the Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Bank or any other Person, whether in connection with this Agreement or any unrelated transaction;
(iii) any breach of contract or other dispute between Borrower and any beneficiary or transferee of the Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Bank or any other Person;
(iv) any demand, statement, tested telex or any other document presented under a Letter of Credit which on its face appears to conform with the 2002 terms and conditions of the Letter of Credit Agreement and/or but proves to have been invalid or insufficient for its intended business purpose or to have been forged or fraudulent in any respect or to contain any statement therein which is untrue or inaccurate in any respect whatsoever; or
(v) any delay, extension of time, renewal, waiver, compromise or other indulgence or modification granted or agreed to by the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters Issuing Bank, with or without notice to or approval by Borrower, in respect to any Letter of credit Credit.
(h) Neither the Issuing Bank nor any of its officers or directors shall be deemed liable or responsible for:
(i) the use that may be made of the Letters of Credit or for any acts or omissions of the beneficiary or any transferee of the Letters of Credit in connection therewith;
(ii) the validity, sufficiency for their intended business purpose or genuineness of documents, or of any endorsements thereon which on their face appear to beconform to the terms and conditions of the Letter of Credit, even if such documents should prove to be in any or all respects invalid, insufficient for their intended business purpose, fraudulent or forged; or
(iii) acceptance of documents that appear on their face to conform to the terms and hereby are converted intoconditions of the Letter of Credit, outstanding letters without responsibility for further investigation, regardless of credit hereunderany notice or information to the contrary.
Appears in 1 contract
Samples: Credit Agreement (Todd Ao Corp)
Letters of Credit. (ai) The Banks agree to make available Subject to the terms and conditions hereof, Issuing Bank will issue Letters of Credit in form and substance acceptable to Issuing Bank for the account of Borrower letters of credit, issued by on any Business Day before the Agent, pursuant to their respective Commitments up to an Revolving Maturity Date. The aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal undrawn amount of all then issued and outstanding Surety Bonds issued Letters of Credit plus the aggregate amount of all drawn but unreimbursed amounts under any Letter of Credit shall at all times reduce the amount otherwise available for Advances under the Revolving Line. Unless otherwise agreed by a Surety on behalf the Lenders, each Letter of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to Credit shall (i) be denominated in Dollars and (ii) expire no later than the Agent being satisfied with earlier of (A) 30 days prior to the terms of the letter of credit, Revolving Maturity Date (unless cash collateral is provided therefor as provided hereunder) and (ii) the Borrower’s executing first anniversary of its date of issuance; provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (A) above).
(ii) Borrower may from time to time request that Issuing Bank issue a Letter of Credit by delivering to Issuing Bank an application and delivering such letter of credit and reimbursement agreements and related other documents as required by Issuing Bank may request. Issuing Bank shall furnish a copy of such Letter of Credit to Borrower and Lenders promptly following the Agent, and issuance thereof.
(iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter Issuing Bank such fees as are incurred or charged by Issuing Bank in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentCredit.
(biv) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”)Issuing Bank grants to each Lender, a Revolving Loan shall be deemed and each Lender irrevocably agrees to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence accept and payment of a Draw no later than 12:00 p.m. (Cleveland time) purchase from Issuing Bank, on the date of terms and conditions set forth below, an undivided interest equal to such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent Lender’s Commitment Percentage in U.S. Dollars Issuing Bank’s obligations and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, rights under and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery and the amount of each draft paid by Issuing Bank thereunder. If a draft is paid under any Letter of Credit Request for which Issuing Bank is not reimbursed in full by Borrower, such Lender shall pay to Issuing Bank upon demand an
11. amount equal to such Lender’s Commitment Percentage of the amount of such draft, or any part thereof, that is not so reimbursed. Each Lender’s obligation to pay such amount shall be deemed a representation absolute and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditunconditional.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
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Letters of Credit. (a) If any Event of Default shall occur and be continuing, on the Business Day on which the Borrower receives notice from the Collateral Agent demanding the deposit of cash collateral pursuant to this paragraph, the Borrower agrees to deposit into the XX Xxxx Collateral Account, an amount in Dollars in cash equal to 105% of the Letter of Credit Exposure for all Participants; provided that the obligation to deposit such amount will become effective immediately, and such deposit will become immediately due and payable, without demand or other notice of any kind, upon the occurrence of the Acceleration Date. Each such deposit pursuant to this paragraph shall be held by the Collateral Agent as collateral for the payment and performance of the obligations of the Borrower with respect to Letters of Credit under Section 2.01. The Banks agree Collateral Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Moneys in such account shall be applied by the Collateral Agent to make available reimburse the Issuing Bank for LC Disbursements made by it with respect to Letters of Credit for which the Issuing Bank has not been reimbursed pursuant to Section 2.01 and, to the extent not so applied, shall be held to satisfy drawings under Letters of Credit as they occur. If the Borrower is required to deposit an amount in the XX Xxxx Collateral Account as a result of the occurrence of an Event of Default (and the Acceleration Date shall not have occurred), such amount (to the extent not applied as aforesaid) shall be returned to the Borrower letters within three Business Days after all Events of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount Default have been cured or waived. If at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to either (ix) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of cash held in the requested letter XX Xxxx Collateral Account exceeds 105% of credit. The Borrower the Letter of Credit Exposure for all Participants or (y) any cash remains on deposit in the XX Xxxx Collateral Account after all Letters of Credit have either been fully drawn or expired, then such excess or remaining amount shall pay a fee for each letter be (A) if the Acceleration Date shall have occurred or Event of credit Default shall be continuing, applied to the Agent for the Pro rata benefit of the Banksother Obligations, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstandingif any, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided thatorder set forth in Section 7.06 above and (B) otherwise, the Agent shall be entitled to .125% of such fee prior returned to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentBorrower.
(b) In On the event Acceleration Date, the Administrative Agent pays any shall request the Deposit Bank to withdraw from the Deposit Account and to pay same over to it, and shall return to each Participant such Participant’s Deposits in an amount equal to the amount by which such Participant’s Commitments at such time exceeds such Participant’s Letter of Credit Exposure at such time. If on such date the Issuing Bank has made LC Disbursements in respect of Letters of Credit for which the Issuing Bank has not been reimbursed pursuant to Section 2.01(c) or by application of amounts held in the XX Xxxx Collateral Account pursuant to Section 7.07(a), the Administrative Agent shall request the Deposit Bank to withdraw a portion of each Participant’s Deposits (if any) in an amount equal to such Participant’s Pro Rata Share of such unreimbursed LC Disbursements and deliver such amount to the Issuing Bank in satisfaction of the obligations of the respective Participants under or on account of a letter of credit Section 2.01(c) (but not the Borrower’s Reimbursement Obligation under Section 2.01(c), which obligation shall only be satisfied by payment by the Borrower to the Administrative Agent under for application in accordance with Section 2.01(c) or on by application of amounts held in the XX Xxxx Collateral Account as set forth in Section 7.07(a) above). The Administrative Agent shall then request the Deposit Bank to withdraw all amounts remaining in the Deposit Account and deposit same in a new separate account of a letter of credit being herein called or accounts for each applicable Participant maintained with the Collateral Agent (each a “DrawLC Reserve Account”), a Revolving Loan . The Administrative Agent shall be deemed to be made to the Borrower by deposit in each Bank to the extent of its Participant’s LC Reserve Account such Participant’s Pro rata share Rata Share of the Total Revolving Loan Commitments to reimburse immediately amounts received from the Agent for the amount of the DrawDeposit Account as provided above. The Collateral Agent shall notify have sole dominion and control over each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the BorrowerLC Reserve Account, and the Borrower amounts deposited in each LC Reserve Account shall immediately pay be held in such corresponding amount to the AgentLC Reserve Account until withdrawn as provided in paragraph (c), (d), or (e) below. The Collateral Agent shall also be entitled maintain records enabling it to recover from determine the Bank or amounts paid over to it and deposited in the Borrower, as the case may be, interest on such corresponding amount LC Reserve Accounts in respect of each day from Letter of Credit and the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated amounts on deposit in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount respect of each DrawLetter of Credit attributable to each Participant’s Pro Rata Share. The amounts held in each Participant’s LC Reserve Account shall be held as a reserve against the LC Exposures, together with interest thereonshall be the property of such Participant, shall not constitute a loan to or give rise to any claim of or against any account Loan Party and shall not give rise to any obligation on the part of any Loan Party to pay interest to such Participant, it being agreed that the Borrower maintained with the Agentreimbursement obligations in respect of Letters of Credit shall arise only at such times as drawings are made thereunder, as provided in Section 2.01.
(c) So long as letters In the event that after the Acceleration Date any drawing shall be made in respect of credit are outstandinga Letter of Credit which is not immediately reimbursed by the Borrower (including by application of amounts held in the XX Xxxx Collateral Account pursuant to Section 7.07(a)), the Collateral Agent shall, at the request of the Issuing Bank, withdraw from the LC Reserve Account of each Participant any amounts, up to the amount of Revolving Loans that such Participant’s Pro Rata Share of such drawing deposited in respect of such Letter of Credit and remaining on deposit and deliver such amounts to the Issuing Bank in satisfaction of the obligation of the respective Participants under Section 2.01(c) (but not the Borrower’s Reimbursement Obligation under Section 2.01(c), which obligation shall only be satisfied by payment by the Borrower is entitled to obtain under Article II shall be reduced the Administrative Agent for application in accordance with Section 2.01(c) or by the LC Obligations then outstanding and, application of amounts held as cash collateral as set forth in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving LoansSection 7.07(a) above).
(d) Whenever In the Borrower desires event that a letter of credit be issued, after the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Acceleration Date any Letter of Credit Request”). Each shall expire undrawn, the Collateral Agent shall withdraw from the LC Reserve Account of each Participant the amount remaining on deposit therein in respect of such Letter of Credit Request shall include an application for and distribute such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Requestamount to such Participant.
(e) The delivery With the prior written approval of each the Collateral Agent and the Issuing Bank, any Participant may withdraw the amount held in its LC Reserve Account. Any Participant making such a withdrawal shall be unconditionally obligated, in the event there shall subsequently be a drawing under any Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as Credit, to pay over to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shallCollateral Agent, on for the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice account of the issuance Issuing Bank on demand, its Pro Rata Share of such drawing or amendment or modification to such letter of creditpayment.
(f) In determining whether to pay under Pending the withdrawal by any letter Participant of creditany amounts from its LC Reserve Accounts as contemplated by the above paragraphs, the Collateral Agent shall will, at the direction of such Participant and subject to such rules as the Collateral Agent may prescribe for the avoidance of inconvenience, invest such amounts. Each Participant that has not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements withdrawn all of the letter of credit. Any action taken or omitted to be taken amounts in its LC Reserve Accounts as provided in paragraph (e) above shall have the right, at intervals reasonably specified by the Collateral Agent, to withdraw the earnings on investments so made by the Collateral Agent with respect amounts remaining in its LC Reserve Accounts and to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability retain such earnings for the Agentits own account.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
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Letters of Credit. (a) The Banks agree Subject to make available to the Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to terms and conditions hereof (including Section 2.1(a) hereof, assuming the Borrowers had requested an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan Advance in the amount of the requested letter stated amount of creditthe Letter of Credit), at the written request of a Borrower, CBT will on or after the date hereof issue standby letters of credit ("Letters of Credit") for the account or benefit of such Borrower expiring on or before the Termination Date; provided, however, CBT shall not be required to issue a Letter of Credit if, after giving effect thereto, (i) the aggregate stated amount of all outstanding Letters of Credit, plus unreimbursed reimbursement obligations, would exceed $5,000,000 or (ii) the sum of the aggregate outstanding principal amount of all Advances and the aggregate stated amount of all outstanding Letters of Credit would exceed the aggregate amount of the Commitments. The Borrower aggregate stated amount of any and all Letters of Credit shall pay count against and reduce the available Commitments hereunder on a fee for each letter of credit to the Agent for the Pro pro rata benefit of the Banks, basis.
(b) Immediately upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each Letter of Credit hereunder, each Bank shall be deemed to have automatically, irrevocably and unconditionally purchased and received from CBT an undivided interest and participation in and to such letter Letter of credit remaining outstandingCredit, the obligations of the Borrowers in respect thereof, and the liability of CBT thereunder in an amount equal to the amount available for drawing under such Letter of Credit multiplied by such Bank's Percentage. The Administrative Agent will notify each Bank promptly (a) upon the issuance of any Letter of Credit and (b) upon any draw under a Letter of Credit. On or before the Business Day on which CBT makes payment of any draw on a Letter of Credit, on demand of CBT (which demand shall not require payment prior to the Business Day such payment is required to be made under the Letter of Credit), each Bank shall make payment to the Administrative Agent for the account of CBT, in immediately available funds an amount equal to such Bank's Percentage of the amount of such payment or draw. The obligation of each Bank to reimburse the Indicated Spread Administrative Agent for Revolving Loans under the LIBOR Rate Option on account of CBT shall be unconditional, continuing, irrevocable and absolute. In the stated event that any Bank fails to make payment to the Administrative Agent for the account of CBT of any amount of the letter of credit; provided thatdue hereunder, the Administrative Agent shall be entitled to .125% receive, retain and apply against such obligation the principal and interest otherwise payable to such Bank hereunder until the Administrative Agent receives such payment from such Bank on behalf of CBT or such fee prior to the distribution of the balance of obligation is otherwise fully satisfied; provided, however, that nothing contained in this sentence shall relieve such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments obligation to reimburse immediately the Administrative Agent on behalf of CBT for the such amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agentthis Section 2.12.
(c) So long as letters If and to the extent a drawing is at any time made under such a Letter of credit are outstandingCredit, the Borrowers agree to pay to the Administrative Agent, for the account of CBT and the Banks immediately and unconditionally upon demand in lawful money of the United States, an amount of Revolving Loans that the Borrower is entitled equal to obtain under Article II each amount which shall be reduced so drawn; and the Administrative Agent shall have the right to convert automatically the reimbursement obligation of the Borrowers arising out of any such drawing into an Advance made under this Agreement (each of the Borrowers hereby irrevocably authorizing the Administrative Agent to refinance without notice to the Borrowers the reimbursement obligation of the Borrowers arising out of any such drawing into such an Advance and to take all action on behalf of the Borrowers required pursuant to Section 2.1(d) hereof to request such Advance), and such Advance to be evidenced by the LC Obligations then outstanding andNotes and for all purposes of this Agreement although without regard to the conditions precedent to making any such Advance and any requirement of this Agreement that each Advance under this Agreement be in a minimum amount. If and to the extent any such Letter of Credit expires or otherwise terminates in a manner satisfactory to CBT without having been drawn upon, in addition to otherwise constituting part the available Commitments of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit Banks shall to such extent be treated as principal of the Revolving Loansreinstated.
(d) Whenever The Borrowers agree to pay (i) monthly, in arrears, to the Borrower desires that Administrative Agent for the ratable benefit of the Banks a letter of credit be issuedfee, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) computed at least five Cleveland Banking Days (or such shorter period as may be acceptable an annual rate equal to the Agent) prior Applicable Margin in effect from time to time applied to the proposed aggregate amount available for drawing under all of the Letters of Credit issued for the account of the Borrowers, or either of them, from the date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Requestuntil the expiration thereof, and (ii) to CBT directly for its benefit as issuing bank, all customary fees (including fronting fees) and other issuance, amendment, document examination, negotiation and presentment expenses and related charges in connection with the issuance, amendment, presentation of drafts, and the like customarily charged by CBT with respect to standby letters of credit, payable at the time of invoice of such amounts.
(ei) The delivery In addition to amounts payable as elsewhere provided in this Agreement, each of the Borrowers hereby agrees to protect, indemnify, pay and save harmless the Administrative Agent, each Bank and CBT from and against any and all liabilities and costs which the Administrative Agent, any Bank or CBT may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit Request shall be deemed other than, in the case of CBT, as a representation and warranty result of (A) its gross negligence or willful misconduct, as determined by the Borrower that such letter final judgment of credit as requested a court of competent jurisdiction, in determining whether documents presented under any Letter of Credit comply with the terms thereof, or (B) the failure of CBT to honor a drawing under such Letter of Credit Request may be issued in accordance with and will not violate the requirements as a result of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount any act or omission, whether rightful or wrongful, of any present or future de jure or de facto governmental authority (all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of such acts or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditomissions herein called "Governmental Acts").
(fii) As among the Borrowers, the Banks, CBT and the Administrative Agent, the Borrowers assume all risks of the acts and omissions of, or misuse of such Letter of Credit by, the beneficiary of any Letter of Credit. In furtherance and not in limitation of the foregoing, subject to the provisions of the Letter of Credit applications and Letter of Credit reimbursement agreements executed by the Borrowers, or either of them, at the time of request for any Letter of Credit, CBT, the Administrative Agent and the Banks shall not be responsible: (A) 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 the Letters of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient , inaccurate, fraudulent or forged; (B) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (C) for failure of the beneficiary of a Letter of Credit to comply with conditions required in order to draw upon such Letter of Credit; (D) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, or other similar form of teletransmission or otherwise; (E) for errors in interpretation of technical trade terms; (F) 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; (G) for the misapplication by the beneficiary of a Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (H) for any consequences arising from causes beyond the control of the Administrative Agent, CBT and the Banks.
(iii) In determining whether to pay under any letter of credit, the Agent shall furtherance and extension and not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements in limitation of the letter of credit. Any specific provisions hereinabove set forth, any action taken or omitted to be taken by CBT under or in connection with Letters of Credit issued on behalf of the Agent with respect to a letter Borrowers, or either of credit issued by it if taken them, or omitted any related certificates shall not, in the absence of gross negligence or willful misconductmisconduct of CBT, shall not create as determined by the final judgment of a court of competent jurisdiction, in determining whether documents presented under any Letter of Credit comply with the terms thereof, put CBT, the Agent or any Bank under any resulting liability for to the AgentBorrowers or relieve the Borrowers of any of their obligations hereunder to any such Person.
(giv) Immediately prior Without prejudice to the effectiveness survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in this Section 2.12(e) shall survive the payment in full of principal and interest hereunder, the termination of the Letters of Credit and termination of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
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Letters of Credit. (a) The Banks agree to make available Existing Letters of Credit described in Schedule 2.4 shall be Letters of Credit for all purposes under this Agreement. Subject to the Borrower letters of creditterms and conditions hereof, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding and from time to time from the Closing Date through the Revolving Loan Maturity Date, the Issuing Lender shall issue such Letters of $100,000,000 minus Credit under the Revolving Commitment as Borrower Representative may request by a Request for Letter of Credit; provided that (i) giving effect to all such Letters of Credit, the sum of (A) the aggregate principal amount outstanding under the Revolving Notes plus (B) the Aggregate Effective Amount of all outstanding Letters of Credit, does not exceed the then applicable Revolving Commitment and (ii) the Aggregate Effective Amount under all outstanding Surety Bonds issued by Letters of Credit does not exceed $10,000,000. Each Letter of Credit shall be in a Surety on behalf form acceptable to the Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the term of any Letter of Credit shall not exceed one (1) year or extend beyond the Revolving Loan Maturity Date.
(b) Each Request for Letter of Credit shall be submitted to the Issuing Lender, with a copy to the Administrative Agent, at least two (2) Banking Days prior to the date upon which the related Letter of Credit is proposed to be issued. The Administrative Agent shall promptly notify the Issuing Lender whether such Request for Letter of Credit, and the issuance of a Letter of Credit pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit, the Issuing Lender shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify the Lenders, of the Parent amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Lender shall be deemed to have purchased a pro rata participation in such Letter of Credit from the Issuing Lender in an amount equal to that Lender’s Pro Rata Share. Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed by Borrowers for any payment required to be made by the Issuing Lender under any Letter of Credit, each Lender shall, pro rata according to its Pro Rata Share, reimburse the Issuing Lender through the Administrative Agent promptly upon demand for the amount of such payment. The obligation of each Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrowers to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit together with interest as hereinafter provided.
(d) Borrowers agree to pay to the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of Credit within one (1) Banking Day after demand made by the Issuing Lender therefor, together with interest on such amount from the date of any payment made by the Issuing Lender at the rate applicable to Alternate Base Rate Loans for two (2) Banking Days and thereafter at the Default Rate. The principal amount of any such payment shall be used to reimburse the Issuing Lender for the payment made by it under the Letter of Credit and, to the extent that the Lenders have not reimbursed the Issuing Lender pursuant to an Indemnity AgreementSection 2.5(c), the interest amount of any such payment shall be for the account of the Issuing Lender. Each Lender that has reimbursed the Issuing Lender pursuant to Section 2.5(c) for its Pro Rata Share of any payment made by the Issuing Lender under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of such reimbursement, in the claim of the Issuing Lender against Borrowers for reimbursement of principal and interest under this Section 2.5(d) and shall share, in accordance with that pro rata participation, in any principal payment made by Borrowers with respect to such claim and in any interest payment made by Borrowers (but only with respect to periods subsequent to the date such Lender reimbursed the Issuing Lender) with respect to such claim.
(e) Borrower Representative may, pursuant to a Request for Loan, request that Advances be made pursuant to Section 2.1(a) to provide funds for the payment required by Section 2.5(d) and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The availability proceeds of letters such Advances shall be paid directly to the Issuing Lender to reimburse it for the payment made by it under the Letter of credit will Credit.
(f) If Borrowers fail to make the payment required by Section 2.5(d) within the time period therein set forth, in lieu of the reimbursement to the Issuing Lender under Section 2.5(c) the Issuing Lender may (but is not required to), without notice to or the consent of Borrowers, instruct the Administrative Agent to cause Advances to be made by the Lenders under the Revolving Commitment in an aggregate amount equal to the amount paid by the Issuing Lender with respect to that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid directly to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit.
(g) The issuance of any supplement, modification, amendment, renewal, or extension to or of any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit.
(h) The obligation of Borrowers to pay to the Issuing Lender the amount of any payment made by the Issuing Lender under any Letter of Credit shall be absolute, unconditional, and irrevocable, subject only to performance by the Issuing Lender of its obligations to Borrowers under Uniform Commercial Code Section 5109. Without limiting the foregoing, Borrowers’ obligations shall not be affected by any of the following circumstances:
(i) any lack of validity or enforceability prior to its stated expiration date of the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, with the consent of Borrowers;
(iii) the existence of any claim, setoff, defense, or other rights which any Borrower may have at any time against the Issuing Lender, the Administrative Agent or any Lender, any beneficiary of the Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being satisfied untrue or inaccurate in any respect whatsoever so long as any such document appeared substantially to comply with the terms of the letter Letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.Credit;
(bv) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent Issuing Lender in good faith under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each against presentation of a draft or any accompanying document which does not strictly comply with the terms of the Letter of Credit;
(vi) the existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit Request shall include an application for or any difference between any such letter Property and the character, quality, quantity, condition, or value of credit and any other such Property as described in such documents;
(vii) the time, place, manner, order or contents of shipments or deliveries of Property as described in documents that the Agent customarily requires presented in connection therewith. The Agent shall promptly notify each Bank of each with any Letter of Credit Request.or the existence, nature and extent of any insurance relative thereto;
(eviii) The delivery the solvency or financial responsibility of each any party issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any Property;
(x) any error in the transmission of any message relating to a Letter of Credit Request shall be deemed a representation and warranty not caused by the Borrower that Issuing Lender, or any delay or interruption in any such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.message;
(fxi) In determining whether to pay under any letter of crediterror, the Agent shall not have any obligation relative to the Banks neglect or default (other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct) of any correspondent of the Issuing Lender in connection with a Letter of Credit;
(xii) any consequence arising from acts of God, shall not create war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or other similar causes beyond the control of the Issuing Lender;
(xiii) so long as the Issuing Lender in good faith determines that the contract or document appears substantially to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any resulting liability for contract or document referred to in any document submitted to the AgentIssuing Lender in connection with a Letter of Credit; and
(xiv) where the Issuing Lender has acted in good faith and observed general banking usage, any other circumstances whatsoever.
(gi) Immediately prior The Issuing Lender shall be entitled to the effectiveness protection accorded to the Administrative Agent pursuant to Section 10.6, with all necessary changes.
(j) The Uniform Customs and Practice for Documentary Credits, as published in its most current version by the International Chamber of this AgreementCommerce, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed a part of this Section and shall apply to be, and hereby are converted into, outstanding letters all Letters of credit hereunderCredit to the extent not inconsistent with applicable Law.
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Letters of Credit. (a) The Banks agree to make available to At the Borrower letters request of creditBorrower, issued by Coast may, in its sole discretion, arrange for the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability issuance of letters of credit will be subject to for the account of Borrower (i) the Agent being satisfied with the terms collectively, "Letters of the letter of creditCredit"), (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions issuing guarantees to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount issuer of the letter of credit requestedor by other means. All Letters of Credit shall be in form and substance satisfactory to Coast in its sole discretion . The aggregate face amount of all outstanding Letters of Credit from time to time shall not exceed $7,500,000 (the "Letter of Credit Sublimit"), and shall be reserved against Loans which would otherwise be available hereunder. Borrower shall pay all bank charges for the other conditions issuance of Section 5.03 Letters of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required Credit. Any payment by the Agent.
(b) In the event the Agent pays any amount Coast under or on account in connection with a Letter of Credit shall constitute a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) hereunder on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount payment is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include have an application expiry date no later than thirty (30) days prior to the initial renewal date set forth in Section 8 and thereafter each subsequent renewal date. Borrower hereby agrees to indemnify, save, and hold Coast harmless from any loss, cost, expense, or liability, including payments made by Coast, expenses, and reasonable attorneys' fees incurred by Coast arising out of or in connection with any Letters of Credit. Borrower agrees to be bound by the regulations and interpretations of the issuer of any Letters of Credit guarantied by Coast and opened for Borrower's account or by Coast's interpretations of any Letter of Credit issued by Coast for Borrower's account, and Borrower understands and agrees that Coast 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 Letters of Credit or any modifications, amendments, or supplements thereto. Borrower understands that Letters of Credit may require Coast to indemnify the issuing bank for certain costs or liabilities arising out of claims by Borrower against such letter issuing bank. Borrower hereby agrees to indemnify and hold Coast harmless with respect to any loss, cost, expense, or liability incurred by Coast under any Letter of credit Credit as a result of Coast's indemnification of any such issuing bank. The provisions of this Loan Agreement, as it pertains to Letters of Credit, and any other present or future documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter or agreements between Borrower and Coast relating to Letters of Credit Requestare cumulative.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan and Security Agreement (Catalyst Semiconductor Inc)
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions hereof, each LC Issuing Bank agrees to issue Letters of Credit from time to time for the account of the Borrower letters of credit(or to extend the stated maturity thereof or to amend or modify the terms thereof), issued by the Agentin an aggregate stated amount not exceeding such LC Issuing Bank’s Fronting Commitment, pursuant to their respective Commitments up to an a maximum aggregate stated amount for all Letters of Credit at any one time outstanding equal to the LC Commitment Amount. With respect to Letters of $100,000,000 minus Credit that are not Bond Letters of Credit, such issuance shall occur on not less than three Business Days’ prior notice thereof by delivery of (x) a Request for Issuance for such Letter of Credit to the aggregate principal amount Administrative Agent and the LC Issuing Bank for such Letter of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the AgentCredit, and (iiiy) the satisfaction such LC Issuing Bank’s standard form of all conditions to the Borrower obtaining a Loan in the amount Letter of Credit application for the requested letter Letter of credit. The Borrower shall Credit (including, for direct pay a fee for each letter Letters of credit Credit, any reimbursement agreement or other standard form required by such LC Issuing Bank) to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requesteddepartment of such LC Issuing Bank for the account of the Borrower. With respect to each Bond Letter of Credit, such issuance shall occur after receipt of (x) a Request for Issuance for such Bond Letter of Credit to the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan Administrative Agent and the Borrower has executed and delivered LC Issuing Bank for such letter Bond Letter of creditCredit, reimbursement agreements and other related documents (y) the Xxxx XX Reimbursement Agreement for such Bond Letter of Credit, as may be required by the AgentLC Issuing Bank for such Bond Letter of Credit, and (z) the documents required pursuant to Section 3.03 and such Xxxx XX Reimbursement Agreement; provided that in the case of any Request for Issuance for an extension of an outstanding Bond Letter of Credit, such Request for Issuance shall be delivered to the Administrative Agent and the applicable LC Issuing Bank at least 90 days prior to the then-current Stated Expiry Date of such Bond Letter of Credit. Each Letter of Credit shall be issued in a form acceptable to the applicable LC Issuing Bank. Each Request for Issuance shall specify (i) the identity of the applicable LC Issuing Bank, (ii) the date (which shall be a Business Day) of issuance of such Letter of Credit (or the date of effectiveness of such extension, modification or amendment) and the Stated Expiry Date thereof, (iii) the proposed stated amount of such Letter of Credit (which amount (A) shall not be less than $100,000 and (B) may be subject to any automatic increase and reinstatement provisions), (iv) the name and address of the beneficiary of such Letter of Credit and (v) a statement of drawing conditions applicable to such Letter of Credit. If such Request for Issuance relates to an amendment or modification of a Letter of Credit, it shall be accompanied by the consent of the beneficiary of the Letter of Credit thereto (except in the case of an extension of the Stated Expiry Date of any Bond Letter of Credit where no consent of the beneficiary is required for such extension). If so requested by the Borrower, a Letter of Credit that is not a Bond Letter of Credit may provide that it is automatically renewable for additional one-year periods if subject to an ability of the
(i) On the Closing Date with respect to all Existing Letters of Credit and (ii) upon the date of issuance with respect to all other Letters of Credit, each Lender shall be deemed, without further action by any party hereto, to have irrevocably and unconditionally purchased from such LC Issuing Bank without recourse a participation in such Letter of Credit equal to such Xxxxxx’s Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit. Upon each modification of a Letter of Credit by any LC Issuing Bank which modifies the aggregate amount available to be drawn under such Letter of Credit, such LC Issuing Bank and the Lenders shall be deemed, without further action by any party hereto, to have purchased or sold, as appropriate, participations in such Letter of Credit such that each Lender’s participation in such Letter of Credit shall equal such Lender’s Commitment Percentage of such modified aggregate amount available to be drawn under such Letter of Credit. Each Letter of Credit shall utilize the Commitment of each Lender by an amount equal to the amount of such participation. Without limiting the foregoing, any LC Issuing Bank that issues a Bond Letter of Credit agrees that (i) all Bonds pledged to such LC Issuing Bank pursuant to any applicable Pledge Agreement or otherwise registered in the name of such LC Issuing Bank pursuant to the other Related Documents will be held for the benefit of such LC Issuing Bank and the Lenders and (ii) to apply and/or remit all proceeds from the sale or remarketing of such Bonds in accordance with Section 2.17(f). Notwithstanding anything herein to the contrary, Barclays Bank PLC, as an LC Issuing Bank, shall only be required to issue standby Letters of Credit (and shall not, for the avoidance of doubt, be required to issue a Bond Letter of Credit).
(b) In The Borrower may from time to time appoint one or more additional Lenders (with the event consent of any such Lender, which consent may be withheld in the Agent pays any amount under sole discretion of each Lender) to act, either directly or on account through an Affiliate of such Lender, as an LC Issuing Bank hereunder. Any such appointment and the terms thereof shall be evidenced in a letter of credit (the payment separate written agreement executed by the Agent under or on account of a letter of credit being herein called a “Draw”)Borrower and the relevant LC Issuing Bank, a Revolving Loan copy of which agreement shall be deemed to be made to the Borrower delivered by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.the
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Each Issuing Bank agrees, on the terms and subject to the Borrower conditions herein set forth, to issue letters of credit (such letters of credit, issued the “Letters of Credit”) for the account of any Borrower on any Letter of Credit Business Day from time to time during the period from the date hereof until 30 days prior to the Termination Date. No Issuing Bank shall have any obligation to issue, and no Borrower shall request the issuance of, any Letter of Credit hereunder if after giving effect thereto (i) the Commitment Outstanding Amount of any Lender would exceed such Lender’s Commitment or (ii) the Total Outstanding Amount would exceed the aggregate amount of the Commitments (as such Issuing Bank shall be advised by the AgentAdministrative Agent as contemplated by Section 2.04). No Issuing Bank shall have any obligation to issue, pursuant to their respective Commitments up to an aggregate amount at and no Borrower shall request the issuance of, any one time outstanding Letter of $100,000,000 minus Credit hereunder if the aggregate principal Available Amounts or the aggregate stated amount of all then outstanding Surety Bonds Letters of Credit issued by such Issuing Bank would exceed, after giving effect to such issuance, the maximum amount set forth in a Surety letter agreement between such Issuing Bank and Parent, on behalf of the Parent pursuant Borrowers. No Issuing Bank shall have any obligation to an Indemnity Agreement. The availability issue, and no Borrower shall request the issuance of, any Letter of letters of credit will be subject to Credit except within the following limitations: (i) the Agent being satisfied with the terms each Letter of the letter of creditCredit shall be denominated in U.S. dollars (unless issued pursuant to Section 2.21), (ii) the Borrower’s executing each Letter of Credit shall be payable only against sight drafts (and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, not time drafts) and (iii) the satisfaction no Letter of Credit shall have an expiration date (including all conditions to the Borrower obtaining a Loan in the amount rights of the requested letter applicable Borrower or the beneficiary to require renewal) later than the earlier of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee 10 days prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date Termination Date and one year after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice andissuance thereof, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be but a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each may by its terms be automatically renewable annually unless the applicable Issuing Bank notifies the beneficiary thereof of its election not to renew such Letter of Credit Request shall include an application for such letter of credit and any other documents Credit; provided that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank terms of each Letter of Credit Request.
that is automatically renewable annually shall not permit the expiration date (eafter giving effect to any renewal) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may in any event to be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include extended to a representation and warranty as date later than 10 days prior to the aggregate principal amount of all then outstanding Surety BondsTermination Date. The Agent shall, on the date of each issuance of or amendment or modification No Issuing Bank shall have any obligation to a issue any letter of credit by itwhich is unsatisfactory in form, give each Bank and the Borrower written notice of the issuance of substance or amendment or modification beneficiary to such letter Issuing Bank in the exercise of credit.
(f) In determining whether to pay under any letter of credit, the Agent its reasonable judgment consistent with its customary practice. No Issuing Bank shall not have any obligation relative to the Banks other than to determine issue a Letter in Credit in favor of a beneficiary that any documents required to be delivered under such letter of credit have been delivered and is a Sanctioned Person or that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued is organized under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters laws of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereundera Sanctioned Country.
Appears in 1 contract
Samples: Credit Agreement (Ace LTD)
Letters of Credit. (a) 2.1. The Banks agree to make available Letter of Credit Commitment; Letter of Credit Fee. Subject to the Borrower letters of creditterms and conditions hereof, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding and from time to time from the Effective Date through the date that is three (3) Business Days prior to the Termination Date, the Lender shall take such Letter of $100,000,000 minus Credit Actions as the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to Borrower may request; provided, however, that (i) the Agent being satisfied with aggregate outstanding Letter of Credit Usage shall not exceed the terms Letter of the letter of creditCredit Commitment at any time, and (ii) the Borrower’s executing each Letter of Credit Action shall be in a form reasonably acceptable to Lender and delivering such letter shall not violate any policies of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction Lender. Each Letter of all conditions to the Borrower obtaining Credit will be a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each nontransferable standby letter of credit to the Agent for the Pro rata benefit support payment and/or performance obligations of the Banks, upon Borrower or any of its Subsidiaries. No Letter of Credit shall expire more than 365 days after the date of issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided except that, at the Agent request of Borrower, such Letter of Credit shall provide that it shall be entitled to .125% automatically renewed for a one-year period unless the Lender, as issuer of such fee prior Letter of Credit, shall give at least 90 days advance notice to the distribution beneficiary thereof that such Letter of Credit shall not be automatically renewed. If any Letter of Credit shall remain outstanding after the balance Termination Date or other date upon which Lender's Letter of such fee Pro rata Credit Commitment expires pursuant to the Banks. In additionterms hereof, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice andshall, not later than 1:00 p.m. sixty (Cleveland time60) days thereafter with respect to all such then outstanding Letters of Credit, (i) deposit Cash Equivalents in an amount equal to one hundred and two percent (102%) of the Letter of Credit Usage as of the date such deposit shall be required in a collateral account with the Lender (which account shall, with respect to all cash collateral, bear interest for the account of the Borrower or be invested in Cash Equivalents (other than cash) at the direction, and for the account, of the Borrower), or (ii) cause the then outstanding Letters of Credit to be replaced and terminated. In the case of each Letter of Credit issued hereunder, a Letter of Credit Issuance Fee shall be payable to the Lender on the issuance date thereof and the Letter of such notice, each Bank will make available Credit Fee with respect thereto shall be payable quarterly in advance. At least two (2) Business Days prior to the Agent its Pro rata portion commencement of any quarterly period during which any Letter of Credit shall remain outstanding, the Draw deemed to be a Revolving Loan. All amounts Lender shall be made available deliver to the Agent in U.S. Dollars and immediately available funds at its office listed on Borrower a statement showing the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to Letter of Credit Fee due for the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrowernext quarterly period, and the Borrower shall immediately pay the Letter of Credit Fee then due not later than five (5) Business Days following receipt of such corresponding amount statement (unless such statement shall be delivered more than five (5) Business Days prior to the Agent. The Agent commencement of any quarterly period, in which case the Borrower shall also not be entitled required to recover from pay the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect Letter of each day from the date such corresponding amount was made available by the Agent Credit fee then due prior to the Borrower first Business Day of the quarterly period as to the date which such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loansfee shall relate). In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount that any Letter of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II Credit shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) have terminated prior to the proposed date end of issuance (any quarterly period as to which the Lender shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “have received such advance Letter of Credit Request”). Each Fee, the Lender shall refund to the Borrower the unearned portion of the Letter of Credit Request shall include an application for such letter Fee in respect of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Requestthat shall have early terminated.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Letter of Credit Facility Agreement (Alliance Resource Partners Lp)
Letters of Credit. (a) The Banks agree to make available Upon receipt by the Administrative Agent of at least three (3) Business Days written notice from the Borrower in the form of a Request for Issuance of Letter of Credit, the Administrative Agent shall promptly forward such notice to the Borrower letters of creditArrangers, issued the Issuing Bank or, if requested by the AgentBorrower, pursuant to their respective Commitments up another Lender agreeing to act as an aggregate Issuing Bank (and if such Lender shall accept and countersign such Request for Issuance of Letter of Credit, such Lender shall become the Issuing Bank with respect to such Letter of Credit), and the applicable Issuing Bank will issue a Letter of Credit in the amount at any one time outstanding requested subject to the terms and conditions of $100,000,000 minus this Agreement and further subject to the following: (i) after giving effect to the requested issuance, the aggregate principal face amount of all Letters of Credit outstanding hereunder would not exceed the Letter of Credit Committed Amount, and (ii) after giving effect to the requested issuance, the aggregate amount of all L/C Obligations then outstanding, plus the aggregate amount of Swing Loans then outstanding, plus the aggregate amount of all Revolving Loans then outstanding Surety Bonds issued by shall not exceed the Revolving Loan Commitment. No Letter of Credit shall have a Surety on behalf maturity extending beyond the earlier of (x) a term of one (1) year from the date of issuance or (y) the Initial Maturity Date. Subject to the maturity limitations provided herein and so long as no Default or Event of Default then exists or would be caused thereby, Letters of Credit shall be renewable annually upon the request of the Parent pursuant to an Indemnity Agreement. The availability Borrower and with the consent of letters of credit will the applicable Issuing Bank, which consent shall not be unreasonably withheld but shall be subject to compliance with customary letter of credit practices at the times of any proposed renewal. Each Request for Issuance of Letter of Credit from the Borrower shall specify in reasonable detail the documents which must be presented to draw under such Letter of Credit, which specification shall include all documents which the applicable Issuing Bank may reasonably require.
(ib) If a Letter of Credit provides that it is automatically renewable unless notice is given by the Issuing Bank with respect thereto that it will not be renewed, such Issuing Bank and the Borrower shall give notice of nonrenewal to the Administrative Agent being satisfied at least ten (10) Business Days prior to the last date on which a notice of non-renewal may be given to the beneficiary of such Letter of Credit. The Administrative Agent shall promptly notify the Lenders and, unless so directed by the Majority Lenders at least three (3) Business Days prior to the last date on which a notice of non-renewal may be given to the beneficiary of such Letter of Credit, the Issuing Bank with respect to such Letter of Credit shall not be bound to give notice of non-renewal to the beneficiary of such Letter of Credit.
(c) Provided that no Default or Event of Default then exists or would be caused thereby, each Lender irrevocably authorizes each Issuing Bank to issue, reconfirm, reissue and extend each Letter of Credit issued by such Issuing Bank in accordance with the terms of the letter of creditthis Agreement. Each Issuing Bank hereby sells, and each other Lender that has issued a Revolving Loan Commitment hereby purchases, on a continuing basis, a participation and an undivided interest in (iiA) the Borrower’s executing and delivering obligations of such letter Issuing Bank to honor any draws under the Letters of credit and reimbursement agreements and related documents as required by the AgentCredit issued pursuant to this Agreement, and (iiiB) the satisfaction Indebtedness of all conditions to the Borrower obtaining to such Issuing Bank under this Agreement in respect of Letters of Credit issued by it, such participation being in the amount of such Lender’s pro rata share of such obligations and Indebtedness based on such Lender’s Revolving Commitment Percentage, in each case without further action by any party.
(d) Upon receipt of a draw certificate from the beneficiary of a Letter of Credit, the applicable Issuing Bank shall promptly notify the Administrative Agent, which shall in turn notify the Borrower, the Arrangers and each Lender that has issued a Revolving Loan in Commitment, by telephone or telecopy, of the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit draw and, thereafter, upon in the annual anniversary of the issuance case of each such letter of credit remaining outstandingLender, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% such Lender’s portion of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance draw amount as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the its Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit RequestCommitment Percentage.
(e) The delivery of Borrower hereby irrevocably requests, and the Lenders that have issued Revolving Loan Commitments hereby severally agree to make, a Base Rate Advance to the Borrower (notwithstanding the minimum amount requirements otherwise applicable to Base Rate Advances) on each day on which a draw is made under any Letter of Credit Request and in the amount of such draw, and each such Lender shall fund such Lender’s share of such Base Rate Advance by payment to the Administrative Agent in accordance with Section 2.2(e) hereof and its Revolving Commitment Percentage, without reduction for any set-off counterclaim of any nature whatsoever. The obligation of each such Lender to make payments to the Administrative Agent, for the account of each Issuing Bank, in accordance with this Section 2.15 shall be deemed a representation absolute and warranty unconditional, and no such Lender shall be relieved of its obligations to make such payments by reason of non-compliance by any other Person with the Borrower that such letter terms of credit as requested in such any Letter of Credit Request may be issued in accordance with and will not violate or for any other reason other than the requirements gross negligence or willful misconduct of this Section 3.01 and the Administrative Agent or the applicable Issuing Bank. The Administrative Agent shall include a representation and warranty as promptly remit to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on applicable Issuing Bank the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and amounts so received from the Borrower written notice of the issuance of or amendment or modification to such letter of creditapplicable Lenders.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine The Borrower agrees that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by any Issuing Bank in connection with any Letter of Credit issued by it, except for such actions or omissions as shall constitute gross negligence or willful misconduct on the Agent part of such Issuing Bank or such Issuing Bank’s willful failure to pay under any such Letter of Credit after presentation to it of documents complying with the terms of such Letter of Credit, shall be binding on the Borrower as between the Borrower and such Issuing Bank, and shall not result in any liability of the Issuing Bank to the Borrower. The obligation of the Borrower to reimburse the Lenders for Advances made to reimburse any Issuing Bank for draws under the Letters of Credit issued by it shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances whatsoever, including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any Loan Document;
(ii) Any amendment or waiver of or consent to any departure from any or all of the Loan Documents;
(iii) Any improper use which may be made of any Letter of Credit or any improper acts or omissions of any beneficiary or transferee of any Letter of Credit in connection therewith;
(iv) The existence of any claim, set-off, defense or any right which the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or Persons for whom any such beneficiary or any such transferee may be acting) or any Lender (other than the defense of payment to such Lender in accordance with the terms of this Agreement) or any other Person, whether in connection with any Letter of Credit, any transaction contemplated by any Letter of Credit, this Agreement, any other Loan Document, or any unrelated transaction;
(v) Any statement or any other documents presented under any Letter of Credit proving to be insufficient, forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever, provided that such payment shall not have constituted gross negligence of willful misconduct of the applicable Issuing Bank;
(vi) The insolvency of any Person issuing any documents in connection with any Letter of Credit;
(vii) Any breach of any agreement between the Borrower and any beneficiary or transferee of any Letter of Credit;
(viii) Any irregularity in the transaction with respect to which any Letter of Credit is issued, including any fraud by the beneficiary or any transferee of such Letter of Credit;
(ix) Any errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, wireless or otherwise, whether or not they are in code;
(x) Any act, error, neglect or default, omission, insolvency or failure of business of any of the correspondents of the applicable Issuing Bank, provided that the same shall not have constituted the gross negligence or willful misconduct of such Issuing Bank;
(xi) Any other circumstances arising from causes beyond the control of the applicable Issuing Bank;
(xii) Payment by the applicable Issuing Bank under any Letter of Credit against presentation of a letter sight draft or a certificate which does not comply with the terms of credit issued by it if taken such Letter of Credit, provided that such payment shall not have constituted gross negligence or omitted in willful misconduct of the absence Issuing Bank; and
(xiii) Any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, provided that such other circumstances or happenings shall not have been the result of gross negligence or willful misconduct, shall not create wilful misconduct of the applicable Issuing Bank or any resulting liability for the AgentLender.
(g) Immediately prior to If, after the effectiveness Agreement Date, any change in Applicable Law, any change in the interpretation or administration thereof, or any change in compliance with Applicable Law by any Issuing Bank or any other Lender as a result of this Agreementany request or directive of any governmental authority, central bank or comparable agency (whether or not having the outstanding force of law) shall (i) impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit, capital adequacy, assessment or other requirements or conditions against letters of credit issued under by any Issuing Bank or against participations by any other Lender in the 2002 Letters of Credit Agreement and/or or (ii) impose on any Issuing Bank or any other Lender any other condition regarding any Letter of Credit or any participation therein, and the 2004 result of any of the foregoing in the reasonable determination of such Issuing Bank or such Lender, as the case may be, is to increase the cost to such Issuing Bank or such Lender of issuing or maintaining any Letter of Credit Agreement are or purchasing or maintaining any participation therein, as listed on Exhibit C hereto and such letters of credit the case may be, by an amount (which amount shall be reasonably determined) deemed by such Issuing Bank or such Lender to be material, and the designation of a different lending office will not avoid the need for (or reduce the amount of) additional compensation, then, on the earlier of ten (10) days following the date of demand (which demand shall be made not later than six (6) months following such Issuing Bank’s or such Lender’s determination of a need for additional compensation) by such Issuing Bank or such Lender or the Initial Maturity Date, the Borrower shall promptly pay such Issuing Bank or such Lender, as the case may be, such additional amount or amounts as such Issuing Bank or such Lender, as the case may be, determines will compensate it for such increased costs. Within sixty (60) days of such written demand by such Issuing Bank or such Lender, the Borrower may, in its discretion, provide a replacement bank or banks for such Issuing Bank or such Lender, which replacement bank or banks will be subject to the approval of the Arrangers and hereby are converted intothe Majority Lenders (which approval, outstanding letters in each case, will not be unreasonably withheld), and shall take all necessary actions to transfer the rights, duties and obligations of credit such Issuing Bank or such Lender to such replacement bank or banks within such 60-day period. A certificate of such Lender setting forth the amount, and in reasonable detail the basis for such Issuing Bank’s or such Lender’s determination of such amount, to be paid to such Issuing Bank or such Lender by the Borrower as a result of any event referred to in this paragraph shall, absent manifest error, be conclusive. Such certificate shall be delivered to the Borrower with each written demand for payment referenced above. Each Issuing Bank and each Lender further agree that they shall use their best efforts to give the Borrower thirty (30) days prior notice, and in any event shall give prompt notice, of any event referred to in this paragraph which may have the effect of materially increasing the cost to such Issuing Bank or such Lender of issuing or maintaining the Letter of Credit or purchasing or maintaining any participation therein.
(h) Each Lender shall be responsible for its pro rata share (based on such Lender’s Revolving Commitment Percentage) of any and all reasonable out-of-pocket costs, expenses (including reasonable legal fees) and disbursements which may be incurred or made by any Issuing Bank in connection with the collection of any amounts due under, the administrative of, or the presentation or enforcement of any rights conferred by any Letter of Credit issued by such Issuing Bank, the Borrower’s or any Guarantor’s obligations to reimburse or otherwise. In the event the Borrower shall fail to pay such expenses of any Issuing Bank within thirty (30) days of demand for payment by such Issuing Bank, provided that such Issuing Bank has, during such 30-day period, made a diligent collection effort with respect to such expenses, and provided that such costs will not result from the gross negligence or wilful misconduct of such Issuing Bank, each Lender shall thereupon pay to such Issuing Bank its pro rata share (based on such Lender’s Revolving Commitment Percentage) of such expenses within ten (10) days from the date of such Issuing Bank’s notice to the Lenders of the Borrower’s failure to pay; provided, however, that if the Borrower or any Guarantor shall thereafter pay such expense, such Issuing Bank will repay to each Lender the amounts received from such Lender hereunder.
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Letters of Credit. (a) The Banks agree to make available Subject to the Borrower terms and conditions hereof and provided no Default has occurred and that the Issuing Bank is then generally issuing letters of creditcredit for its banking customers, issued by the AgentIssuing Bank shall at any time prior to the Revolving Credit Termination Date, upon the request of the Borrowers pursuant to their respective Commitments up to an aggregate amount at any one time outstanding paragraph (b) below, issue Letters of $100,000,000 minus Credit for the account of the Borrowers, PROVIDED that the aggregate principal face amount of all then outstanding Surety Bonds issued by a Surety on behalf Letters of Credit shall not at any time exceed $2,000,000. As of the Parent pursuant to an Indemnity Agreement. The availability date hereof, the Issuing Bank has issued the Existing Letters of letters of credit will be subject to (i) Credit for the Agent being satisfied with the terms account of the letter Borrowers, which from and after the date hereof shall be deemed to be Letters of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the AgentCredit issued hereunder, and (iii) the satisfaction of all conditions face amount thereof from time to time shall count against the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agentlimit set forth above.
(b) In The Borrowers may request that the event the Agent pays any amount under or on account Issuing Bank issue a Letter of a letter of credit (the payment Credit by written notice given by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made Borrowers to the Borrower by each Issuing Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later not less than 12:00 p.m. five (Cleveland time5) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Business Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written of such Letter of Credit. The notice shall be in (i) specify the form proposed date of Exhibit E hereto (eachissuance, a “the beneficiary, amount and the purpose of such Letter of Credit Request”and (ii) be accompanied by a completed letter of credit application furnished by the Issuing Bank.
(c) The Borrowers hereby agree, jointly and severally, to pay to the Issuing Bank on the date on which the Issuing Bank shall be required to pay any draft presented under any Letter of Credit, a sum (the "Reimbursement Obligation") equal to: (i) the amount so paid under such Letter of Credit, plus (ii) interest on any amount remaining unpaid by the Borrowers to the Issuing Bank under clause (i) from and including the date on which such amount becomes payable pursuant to clause (i) until payment in full, payable on demand, at a per annum rate of interest equal to the rate applicable to the Revolving Credit Advances which are Base Rate Loans. If the Borrowers shall fail to pay to the Issuing Bank the Reimbursement Obligation on the date on which the Issuing Bank shall be required to pay any draft presented under any Letter of Credit, the Administrative Agent shall, to the extent the Borrowers have availability to request a Revolving Credit Advance, consider such failure to be a request for a Revolving Credit Advance in the amount of the unpaid Reimbursement Obligation (which request shall be deemed a confirmation that the conditions set forth in Section 3.2 have been satisfied). Each , and the Administrative Agent shall apply the proceeds of such Revolving Credit Advance to reimburse the Issuing Bank for the Reimbursement Obligation.
(d) The Borrowers shall, jointly and severally, quarterly in arrears on the last day of each calendar quarter for the immediately preceding calendar quarter or portion thereof, pay (i) a fee (in each case, a "Letter of Credit Request shall include an application Fee") to the Issuing Bank for such letter the account of credit and any other documents that the Agent customarily requires Lenders in connection therewith. The Agent shall promptly notify each Bank respect of each Letter of Credit Requestissued at the request of the Borrowers a rate per annum equal to the LIBOR Rate Margin applicable to Revolving Credit Advances in effect at such time, multiplied by the average daily undrawn face amount of each Letter of Credit and (ii) a fronting fee to the Issuing Bank for its account equal at a rate per annum of 1/4% multiplied by the average daily undrawn face amount of each Letter of Credit. The Issuing Bank shall, in turn, remit to each Lender its pro rata portion of such Letter of Credit Fee. In addition, the Borrowers shall, jointly and severally, pay to the Issuing Bank, for its own account, on the date of issuance, or any extension or renewal of any Letter of Credit and at such other time or times as such charges are customarily made by the Issuing Bank, the Issuing Bank's standard issuance, processing, negotiation, amendment and administrative fees, determined in accordance with customary fees and charges for similar facilities.
(e) Each payment by the Borrowers hereunder shall be made to the Issuing Bank at its head office in Boston, Massachusetts in immediately available funds. Interest on any and all amounts remaining unpaid by the Borrowers under this Section 2.15 at any time from the date such amounts become due and payable (whether as stated in this Section 2.15, by acceleration or otherwise) until payment in full (whether before or after judgment) shall be payable to the Issuing Bank on demand at the rate for the overdue principal on Revolving Credit Advances which are Base Rate Loans.
(f) The delivery obligations of the Borrowers with respect to the Letters of Credit shall be joint and several, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of the Letters of Credit;
(ii) any amendment or waiver of or any consent to or actual departure from this Agreement;
(iii) the existence of any claim, set-off, defense or other right which the Borrowers may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons or entities for which any such beneficiary or any such transferee may be acting), the Issuing Bank or any other Person or entity, whether in connection with this Agreement, the transactions contemplated herein or in any other agreements or any unrelated transaction;
(iv) any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against presentation by the beneficiary thereof of a draft or certificate which does not comply with the terms of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
(g) The Uniform Customs and Practice shall be binding on the Borrowers, the Lenders and the Issuing Bank. The Borrowers assume all risks of the acts or omissions of the beneficiary of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in with respect to such Letter of Credit Request may be issued Credit. In furtherance of, and not in accordance with limitation of the Issuing Bank's rights and will not violate powers under the requirements Uniform Customs and Practice, but subject to all other provisions of this Section 3.01 paragraph (g), it is understood and shall include a representation and warranty as to agreed that the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Issuing Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative liability for, and that the Borrowers assume all responsibility for: (i) the genuineness of any signature; (ii) the form, correctness, validity, sufficiency, genuineness, falsification and legal effect of any draft, certification or other document required by a Letter of Credit or the authority of the Person signing the same; (iii) the failure of any instrument to bear any reference or adequate reference to a Letter of Credit or the failure of any Persons to note the amount of any instrument on the reverse of a Letter of Credit or to surrender a Letter of Credit or otherwise to comply with the terms and condition of a Letter of Credit; (iv) the good faith or acts of any Person other than the Issuing Bank and its agents and employees; (v) the existence, form or sufficiency or breach or default under any agreement or instrument of any nature whatsoever; (vi) any delay in giving or failure to give any notice, demand or protest; and (vii) any error, omission, delay in or nondelivery of any notice or other communication, however sent. The determination as to whether the required documents are presented prior to the Banks expiration of a Letter of Credit and whether such other than to determine documents are in proper and sufficient form for compliance with a Letter of Credit shall be made by the Issuing Bank in its sole discretion, which determination shall be conclusive and binding upon the Borrowers absent manifest error. It is agreed that the Issuing Bank may honor, as complying with the terms of a Letter of Credit and this Agreement, any documents required otherwise in order and signed or issued by the beneficiary thereof. Any action, inaction or omission on the part of the Issuing Bank under or in connection with the Letters of Credit or any related instruments or documents, if in good faith and in conformity with such laws, regulations or commercial or banking customs as the Issuing Bank may reasonably deem to be delivered applicable, shall be binding upon the Borrowers, shall not place the Issuing Bank under such letter any liability to the Borrowers, and shall not affect, impair or prevent the vesting of credit have been delivered and that they appear any of the Issuing Bank's rights or powers hereunder or the Borrowers' obligation to make full reimbursement of amounts drawn under the Letters of Credit.
(h) If the Borrowers, either in writing or orally, request or consent to any modification or extension of a Letter of Credit or waive failure of any draft, certificate or other documents to comply on their face with the requirements terms of a Letter of Credit, the letter of credit. Any Issuing Bank shall be entitled to rely and shall be deemed to have relied on such request, consent or waiver with respect to any action taken or omitted to be taken by the Agent with respect Issuing Bank pursuant to a letter of credit issued by it if taken any such request, consent or omitted in waiver, and such extension, modification or waiver shall be binding upon the absence of gross negligence or willful misconductBorrowers, shall not create any resulting liability for the Agentjointly and severally.
(gi) Immediately prior Each Lender severally agrees that it shall be absolutely liable, without regard to the effectiveness occurrence of this Agreementany Default or Event of Default or any other condition precedent whatsoever, to the extent of such Lender's Commitment Percentage, to reimburse the Issuing Bank on demand for the amount of each draft paid by the Issuing Bank under each Letter of Credit to the extent that such amount is not reimbursed by the Borrowers pursuant to paragraph (c) above (such agreement for a Lender being called herein the "Letter of Credit Participation" of such Lender).
(j) If any draft shall be presented or other demand for payment shall be made under any Letter of Credit, the outstanding letters Issuing Bank shall notify the Borrowers of credit issued under the 2002 Credit Agreement and/or date and amount of the 2004 Credit Agreement are draft presented or demand for payment and of the date and time when it expects to pay such draft or honor such demand for payment. If the Borrowers fail to reimburse the Issuing Bank as listed provided in paragraph (c) above on Exhibit C hereto or before the date that such draft is paid or other payment is made by the Issuing Bank, the Issuing Bank may at any time thereafter notify the Lenders of the amount of any such unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston time) on the Business Day next following the receipt of such notice, each Lender shall make available to the Issuing Bank, at its head office located in Boston, Massachusetts, in immediately available funds, such Lender's Commitment Percentage of such unpaid Reimbursement Obligation, together with an amount equal to the product of (i) the average, computed for the period referred to in clause (iii) below, of the weighted average interest rate paid by the Issuing Bank for federal funds acquired by the Issuing Bank during each day included in such period, TIMES (ii) the amount equal to such Lender's Commitment Percentage of such unpaid Reimbursement Obligation, TIMES (iii) a fraction, the numerator of which is the number of days that elapse from and including the date the Issuing Bank paid the draft presented for honor or otherwise made payment to the date on which such letters Lender's Commitment Percentage of credit such unpaid Reimbursement Obligation shall become immediately available to the Issuing Bank, and the denominator of which is 360.
(k) Neither the Issuing Bank nor any Lender nor any of their officers, directors or employees shall be deemed liable or responsible for: (i) the use which may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (ii) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to bebe in any or all respects invalid, insufficient, fraudulent or forged; (iii) payment by the Issuing Bank against presentation of documents which do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to a Letter of Credit; or (iv) any other circumstances whatsoever in making or failure to make payment under a Letter of Credit; PROVIDED that, notwithstanding anything in this Section 2.15 to the contrary, the Borrowers shall have a claim against the Lenders, and hereby are converted intothe Lenders shall be liable to the Borrowers, outstanding letters to the extent, but only to the extent, of credit hereunderany direct, as opposed to consequential, damages suffered by the Borrowers which were caused by the Issuing Bank's failure to conform to the standards of the Uniform Customs and Practice. In furtherance and not in limitation of the foregoing, the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available to Provided that the Borrower letters has satisfied the conditions precedent contained in Section 2A.1(c) hereof, the Issuing Bank agrees, from time to time, to issue and/or renew Standby Letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety Credit on behalf of the Parent pursuant Borrower so long as upon such issuance and/or renewal, after giving to an Indemnity Agreement. The availability such Standby Letter of letters of credit will be subject to Credit, (i) the Agent being satisfied with Outstanding Balance will not exceed the terms Commitment and (ii) the Letter of Credit Balance will not exceed the Letter of Credit Commitment. The expiration date of a Standby Letter of Credit may not exceed the earlier of the Maturity Date or one year after its issuance. On each Quarterly Payment Date and on the earlier of the expiration date of a Standby Letter of Credit and the date upon which the Obligations are paid in full and the Commitment terminated, Borrower shall pay in arrears to the Administrative Agent, for the account of each Lender according to its Pro Rata Share of the Commitment, a Standby Letter of Credit fee equal to the Eurodollar Rate Spread times the undrawn amount of each outstanding Standby Letter of Credit.
(b) Provided that the Borrower has satisfied the conditions precedent contained in Section 2A.1(c) hereof, the Issuing Bank agrees, from time to time, to issue and/or renew Commercial Letters of Credit on behalf of the Borrower so long as upon such issuance and/or renewal, after giving to such Commercial Letter of Credit, (i) the Outstanding Balance, will not exceed the Commitment and (ii) the Letter of Credit Balance will not exceed the Letter of Credit Commitment. The expiration date of a Commercial Letter of Credit may not exceed the Maturity Date. Borrower shall pay to the Administrative Agent, for the account of each Lender according to its Pro Rata Share of the Commitment, the Commercial Letter of Credit Fee upon the issuance and/or renewal of such Commercial Letter of Credit.
(c) The obligation of the Issuing Bank to issue and/or renew any Letters of Credit on behalf of the Borrower shall be subject to the following conditions precedent on the date of issuance or renewal of each such Letter of Credit:
(i) The Borrower shall execute and deliver to the Issuing Bank an application for letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in specifying the amount of the requested letter Letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided thatCredit, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In additionrequested term thereof, the Type of Letter of Credit and the beneficiary thereof; and
(ii) The Borrower shall pay to the Agent upon issuance of each letter of credit provided Issuing Bank, for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit its own account, such reasonable fronting, issuance, drawing, amendment, transfer, obligation and other fees as shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks agreed upon by Borrower and the Borrower agree. The Borrower shall not be entitled Issuing Bank from time to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agenttime.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions of this Agreement (including Section 8.3), Borrower letters may request from time to time during the period from the 1997 Closing Date through the day prior to the Maturity Date that the Issuing Bank issue Letters of creditCredit for the account of Borrower, issued by and the AgentIssuing Bank agrees to issue for the account of Borrower one or more Letters of Credit, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to provided that (i) Borrower shall not request that the Agent being satisfied with Issuing Bank issue any Letter of Credit if, after giving effect to such issuance, (A) the terms aggregate outstanding principal evidenced by the Notes plus the Letter of Credit Usage plus the letter Money Market Outstandings plus the Swing Line Outstandings exceeds the Commitments or (B) the aggregate outstanding principal evidenced by the Line A Notes plus the Letter of creditCredit Usage plus Swing Line Outstandings exceeds the Line A Commitment, (ii) Borrower shall not request that the Borrower’s executing Issuing Bank issue any Letter of Credit if Borrower would not be in compliance with Sections 6.10 and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent6.11, and (iii) in no event shall the satisfaction Issuing Bank issue any Letter of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued Credit having an expiration date after the Termination Maturity Date. All letters of credit shall be in such form and substance as , (iv) the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled request any Letter of Credit if, after giving effect to obtain letters such issuance, the Letter of credit Credit Usage would exceed $100,000,000 or any limit established by Law after the 1997 Closing Date on the Issuing Bank's ability to issue the requested Letter of Credit at any time, and (v) prior to the issuance of any Letter of Credit the Issuing Bank shall request confirmation by telephone from the Administrative Agent unless that such Letter of Credit may be issued. Notwithstanding the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requestedforegoing, the other Issuing Bank shall not be obligated to issue a Letter of Credit if, on or prior to the Banking Day immediately preceding the issuance thereof any Bank has notified the Issuing Bank in writing that the conditions of set forth in Section 5.03 of this Agreement 8.3 have not been satisfied as if with respect to the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered issuance of such letter Letter of credit, reimbursement agreements and other related documents as may be required by the AgentCredit.
(b) In Whenever Borrower requests that the event Issuing Bank issue a Letter of Credit it shall deliver to the Issuing Bank (with a copy to the Administrative Agent)
(i) an executed application for such Letter of Credit in the form customarily required by the Issuing Bank and a Request for Letter of Credit by 10:00 a.m., California time, at least three (3) Banking Days prior to the proposed date of issuance, provided that the Issuing Bank shall use its best efforts to issue the proposed Letter of Credit within two Banking Days after receipt of such request, and (ii) the form of the Letter of Credit requested, together with such other information or materials as the Issuing Bank may reasonably request with respect to such Letter of Credit. The Administrative Agent pays shall promptly thereafter notify each of the Banks of the contents of such Request for Letter of Credit and proposed form of Letter of Credit. Prior to the issuance of any amount under Letter of Credit, the Issuing Bank shall confirm by telephone with the Administrative Agent that, giving effect to the issuance of such Letter of Credit, the limitations set forth in Section 2.5(a) have been satisfied.
(c) The Issuing Bank shall notify the Administrative Agent and Borrower of each issuance or amendment of any Letter of Credit issued by it on account the Banking Day upon which such issuance or amendment occurs. Upon the issuance of a letter Letter of credit Credit, each Bank (other than the payment by Issuing Bank and any Bank that has notified the Agent under or on account Issuing Bank pursuant to the last sentence of a letter Section 2.5(a) with respect to such Letter of credit being herein called a “Draw”), a Revolving Loan Credit) shall be deemed to have purchased a pro rata participation from the Issuing Bank in an amount equal to that Bank's Pro Rata Share of the Line A Commitment, of the face amount of such Letter of Credit. Without limiting the scope and nature of each such Bank's participation in any Letter of Credit, to the extent that the Issuing Bank has not been reimbursed for any payment required to be made by the Issuing Bank under any Letter of Credit by the Banks through the making of an Alternative Base Rate Loan in accordance with Section 2.5(d) or by the Borrower in accordance with Section 2.5(e), each such Bank shall, according to its Pro Rata Share of the Line A Commitment, immediately reimburse the Issuing Bank upon demand for the amount of such payment. If any Bank fails to reimburse the Issuing Bank in the manner required by this Section on the same day upon which the related payment has been made by the Issuing Bank, that Bank shall also pay interest to the Issuing Bank on the amount of such reimbursement obligations at the Federal Funds Rate for the first two days after payment has been made by the Issuing Bank and at a rate equal to the sum of the Federal Funds Rate plus 2% from and after the third day after the date such payment was made (which interest shall not be for the account of or otherwise reimbursable by Borrower). The obligation of each such Bank to so reimburse the Issuing Bank shall be absolute and unconditional and shall not be affected by (i) the occurrence of an Event of Default or a Default, (ii) any set-off, counterclaim, defense or other right that such Bank or Borrower may have against the Issuing Bank, Borrower or any other Person, (iii) any adverse change in the condition (financial or otherwise) of Borrower or (iv) any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to reimburse the Issuing Bank under any Letter of Credit together with interest as hereinafter provided.
(d) The Issuing Bank shall provide notice to Borrower and the Administrative Agent of the amount of each demand for a draw under any Letter of Credit and, where practicable, such notice may be provided on the Banking Day immediately preceding the Banking Day of an expected payment. If all of the limitations and requirements set forth in this Agreement with respect to the making of an Alternate Base Rate Loan under the Line A Commitment (except the requirement that a Request for Loan be made as and when specified herein) have been satisfied then the Banks shall be obligated to make an Alternate Base Rate Loan to Borrower (without notice to or the consent of the Borrower) under the Line A Commitment in an aggregate amount equal to the amount paid by the Issuing Bank on the related Letter of Credit. The Administrative Agent shall thereupon promptly provide notice of such payment under the Letter of Credit to the Banks, and within one Banking Day after such notice from the Administrative Agent, each Bank shall make its Pro Rata Share of such Alternate Base Rate Loan under the Line A Commitment (plus interest at the Federal Funds Rate for the first two days after the date payment has been made by the Issuing Bank and at a rate equal to the sum of the Federal Funds Rate plus 2% from and after the third day after the date such payment has been made by the Issuing Bank, which interest shall not be for the account of or otherwise reimbursable by Borrower) available to the Administrative Agent for the account of the Issuing Bank in immediately available funds, and such funds shall collectively constitute the aforementioned Alternate Base Rate Loan, the proceeds of which shall be paid to the Issuing Bank to reimburse it for the payment made by it under the Letter of Credit.
(e) In the event that not all of the limitations and requirements set forth in this Agreement with respect to the making of an Alternative Base Rate Loan under the Line A Commitment (other than the requirement that a Request for Loan be made as and when specified herein) have been satisfied, then Borrower agrees to pay to the Issuing Bank an amount equal to the amount of the applicable demand for a draw under a Letter of Credit (i) on the same Banking Day any payment is made, if the Issuing Bank notifies Borrower of such payment prior to 12:00 p.m., California time, on the Banking Day immediately preceding the Banking Day upon which such payment is to be made or (ii) on the Banking Day immediately following the Banking Day of the payment, if later notice is given. The principal amount of any such payment made by Borrower to the Issuing Bank shall be used to reimburse the Issuing Bank for the payment made by it under the Letter of Credit. In the event that Borrower does not make such payment when due, Borrower shall also pay interest to the Administrative Agent for the account of the Banks on such amount from the date of any payment to, but not including, the date of payment by Borrower at the rate provided for in Section 3.8; provided that not less than one day's interest shall be due. Each Bank that has reimbursed the Issuing Bank pursuant to Section 2.5(c) in accordance with its Pro Rata Share of the Line A Commitment of any payment made by the Issuing Bank under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of its Pro rata share such reimbursement, in the claim of the Total Revolving Loan Commitments Issuing Bank against Borrower under this Section 2.5(e).
(f) Subject to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice andSection 3.18, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available Borrower agrees to pay to the Administrative Agent its Pro rata portion of (which shall promptly pay the Draw deemed to be a Revolving Loan. All amounts shall be made available same to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank Banks or the BorrowerIssuing Bank, as the case may be), interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by for the account of the Banks (other than a Bank that has notified the Issuing Bank pursuant to the last sentence of Section 2.5(a) with respect to such BankLetter of Credit) with respect to each Letter of Credit, a per annum letter of credit fee in an amount equal to the overnight Federal Funds Effective Rate or Applicable Letter of Credit Fee times the face amount of such Letter of Credit (including increases in the undrawn face amount thereof) for the term of such Letter of Credit, and (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loansaccount of the Issuing Bank with respect to each Letter of Credit, an issuance fee in an amount equal to the greater of $500 or one eighth percent (1/8%) per annum times the face amount of such Letter of Credit (including increases in the undrawn face amount thereof) for the term of such Letter of Credit, together with the Issuing Bank's standard charges and actual and reasonable out-of-pocket costs in connection with such issuance. The letter of credit fees for each Letter of Credit are payable in advance for each six month period (or portion thereof) during the term of the applicable Letter of Credit, on the issuance date and on each six month anniversary thereof during the term the applicable Letter of Credit is outstanding. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter is canceled or terminated prior to its original expiration date, the fee provided for in clause (i) of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires first sentence in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
this subsection (ef) The delivery of each Letter of Credit Request shall be deemed a representation and warranty refundable by the Borrower that such letter of credit as requested in Banks on a pro rata basis over the period such Letter of Credit Request may will no longer be issued in accordance with outstanding, and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice one-half of the issuance fee referred to in clause (ii) of or amendment or modification to such letter of credit.
the first sentence in this subsection (f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken refundable by the Agent with respect to a letter Issuing Bank over the period such Letter of credit issued by it if taken or omitted in Credit will no longer be outstanding (and the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agentbalance will be non-refundable).
(g) Immediately prior The obligation of Borrower to reimburse the effectiveness Issuing Bank for drawings or payments made under each Letter of Credit shall be unconditional and irrevocable. Without limiting the foregoing, such obligation of Borrower shall not be affected by any of the following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit, this Agreement, or any letter of credit application or other agreement or instrument relating thereto;
(ii) compliance by the outstanding Issuing Bank with any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement or any letter of credit application or other agreement or instrument relating thereto previously approved by Borrower pursuant to Section 2.5(b);
(iii) the existence of any claim, setoff, defense, or other rights which Borrower may have at any time against any Bank, any beneficiary of the Letter of Credit (or any Persons for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any letter of credit application or other agreement or instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the terms of the Letter of Credit;
(v) the solvency or financial responsibility of any party issuing any documents in connection with a Letter of Credit;
(vi) any failure or delay in notice of shipments or arrival of any property;
(vii) any error in the transmission of any message relating to a Letter of Credit not caused by the Issuing Bank, or any delay or interruption in any such message;
(viii) any error, neglect or default of any correspondent of any Bank in connection with a Letter of Credit;
(ix) any consequence arising from acts of God, war, insurrection, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Banks;
(x) the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Issuing Bank in connection with a Letter of Credit so long as the Issuing Bank in good faith determines that the draft or document appears to comply with the terms of the Letter of Credit; and
(xi) where the Issuing Bank has acted in good faith and without gross negligence and observed general banking usage, any other circumstance whatsoever. IN DETERMINING WHETHER TO PAY UNDER ANY LETTER OF CREDIT, THE ISSUING BANK SHALL BE RESPONSIBLE ONLY TO DETERMINE THAT THE DOCUMENTS AND CERTIFICATES REQUIRED TO BE DELIVERED UNDER THAT LETTER OF CREDIT HAVE BEEN DELIVERED AND THAT THEY COMPLY ON THEIR FACE WITH THE REQUIREMENTS OF THAT LETTER OF CREDIT AND THE ISSUING BANK SHALL OBTAIN THE CONSENT OF THE BORROWER PRIOR TO MAKING ANY PAYMENT WITH RESPECT TO ANY DOCUMENT OR CERTIFICATE WHICH DOES NOT SO COMPLY ON ITS FACE.
(h) Borrower shall initially request all Letters of Credit from Bank of America, as Issuing Bank (provided that the foregoing shall not limit Borrower's ability to request letters of credit issued under that are not Letters of Credit from any issuing bank). In the 2002 event that (i) a prospective beneficiary will not accept Bank of America as the Issuing Bank with respect to the requested Letter of Credit, or (ii) Bank of America is otherwise unable to issue a properly requested Letter of Credit Agreement and/or to which Borrower is entitled hereunder or (iii) Bank of America is unwilling, after reasonable opportunity to do so, to issue a properly requested Letter of Credit to which Borrower is entitled hereunder in the 2004 Credit Agreement are as listed on Exhibit C hereto and form requested by Borrower, then, upon prior notice to the Administrative Agent, Borrower may select an additional "Issuing Bank" from among the Banks holding a portion of the Line A Commitment (with such letters additional Issuing Bank's approval) to issue the requested Letter of credit Credit.
(i) The Issuing Bank shall be deemed entitled to bethe protections accorded to the Administrative Agent pursuant to Article 10, and hereby are converted into, outstanding letters of credit hereunder.mutatis mutandis. -35- 42
Appears in 1 contract
Samples: Revolving Loan Agreement (Kaufman & Broad Home Corp)
Letters of Credit. Letters of credit under the Revolving Facility will be issued by each Lender (aother than Macquarie Lender) The Banks agree under the Revolving Facility (each, in such capacity, an “Issuing Bank”), with each such Issuing Bank agreeing to make available to the Borrower issue such letters of credit, issued by the Agent, pursuant to their respective Commitments up to credit in an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant up to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms its pro rata share of the letter of creditcredit sublimit (determined by reference to its pro rata share of the commitments under the Revolving Facility; provided, (ii) that, the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by sublimit for the Agent, and (iii) Agent will be based on its Revolving Facility commitment plus the satisfaction Revolving Facility commitment of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of creditMacquarie Lender). The Borrower shall pay a fee for each Each letter of credit shall expire not later than the earlier of (a) 12 months after its date of issuance (or such longer period as may be agreed by the relevant Issuing Bank and the Borrower) and (b) the fifth business day prior to the Agent for the Pro rata benefit final maturity of the BanksRevolving Facility; provided, upon issuance of each however, that any letter of credit andmay provide for renewal thereof for additional periods of up to 12 months (which in no event shall extend beyond the date referred to in clause (b) above, thereafter, upon except to the annual anniversary extent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the relevant Issuing Bank). No Issuing Bank shall be required to issue documentary or trade Letters of the issuance of each such letter Credit unless it agrees to do so in its sole discretion. Existing letters of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans may be rolled over or back-stopped under the LIBOR Rate Option Revolving Facility on the stated amount Closing Date. Letters of the letter of credit; provided that, the Agent credit shall be entitled issued in United States dollars or other currencies to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banksbe agreed. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for Drawings under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No any letter of credit shall be issued having an expiration date reimbursed by the Borrower within 1 business day after notice of such drawing is received by the Termination DateBorrower from the relevant Issuing Bank; provided that if such notice is received by 11:00 a.m., New York City time, such reimbursement shall occur on the same day. All To the extent that the Borrower does not reimburse the Issuing Bank on such time frame, the Lenders under the Revolving Facility shall be irrevocably obligated to reimburse the Issuing Bank pro rata based upon their respective Revolving Facility commitments. The issuance of all letters of credit shall be in such form and substance as subject to the Agent, customary procedures of the Banks and the Borrower agreerelevant Issuing Bank. The Borrower shall not be entitled Senior Facility Loan Documentation will include customary provisions consistent with the Documentation Precedent to obtain letters of credit from protect the Agent unless the Borrower is then entitled to obtain Loans from the Banks Issuing Bank in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount Lender under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only Facility is a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the AgentDefaulting Lender.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Additional Initial Lender Agreement (Pomegranate Merger Sub, Inc.)
Letters of Credit. (a) The Banks agree In addition to Company requesting that Lenders make available to the Borrower letters of credit, issued by the Agent, Loans pursuant to their respective Commitments up subsection 2.1.A Company may request, in accordance with the provisions of this sub- section 2.4, that one or more Issuing Lenders issue Letters of Credit for the account of Company; provided that Company shall not request that any Lender issue any Letter of Credit if, after giving effect to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to such issuance (i) the Agent being satisfied with Total Utilization of Revolving Loan Commitments would exceed the terms of Revolving Loan Commitments then in effect, as the letter of creditamount available under the Revolving Loan Commitments may be limited from time to time pursuant to subsection 2.1.A, or (ii) the Borrower’s executing and delivering Letter of Credit Usage would exceed $25,000,000. In no event shall Company request that any Letter of Credit be issued to the extent that Company would be able to arrange for such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to be issued pursuant to the Borrower obtaining a Loan in Separate Letter of Credit Facility. The commitment of each Issuing Lender to issue Letters of Credit pursuant to this subsection 2.4.A is herein called its Letter of Credit Commitment and such commitments of the Issuing Lenders collectively are herein called the Letter of Credit Commitments . The original amount of the requested letter Letter of credit. The Borrower Credit Commitment is $25,000,000 and shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option expire on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee date occurring three months prior to the distribution Term Loan Funding Date, after which date no Letter of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit Credit shall be issued hereunder. In no event shall any Issuing Lender issue any Letter of Credit having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less later than the stated amount earlier of (y) the letter of credit requested, Term Loan Funding Date and (z) the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on date which is one year from the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date issuance of such notice, each Bank will make available to the Agent its Pro rata portion Letter of the Draw deemed to be a Revolving Loan. All amounts Credit; provided that this clause (z) shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If not prevent such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount Issuing Lender from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires agreeing that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”)will automatically be extended for a period not to exceed one year unless such Issuing Lender elects not to extend for such additional period. Each Letter of Credit Request issued pursuant to this subsection 2.4 shall include an application for such letter be in a minimum stated amount of credit and any other documents that the Agent customarily requires in connection therewithat least $25,000. The Agent shall promptly notify each Bank of each Letter Any Existing Letters of Credit Request.
(e) The delivery issued pursuant to the Old Credit Agreement and outstanding as of each Letter the Closing Date shall for all purposes of Credit Request shall this Agreement be deemed a representation to have been issued under and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as pursuant to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness terms of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Credit Agreement (Danaher Corp /De/)
Letters of Credit. (a) The Banks agree Silicon, in its reasonable discretion, will, from time to make available to time during the term of this Agreement, on the request of the Borrower, issue letters of credit for the account of the Borrower letters ("Letters of creditCredit"), issued by the Agent, pursuant to their respective Commitments up to in an aggregate amount at any one time outstanding not to exceed the Letter of $100,000,000 minus Credit Sublimit shown on the aggregate principal Schedule, provided that, on the date the Letters of Credit are to be issued, Borrower has available to it Loans in an amount equal to or greater than the face amount of all then outstanding Surety Bonds issued by a Surety on behalf the Letters of Credit to be issued. Letters of Credit shall be in form and substance acceptable to Silicon in its sole discretion, shall be payable in United States dollars and shall have an expiry date no later than the Parent pursuant Maturity Date *. Prior to an Indemnity Agreement. The availability the issuance of any Letters of Credit, Borrower shall execute and deliver to Silicon applications for letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agenton Silicon's standard forms, and such other documentation as Silicon shall specify (iii) the satisfaction "Letter of all conditions to the Borrower obtaining a Loan Credit Documentation"). Fees for Letters of Credit shall be as provided in the amount Letter of the requested letter Credit Documentation. Borrower shall indemnify, defend and hold Silicon harmless from any loss, cost, expense or liability, including without limitation reasonable attorneys fees, arising out of creditor relating to Letters of Credit. The Credit Limit and the Loans available to Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated face amount of the letters Letters of credit shall be treated as principal of the Revolving LoansCredit from time to time outstanding. * PROVIDED THAT LETTERS OF CREDIT MAY HAVE A MATURITY DATE UP TO TWELVE MONTHS BEYOND THE MATURITY DATE IN EFFECT FROM TIME TO TIME, PROVIDED THAT IF ON THE MATURITY DATE, OR ON ANY EARLIER EFFECTIVE DATE OF TERMINATION, THERE ARE ANY OUTSTANDING LETTERS OF CREDIT ISSUED BY SILICON OR ISSUED BY ANOTHER INSTITUTION BASED UPON AN APPLICATION, GUARANTEE, INDEMNITY OR SIMILAR AGREEMENT ON THE PART OF SILICON, THEN ON SUCH DATE BORROWER SHALL PROVIDE TO SILICON CASH COLLATERAL IN AN AMOUNT EQUAL TO THE FACE AMOUNT OF ALL SUCH LETTERS OF CREDIT PLUS ALL INTEREST, FEES AND COST DUE OR TO BECOME DUE IN CONNECTION THEREWITH, TO SECURE ALL OF THE OBLIGATIONS RELATING TO SAID LETTERS OF CREDIT, PURSUANT TO SILICON'S THEN STANDARD FORM CASH PLEDGE AGREEMENT. NOTE TO XXXXX VERSION: Deleted language is indicated by brackets, not strike-throughs.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit -1- Silicon Valley Bank Loan and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Security Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.--------------------------------------------------------------------------------
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Provided that no Event of Default or ----------------- Unmatured Default then exists, Lender agrees, subject to the Borrower letters following additional conditions, to issue from time to time one or more Letters of credit, issued by the Agent, pursuant Credit on Lender's standard form and otherwise in form and substance acceptable to their respective Commitments up to Lender in an aggregate amount at any one time outstanding of not to exceed $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit850,000; provided, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agenthowever, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee that prior to the distribution and as a condition to Lender being obligated to issue any Letter of the balance of such fee Pro rata to the Banks. In additionCredit, the Borrower Borrowers shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 Lender an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled equal to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount 1% of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan amount thereof and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan issuance fee shall be deemed to be made fully earned upon the payment thereof. Any amounts disbursed by Lender under a Letter of Credit at any time and from time to the Borrower by each Bank to the extent time shall be deemed disbursements of its Pro rata share proceeds of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available due and payable by Borrowers to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount Lender upon written demand from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each DrawLender, together with interest thereon, against thereon until paid at the Default Rate. If any account Letter of Credit is outstanding on the Business Day immediately preceding the Maturity Date of the Borrower maintained with Loan (or if an amount has then been drawn on a Letter of Credit which has not been reimbursed or repaid), Lender may demand delivery of cash collateral in an amount equal to the Agent.
(c) then outstanding Letter of Credit Liability, and such cash collateral may be retained by Lender until such time as the Letter of Credit Liability is reduced to $0. Lender may apply such cash collateral to the payment of any amounts thereafter drawn on the Letters of Credit which have not been reimbursed or repaid to Lender by Borrowers. The failure to deliver such cash collateral upon demand shall constitute an immediate Event of Default under the Loan Documents. So long as letters any Letter of credit are Credit is outstanding, Lender shall not be required to issue a full release of any of the Loan Documents. Notwithstanding anything contained herein to the contrary, if and to the extent any outstanding Letters of Credit are reduced or released without having been drawn upon, Borrowers shall have the right to borrow the amount of Revolving Loans any such reduction or release, provided that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated principal amount of the letters of credit shall be treated as principal Loan outstanding at such time is not greater than 52% of the Revolving Loans.
(d) Whenever appraised value of the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable Real Property then subject to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice lien of the issuance of or amendment or modification to such letter of creditLoan Documents, as determined by Lender.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan Agreement (Sundance Homes Inc)
Letters of Credit. SECTION 2A.01. L/C COMMITMENT.
(a) The Banks agree to make available Subject to the Borrower letters of creditterms and conditions hereof, issued by the AgentIssuing Lender, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus in reliance on the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf agreements of the Parent pursuant other Lenders set forth in Section 2A.04, agrees to an Indemnity Agreement. The availability of issue standby letters of credit will ("Letters of Credit") for the account of Borrower on any Business Day from the Closing Date through but not including the Maturity Date in such form as may be subject approved from time to time by the Issuing Lender; provided, that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (a) the aggregate outstanding principal Dollar Amount of the L/C Obligations would exceed the L/C Commitment, (b) the aggregate outstanding principal Dollar Amount of Alternative Currency Loans and L/C Obligations with respect to Alternative Currency Letters of Credit would exceed the Alternative Currency Commitment, or (c) the aggregate outstanding principal Dollar Amount of Loans and L/C Obligations would exceed the total Syndicated Loan Commitments. Each Letter of Credit shall (i) be denominated in a Permitted Currency in a minimum amount of $100,000 (or the Agent being satisfied with the terms of the letter of creditAlternative Currency Amount thereof, as applicable), (ii) the Borrower’s executing and delivering such be a standby letter of credit and reimbursement agreements and related documents as required by issued to support obligations of Borrower or any of its Subsidiaries, contingent or otherwise, incurred in the Agentordinary course of business, and (iii) the satisfaction of all conditions expire on a date satisfactory to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the BanksIssuing Lender, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent which date shall be entitled to .125% no later than the earlier of such fee (i) one year after its date of issuance and (ii) the fifth (5th) Business Day prior to the distribution Maturity Date and (iv) be subject to the Uniform Customs and/or ISP 98, as set forth in the Application or as determined by the Issuing Lender and, to the extent not inconsistent therewith, the laws of the balance State of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agreeGeorgia. The Borrower Issuing Lender shall not at any time be entitled obligated to obtain letters issue any Letter of credit from Credit hereunder if such issuance would conflict with, or cause the Agent Issuing Lender or any L/C Participant to exceed any limits imposed by, any Requirement of Law. References herein to "issue" and derivations thereof with respect to Letters of Credit shall also include extensions or modifications of any existing Letters of Credit, unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount context otherwise requires. Each Existing Letter of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan Credit shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit issued and any other documents that outstanding under this Agreement on and after the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit RequestClosing Date.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. The Borrower shall pay directly to each L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued by it equal to 0.125% per annum of the maximum amount available (al) The Banks agree Provisions Related to Extended Revolving Credit Commitments. If the Maturity to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect Date in respect of any Participating Revolving Credit Commitments occurs prior to the expiry date under such Letter of Credit if such maximum amount increases periodically pursuant to the terms of any Letter of Credit, then (i) if one or more other Participating Revolving Credit Commitments of such Letter of Credit). Such fronting fees shall be computed on a quarterly basis in arrears. are then in effect (or will automatically be in effect upon such maturity), such Letters of Credit Such fronting fees shall be due and payable in Dollars on the 15th day of each of April, July, shall automatically be deemed to have been issued (including for purposes of the obligations of October and January, commencing with the first such date to occur after the issuance of such Letter the Participating Revolving Credit Lenders to purchase participations therein and to make available of Credit, on the Letter of Credit Expiration Date and thereafter on demand, provided that if any Revolving Credit Loans and payments in respect thereof pursuant to Sections 2.26(c) and (d)) such day is not a Business Day, payment shall be due on the next succeeding Business Day. In under (and ratably participated in by Participating Revolving Credit Lenders pursuant to) the non- addition, the Borrower letters of credit, issued by the Agent, pursuant shall pay directly to their respective each L/C Issuer for its own account with respect to terminating Participating Revolving Credit Commitments up to an aggregate amount at any one time outstanding not to exceed each Letter of $100,000,000 minus Credit the customary issuance, presentation, amendment and other processing fees, the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf the unutilized Participating Revolving Credit Commitments and other standard costs and charges, of the Parent pursuant such L/C Issuer relating to an Indemnity Agreement. The availability of letters of credit will as from time continuing at such time (it being understood that no partial face amount of any Letter of Credit to time in effect. Such customary fees and standard costs and charges are due and payable within may be subject so reallocated) and (ii) to the extent not reallocated pursuant to immediately preceding ten (10) Business Days of demand and are non-refundable. clause (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions unless provisions reasonably satisfactory to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent applicable L/C Issuer for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% treatment of such fee prior to the distribution Letter of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance Credit as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of successor credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit facility have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.j)
Appears in 1 contract
Samples: Credit Agreement (Sothebys)
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions set forth in this Agreement and the applicable Reimbursement Agreement, upon the written request of Borrower letters to an Issuing Bank and Lead Agent in the form of creditExhibit C attached hereto (a "Letter of Credit Request") and the execution and delivery of a Reimbursement Agreement by Borrower to such Issuing Bank, issued such Issuing Bank agrees to issue (with pro rata participation by the Agent, pursuant to Lenders in accordance with their respective Commitments up Commitment Percentages) on any Business Day, but prior to an the Maturity Date, one (1) or more irrevocable Performance Letters of Credit or Financial Letters of Credit in U.S. Dollars in such form as may be agreed upon by Borrower, such Issuing Bank and Lead Agent; provided, however, that (i) the aggregate amount Letters of Credit Exposure of all Letters of Credit shall not exceed $75,000,000.00 at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of creditoutstanding, (ii) Borrower shall be in compliance with the Borrower’s executing covenant described in the first sentence of Section 2.1 above, (iii) no Default or Event of Default shall have occurred and delivering be continuing, (iv) the conditions set forth in Section 8 shall have been satisfied, (v) such letter Issuing Bank receives written notice from the Lead Agent that all of credit and reimbursement agreements and related documents the conditions to issuance of such Letter of Credit as required by the Agentprovided herein have been satisfied, and (iiivi) the satisfaction in no event shall any amount drawn under a Letter of all conditions to the Borrower obtaining Credit be available for reinstatement or a Loan in the amount subsequent drawing under such Letter of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentCredit.
(b) In the event the Agent pays any amount under or on account Each Letter of a letter of credit (the payment Credit Request hereunder shall be received by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each applicable Issuing Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Lead Agent at a rate per annum equal to least three (i3) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Business Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall issuance. The expiration dates, amounts and beneficiaries of the Letters of Credit will be a Cleveland Banking Day)as agreed by Borrower, which written notice shall be in the form of Exhibit E hereto (each, a “such Issuing Bank and Lead Agent. No Letter of Credit Request”)shall have an expiration date (taking into account any automatic renewal provisions) later than seven (7) Business Days prior to the Maturity Date. Each Letter of Credit Request shall include an application for such letter of credit be issued pursuant to a Reimbursement Agreement to be entered into between Borrower and any other documents the applicable Issuing Bank; provided, however, that to the extent that the Agent customarily requires terms and conditions of any Reimbursement Agreement are in connection therewithconflict with or are inconsistent with the terms and conditions of this Agreement, the obligations of the Lenders and Borrower with respect to the Letters of Credit shall be governed by the terms and conditions of this Agreement. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance assumes all risks with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as respect to the aggregate principal amount use of all then outstanding Surety Bondsthe Letters of Credit. The Issuing Bank shall give Lead Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of each Letter of Credit together with a copy of same.
(c) Upon the issuance of a Letter of Credit, each Lender shall be deemed to have purchased a participation therein from the Issuing Bank in an amount equal to its respective Commitment Percentage of the amount of such Letter of Credit. The issuance of any supplement, modification, amendment, renewal or amendment extension to or modification of any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit.
(d) Lead Agent may, in its discretion, and shall, at the request of the Majority Lenders, at any time and from time to time while there exists any Event of Default, require the Borrower to immediately deposit with Lead Agent an amount equal to all or any portion of the Letters of Credit Exposure of any outstanding Letters of Credit hereunder, (provided that if Borrower fails to make such deposit with Lead Agent, Lead Agent shall be authorized to make an Advance on Borrower's behalf to fund such deposit). Lead Agent shall hold the proceeds thereof in an interest bearing account as collateral security for the Obligations and Borrower hereby grants a security interest to Lead Agent for the benefit of the Lenders in such account and the proceeds therein (and such account shall be subject to Lead Agent's right to setoff against such amounts under Section 13), provided that Lead Agent shall promptly notify Borrower, Issuing Bank and the Lenders of such Advance and application of the proceeds thereof to draws under outstanding Letters of Credit as such draws are made. Upon expiration of all Letters of Credit and payment in full of all draws thereunder and the Outstanding Loans and all other Obligations, the amounts remaining on deposit in such account, if any, and all interest earned thereon shall be paid over to Borrower.
(e) In the event that an Issuing Bank makes any payment under a Letter of Credit, such Issuing Bank shall promptly notify Lead Agent, who shall then notify each Lender, and Borrower shall immediately and unconditionally reimburse such Issuing Bank therefor on the date of such payment. If the amount of such draw is not reimbursed by Borrower, subject to Section 2.9(f) below, the unreimbursed amount of the drawing shall automatically be converted into a Prime Rate Advance made on the date of such drawing bearing interest as provided in Section 2.8(a) and otherwise subject to the provisions of this Agreement regarding Prime Rate Advances, but without any requirement for the conditions set forth in Section 8 to be satisfied. Lead Agent shall then pay the amount of such Prime Rate Advance to such letter Issuing Bank. The liability of creditBorrower under this Agreement to repay the Lenders in respect of drawings under Letters of Credit shall rank pari passu with the obligations of Borrower to repay all other Advances hereunder.
(f) In determining whether If after the issuance of a Letter of Credit pursuant to pay under any letter of creditSection 2.9(a) by an Issuing Bank, the Agent shall not have any obligation relative but prior to the Banks other than funding of any portion thereof by a Lender, one of the events described in Section 12.1(i) shall have occurred, each Lender will, on the date such Advance pursuant to determine that any documents required Section 2.9(e) was to be delivered under such letter of credit have been delivered and that they appear made, purchase an undivided participating interest in the Letter of Credit in an amount equal to comply on their face with the requirements its Commitment Percentage of the letter amount of creditsuch Letter of Credit. Any action taken or omitted Each Lender will immediately transfer to be taken by Lead Agent in immediately available funds the amount of its participation and upon receipt thereof the Lead Agent with respect will deliver to such Lender a letter Letter of credit issued by it if taken or omitted Credit participation certificate dated the date of receipt of such funds and in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agentsuch amount.
(g) Immediately prior Whenever at any time after Lead Agent has received from any Lender such Lender's payment of funds under a Letter of Credit pursuant to Section 2.9(f) above and thereafter Lead Agent receives any payment on account thereof, then Lead Agent will distribute to Lender its participating interest in such amount (appropriately adjusted in the effectiveness case of interest payments to reflect the period of time during which such Lender's participating interest was outstanding and funded); provided, however, that in the event that such payment received by Lead Agent is required to be returned, such Lender will return to Lead Agent any portion thereof previously distributed by Lead Agent to Lender.
(h) Each Issuing Bank shall, no later than the tenth (10th) day following the last day of each month, provide to Lead Agent a schedule of the Letters of Credit issued by it, in form and substance reasonably satisfactory to Lead Agent, showing the issuance date, account party, original face amount, amounts (if any) paid thereunder, expiration date and the reference number of each Letter of Credit outstanding at any time during such month and whether each such Letter of Credit is a Performance Letter of Credit or a Financial Letter of Credit. Copies of such reports shall be provided to each Lender and Borrower by the Lead Agent.
(i) In addition to amounts payable as elsewhere provided in this Agreement, Borrower hereby agrees to protect, indemnify, pay and save Lead Agent, each Lender and each Issuing Bank harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees) arising from the outstanding letters claims of credit third parties against Lead Agent, any Issuing Bank or any Lender as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit other than, in the case of an Issuing Bank, as a result of its willful misconduct or gross negligence as determined by a final and non-appealable judgment of a court of competent jurisdiction, or (ii) the failure of an Issuing Bank to honor a drawing under a Letter of Credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are by it as listed on Exhibit C hereto and such letters a result of credit shall be deemed to beany act or omission, and hereby are converted intowhether rightful or wrongful, outstanding letters of credit hereunderany present or future Governmental Authority or other beneficiary thereunder.
Appears in 1 contract
Samples: Senior Unsecured Revolving Credit Agreement (Wci Communities Inc)
Letters of Credit. (a) The Banks agree As a part of the Revolving Credit and subject to its terms and conditions, Lender shall make available to Borrower Letters of Credit which shall not exceed, in the Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding outstanding, the L/C Commitment. Notwithstanding the foregoing, all Letters of $100,000,000 minus the aggregate principal amount Credit shall be in form and substance reasonably satisfactory to Lender. No Letter of all then outstanding Surety Bonds Credit shall be issued by a Surety on behalf of the Parent pursuant to with an Indemnity Agreement. The availability of letters of credit will be subject to expiry date later than (i) three hundred sixty five (365) days from the Agent being satisfied with the terms date of the issuance for a stand-by letter of credit, or (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and ten (iii10) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee Business Days prior to the distribution of the balance of such fee Pro rata to the BanksRevolving Credit Maturity Date. In addition, the Borrower shall pay execute and deliver to the Agent upon issuance Issuer all Letter of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be Credit Documents required by Lender for such purposes. Each Letter of Credit shall comply with the AgentLetter of Credit Documents.
(b) Each Letter of Credit issued from time to time under the Revolving Credit which remains undrawn (and the amounts of draws on Letters of Credit prior to payment as hereinafter set forth) shall reduce, dollar for dollar, the amount available to be borrowed by Borrower under the Revolving Credit.
(c) In the event the Agent pays of any amount request for drawing under or on account any Letter of a letter of credit (the payment Credit by the Agent under or on account of a letter of credit being herein called a “Draw”)beneficiary thereof, a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent Lender shall promptly notify Borrower and Borrower shall immediately reimburse Lender on the day when such drawing is honored, by either a cash payment by Borrower or, so long as no Event of Default has occurred and is continuing, in the absence of such payment by Borrower, and at Lender's option, by Lender automatically making or having been deemed to have made (without further request or approval of Borrower) a cash Advance under the Revolving Credit on such date to reimburse Lender. Borrower's reimbursement obligation for draws under Letters of Credit along with the obligation to pay L/C Fees shall herein be referred to collectively as Borrower's "Reimbursement Obligations." All of Borrower's Reimbursement Obligations hereunder with respect to Letters of Credit shall apply unconditionally and absolutely to Letters of Credit issued hereunder on behalf of Borrower.
(d) The obligation of Borrower to reimburse Lender for drawings made (or for cash Advances made to cover drawings made) under the Letters of Credit shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, setoff, defense or other right that Borrower or any other Person 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), Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction;
(iii) any draft, demand, certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(iv) payment by Lender under any Letter of Credit against presentation of a demand, draft or certificate or other document that does not comply with the terms of such Letter of Credit unless Lender shall have acted with willful misconduct or gross negligence in issuing such payment;
(v) any other circumstances or happening whatsoever that is similar to any of the foregoing; or
(vi) the fact that a Default or Event of Default shall have occurred and be continuing.
(e) If by reason of (i) any change after the Closing Date in any Requirement of Law, or any change in the interpretation or application thereof by any Governmental Authority of any Requirement of Law or (ii) compliance by Lender with any direction, reasonable request or requirement (whether or not having the force of law) of any governmental or monetary authority including, without limitation, Regulation D:
(i) Lender shall be subject to any tax or other levy or charge of any nature or to any variation thereof (except for changes in the rate of any tax on the net income of Lender or its applicable lending office) or to any penalty with respect to the maintenance or fulfillment of its obligations under this Section 2.2, whether directly or by such being imposed on or suffered by Lender;
(ii) any reserve, deposit or similar requirement is or shall be applicable, imposed or modified in respect of any Letter of Credit issued by Lender; or
(iii) there shall be imposed on Lender any other condition regarding this Section 2.2 or any Letter of Credit; and the result of the foregoing is to directly or indirectly increase the cost to Lender of issuing, creating, making or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by Lender, then and in any such case, Lender shall, after the additional cost is incurred or the amount received is reduced, notify Borrower and Borrower shall immediately pay on demand such corresponding amount amounts as may be necessary to the Agent. The Agent shall also be entitled to recover from the Bank compensate Lender for such additional cost or the Borrowerreduced receipt, as the case may be, together with interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent demanded until payment in full thereof at a rate per annum equal at all times to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable interest rate of interest, calculated in accordance with Article IV, for under the Revolving LoansCredit. In the event no Revolving Loan or only a partial Revolving Loan is deemed A certificate signed by an officer of Lender as to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Drawsuch increased cost or reduced receipt showing in reasonable detail the basis for the calculation thereof, together with interest thereon, against any account of the submitted to Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving LoansLender shall, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent for manifest error and absent written notice from Borrower to Lender within ten (including by way of facsimile transmission10) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may days from submission, be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day)final, which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application conclusive and binding for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditpurposes.
(f) In determining whether addition to amounts payable as elsewhere provided in this Section 2.2, without duplication, Borrower hereby agrees to protect, indemnify, pay and save Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees) which Lender may incur or be subject to as a consequence, direct or indirect, of (A) the issuance of the Letters of Credit or (b) the failure of Lender to honor a drawing under any letter Letter of creditCredit as a result of any such act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority (all such acts or omissions herein called "Government Acts") in each case except for claims, demands, liabilities, damages, losses, costs, charges and expenses arising solely from acts or conduct of Lender constituting gross negligence or willful misconduct.
(g) As between Borrower and Lender, Borrower assumes all risks of the Agent acts and omissions of or misuse of the Letters of Credit issued by Lender by the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, Lender shall not have be responsible: (A) for the form, validity, sufficiency, accuracy, genuineness or legal effects of any obligation relative to document submitted by any party in connection with the Banks other than to determine that any documents required application for and issuance if such Letters of Credit, even if it should in fact prove to be delivered in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (C) for failure of the beneficiary of any such Letter of Credit to comply fully with conditions required in order to draw upon such Letter of Credit; (D) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they are in cipher, unless any of the foregoing are caused by Lender's gross negligence or willful misconduct; (E) for errors in interpretation of technical terms; (F) for any loss or delay in the transmission of any document or required in order to make a drawing under such letter Letter of credit have been delivered and that they appear to comply on their face with the requirements Credit or of the letter proceeds thereof, unless caused by Lender's gross negligence or willful misconduct; (G) for the misapplication by the beneficiary of creditany such Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (H) for any consequences arising from causes beyond the control of Issuer, including, without limitation, any Government Acts. Any None of the above shall affect, impair or prevent the vesting of any of Lender's rights or powers hereunder
(h) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted to be taken by Lender in connection with the Agent with respect to a letter Letters of credit Credit issued by it or the related certificates, if taken or omitted in the absence of gross negligence or willful misconductgood faith, shall not create any resulting liability for on the Agentpart of Lender to Borrower.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan and Security Agreement (Lakeland Industries Inc)
Letters of Credit. (a) The Banks agree to make available At the request of the Borrower, at any time prior to the Borrower letters of creditExpiration Date, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of Bank will issue standby letters of credit will be subject with a maximum maturity of 365 days but not to (i) extend more than 365 days beyond the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of creditExpiration Date. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All standby letters of credit shall may include a provision providing that the maturity date will be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent automatically extended each year for an additional year unless the Borrower is then entitled Bank gives written notice to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agentcontrary.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal outstanding at any one time (including the drawn and unreimbursed amounts of the Revolving Loansletters of credit) plus the amount of advances made under the Facility and outstanding may not exceed the Commitment at any time.
(dc) Whenever the The Borrower desires that agrees:
(i) Any sum drawn under a letter of credit may, at the option of the Bank, be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable added to the Agentprincipal amount outstanding under this Agreement. The amount will bear interest and be due as described elsewhere in this Agreement.
(ii) prior If there is an Event of Default hereunder, to make the Bank whole for any outstanding letters of credit to the proposed date extent they are undrawn by immediately providing the Bank with cash in an amount equal to the outstanding letters of credit to the extent they are undrawn.
(iii) The issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such any letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each is subject to the Bank’s written approval and must be in form and content satisfactory to the Bank and in favor of a beneficiary reasonably acceptable to the Bank.
(iv) To sign the Bank’s standard form of Application and Agreement for Standby Letter of Credit.
(v) To pay any reasonable issuance and/or other fees that the Bank notifies the Borrower written notice of (at or prior to the issuance of or amendment or modification to any such letter of credit) will be charged for issuing and processing letters of credit for the Borrower.
(fvi) In determining whether To allow the Bank to automatically charge its checking account for applicable fees, discounts, and other charges.
(vii) To pay under any the Bank a non-re fundable fee equal to 2.0% per annum of the outstanding undrawn amount of each letter of credit, payable annually in advance, calculated on the Agent basis of the face amount outstanding on the day the fee is calculated. If there is a Default or an Event of Default, at the Bank’s option, the amount of the fee shall not have any obligation relative be increased by 1% per annum, effective starting on the day the Bank provides notice of the increase to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the AgentBorrower.
(gviii) Immediately If the Expiration Date is not extended by the Bank (which extension, the Borrower acknowledges, shall be at the sole and complete discretion of the Bank) so that any letters of credit remain outstanding after the Expiration Date, to provide the Bank, on or prior to the effectiveness Expiration Date, with a first priority security interest and lien in and to cash collateral in an amount equal to the then face amount of this Agreement, the outstanding all letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunderthen outstanding.
Appears in 1 contract
Samples: Loan Agreement (Martha Stewart Living Omnimedia Inc)
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions hereof, at any time and from time to time from the Closing Date through the day prior to the Maturity Date, the Issuing Bank shall issue such Letters of Credit under the Commitment as Borrower letters may request by a Request for Letter of creditCredit; provided that giving effect to all such Letters of Credit, issued by (i) the Outstanding Obligations shall not exceed the Commitment, and (ii) the Aggregate Effective Amount under all outstanding Letters of Credit shall not exceed $100,000,000. Each Letter of Credit shall be in a form reasonably acceptable to the Issuing Bank. Unless all the Banks otherwise consent in a writing delivered to the Administrative Agent, pursuant to their respective Commitments up to an aggregate amount at any the terms of each Letter of Credit shall not (x) exceed one time outstanding of $100,000,000 minus (1) year, (y) extend beyond the Maturity Date or (z) extend past the Reduction Date if, giving effect thereto, the aggregate principal amount of all then the outstanding Surety Bonds issued by a Surety on behalf Eurodollar Loans having Eurodollar Periods ending after the Reduction Date plus the aggregate principal amount of the Parent outstanding Competitive Advances having maturities after the Reduction Date, plus the Aggregate Effective Amount of all Letters of Credit expiring after the Reduction Date would exceed the Commitment (as reduced on the Reduction Date).
(b) Each Request for Letter of Credit shall be submitted to the Issuing Bank, with a copy to the Administrative Agent, at least five (5) Banking Days prior to the date upon which the related Letter of Credit is proposed to be issued. The Administrative Agent shall promptly notify the Issuing Bank whether such Request for Letter of Credit, and the issuance of a Letter of Credit pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit, the Issuing Bank shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify the Banks, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Bank shall be deemed to have purchased a pro rata participation in such Letter of Credit from the Issuing Bank in an amount equal to that Bank's Pro Rata Share. Without limiting the scope and nature of each Bank's participation in any Letter of Credit, to the extent that the Issuing Bank has not been reimbursed by Borrower for any payment required to be made by the Issuing Bank under any Letter of Credit, each Bank shall, pro rata according to its Pro Rata Share, reimburse the Issuing Bank promptly upon demand for the amount of such payment. The obligation of each Bank to so reimburse the Issuing Bank shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to reimburse the Issuing Bank for the amount of any payment made by the Issuing Bank under any Letter of Credit together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Bank an amount equal to any payment made by the Issuing Bank with respect to each Letter of Credit within one (1) Banking Day after demand made by the Issuing Bank therefor (which demand the Issuing Bank shall make promptly and in any event shall make upon the request of the Requisite Banks), together with interest on such amount from the date of any payment made by the Issuing Bank at the rate applicable to Alternate Base Rate Loans for three Banking Days and thereafter at the Default Rate. The principal amount of any such payment shall be used to reimburse the Issuing Bank for the payment made by it under the Letter of Credit and, to the extent that the Banks have not reimbursed the Issuing Bank pursuant to an Indemnity AgreementSection 2.4(c), the interest amount of any such payment shall be for the account of the Issuing Bank. Each Bank that has reimbursed the Issuing Bank pursuant to Section 2.4(c) for its Pro Rata Share of any payment made by the Issuing Bank under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of such reimbursement, in the claim of the Issuing Bank against Borrower for reimbursement of principal and interest under this Section 2.4(d) and shall share, in accordance with that pro rata participation, in any principal payment made by Borrower with respect to such claim and in any interest payment made by Borrower (but only with respect to periods subsequent to the date such Bank reimbursed the Issuing Bank) with respect to such claim. The availability Issuing Bank shall promptly make available to the Administrative Agent, which will thereupon remit to the appropriate Banks, in immediately available funds, any amounts due to the Banks under this Section.
(e) Borrower may, pursuant to a Request for Loan, request that Advances be made pursuant to Section 2.1(a) to provide funds for the payment required by Section 2.4(d) and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of letters such Advances shall be paid directly to the Issuing Bank to reimburse it for the payment made by it under the Letter of credit will Credit.
(f) If Borrower fails to make the payment required by Section 2.4(d) within the time period therein set forth, in lieu of the reimbursement to the Issuing Bank under Section 2.4(c) the Issuing Bank may (but is not required to), without notice to or the consent of Borrower, cause Advances to be subject made by the Banks under the Commitment in an aggregate amount equal to the amount paid by the Issuing Bank with respect to that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid directly to the Issuing Bank to reimburse it for the payment made by it under the Letter of Credit.
(g) The issuance of any supplement, modification, amendment, renewal, or extension to or of any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit.
(h) The obligation of Borrower to pay to the Issuing Bank the amount of any payment made by the Issuing Bank under any Letter of Credit shall be absolute, unconditional, and irrevocable. Without limiting the foregoing, Borrower's obligations shall not be affected by any of the following circumstances: (i) any lack of validity or enforceability of the Agent Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; (ii) any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; (iii) the existence of any claim, setoff, defense, or other rights which Borrower may have at any time against the Issuing Bank or any other Creditor, any beneficiary of the Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions; (iv) any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being satisfied untrue or inaccurate in any respect whatsoever; (v) payment by the Issuing Bank under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the letter Letter of credit, Credit; (iivi) the Borrower’s executing existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or any difference between any such Property and delivering the character, quality, quantity, condition, or value of such letter Property as described in such documents; (vii) the time, place, manner, order or con- tents of credit shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the existence, nature and reimbursement agreements and related extent of any insurance relative thereto; (viii) the solvency or financial responsibility of any party issuing any documents as required in connection with a Letter of Credit; (ix) any failure or delay in notice of shipments or arrival of any Property; (x) any error in the transmission of any message relating to a Letter of Credit not caused by the AgentIssuing Bank, or any delay or interruption in any such message; (xi) any error, neglect or default of any correspondent of the Issuing Bank in connection with a Letter of Credit; (xii) any consequence arising from acts of God, war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Issuing Bank; (xiii) so long as the Issuing Bank in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit (and no payment is made by the Issuing Bank after the expiration date of the Letter of Credit or in amounts greater than the amount thereof), the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Issuing Bank in connection with a Letter of Credit; (xiv) so long as the Issuing Bank in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Issuing Bank in connection with a Letter of Credit; and (iiixv) where the satisfaction of all conditions to the Borrower obtaining a Loan Issuing Bank has acted in the amount of the requested letter of credit. good faith and observed general banking usage, any other circumstances whatsoever.
(i) The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Issuing Bank shall be entitled to .125% of such fee prior the pro- tection accorded to the distribution of the balance of such fee Pro rata Administrative Agent pursuant to the Banks. In additionSection 10.6, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agentmutatis mutandis.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree Upon the request of the Collection Agent (acting as agent for the Seller as described in subsection (b) below), and on the terms and conditions for issuing Letters of Credit under the Receivables Purchase Agreement (including any limitations therein on the amount of any such issuance), the Purchaser agrees to make available cause the LC Bank to issue, on the Borrower letters of credit, issued Purchase Dates specified by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety Collection Agent (on behalf of the Parent pursuant to an Indemnity AgreementSeller), Letters of Credit in favor of the beneficiaries specified by the Collection Agent (on behalf of the Seller). The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the aggregate stated amount of the letter Letters of credit; provided that, Credit being issued on any Purchase Date on behalf of the Agent Seller shall be entitled to .125% of such fee prior constitute a credit against the aggregate Purchase Price payable by the Purchaser to the distribution of Seller on such Purchase Date pursuant to Section 2.01(c). To the balance of such fee Pro rata to extent that the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the aggregate stated amount of the letter Letters of credit requested, Credit being issued on any Payment Date exceeds the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required aggregate Purchase Price payable by the Agent.
(b) In Purchaser to the event the Agent pays any amount under or Seller on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”)such Payment Date, a Revolving Loan such excess shall be deemed to be made to a reduction in the Borrower by each Bank outstanding principal balance of (and, to the extent necessary, the accrued but unpaid interest on) the Deferred Purchase Price Note payable to the Seller. The aggregate stated amount of Letters of Credit to be issued on any Payment Date shall not exceed the sum of the aggregate Purchase Price payable on such Payment Date to the Seller plus the aggregate outstanding principal balance of and accrued but unpaid interest on the Deferred Purchase Price Note payable to the Seller on such Payment Date. In the event that any such Letter of Credit issued pursuant to this Section 2.07 (i) expires or is cancelled or otherwise terminated with all or any portion of its Pro rata share of stated amount undrawn, (ii) has its stated amount decreased (for a reason other than a drawing having been made thereunder) or (iii) the Total Revolving Loan Commitments to reimburse immediately the Agent Purchaser’s Reimbursement Obligation in respect thereof is reduced for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment any reason other than by virtue of a Draw no later than 12:00 p.m. (Cleveland time) on the date payment made in respect of a drawing thereunder, then an amount equal to such notice and, not later than 1:00 p.m. (Cleveland time) on the date of undrawn amount or such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrowerreduction, as the case may be, interest shall either be paid in cash to the Seller on such corresponding amount the next Purchase Date or, if the Purchaser does not then have cash available therefor, shall be deemed to be added to the outstanding principal balance of the Deferred Purchase Price Note issued to the Seller. Under no circumstances shall the Seller (or any Affiliate thereof (other than the Purchaser)) have any reimbursement or recourse obligations in respect of each day from any Letter of Credit.
(b) The Seller appoints the date Collection Agent as its agent (on which appointment the Purchaser, the Agent, the LC Bank and the Purchaser may rely until the Seller provides contrary written notice to all of such corresponding amount was made available by Persons) to act on the Agent Seller’s behalf to take all actions and to make all decisions in respect of the issuance, amendment and administration of the Letters of Credit, including requests for the issuance and extension of Letters of Credit and the allocation of the stated amounts of Letters of Credit against the Purchase Price owed to the Borrower Seller and against the Deferred Purchase Price Note issued to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving LoansSeller. In the event no Revolving Loan or only that the Collection Agent requests a partial Revolving Loan is deemed to be madeLetter of Credit hereunder, the Collection Agent shall on a timely basis provide the Purchaser with such information as is hereby authorized necessary for the Purchaser to charge (without prior notice to obtain such Letter of Credit from the Borrower) LC Bank, and shall notify the amount of each DrawSeller, together with interest thereon, against any account the Purchaser and the Administrator of the Borrower maintained with allocations described in the Agentpreceding sentence. Such allocations shall be binding on the Purchaser and the Seller, absent manifest error.
(c) So long as letters The Seller agrees to be bound by the terms of credit are outstanding, each Letter of Credit Application referenced in the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced Receivables Purchase Agreement and by the LC Obligations then outstanding andBank’s interpretations of any Letter of Credit issued for the Purchaser and by the LC Bank’s written regulations and customary practices relating to letters of credit, in addition each case subject to otherwise constituting part the terms and conditions set forth in the Receivables Purchase Agreement.
(c) Section 4.01(f) of the Revolving Loans, except as otherwise expressly stated herein, Purchase and Contribution Agreement is hereby amended to delete the stated amount of year “2008” in the letters of credit shall be treated as principal of first and last sentences thereof and insert the Revolving Loansyear “2010” in replacement thereof.
(d) Whenever Section 4.01(g) of the Borrower desires that a letter of credit Purchase and Contribution Agreement is hereby amended to delete the word “may” and insert the phrase “could reasonably be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be expected to” in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Requestreplacement thereof.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice 4.01(q) of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered Purchase and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted Contribution Agreement is hereby amended and restated in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are its entirety as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.follows:
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available to the Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of may request the issuance of each such letter Tranche A Letters of credit remaining outstandingCredit, in a form reasonably acceptable to the amount Administrative Agent and the Issuing Bank, for the account of the Indicated Spread for Borrower, at any time and from time to time during the Tranche A Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of creditCredit Availability Period; provided that, the Agent shall be entitled to .125% that any Tranche A Letter of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit Credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form only if, and substance as the Agent, the Banks and each request by the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount issuance of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Tranche A Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that, immediately following the issuance of such Letter of Credit, the sum of (i) the Tranche A Letter of Credit Exposure and (ii) the aggregate principal amount of outstanding Tranche A Revolving Loans shall not exceed the lesser of (A) the aggregate amount of the Tranche A Revolving Credit Commitments at such time and (B) the Borrowing Base at such time, provided that, in no event shall the sum (I) of the aggregate principal amount of outstanding Tranche A Revolving Loans on the date of such issuance plus (II) the aggregate amount of the Tranche A Letter of Credit Exposure on such date exceed the aggregate Tranche A Revolving Credit Commitment of all the Lenders. Each Tranche A Letter of Credit shall expire at the close of business on the earlier of (i) the date that is five Business Days prior to the Tranche A Maturity Date and (ii) the first anniversary of the date of issuance of such letter Tranche A Letter of credit Credit, unless such Tranche A Letter of Credit expires by its terms on an earlier date, provided that, any Tranche A Letter of Credit with an expiration date on the first anniversary of such Tranche A Letter of Credit may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (i) above). Each Letter of Credit shall provide for payments of drawings in dollars.
(b) The Borrower may request the issuance of the Tranche B Letters of Credit, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, for the account of the Borrower, at any time and from time to time during the Tranche B Revolving Credit Availability Period; provided that any Tranche B Letter of Credit shall be issued only if, and each request by the Borrower for the issuance of any Tranche B Letter of Credit shall be deemed a representation and warranty by the Borrower that, immediately following the issuance of such Letter of Credit, the sum of (i) the Tranche B Letter of Credit Exposure and (ii) the aggregate principal amount of outstanding Tranche B Revolving Loans shall not exceed the aggregate amount of the Tranche B Revolving Credit Commitments at such time; provided that, in no event shall the sum of (A) the aggregate principal amount of outstanding Tranche B Revolving Loans on the date of such issuance plus (B) the aggregate amount of Tranche B Letter of Credit Exposure on such date exceed the aggregate Tranche B Revolving Credit Commitment of all the Lenders and, provided, further, that the amount of all outstanding Letters of Credit (as requested defined in the Parity Debt Credit Agreement) and the Tranche B Letters of Credit shall not exceed $12,500,000. Each Tranche B Letter of Credit shall expire at the close of business on the earlier of (i) the date that is five Business Days prior to the Tranche B Conversion Date (or, if the Tranche B Term-Out Option has become effective pursuant to Section 2.02(c), five Business Days prior to the Tranche B Maturity Date) and (ii) the first anniversary of the date of issuance of such Tranche B Letter of Credit, unless such Tranche B Letter of Credit expires by its terms on an earlier date, provided that, any Tranche B Letter of Credit with an expiration date on the first anniversary of such Tranche B Letter of Credit may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (i) above). Each Letter of Credit shall provide for payments of drawings in dollars.
(c) Each issuance of any Letter of Credit shall be made on at least two Business Days' prior irrevocable written or telecopy notice (or such shorter notice as shall be acceptable to the Issuing Bank) from the Borrower to the Administrative Agent and the Issuing Bank specifying, on the Issuing Bank's standard form or on such other form as is acceptable to the Issuing Bank, the date of issuance, the date on which such Letter of Credit is to expire, the amount of such Letter of Credit, the name and address of the beneficiary of such Letter of Credit, whether such Letter of Credit is a Tranche A Letter of Credit or a Tranche B Letter of Credit, and such other information as may be necessary or desirable to complete such Letter of Credit. The Issuing Bank will give the Administrative Agent prompt notice of the issuance and amount of such Letter of Credit and the expiration date of such Letter of Credit (and the Administrative Agent shall give prompt notice thereof to each Lender). The Issuing Bank also will give the Administrative Agent a quarterly summary indicating the issuance of any Letter of Credit and the amount thereof, the expiration of any Letter of Credit and the amount thereof and the payment on any draft presented under any Letter of Credit. The Administrative Agent will promptly provide the Lenders with copies of each such quarterly summary.
(d) By the issuance of a Letter of Credit and without any further action on the part of the Issuing Bank, the Administrative Agent or the Lenders in respect thereof, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, effective upon the issuance of such Letter of Credit, a participation in such Letter of Credit Request may equal to (i) in the case of any such Tranche A Letter of Credit, such Lender's pro rata share (based on such Lender's Tranche A Revolving Credit Commitment Percentage) of the aggregate amount available to be issued drawn under such Tranche A Letter of Credit and (ii) in the case of any such Tranche B Letter of Credit, such Lender's pro rata share (based on such Lender's Tranche B Revolving Credit Commitment Percentage) of the aggregate amount available to be drawn under such Tranche B Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, on behalf of the Issuing Bank, in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall2.02(d), (A) such Lender's pro rata share (based on the date such Lender's Tranche A Revolving Credit Commitment Percentage) of each issuance Tranche A Letter of or amendment or modification to a letter of credit Credit Disbursement made by it, give each the Issuing Bank and not reimbursed by the Borrower written notice when due in accordance with Section 2.21(g) and (B) such Lender's pro rata share (based on such Lender's Tranche B Revolving Credit Commitment Percentage) of each Tranche B Letter of Credit Disbursement made by the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, Issuing Bank and not reimbursed by the Agent Borrower when due in accordance with Section 2.21(g); provided that the Lenders shall not have be obligated to make any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent payment with respect to any wrongful Letter of Credit Disbursement made as a letter result of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for misconduct of the AgentIssuing Bank.
(ge) Immediately prior Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to Section 2.21(d) 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 Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever (subject only to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunderproviso set forth in Section 2.21(d)).
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters of creditterms and conditions hereof, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding and from time to time from the Closing Date through the Business Day immediately prior to the Revolver Maturity Date, the Issuing Lender shall issue such Letters of $100,000,000 minus Credit under the aggregate principal amount of all then outstanding Surety Bonds issued Revolving Commitment as the Borrower may request by a Surety on behalf Request for Letter of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to Credit; provided that (i) giving effect to all such Letters of Credit and the Agent being satisfied with Revolving Usage shall not exceed the terms of the letter of creditthen Revolving Commitment, and (ii) the Borrower’s executing Aggregate Effective Amount of all outstanding Letters of Credit shall not exceed $20,000,000. Each Letter of Credit shall be in a form acceptable to the Issuing Lender. Unless all the Lenders otherwise consent, no Letter of Credit shall have a term which exceeds one year or extends beyond the Revolver Maturity Date.
(b) Each Request for a Letter of Credit shall be submitted to the Issuing Lender, with a copy to the Administrative Agent, at least five Business Days prior to the date upon which the related Letter of Credit is proposed to be issued. The Administrative Agent shall promptly notify the Issuing Lender whether such Request for Letter of Credit, and delivering such letter the issuance of credit and reimbursement agreements and related documents as required by a Letter of Credit pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit, the Issuing Lender shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify the Lenders, of the amount and terms thereof.
(iiic) Upon the satisfaction issuance of all conditions a Letter of Credit, each Lender which owns a Pro Rata Share of the Revolving Commitment shall be deemed to have purchased at par a pro rata participation in such Letter of Credit from the Issuing Lender in an amount equal to that Lender's Pro Rata Share of the Revolving Commitment. Without limiting the scope and nature of each Lender's participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed by the Borrower obtaining for any payment required to be made by the Issuing Lender under any Letter of Credit, each Lender shall, pro rata according to its Pro Rata Share of the Revolving Commitment, pay the purchase price for such participation to the Issuing Lender through the Administrative Agent promptly upon demand therefor. The obligation of each Lender to so pay the participation purchase price to the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such payment of the purchase price shall not relieve or otherwise impair the obligation of the Borrower to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit together with interest as hereinafter provided.
(d) The Borrower shall pay to the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of Credit upon demand made by the Issuing Lender therefor, together with interest on such amount from the date of any payment made by the Issuing Lender at the Default Rate (unless the Borrower has made arrangements for the making of a Loan in the amount of such payment on the requested letter date thereof or had otherwise arranged for the timely reimbursement of creditsuch payment). The Borrower principal amount of any such payment shall pay a fee be used to reimburse the Issuing Lender for each letter the payment made by it under the Letter of credit Credit and, to the Agent extent that the Lenders have not reimbursed the Issuing Lender pursuant to Section 2.4(c), the interest amount of any such payment shall be for the Pro rata benefit account of the Banks, upon issuance of each letter of credit and, thereafter, upon Issuing Lender. Each Lender that has paid the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior participation purchase price to the distribution of the balance of such fee Pro Issuing Lender pursuant to Section 2.4(c) shall thereupon acquire a pro rata to the Banks. In additionparticipation, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share such payment, in the claim of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and Issuing Lender against the Borrower for reimbursement of principal and interest under this Section 2.4(d) and shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrowershare, as the case may bein accordance with that pro rata participation, interest on such corresponding amount in respect of each day from the date such corresponding amount was any principal payment made available by the Agent Borrower with respect to such claim and in any interest payment made by the Borrower (but only with respect to periods subsequent to the date such corresponding amount is recovered by Lender paid the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice participation purchase price to the BorrowerIssuing Lender) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled respect to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Requestclaim.
(e) Subject to Article 8, the Borrower may request, pursuant to a Request for Loan, that Advances be made pursuant to Section 2.1(a) to provide funds for the payment required by Section 2.4(d). The delivery proceeds of each such Advances shall be paid directly to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditCredit.
(f) In determining whether If the Borrower fails to pay make the payment required by Section 2.4(d) on a timely basis then, in lieu of the payment of the participation purchase price to the Issuing Lender under any letter of creditSection 2.4(c), the Issuing Lender may (but is not required to), without notice to or the consent of the Borrower, instruct the Administrative Agent shall not have any obligation relative to cause Advances to be made by the Lenders under their Pro Rata Shares of the Revolving Commitment in an aggregate amount equal to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken amount paid by the Agent Issuing Lender with respect to a letter that Letter of credit issued Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid directly to the Issuing Lender to reimburse it for the payment made by it if taken or omitted in under the absence Letter of gross negligence or willful misconduct, shall not create any resulting liability for the AgentCredit.
(g) Immediately prior The issuance of any supplement, modification, amendment, renewal, or extension to or of any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit, provided that no new issuance fees shall be assessed except to the effectiveness extent that the tenor or amount of the related Letter of Credit are thereby increased.
(h) The obligation of the Borrower to pay to the Issuing Lender the amount of any payment made by the Issuing Lender under any Letter of Credit shall be absolute, unconditional, and irrevocable, subject only to performance by the Issuing Lender of its obligations to the Borrower under Uniform Commercial Code Sections 5108 and 5109. Without limiting the foregoing, the obligations of the Borrower to the Issuing Lender shall not be affected by any of the following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from the outstanding letters Letter of credit issued Credit, this Agreement, or any other agreement or instrument relating thereto, with the consent of the Borrower;
(iii) the existence of any claim, setoff, defense, or other rights which the Borrower may have at any time against the Issuing Lender, the Administrative Agent or any Lender, any beneficiary of the Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented under the 2002 Letter of Credit Agreement and/or proving to be forged, fraudulent or invalid or any statement therein being untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the 2004 terms of the Letter of Credit;
(v) payment by the Issuing Lender in good faith under the Letter of Credit Agreement are against presentation of a draft or any accompanying document which does not strictly comply with the terms of the Letter of Credit;
(vi) the existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or any difference between any such Property and the character, quality, quantity, condition, or value of such Property as listed on Exhibit C hereto described in such documents;
(vii) the time, place, manner, order or contents of shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the existence, nature and extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any Property;
(x) any error in the transmission of any message relating to a Letter of Credit not caused by the Issuing Lender, or any delay or interruption in any such letters message;
(xi) any error, neglect or default of credit any correspondent of the Issuing Lender in connection with a Letter of Credit;
(xii) any consequence arising from acts of God, war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Issuing Lender;
(xiii) so long as the Issuing Lender in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Issuing Lender in connection with a Letter of Credit; and
(xiv) where the Issuing Lender has acted in good faith and observed general banking usage, any other circumstances whatsoever.
(i) The Issuing Lender shall be entitled to the protection accorded to the Administrative Agent pursuant to Article 10, mutatis mutandis.
(j) The Uniform Customs and Practice for Documentary Credits, as published in its most current version by the International Chamber of Commerce, shall be deemed a part of this Section and shall apply to be, and hereby are converted into, outstanding letters all Letters of credit hereunderCredit to the extent not inconsistent with applicable Law.
Appears in 1 contract
Letters of Credit. (a) The Banks agree Subject to make available to and upon the terms and conditions contained herein and in the Letter of Credit Documents, at the request of a Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety (or Administrative Borrower on behalf of such Borrower), Agent agrees to cause Issuing Bank to issue, and Issuing Bank agrees to issue, for the Parent account of such Borrower one or more Letters of Credit, for the ratable risk of each Lender according to its Pro Rata Share, containing terms and conditions acceptable to Agent and Issuing Bank.
(b) The Borrower requesting such Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall give Agent and Issuing Bank three (3) Business Days' prior written notice of such Borrower's request for the issuance of a Letter of Credit. Such notice shall be irrevocable and shall specify the original face amount of the Letter of Credit requested, the effective date (which date shall be a Business 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 year from the date of issuance), the purpose for which such Letter of Credit is to be issued, and the beneficiary of the requested Letter of Credit. The Borrower requesting the Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall attach to such notice the proposed terms of the Letter of Credit. The 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 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 an Indemnity Agreement. The availability the terms thereof, and the form and terms of the proposed Letter of Credit shall be satisfactory to Agent and Issuing Bank, (ii) as of the date of issuance, no order of any court, arbitrator or other 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, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not 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 will be subject to (i) generally or the Agent being satisfied with the terms issuance of the letter such Letter of creditCredit, (iiiii) after giving effect to the Borrower’s executing and delivering issuance of such letter Letter of credit and reimbursement agreements and related documents as required by Credit, the AgentLetter of Credit Obligations shall not exceed the Letter of Credit Limit, and (iiiiv) the satisfaction Excess Availability of the Borrower requesting such Letter of Credit, prior to giving effect to any Reserves with respect to such Letter of Credit, on the date of the proposed issuance of any Letter of Credit shall be equal to or greater than: (A) if the proposed Letter of Credit is for the purpose of purchasing Eligible Inventory and the documents of title with respect thereto are consigned to Issuing Bank, the sum of (1) the percentage equal to 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 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 such Borrower's locations for Eligible Inventory within the United States of America and (B) if the proposed Letter of Credit is for any other purpose or the documents of title are not consigned to Issuing Bank in connection with a Letter of Credit for the purpose of purchasing Inventory, an amount equal to one hundred (100%) percent of the Letter of Credit Obligations with respect thereto. Effective on the issuance of each Letter of Credit, a Reserve shall be established in the applicable amount set forth in Section 2.2(c)(iv)(A) or Section 2.2(c)(iv)(B).
(d) Except in Agent's discretion, with the consent of all conditions Lenders, the amount of all outstanding Letter of Credit Obligations shall not at any time exceed the Letter of Credit Limit.
(e) Each Borrower shall reimburse immediately Issuing Bank for any draw under any Letter of Credit issued for the 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, setoff, defense or other right which such Borrower may have at any time against Issuing Bank or any 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 obtaining for whose account such Letter of Credit was issued to Agent for a Prime Rate Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Bankssuch drawing or other amount then due, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent and shall be entitled to .125% made by Agent on behalf of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance Lenders as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and (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 has executed and delivered such letter of credit, reimbursement agreements and other related documents pursuant to this Section 2 (or Special Agent Advances as the case may be required by the Agentbe).
(bf) Borrowers 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 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 beneficiary shall be deemed such Borrower's agent. Each Borrower assumes all risks for, and agrees to pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter of Credit or any documents, drafts or acceptances thereunder. Each Borrower hereby releases and holds Agent and Lenders harmless from and against any acts, waivers, errors, delays or omissions with respect to or relating to any Letter of Credit, except for 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. The provisions of this Section 2.2(f) shall survive the payment of Obligations and the termination of this Agreement.
(g) In connection with Inventory purchased pursuant to any Letter of Credit, Borrowers 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 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 shall designate Issuing Bank as the event consignee on all bills of lading and other negotiable and non-negotiable documents.
(h) Each Borrower hereby irrevocably authorizes and directs Issuing Bank to name such Borrower as the account party therein and to deliver to Agent pays all instruments, documents and other writings and property received by Issuing Bank pursuant to the Letter of Credit and to accept and rely upon Agent's instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the Letter of Credit Documents with respect thereto. Nothing contained herein shall be deemed or construed to grant any amount Borrower any right or authority to pledge the credit of Agent or any Lender in any manner. Borrowers shall be bound by any reasonable interpretation made in good faith by Agent, or Issuing Bank under or on account in connection with any Letter of a letter Credit Accommodation or any documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of credit any Borrower.
(i) Immediately upon the payment by the Agent under issuance or on account amendment of a letter any Letter of credit being herein called a “Draw”)Credit, a Revolving Loan each Lender shall be deemed to be made to the Borrower by each Bank have irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided interest and participation to the extent of such Lender's Pro Rata Share of the liability with respect to such Letter of Credit and the obligations of Borrowers with respect thereto (including all Letter of Credit Obligations with respect thereto). Each Lender shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to Issuing Bank therefor and discharge when due, its Pro rata share Rata Share of all of such obligations arising under such Letter of Credit. Without limiting the Total Revolving Loan Commitments scope and nature of each Lender's participation in any Letter of Credit, to reimburse immediately the extent that Issuing Bank has not been reimbursed or otherwise paid as required hereunder or under any such Letter of Credit, each such Lender shall pay to Issuing Bank its Pro Rata Share of such unreimbursed drawing or other amounts then due to Issuing Bank in connection therewith.
(j) The obligations of Borrowers to pay each Letter of Credit Obligations and the obligations of Lenders to make payments to Agent for the amount account of Issuing Bank with respect to Letters of Credit shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the Draw. The Agent shall notify each Bank terms of this Agreement under any and all circumstances, whatsoever, notwithstanding the occurrence and payment or continuance of a Draw no later than 12:00 p.m. (Cleveland time) on any Default, Event of Default, the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available failure to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent satisfy any other condition set forth in U.S. Dollars and immediately available funds at its office listed on the signature pages heretoSection 4 or any other event or circumstance. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the a Lender when due, Agent shall be entitled to recover such corresponding amount on demand from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand thereforLender with interest thereon, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of for each day from the date such corresponding amount was made available by the Agent to the Borrower to due until the date such corresponding amount is recovered by the paid to Agent at a the interest rate per annum equal to (i) if paid then payable by such Bank, the overnight Federal Funds Effective any Borrower in respect of Loans that are Prime Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In Any such reimbursement shall not relieve or otherwise impair the event no Revolving Loan or only a partial Revolving Loan is deemed obligation of Borrowers to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against reimburse Issuing Bank under any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and or make any other documents that the Agent customarily requires payment in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan and Security Agreement (Sed International Holdings Inc)
Letters of Credit. The Issuing Lender shall, at the request of the Company, issue one or more Letters of Credit hereunder, with expiry dates that would occur after the Letter of Credit Expiration Date (a) The Banks agree and after the Maturity Date), based upon the Company’s agreement to make available fully Cash Collateralize the LOC Obligations relating to such Letters of Credit on the Borrower letters Letter of credit, issued by the Agent, Credit Expiration Date pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of creditSection 2.20(a)(ii). The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or Company fails to fully Cash Collateralize the outstanding LOC Obligations on account the Letter of a letter Credit Expiration Date, each outstanding Letter of credit (Credit shall automatically be deemed to be drawn in full, and the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan Company shall be deemed to have requested a Base Rate Loan to be funded by the Lenders on the Letter of Credit Expiration Date to reimburse such drawing (with the proceeds of such Base Rate Loan being used to Cash Collateralize outstanding LOC Obligations as set forth in Section 2.20). If the event a Mandatory LOC Borrowing cannot for any reason be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank on such date (including, without limitation, as a result of the occurrence and payment of a Draw no later than 12:00 p.m. Bankruptcy Event) then each such Revolving Lender hereby agrees that it shall fund its Participation Interests in the outstanding LOC Obligations on such day (Cleveland time) on with the date proceeds of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of funded Participation Interests being used to Cash Collateralize outstanding LOC Obligations as set forth in Section 2.20). Each Lender’s obligation to make such notice, each Bank will make available payment to the Agent its Pro rata portion Issuing Lender, and the right of the Draw deemed Issuing Lender 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 hereunder, the existence of a Revolving Loan. All amounts Default or Event of Default or the acceleration of the Obligations hereunder and shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand thereforwithout any offset, the Agent shall promptly notify the Borrowerabatement, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank withholding or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agentreduction whatsoever.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Credit Agreement (Universal Health Realty Income Trust)
Letters of Credit. (a) The Banks agree Subject to the terms and conditions set forth herein, the Issuing Lender agrees, in reliance upon the agreements of Lenders set forth in this Section 2.4, to issue, supplement, modify, amend, renew, or extend such Letters of Credit for the account of Borrowers, jointly and severally, under the Commitments as Borrowers may request; provided that the Issuing Lender shall not be obligated to make available any Letter of Credit Extension with respect to the Borrower letters any Letter of creditCredit, issued by the Agent, pursuant and no Lender shall be obligated to their respective Commitments up to an aggregate amount at participate in any one time outstanding Letter of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf Credit if as of the Parent pursuant to an Indemnity Agreement. The availability date of letters such Letter of credit will be subject to Credit Extension, (i) the Outstanding Amount of all Letter of Credit Usage and all Loans would exceed the Aggregate Commitments, (ii) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Letter of Credit Usage, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans would exceed such Lender’s Commitment, or (iii) the Outstanding Amount of the Letter of Credit Usage would exceed the Letter of Credit Sublimit. Each Letter of Credit shall be in a form acceptable to the Issuing Lender. Unless all Lenders, Administrative Agent, and the Issuing Lender otherwise consent in a writing delivered to Administrative Agent, the term of any Letter of Credit shall not exceed the Maturity Date. Each commercial Letter of Credit will require drafts drawn at sight.
(b) Borrowers may irrevocably request the issuance, supplement, modification, amendment, renewal, or extension of a Letter of Credit by delivering a duly completed Letter of Credit Application therefor to the Issuing Lender, with a copy to Administrative Agent, by Requisite Notice not later than the Requisite Time therefor; provided, however, that for such requests the Requisite Notice must be in writing. Administrative Agent shall promptly notify the Issuing Lender whether such Letter of Credit Application, and the action requested pursuant thereto, conforms to the requirements of this Agreement. Upon the issuance, supplement, modification, amendment, renewal, or extension of a Letter of Credit, the Issuing Lender shall promptly notify Administrative Agent of such action and the amount and terms thereof. Letters of Credit may have automatic extension or renewal provisions (“evergreen” Letters of Credit) so long as the Issuing Lender has the right to terminate such evergreen Letters of Credit no less frequently than annually within a notice period (the “Letter of Credit Evergreen Notice Period”) to be agreed upon at the time each such Letter of Credit is issued. This Agreement shall control in the event of any conflict with any Letter of Credit Application.
(c) Upon the issuance of a Letter of Credit, each Lender shall be deemed to have purchased a pro rata participation in such Letter of Credit, as from time to time supplemented, amended, renewed, or extended, from the Issuing Lender in an amount equal to that Lender’s Pro Rata Share. Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed by Borrowers for any payment required to be made by the Issuing Lender under any Letter of Credit within the time specified in Section 2.4(d) below, each Lender shall, pro rata according to its Pro Rata Share, reimburse the Issuing Lender through Administrative Agent promptly upon demand for the amount of such payment. The obligation of each Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrowers, jointly and severally, to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit together with interest as hereinafter provided.
(d) Borrowers agree to pay to the Issuing Lender an amount equal to any payment made by the Issuing Lender with respect to each Letter of Credit within one Business Day after demand made by the Issuing Lender therefor, together with interest on such amount from the date of any payment made by the Issuing Lender at the Default Rate. The principal amount of any such payment shall be used to reimburse the Issuing Lender for the payment made by it under the Letter of Credit. Each Lender that has reimbursed the Issuing Lender for its Pro Rata Share of any payment made by the Issuing Lender under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of such reimbursement, in the claim of the Issuing Lender against Borrowers under this Section and shall share, in accordance with that pro rata participation, in any payment made by Borrowers with respect to such claim.
(e) If Borrowers fail to make the payment required by subsection (d) above within the time period therein set forth, the Issuing Lender shall notify Administrative Agent of such fact and the amount of such unreimbursed drawing. Administrative Agent shall promptly notify each Lender of its Pro Rata Share of such amount by Requisite Notice. Each Lender shall make funds in an amount equal its Pro Rata Share of such amount available to Administrative Agent at Administrative Agent’s Office not later than the Requisite Time on the Business Day specified by Administrative Agent. Such funds shall be paid to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit. If the conditions precedent set forth in Section 4 could be satisfied (except for the giving of a Request for Extension of Credit) on the date such funds are made available by Lenders, such funds shall be deemed a Borrowing of Base Rate Loans (without regard to the Minimum Amount therefor) requested by Borrowers. If the conditions precedent set forth in Section 4 could not be satisfied on the date such funds are made available by Lenders, such funds shall be deemed a funding of each Lender’s participation in such Letter of Credit, and such funds shall be payable by Borrowers upon demand and shall bear interest at the Default Rate.
(f) Once an evergreen Letter of Credit is issued, Borrowers shall not be required to request that the Issuing Lender permit the renewal thereof. If such Letter of Credit could be issued within the Letter of Credit Evergreen Notice Period, the Issuing Lender shall permit the renewal of such evergreen Letter of Credit at such time; provided that the Issuing Lender shall not permit the renewal of an evergreen Letter of Credit if such evergreen Letter of Credit would expire after the Maturity Date.
(g) The obligation of Borrowers to pay to the Issuing Lender the amount of any payment made by the Issuing Lender under any Letter of Credit shall be joint and several, absolute, unconditional, and irrevocable. Without limiting the foregoing, Borrowers’ obligations shall not be affected by any of the following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, with the consent of Borrowers;
(iii) the existence of any claim, set-off, defense, or other rights which Borrowers may have at any time against the Issuing Lender, Administrative Agent or any Lender, any beneficiary of the Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being satisfied untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the terms of the letter Letter of creditCredit;
(v) payment by the Issuing Lender in good faith under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the Letter of Credit;
(vi) the existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or for any difference between any such Property and the character, quality, quantity, condition, or value of such Property as described in such documents;
(vii) the time, place, manner, order or contents of shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the existence, nature and extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any Property;
(x) any error in the transmission of any message relating to a Letter of Credit not caused by the Issuing Lender, or any delay or interruption in any such message;
(xi) any error, neglect or default of any correspondent of the Issuing Lender in connection with a Letter of Credit;
(xii) any consequence arising from acts of God, wars, insurrections, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Issuing Lender;
(xiii) so long as the Issuing Lender in good faith determines that the document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Issuing Lender in connection with a Letter of Credit; and
(xiv) where the Issuing Lender has acted in good faith and observed general banking usage, any other circumstances whatsoever.
(h) Unless otherwise expressly agreed by the Issuing Lender and Borrowers when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the Borrower’s executing rules of the Uniform Customs and delivering such letter of credit and reimbursement agreements and related documents Practice for Documentary Credits, as required most recently published by the Agent, and International Chamber of Commerce at the time of issuance shall apply to each commercial Letter of Credit.
(iiii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of Concurrently with the issuance of each such Letter of Credit, Borrowers shall pay a letter of credit remaining outstandingissuance fee to the Issuing Lender, for the sole account of the Issuing Lender, in an amount set forth in the Fee Letter. Borrowers shall also pay to Administrative Agent, for the ratable account of Lenders in accordance with their Pro Rata Share, a Letter of Credit fee in an amount equal to the Applicable Margin times the average daily maximum amount available to be drawn on such outstanding Letter of the Indicated Spread for Revolving Loans under the LIBOR Rate Option Credit, computed and payable in arrears on the stated amount last day of each calendar quarter, commencing June 30, 2005, through the letter date upon which the outstanding Letter of credit; Credit shall expire, with the final payment to be made on such expiration date (provided that, that the Agent minimum fee for each Letter of Credit shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks$500 per annum). In addition, the Borrower Borrowers shall also pay to the Agent upon issuance Issuing Lender for its own account, from time to time on demand, the Issuing Lender’s standard processing fees, costs and charges with respect to Letters of each letter Credit. The Letter of credit provided for under this Section 3.01 an Credit issuance fee and the Letter of $500 Credit fee are nonrefundable.
(j) As of the Closing Date, Bank of America has issued for the Agent’s services in issuing the letter account of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All RSA certain existing letters of credit shall be in such form and substance as the Agentlisted on Schedule 2.4 hereto (collectively, the Banks “Existing Letters of Credit”). On the Closing Date, each Lender will purchase a participation in the Existing Letters of Credit in the same manner as if the Existing Letters of Credit had been a Letter of Credit issued hereunder. With respect to the Existing Letters of Credit, from and after the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of Closing Date the letter of credit requested, fee for the other conditions ratable account of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan Lenders will accrue and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any undrawn amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan thereof shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “constitute Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit RequestUsage.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions hereof, and for so long as no Event of Default exists, Lender shall, upon the request of Borrower, issue Letters of Credit (which term shall be deemed to include the amendment, renewal or extension of an existing Letter of Credit) for the account of Borrower letters of credit, issued by during the Agent, pursuant to their respective Commitments up to period from the date hereof through and including the Commitment Termination Date having an aggregate face amount at any one time outstanding up to the Available Letter of $100,000,000 minus Credit Commitment as then in effect. Documentary Letters of Credit shall not have an expiry date later than 90 days after issuance and standby Letters of Credit shall not have an expiry date later than 1 year after issuance. In no event, however, shall any Letter of Credit have an expiry date later than the aggregate principal amount of Commitment Termination Date. Borrower shall execute and deliver to Lender, all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters letter of credit will be subject agreements and other documents required by Lender, in form and substance satisfactory to Lender in its sole discretion. Borrower agrees to unconditionally and absolutely indemnify, defend, pay and hold harmless Lender for all draws, claims, losses, damages, obligations and liabilities suffered or incurred at any time by Lender, including without limitation attorneys' fees and reasonable costs with respect to any and all Letters of Credit, except to the extent suffered or incurred as a result of Lender's gross negligence or willful misconduct. Lender shall notify Borrower in accordance with its customary practice of any payment or disbursement made by Lender under any Letter of Credit. Borrower shall either (i) reimburse Lender in immediately available funds on the Agent being satisfied with same day as Borrower is notified by Lender that any draw is paid by Lender under the terms Letters of the letter of creditCredit (all such amounts so paid or disbursed until paid, are hereinafter referred to as "Unpaid Drawings"), or (ii) notify the Borrower’s executing and delivering Lender that it has elected to convert such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining into a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentCredit Loan.
(b) In If, notwithstanding the event the Agent pays any amount under or on account other provisions of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”)this subsection 1.3, a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date Commitment Termination Date there are outstanding any Letters of such notice and, Credit which have not later than 1:00 p.m. (Cleveland time) on expired or been terminated with the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account consent of the Borrower maintained and the respective beneficiaries thereof, then this Agreement (including, without limitation, this Section 1.3 and Section 2.7 hereof) and the respective rights, obligations and covenants of the Borrower and Lender under this Agreement shall remain in full force and effect until the date on which the last of the Letters of Credit expire or is terminated (with the Agentconsent of the Borrower and the respective beneficiaries thereof) and all payments made by Lender under the Letters of Credit are reimbursed in full by the Borrower except that the Commitment (including the obligation to issue Letters of Credit) shall terminate on the Commitment Termination Date and Lender shall have no obligation after the Commitment Termination Date to make Loans or issue or extend Letters of Credit hereunder.
(c) So long Upon the execution and delivery by Borrower to Lender of its standard form of application and continuing reimbursement agreement for Letters of Credit and Letter of Credit Security Agreement attached hereto as letters of credit are outstandingExhibit 1.3 (individually, an "Application", and collectively, the amount "Applications") and upon payment by Borrower to Lender of Revolving Loans that the Borrower is entitled standard charges and fees then customarily imposed by Lender in connection with such Applications, and the Letter of Credit Fees described in Section 2.4 for the sole account of Lender, Lender shall, subject to obtain under Article II shall be reduced by the LC Obligations then outstanding andterms and conditions of this Agreement, in addition to otherwise constituting part a timely manner in accordance with its standard operating procedures, issue a Letter of Credit for the account of the Revolving Loans, except as otherwise expressly stated hereinBorrower. In the event of any conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of any Application, the stated amount terms of the letters of credit this Agreement shall be treated as principal of the Revolving Loanscontrol.
(d) Whenever The obligations of the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of under this Section 3.01 and shall include a representation and warranty as 1.3 to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent reimburse Lender with respect to a letter of credit issued by it if taken or omitted in the absence of Unpaid Drawings (including interest thereon) shall, absent gross negligence or willful misconductmisconduct of Lender, shall not create be absolute and unconditional under any resulting liability for the Agentand all circumstances and irrespective of any setoff, counterclaim or defense to payment which Borrower may have or have had against Lender.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan Agreement (Syms Corp)
Letters of Credit. (a) The Banks agree to make available to the Borrower letters Bank shall issue or have issued Letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to Credit for Borrower's account not exceeding (i) the Agent being satisfied Committed Revolving Line minus (ii) the outstanding principal balance of any Advances (including any Cash Management Services), minus (iii) the amount of all Letters of Credit (including drawn but unreimbursed Letters of Credit), plus an amount equal to any Letter of Credit Reserves. The face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed $5,000,000.00. Each Letter of Credit shall have an expiry date no later than 180 days after the Revolving Maturity Date provided Borrower's Letter of Credit reimbursement obligation shall be secured by cash on terms acceptable to Bank on and after (i) the Revolving Maturity Date if the term of this Agreement is not extended by Bank, or (ii) the occurrence of an Event of Default hereunder. All Letters of Credit shall be, in form and substance, acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank's form of standard Application and Letter of Credit Agreement. Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request.
(b) The obligation of Borrower to immediately reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement and such Letters of Credit, under all circumstances whatsoever. Borrower shall indemnify, defend, protect, and hold Bank harmless from any loss, cost, expense or liability, including, without limitation, reasonable attorneys' fees, arising out of or in connection with any Letters of Credit.
(c) Borrower may request that Bank issue a Letter of Credit payable in a currency other than United States Dollars. If a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an Advance to Borrower of the letter equivalent of creditthe amount thereof (plus cable charges) in United States currency at the then prevailing rate of exchange in San Francisco, California, for sales of that other currency for cable transfer to the country of which it is the currency.
(iid) Upon the Borrower’s executing and delivering such issuance of any letter of credit and reimbursement agreements and related documents as required by payable in a currency other than United States Dollars, Bank shall create a reserve (the Agent"Letter of Credit Reserve") under the Committed Revolving Line for letters of credit against fluctuations in currency exchange rates, and in an amount equal to ten percent (iii10%) of the satisfaction of all conditions to the Borrower obtaining a Loan in the face amount of the requested such letter of credit. The Borrower shall pay a fee amount of such reserve may be amended by Bank from time to time to account for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, fluctuations in the amount exchange rate. The availability of the Indicated Spread for Revolving Loans funds under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Committed Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II Line shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated such reserve for so long as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Requestremains outstanding.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters of creditterms and conditions set forth in this Agreement, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding and from time to time from the Closing Date through the day that is thirty (30) days prior to the Maturity Date, the Issuing Lender shall issue such Letters of Credit as the Borrower may request upon the delivery of a written request in the form of Exhibit I hereto (a "Letter of Credit Request") to the Issuing Lender, provided that (i) no Default or Event of Default shall have occurred and be continuing, (ii) upon issuance of such Letter of Credit, the Outstanding Letters of Credit (including Letters of Credit accepted but unpaid) shall not exceed Fifteen Million Dollars ($100,000,000 minus 15,000,000.00), (iii) in no event shall the aggregate principal sum of (A) the Revolving Credit Loans Outstanding, (B) the sum of Swing Loans Outstanding and (C) the amount of Letters of Credit Outstanding (after giving effect to all then outstanding Surety Bonds issued Letters of Credit requested and any Letters of Credit accepted but unpaid) exceed the total Revolving Credit Commitment, (iv) the conditions set forth in (S)(S)10 and 11 shall have been satisfied, and (v) in no event shall any amount drawn under a Letter of Credit be available for reinstatement or a subsequent drawing under such Letter of Credit. Each Letter of Credit Request shall be executed by an officer of Borrower. The Issuing Lender shall be entitled to conclusively rely on such Person's authority to request a Surety Letter of Credit on behalf of the Parent pursuant to an Indemnity AgreementBorrower. The availability Issuing Lender shall have no duty to verify the authenticity of letters any signature appearing on a Letter of credit will Credit Request. The Borrower assumes all risks with respect to the use of the Letters of Credit. Unless the Issuing Lender and the Required Lenders otherwise consent, the term of any Letter of Credit shall not exceed a period of time commencing on the issuance of the Letter of Credit and ending on the date which is fifteen (15) days prior to the Maturity Date (but in any event the term shall not extend beyond the Maturity Date). The amount available to be subject drawn under any Letter of Credit shall reduce on a dollar-for-dollar basis the amount available to be drawn under the Revolving Credit Commitment as a Revolving Credit Loan.
(b) Each Letter of Credit Request shall be submitted to the Issuing Lender at least ten (10) Business Days (or such shorter period as the Issuing Lender may approve) prior to the date upon which the requested Letter of Credit is to be issued. Each such Letter of Credit Request shall contain (i) a statement as to the Agent being satisfied purpose for which such Letter of Credit shall be used (which purpose shall be in accordance with the terms of the letter of creditthis Agreement), and (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required a certification by the Agent, chief financial or chief accounting officer of Borrower that the Borrower is and (iii) will be in compliance with all covenants under the satisfaction of all conditions Loan Documents after giving effect to the Borrower obtaining a Loan in the amount issuance of the requested letter such Letter of creditCredit. The Borrower shall pay a fee for each further deliver to the Issuing Lender such additional applications and documents as the Issuing Lender may require, in conformity with the then standard practices of its letter of credit department, in connection with the issuance of such Letter of Credit; provided that in the event of any conflict, the terms of this Agreement shall control.
(c) The Issuing Lender shall, if it approves of the content of the Letter of Credit Request (which approval shall not be unreasonably withheld), and subject to the Agent for conditions set forth in this Agreement, issue the Pro rata benefit Letter of Credit on or before ten (10) Business Days following receipt of the Banks, upon documents last due pursuant to (S)2.10(b). Each Letter of Credit shall be in form and substance reasonably satisfactory to the Issuing Lender in its reasonable discretion. Upon issuance of each letter a Letter of credit andCredit, thereafter, upon the annual anniversary Issuing Lender shall provide notice of the issuance of such Letter of Credit to the Revolving Credit Lenders and shall provide a copy of such Letter of Credit to any Revolving Credit Lender that requests a copy.
(d) Upon the issuance of a Letter of Credit, each such letter Revolving Credit Lender shall be deemed to have purchased a participation therein from Issuing Lender in an amount equal to its respective Revolving Credit Commitment Percentage of credit remaining outstanding, in the amount of such Letter of Credit. No Revolving Credit Lender's obligation to participate in a Letter of Credit shall be affected by any other Revolving Credit Lender's failure to perform as required herein with respect to such Letter of Credit or any other Letter of Credit.
(e) Upon the Indicated Spread issuance of each Letter of Credit, the Borrower shall pay to the Issuing Lender (i) for its own account, a Letter of Credit fee calculated at the rate of one-eighth of one percent (0.125%) per annum of the amount available to be drawn under such Letter of Credit (which fee shall not be less than $1,000.00 in any event), and (ii) for the accounts of the Revolving Loans under Credit Lenders in accordance with their respective percentage shares of participation in such Letter of Credit, a Letter of Credit fee calculated at the rate per annum equal to the Applicable Margin then applicable to Revolving Credit LIBOR Rate Option Loans on the stated amount available to be drawn under such Letter of the letter of credit; provided that, the Agent Credit. Such fees shall be entitled payable in quarterly installments in arrears with respect to .125% each Letter of such fee prior to Credit on the distribution first day of each calendar quarter following the balance date of such fee Pro rata to issuance and continuing on each quarter or portion thereof thereafter, as applicable, or on any earlier date on which the BanksRevolving Credit Commitments shall terminate and on the expiration or return of any Letter of Credit. In addition, the Borrower shall pay to Issuing Lender for its own account within five (5) days of demand of Issuing Lender the Agent upon issuance standard issuance, documentation and service charges for Letters of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be Credit issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled from time to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required time by the AgentIssuing Lender.
(bf) In the event the Agent pays that any amount is drawn under or on account a Letter of a letter of credit (the payment Credit by the Agent under or on account of a letter of credit being herein called a “Draw”)beneficiary thereof, a Revolving Loan shall be deemed to be made to the Borrower shall reimburse the Issuing Lender by each Bank to the extent of its Pro rata share of the Total having such amount drawn treated as an outstanding Revolving Credit Base Rate Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence under this Agreement and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrowereach Revolving Credit Lender by telex, telecopy, telegram, telephone (confirmed in writing) or other similar means of transmission, and each Revolving Credit Lender shall promptly and unconditionally pay to the Borrower Agent, for the Issuing Lender's own account, an amount equal to such Revolving Credit Lender's Revolving Credit Commitment Percentage of such Letter of Credit (to the extent of the amount drawn). If and to the extent any Revolving Credit Lender shall immediately not make such amount available on the Business Day on which such draw is funded, such Revolving Credit Lender agrees to pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest forthwith on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Drawdemand, together with interest thereon, against any account of for each day from the Borrower maintained with date on which such draw was funded until the date on which such amount is paid to the Agent, at the Federal Funds Effective Rate until three (3) days after the date on which the Agent gives notice of such draw and at the Federal Funds Effective Rate plus 1% for each day thereafter. Further, such Revolving Credit Lender shall be deemed to have assigned any and all payments made of 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 Agent to fund the amount of any drawn Letter of Credit which such Revolving Credit Lender was required to fund pursuant to this (S)2.10(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 Revolving Credit Lenders not so failing or refusing shall be entitled to a priority secured position for such amounts as provided in (S)12.5. The failure of any Revolving Credit Lender to make funds available to the Agent in such amount shall not relieve any other Revolving Credit Lender of its obligation hereunder to make funds available to the Agent pursuant to this (S)2.10(f).
(cg) So long as letters If after the issuance of credit are outstanding, the amount a Letter of Revolving Loans that the Borrower is entitled Credit pursuant to obtain under Article II shall be reduced (S)2.10(c) by the LC Obligations then outstanding andIssuing Lender, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) but prior to the proposed date funding of issuance any portion thereof by a Revolving Credit Lender, one of the events described in (which shall be a Cleveland Banking DayS)12.1(h), which written notice (i) or (j) shall be in the form of Exhibit E hereto (eachhave occurred, a “Letter of each Revolving Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shallLender will, on the date such Revolving Credit Loan pursuant to (S)2.10(f) was to have been made, purchase an undivided participation interest in the Letter of each Credit in an amount equal to its Revolving Credit Commitment Percentage of the amount of such Letter of Credit. Each Revolving Credit Lender will immediately transfer to the Issuing Lender in immediately available funds the amount of its participation and upon receipt thereof the Issuing Lender will deliver to such Revolving Credit Lender a Letter of Credit participation certificate dated the date of receipt of such funds and in such amount.
(h) Whenever at any time after the Issuing Lender has received from any Revolving Credit Lender any such Revolving Credit Lender's payment of funds under a Letter of Credit and thereafter the Issuing Lender receives any payment on account thereof, then the Issuing Lender will distribute to such Revolving Credit Lender its participation interest in such amount (appropriately adjusted in the case of interest payments to reflect the period of time during which such Revolving Credit Lender's participation interest was outstanding and funded); provided, however, that in the event that such payment received by the Issuing Lender is required to be returned, such Revolving Credit Lender will return to the Issuing Lender any portion thereof previously distributed by the Issuing Lender to it.
(i) The issuance of any supplement, modification, amendment, renewal or amendment extension to or modification to a letter of credit by it, give each Bank and any Letter of Credit shall be treated in all respects the Borrower written notice of same as the issuance of or amendment or modification to such letter a new Letter of creditCredit.
(fj) In determining whether to pay under Borrower assumes all risks of the acts, omissions, or misuse of any letter Letter of creditCredit by the beneficiary thereof. Neither Agent, Issuing Lender nor any Lender will be responsible for (i) the Agent shall not have form, validity, sufficiency, accuracy, genuineness or legal effect of any obligation relative to Letter of Credit or any document submitted by any party in connection with the Banks other than to determine that issuance of any documents required Letter of Credit, even if such document should in fact prove to be delivered in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the form, validity, sufficiency, accuracy, genuineness or legal effect of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of any beneficiary of any Letter of Credit to comply fully with the conditions required in order to demand payment under a Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document or draft required by or from a beneficiary in order to make a disbursement under a Letter of Credit or the proceeds thereof; (vii) for the misapplication by the beneficiary of any Letter of Credit of the proceeds of any drawing under such letter Letter of credit have been delivered Credit; and that they appear to comply on their face with (viii) for any consequences arising from causes beyond the requirements control of Agent or any Lender. None of the letter foregoing will affect, impair or prevent the vesting of creditany of the rights or powers granted to Agent, Issuing Lender or the Lenders hereunder. Any action In furtherance and extension and not in limitation or derogation of any of the foregoing, any act taken or omitted to be taken by Agent, Issuing Lender or the Agent with respect to a letter of credit issued by it if taken other Lenders in good faith will be binding on Borrower and will not put Agent, Issuing Lender or omitted in the absence of gross negligence or willful misconduct, shall not create other Lenders under any resulting liability for the Agentto Borrower.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. As part of the Credit available hereunder and upon not less than three (a3) The Banks agree to make available Business Days' prior notice to the Agent, each of the Facility A Borrowers may cause to be issued by an Issuing Lender one or more Letters of Credit under Facility A in a maximum aggregate amount outstanding at any time not exceeding US $15,000,000, and for a duration not exceeding the lesser of one (1) year from the date of issuance or the remaining duration of the Term, subject to the signature by the relevant Facility A Borrower of the Issuing Lender's standard documentation then currently used in connection with letters of credit, issued . Such Borrower shall pay non-refundable fees in respect of any such Letter of Credit equal to the rate per annum indicated in the definition of "Margin" multiplied by the Agentface amount thereof, pursuant subject to their respective Commitments up to a minimum fee for each Letter of Credit in an aggregate amount at any one time outstanding of $100,000,000 minus 250, payable in advance. The relevant Facility A Borrower shall also pay to the aggregate principal amount Issuing Lender Letter of all then outstanding Surety Bonds issued by a Surety on behalf Credit fees in respect of any such Letters of Credit equal to .12% per annum of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to face amount thereof, payable (i) for Letters of Credit issued at the Agent being satisfied with request of a US Borrower, in arrears at the terms end of the letter each fiscal quarter of creditIPG, and (ii) for Letters of Credit issued at the request of a Canadian Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) advance on the date of issuance, or on such notice and, not later than 1:00 p.m. (Cleveland time) on the other date of such notice, each Bank will make available to as the Agent its Pro rata portion of the Draw deemed may determine from time to be a Revolving Loantime. All amounts shall be made available to the Agent in U.S. Dollars IPG and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount LLC expressly acknowledge that they will remain liable hereunder in respect of each day from Letters of Credit irrespective of the date fact that they have not executed such corresponding amount was standard documentation together with the applicable Borrower. If a request for payment is made available under any Letter of Credit, the Issuing Lender will advise the Agent and the Agent will promptly advise the relevant Facility A Borrower of any payment made thereunder. Upon any payment by the Agent Issuing Lender under any Letter of Credit, each of the Lenders shall reimburse to the Borrower Issuing Lender a portion of such payment equal to the date such corresponding amount is recovered percentage of its respective Facility A Commitment multiplied by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agentsuch payment.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree 2.3.1 At the request of Borrower, Lender may issue, or cause to make available be issued, from time to time before the date which is 30 days prior to the Borrower Termination Date standby letters of credit, issued by the Agent, pursuant or participation agreements confirming payment to their respective Commitments up issuers (reasonably acceptable to an aggregate amount at any one time outstanding Lender) of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of standby letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, in each case for the account of Borrower or any Subsidiary and containing terms and conditions which are consistent with this Agreement and reasonably satisfactory to Lender (ii) the Borrower’s executing and delivering each such standby letter of credit and reimbursement agreements and related documents as required by the Agentparticipation agreement, and (iii) the satisfaction a “Letter of all conditions Credit”). With respect to the Borrower obtaining a Loan in the outstanding face amount drawn on each such Letter of the requested letter of credit. The Credit, Borrower shall pay to Lender a fee for each letter of credit equal to the Agent Applicable Margin per annum for LIBOR Rate Revolving Loans, calculated based upon a year of 365 days for actual days outstanding and payable on the Pro rata benefit of the Banks, upon issuance last day of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, calendar quarter in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banksarrears. In addition, with respect to each Letter of Credit, the Borrower shall pay to or as directed by Lender such additional customary fees as Borrower and Lender may from time to time agree. After giving effect to each such issuance, the Agent upon aggregate Stated Amount of all Letters of Credit shall not at any time exceed the least of (a) $1,000,000, (b) the Revolving Loan Commitment minus the aggregate amount of all outstanding Revolving Loans and (c) the Borrowing Availability minus the aggregate amount of all outstanding Revolving Loans. Borrower shall give notice to Lender of the proposed issuance of each letter Letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower Credit on a Business Day which is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking ten (10) Business Days (or such shorter period lesser number of days as may be acceptable to the AgentLender shall agree) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written of such Letter of Credit. Each such notice shall be in the form of Exhibit E hereto (each, accompanied by a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for in form reasonably acceptable to Lender, duly executed by Borrower, together with such letter of credit and any other documents documentation as Lender may request in support thereof, it being understood that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each application shall specify, among other things, the date on which the proposed Letter of Credit Request shall is to be deemed a representation issued, and warranty by the Borrower that such letter expiration date of credit as requested in such Letter of Credit Request may (which shall not be issued in accordance with later than the earlier to occur of (a) one year after the date of issuance thereof and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as (b) 30 days prior to the aggregate principal scheduled Termination Date.
2.3.2 Borrower hereby unconditionally and irrevocably agrees to reimburse Lender for each payment or disbursement made by Lender under any Letter of Credit honoring any demand for payment made thereunder, in each case on the date that such payment or disbursement is made. Lender shall promptly notify Borrower whenever any demand for payment is made under any Letter of Credit; provided, that the failure of Lender to so notify Borrower shall not affect the rights of Lender in any manner whatsoever. Any amount of all then outstanding Surety Bonds. The Agent shall, not reimbursed on the date of each issuance such payment or disbursement shall bear interest from the date of such payment or amendment disbursement to the date that Lender is reimbursed by Borrower therefor, payable on demand, at the interest rate per annum from time to time in effect for Revolving Loans which are Base Rate Loans.
2.3.3 Borrower’s reimbursement obligations hereunder shall be irrevocable and unconditional under all circumstances, including (i) any lack of validity or modification to enforceability of any Letter of Credit, this Agreement or any other Loan Document, (ii) the existence of any claim, set-off, defense or other right which any Loan Party may have at any time against a letter beneficiary named in a Letter of credit by itCredit, give each Bank any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), Lender or any other Person, whether in connection with any Letter of Credit, this Agreement, any other Loan Document, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between any Loan Party and the Borrower written notice beneficiary named in any Letter of Credit), (iii) the issuance validity, sufficiency or genuineness of or amendment or modification to such any document which Lender (or, as applicable, the issuer of any underlying letter of credit.
) has determined complies on its face with the terms of the applicable Letter of Credit (f) In determining whether to pay under any or, if applicable, underlying letter of credit), the Agent shall not have any obligation relative even if such document should later prove to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with forged, fraudulent, invalid or insufficient in any respect or any statement therein shall have been untrue or inaccurate in any respect, or (iv) the requirements surrender or impairment of any security for the performance or observance of any of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agentterms hereof.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters terms and conditions of creditthis Agreement, issued by the Agent, pursuant Issuing Lender agrees to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of issue letters of credit will for the account of US Borrower (each, an “US Borrower L/C”). To request the issuance of an US Borrower L/C (or the amendment, renewal, or extension of an outstanding US Borrower L/C), Administrative Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Lender) to the Issuing Lender and Agent (reasonably in advance of the requested date of issuance, amendment, renewal, or extension) a notice requesting the issuance of an US Borrower L/C, or identifying the US Borrower L/C to be subject amended, renewed, or extended, the date of issuance, amendment, renewal, or extension, the date on which such US Borrower L/C is to expire, the amount of such US Borrower L/C, the name and address of the beneficiary thereof, and such other information as shall be necessary to prepare, amend, renew, or extend such US Borrower L/C. The Issuing Lender shall have no obligation to issue a US Borrower Letter of Credit if any of the following would result after giving effect to the issuance of such requested US Borrower Letter of Credit:
(i) the Agent being satisfied with US Borrower Letter of Credit Usage would exceed the terms US Borrower Maximum Revolver Amount (when such US Borrower Letter of Credit Usage is added to the letter then extant amount of creditoutstanding US Borrower Advances), or
(ii) the Borrower’s executing and delivering such letter US Borrower Letter of credit and reimbursement agreements and related documents as required by Credit Usage would exceed $30,000,000 less the AgentPR Borrower Letter of Credit Usage less the UK Borrower Letter of Credit Usage, and or
(iii) the satisfaction Letter of all conditions to Credit Usage would exceed the Borrower obtaining a Loan in Maximum Revolver Amount less the then extant amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agentoutstanding Advances.
(b) In Subject to the event terms and conditions of this Agreement, the Agent pays any amount under or on Issuing Lender agrees to issue letters of credit for the account of UK Borrower (each, an “UK Borrower L/C”). To request the issuance of an UK Borrower L/C (or the amendment, renewal, or extension of an outstanding UK Borrower L/C), Administrative Borrower shall hand deliver or telecopy or transmit by electronic communication to the Issuing Lender and Agent (reasonably in advance of the requested date of issuance, amendment, renewal, or extension) a letter notice requesting the issuance of an UK Borrower L/C, or identifying the UK Borrower L/C to be amended, renewed, or extended, the date of issuance, amendment, renewal, or extension, the date on which such UK Borrower L/C is to expire, the amount of such UK Borrower L/C, the name and address of the beneficiary thereof, and such other information as shall be necessary to prepare, amend, renew, or extend such UK Borrower L/C. The Issuing Lender shall have no obligation to issue a UK Borrower Letter of Credit if any of the following would result after giving effect to the issuance of such requested UK Borrower Letter of Credit:
(i) the UK Borrower Letter of Credit Usage would exceed the UK Borrower Maximum Revolver Amount (when such UK Borrower Letter of Credit Usage is added to the then extant amount of outstanding UK Borrower Advances), or
(ii) the UK Borrower Letter of Credit Usage would exceed $30,000,000 less the PR Borrower Letter of Credit Usage less the US Borrower Letter of Credit Usage, or
(iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the then extant amount of outstanding Advances.
(c) Subject to the terms and conditions of this Agreement, the Issuing Lender agrees to issue letters of credit for the account of PR Borrower (each, an “PR Borrower L/C”). To request the payment issuance of a PR Borrower L/C (or the amendment, renewal, or extension of an outstanding PR Borrower L/C), Administrative Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Lender) to the Issuing Lender and Agent under (reasonably in advance of the requested date of issuance, amendment, renewal, or on account extension) a notice requesting the issuance of a letter PR Borrower L/C, or identifying the PR Borrower L/C to be amended, renewed, or extended, the date of credit being herein called issuance, amendment, renewal, or extension, the date on which such PR Borrower L/C is to expire, the amount of such PR Borrower L/C, the name and address of the beneficiary thereof, and such other information as shall be necessary to prepare, amend, renew, or extend such PR Borrower L/C. The Issuing Lender shall have no obligation to issue a “Draw”PR Borrower Letter of Credit if any of the following would result after giving effect to the issuance of such requested PR Borrower Letter of Credit:
(i) the PR Borrower Letter of Credit Usage would exceed the PR Borrower Maximum Revolver Amount (when such PR Borrower Letter of Credit Usage is added to the then extant amount of outstanding PR Borrower Advances);
(ii) the PR Borrower Letter of Credit Usage would exceed $30,000,000 less the US Borrower Letter of Credit Usage less the UK Borrower Letter of Credit Usage, or
(iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the then extant amount of outstanding Advances.
(d) Each 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 Revolving Loan Letter of Credit, (i) the Borrower that is the account party with respect to such Letter of Credit 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 (A) 3:00 p.m., California 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 3:00 p.m., California time, on such date, or (B) if such notice has not been received by Administrative Borrower prior to such time on such date, then (x) not later than 3:00 p.m., California time, on the Business Day that Administrative Borrower receives such notice, if such notice is received prior to 3:00 p.m., California time, on the date of receipt, or (y) not later than 11:00 a.m., California time, on the next Business Day after receipt of such notice, and (ii) in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be made 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, the applicable 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 such Borrower pursuant to this paragraph, Agent shall distribute such payment to the Borrower by each Bank Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.12(f) to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their interest may appear.
(e) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.12(d), each Lender agrees to fund its Pro rata share Rata Share of any Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as if the applicable 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 an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Total Revolving Loan Commitments Issuing Lender or the Lenders, the Issuing Lender shall be deemed to reimburse immediately have granted to each Lender, and each Lender shall be deemed to have purchased, a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and 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 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 due as provided in Section 2.12(d), or of any reimbursement payment required to be refunded to Borrowers for any reason. Each Lender acknowledges and agrees that its obligation to deliver to Agent, for the account of the Issuing Lender, an amount equal to its respective Pro Rata Share of each L/C Disbursement made by the Issuing Lender pursuant to this Section 2.12(e) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3 hereof. If any such Lender fails to make available to Agent for the amount of such Lender’s Pro Rata Share of each L/C Disbursement made by the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date Issuing Lender in respect of such notice andLetter of Credit as provided in this Section, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw Lender shall be deemed to be a Revolving Loan. All amounts shall be made available to Defaulting Lender and Agent (for the Agent in U.S. Dollars and immediately available funds at its office listed on account of the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent Issuing Lender) shall be entitled to recover such corresponding amount on demand from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, Lender together with interest thereon, against any account of thereon at the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, Defaulting Lender Rate until paid in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditfull.
(f) In determining whether Each Borrower hereby agrees to pay under indemnify, save, defend, and hold the Lender Group harmless from any letter loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender Group arising out of creditor in connection with such Borrower’s Letters of Credit; provided, the Agent however, that no Borrower shall not have be obligated hereunder to indemnify for any obligation relative loss, cost, expense, or liability to the Banks other than to determine extent that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken it is caused by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconductmisconduct (including a failure to pay under a Letter of Credit after timely presentation of documents strictly complying with such Letter of Credit) of the Issuing Lender or any other member of the Lender Group. Each Borrower agrees to be bound 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 create be liable for any resulting liability for the Agenterror, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in such Borrower’s Letter of Credit or any modifications, amendments, or supplements thereto.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan and Security Agreement (SMART Modular Technologies (WWH), Inc.)
Letters of Credit. (a) The Banks agree to make available Subject to the Borrower letters terms and conditions of creditthis Agreement, issued by the Agent, pursuant Lender agrees to their respective Commitments up cause Issuing Bank to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of issue letters of credit will for the account of Borrower or a Payee (each, an "L/C") with respect to letters of credit issued by Issuing Bank for the account of Borrower. To request the issuance of an L/C (or the amendment, renewal, or extension of an outstanding L/C), Borrower shall 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 Lender (reasonably in advance of the requested date of issuance, amendment, renewal, or extension) a notice requesting the issuance of an L/C, or identifying the L/C to be subject amended, renewed, or extended, the date of issuance, amendment, renewal, or extension, the date on which such L/C is to expire, the amount of such L/C, the name and address of the beneficiary thereof, and such other information as shall be necessary to prepare, amend, renew, or extend such L/C. The Issuing Bank 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 Agent being satisfied with Letter of Credit Usage would exceed the terms Borrowing Base less the then extant amount of the letter of creditoutstanding Advances, or
(ii) the Borrower’s executing Letter of Credit Usage would exceed the Maximum Revolver Amount less the then extant amount of outstanding Advances. Each Letter of Credit shall have an expiry date no later than thirty (30) days prior to the Maturity Date and delivering all such letter Letters of credit Credit shall be in form and reimbursement agreements substance acceptable to the Issuing Bank (in the exercise of its sole and related documents as required absolute discretion), including the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Bank is obligated to advance funds under a Letter of Credit, Borrower immediately shall reimburse such L/C Disbursement to Issuing Bank by paying to Lender an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on the Agentdate that such L/C Disbursement is made, and 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 (iiii) the satisfaction Business Day that Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of all conditions to the Borrower obtaining a Loan receipt, and, in the amount absence of such reimbursement, the requested letter of credit. The Borrower L/C Disbursement immediately and automatically shall pay a fee for each letter of credit be deemed to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit be an Advance hereunder and, thereafter, upon shall bear interest at the annual anniversary of rate then applicable to Advances. To the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent extent an L/C Disbursement shall be entitled deemed to .125% 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 Lender of any payment from Borrower pursuant to this paragraph, Lender shall distribute such fee prior payment to the distribution of the balance of such fee Pro rata Issuing Bank or, to the Banks. In additionextent that Lender has made payments pursuant to Section 2.12(c) to reimburse the Issuing Bank, the Borrower shall pay then to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks Lender and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied Issuing Bank as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as their interest may be required by the Agentappear.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent[Intentionally deleted.].
(c) So long as letters Borrower hereby agrees to indemnify, save, defend, and hold Lender and Issuing Bank harmless from any loss, cost, expense, or liability, and reasonable attorneys fees incurred by Lender or Issuing Bank arising out of credit are outstandingor in connection with any Letter of Credit; provided, the amount of Revolving Loans however, that the Borrower shall not be obligated hereunder to indemnify Issuing Bank for any loss, cost, expense, or liability that is entitled to obtain under Article II shall be reduced caused by the LC Obligations then outstanding andgross negligence or willful misconduct of the Issuing Bank. Borrower agrees to be bound by Issuing Bank's regulations and interpretations of any L/C issued by Issuing Bank 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 addition to otherwise constituting part following Borrower's instructions or those contained in the Letter of the Revolving LoansCredit or any modifications, except as otherwise expressly stated hereinamendments, the stated amount of the letters of credit shall be treated as principal of the Revolving Loansor supplements thereto.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request[Intentionally deleted.].
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit[Intentionally deleted].
(f) In determining If by reason of (i) any change in any applicable law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (ii) compliance by Issuing Bank or Lender 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 pay under time in effect (and any letter successor thereto):
(i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of creditany Letter of Credit issued hereunder, or
(ii) there shall be imposed on Issuing Bank or Lender any other condition regarding any Letter of Credit issued pursuant hereto; and the result of the foregoing is to increase, directly or indirectly, the Agent cost to Issuing Bank or Lender of issuing, making, guaranteeing, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof by Lender, then, and in any such case, Lender 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 not have any obligation relative to the Banks other than to determine that any documents required pay on demand such amounts as Lender may specify to be delivered under necessary to compensate Lender for such letter additional cost or reduced receipt, together with interest on such amount from the date of credit have been delivered and that they appear such demand until payment in full thereof at the rate then applicable hereunder. The determination by Lender of any amount due pursuant to comply on their face with this Section, as set forth in a certificate setting forth the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted calculation thereof in reasonable detail, shall, in the absence of gross negligence manifest or willful misconductdemonstrable error, shall not create any resulting liability for be final and conclusive and binding on all of the Agentparties hereto.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder[Intentionally deleted.].
Appears in 1 contract
Letters of Credit. (a) The Banks agree At AEI's written request, Issuing Bank shall issue Letters of Credit for Borrowers' account. Each Bank severally agrees to make available to the Borrower letters participate in Letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstandingCredit, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of accordance with such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentBank's Percentage Share.
(b) In Issuing Bank shall issue the event the Agent pays any amount under or on account Letter of Credit upon receipt of a letter Borrower's written request and Issuing Bank's standard form of credit application, stating (a) the payment by date such Borrower wishes to receive the Agent under or on account Letter of a letter of credit being herein called a “Draw”), a Revolving Loan Credit (which shall be deemed to be made to a Business Day); (b) the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the requested amount of such Letter of Credit; (c) the Draw. The Agent shall notify each Bank aggregate amount of the occurrence all Advances and payment Letters of a Draw no later than 12:00 p.m. Credit then outstanding; (Cleveland timed) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand thereforif appropriate, the Agent conditions requested by Borrower under which the Letter of Credit may be drawn upon; and (e) any other information Issuing Bank might need to issue the Letter of Credit. Issuing Bank shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account all of the Borrower maintained with the AgentBanks upon receipt of a request for a Letter of Credit.
(c) So long as letters The maximum aggregate obligation at any one time for undrawn and drawn but unreimbursed Letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II Credit shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
One Million Five Hundred Thousand Dollars (d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”$1,500,000). Each Letter of Credit Request shall include an be issued pursuant to the terms and conditions of this Agreement and of the Issuing Bank's standard form of application and security agreement for letters of credit. Each Letter of Credit shall (a) expire no later than the Revolving Maturity Date; and (b) be otherwise in form and substance satisfactory to Issuing Bank. Upon issuing a Letter of Credit, the Issuing Bank shall immediately notify the other Bank of such letter issuance and shall, on a continuing basis, keep the other Bank informed of credit the drawn and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank undrawn but unreimbursed amount of each Letter of Credit Request.
(e) The delivery for so long as such Letter of Credit is outstanding. Borrower shall pay Issuing Bank its standard fees on account of each Letter of Credit Request issued hereunder, which shall be deemed a representation and warranty shared by Banks in accordance with their agreement. On the day on which Issuing Bank honors any drawing made by the Borrower beneficiary of a Letter of Credit, Borrowers shall pay to Issuing Bank the full amount of the drawing so honored, or at Borrowers' option, shall treat the amount of such drawing as an Advance under Section 2.1. The obligation to reimburse Issuing Bank for the amount of such drawing is absolute, unconditional, and irrevocable.
(d) Borrowers may request that Issuing Bank issue a Letter of Credit payable in a currency other than United States Dollars. If a demand for payment is made under any such letter Letter of Credit, Issuing Bank shall treat such demand as an advance to Borrowers of the Equivalent Amount thereof. Upon the issuance of any Letter of Credit payable in a currency other than United States Dollars, Banks shall create a reserve under the Committed Line for letters of credit against fluctuations in currency exchange rates, in an amount equal to ten percent (10%) of the face amount of such Letter of Credit. The amount of such reserve may be amended by Banks from time to time to account for fluctuations in the exchange rate. The availability of funds under the Committed Line shall be reduced by the amount of such reserve for so long as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditremains outstanding.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan and Security Agreement (Advanced Energy Industries Inc)
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions hereof, each LC Issuing Bank agrees to issue Letters of Credit from time to time for the account of the Borrower letters of credit(or to extend the stated maturity thereof or to amend or modify the terms thereof), issued by the Agentin an aggregate stated amount not exceeding such LC Issuing Bank’s Fronting Commitment, pursuant to their respective Commitments up to an a maximum aggregate stated amount for all Letters of Credit at any one time outstanding equal to the LC Commitment Amount. With respect to Letters of $100,000,000 minus Credit that are not Bond Letters of Credit, such issuance shall occur on not less than three Business Days’ prior notice thereof by delivery of (x) a Request for Issuance for such Letter of Credit to the aggregate principal amount Administrative Agent and the LC Issuing Bank for such Letter of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the AgentCredit, and (iiiy) the satisfaction such LC Issuing Bank’s standard form of all conditions to the Borrower obtaining a Loan in the amount Letter of Credit application for the requested letter Letter of credit. The Borrower shall Credit (including, for direct pay a fee for each letter Letters of credit Credit, any reimbursement agreement or other standard form required by such LC Issuing Bank) to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requesteddepartment of such LC Issuing Bank for the account of the Borrower. With respect to each Bond Letter of Credit, such issuance shall occur after receipt of (x) a Request for Issuance for such Bond Letter of Credit to the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan Administrative Agent and the Borrower has executed and delivered LC Issuing Bank for such letter Bond Letter of creditCredit, reimbursement agreements and other related documents (y) the Xxxx XX Reimbursement Agreement for such Bond Letter of Credit, as may be required by the AgentLC Issuing Bank for such Bond Letter of Credit, and (z) the documents required pursuant to Section 3.03 and such Xxxx XX Reimbursement Agreement; provided that in the case of any Request for Issuance for an extension of an outstanding Bond Letter of Credit, such Request for Issuance shall be delivered to the Administrative Agent and the applicable LC Issuing Bank at least 90 days prior to the then-current Stated Expiry Date of such Bond Letter of Credit. Each Letter of Credit shall be issued in a form acceptable to the applicable LC Issuing Bank. Each Request for Issuance shall specify (i) the identity of the applicable LC Issuing Bank, (ii) the date (which shall be a Business Day) of issuance of such Letter of Credit (or the date of effectiveness of such extension, modification or amendment) and the Stated Expiry Date thereof, (iii) the proposed stated amount of such Letter of Credit (which amount (A) shall not be less than $100,000 and (B) may be subject to any automatic increase and reinstatement provisions), (iv) the name and address of the beneficiary of such Letter of Credit and (v) a statement of drawing conditions applicable to such Letter of Credit. If such Request for Issuance relates to an amendment or modification of a Letter of Credit, it shall be accompanied by the consent of the beneficiary of the Letter of Credit thereto (except in the case of an extension of the Stated Expiry Date of any Bond Letter of Credit where no consent of the beneficiary is required for such extension). If so requested by the Borrower, a Letter of Credit
(i) On the Closing Date with respect to all Existing Letters of Credit and (ii) upon the date of issuance with respect to all other Letters of Credit, each Lender shall be deemed, without further action by any party hereto, to have irrevocably and unconditionally purchased from such LC Issuing Bank without recourse a participation in such Letter of Credit equal to such Xxxxxx’s Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit. Each Lender’s participation obligations in respect of Existing Letters of Credit shall be governed by this Agreement. Upon each modification of a Letter of Credit by any LC Issuing Bank which modifies the aggregate amount available to be drawn under such Letter of Credit, such LC Issuing Bank and the Lenders shall be deemed, without further action by any party hereto, to have purchased or sold, as appropriate, participations in such Letter of Credit such that each Lender’s participation in such Letter of Credit shall equal such Lender’s Commitment Percentage of such modified aggregate amount available to be drawn under such Letter of Credit. Each Letter of Credit shall utilize the Commitment of each Lender by an amount equal to the amount of such participation. Without limiting the foregoing, any LC Issuing Bank that issues a Bond Letter of Credit agrees that (i) all Bonds pledged to such LC Issuing Bank pursuant to any applicable Pledge Agreement or otherwise registered in the name of such LC Issuing Bank pursuant to the other Related Documents will be held for the benefit of such LC Issuing Bank and the Lenders and (ii) to apply and/or remit all proceeds from the sale or remarketing of such Bonds in accordance with Section 2.17(f).
(b) In The Borrower may from time to time appoint one or more additional Lenders (with the event consent of any such Lender, which consent may be withheld in the Agent pays any amount under sole discretion of each Lender) to act, either directly or on account through an Affiliate of such Lender, as an LC Issuing Bank hereunder. Any such appointment and the terms thereof shall be evidenced in a letter of credit (the payment separate written agreement executed by the Agent under or on account of a letter of credit being herein called a “Draw”)Borrower and the relevant LC Issuing Bank, a Revolving Loan copy of which agreement shall be delivered by the Borrower to the Administrative Agent. The Administrative Agent shall give prompt notice of any such appointment to the other Lenders. Upon such appointment, if and for so long as such Lender shall have any obligation to issue any Letter of Credit hereunder or any Letter of Credit issued by such Lender shall remain outstanding, such Lender shall be deemed to be, and shall have all the rights and obligations of, an “LC Issuing Bank” under this Agreement.
(c) No Letter of Credit shall be made requested, issued or modified hereunder if, after the issuance or modification thereof, (i) the Outstanding Credits would exceed the Commitments then scheduled to be in effect until the latest Termination Date, (ii) that portion of the LC Outstandings arising from Letters of Credit issued by an LC Issuing Bank would exceed the amount of such LC Issuing Bank’s Fronting Commitment or (iii) the LC Outstandings would exceed the LC Commitment Amount. No LC Issuing Bank shall be under any obligation to issue any Letter of Credit if any order, judgment or decree of any Governmental Authority shall by its terms purport to enjoin or restrain such LC Issuing Bank from issuing such Letter of Credit, or any law applicable to such LC Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such LC Issuing Bank shall prohibit, or request that the LC Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the LC Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the LC Issuing Bank is not otherwise compensated or required to be compensated hereunder), which restriction, reserve or capital requirement was not in effect on the date hereof, or shall impose upon the LC Issuing Bank any loss, cost or expense (not reimbursed or required to be reimbursed) that was not applicable on the date hereof and that the LC Issuing Bank in good xxxxx xxxxx material to it.
(d) The Borrower hereby agrees to pay to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Administrative Agent for the amount account of each LC Issuing Bank and each Lender that has funded its participation in the reimbursement obligations of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw Borrower pursuant to subsection (e) below, no later than 12:00 p.m. noon (Cleveland timeNew York City Time) on each date on which such 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”). Any Reimbursement Amount shall bear interest, payable on demand, from the date so paid by such LC Issuing Bank until repayment to such LC Issuing Bank in full at a fluctuating interest rate per annum equal to the interest rate applicable to Base Rate Loans 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 (and which Borrowing shall be subject to the conditions in Section 2.02) in the amount of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the BorrowerReimbursement Amount, and the Borrower shall immediately pay proceeds of such corresponding amount Borrowing may be applied to satisfy the Agent. The Agent shall also be entitled Borrower’s obligations to recover from the such LC Issuing Bank or the BorrowerLenders, as the case may be. The Borrower’s obligation to pay any Reimbursement Amount in respect of Existing Letters of Credit shall be governed by the terms of this Agreement.
(e) If any LC Issuing Bank shall not have been reimbursed in full for any Reimbursement Amount in respect of 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 and each Lender prompt notice thereof (an “LC Payment Notice”) no later than 12:00 noon (New York City Time) on the Business Day immediately succeeding the date of such payment by such LC Issuing Bank. Each Lender shall fund the participation that such Lender purchased pursuant to Section 2.04(a) by paying to the Administrative Agent for the account of such LC Issuing Bank an amount equal to such Lender’s Commitment Percentage of such Reimbursement Amount paid by such LC Issuing Bank, plus interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to the Federal Funds Effective Rate, for the first three days from the date of the payment by such LC Issuing Bank, and, thereafter, until the date of payment to such LC Issuing Bank by such Lender, at a rate of interest equal to the rate applicable to Base Rate Loans. Each such payment by a Lender shall be made not later than 3:00 P.M. (New York City Time) on the later to occur of (i) if paid the Business Day immediately following the date of such payment by such Bank, the overnight Federal Funds Effective Rate or LC Issuing Bank and (ii) if paid the Business Day on which such Lender shall have received an LC Payment Notice from such LC Issuing Bank. Each Lender’s obligation to make each such payment to the Administrative Agent for the account of such LC Issuing Bank shall be several and shall not be affected by the Borrower, occurrence or continuance of a Default or the then applicable rate failure of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed any other Lender to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against make any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain payment under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”this Section 2.04(e). Each Letter of Credit Request shall include an application for Lender further agrees that each such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request payment shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shallmade without any offset, on the date of each issuance of abatement, withholding or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditreduction whatsoever.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. Upon Borrower's request therefor, Lender shall, from time to time so long as no Event of Default has occurred and is continuing as of such date of request, issue (ai) The Banks agree to make standby Letters of Credit for the account of Borrower, and/or (ii) commercial Letters of Credit for the account of Borrower, provided the aggregate amounts available to be drawn under such standby and commercial Letters of Credit (or actually drawn but not yet reimbursed by Borrower), together with the Borrower letters sum of creditall advances on account of the Revolving Credit Loan then outstanding, shall not exceed the sum of $10,000,000.00. Each such Letter of Credit issued by Lender for the Agent, pursuant account of Borrower and unreimbursed drafts drawn thereunder shall reduce the amount available to their respective Commitments up Borrower on account of the Revolving Credit Loan in an amount equal to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal stated amount of all then such Letter of Credit so long as such Letter of Credit is outstanding Surety Bonds or such draw unpaid. No Letter of Credit shall be issued by a Surety on behalf Lender for the account of Borrower which has an expiration date later than sixty (60) days prior to the termination date of the Parent pursuant Revolving Credit Loan described in Paragraph 3B(5) above. Upon payment by Lender under any Letter of Credit, any amount so paid shall be immediately due and payable by Borrower and Lender shall have the right to effect payment thereof, together with the payment of any fees, expenses and charges described below, immediately by a charge to Borrower's operating account maintained with Lender. Unless and until such charge to Borrower's operating account is made by Lender, the unreimbursed amount of any drawn Letter of Credit shall be considered an Indemnity Agreementadvance on account of the Revolving Credit Loan to satisfy Borrower's reimbursement obligation to Lender which shall bear interest at the default rate prescribed in Paragraph 3G above until paid in full by Borrower. The availability Lender shall charge Borrower its then-prevailing fee for the issuance of letters such Letters of credit will Credit, based upon the stated amount of each, which fee shall be subject payable by Borrower to Lender upon the issuance thereof. In the event that Borrower desires either a standby or a commercial Letter of Credit, the documentation thereof shall consist of Lender's standard forms therefor and Borrower specifically acknowledges that (i) the Agent being satisfied with reimbursement obligation of Borrower and any fee on account of such Letters of Credit shall be included in the terms of the letter of credit, Obligations; and (ii) the Borrower’s executing and delivering such letter occurrence of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction an Event of all conditions to the Borrower obtaining Default hereunder shall constitute a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans default under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled documentation relating to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter Letters of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as entitle Lender to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent exercise its rights thereunder with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agentsuch default.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan Agreement (Eastern Co)
Letters of Credit. To secure the obligation of Abraxis to pay the Termination Fee and the Final Compensation Payment, Abraxis shall provide to AstraZeneca on the date of this Termination Agreement two (a2) The Banks agree to make available to the Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of irrevocable standby letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of creditissued by JPMorgan Chase Bank, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstandingN.A., in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the aggregate stated amount of the letter of credit; provided thatUS$286,000,000, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.follows:
(b1) In the event the Agent pays any amount under or on account of a first such letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “DrawTermination Fee LOC”), a Revolving Loan ) shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit US$268,000,000, shall be treated scheduled to expire on the close of business on April 7, 2009, shall provide for payment to AstraZeneca as principal beneficiary of the Revolving Loans.
(d) Whenever Termination Fee LOC of the Borrower desires that a letter sum of credit be issuedUS$268,000,000 at any time on or after 1:31 PM New York time on March 31, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice 2009 and shall be in the form attached to this Termination Agreement as Exhibit C; and (2) the second such letter of credit (the “Final Payment LOC”) shall be in the stated amount of US$18,000,000, shall be scheduled to expire on the close of business on April 7, 2009, shall provide payment to AstraZeneca as beneficiary of the Final Payment LOC of the sum of US$18,000,000 at any time on or after 1:31 PM New York time on March 31, 2009 and shall be in the form attached to this Termination Agreement as Exhibit E hereto (each, D. The Termination Fee LOC and the Final Payment LOC are sometimes hereinafter referred to collectively as the “Letters of Credit” or individually as a “Letter of Credit RequestCredit”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter the Letters of Credit Request to AstraZeneca shall not be deemed a representation and warranty by to satisfy or release the Borrower that such letter obligation of credit as requested in such Letter of Credit Request may be issued Abraxis to pay the Termination Fee or Final Compensation Payment when due in accordance with and will not violate the requirements terms of this Section 3.01 Termination Agreement. However, AstraZeneca agrees that the amount drawn by AstraZeneca under each of the Termination Fee LOC and the Final Payment LOC shall include a representation and warranty as be applied to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank Termination Fee and the Borrower written notice Final Compensation Payment, respectively. Abraxis shall pay all fees and expenses necessary to cause JPMorgan Chase Bank, N.A. to issue the Letters of Credit pursuant to the terms of this Termination Agreement. AstraZeneca will surrender for cancellation the original Termination Fee LOC and the original Final Payment LOC to JPMorgan Chase Bank, N.A. promptly upon confirmation of receipt of payment in full by Abraxis of the issuance of or amendment or modification to such letter of creditTermination Fee and the Final Compensation Payment, respectively.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Issuing Bank agrees, subject to the terms ----------------- and conditions of this Agreement, upon request of a Borrower letters of credit, issued by or Borrowers to issue from time to time for the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf account of the Parent pursuant Borrower or Borrowers Letters of Credit upon delivery to the Issuing Bank of an Indemnity Agreement. The availability Application and Agreement for Letter of letters of credit will be subject Credit relating thereto in form and content acceptable to the Issuing Bank; provided, that (i) the Agent being satisfied with Letter of Credit Outstandings shall not exceed the -------- Total Letter of Credit Commitment and (ii) no Letter of Credit shall be issued if, after giving effect thereto, Letter of Credit Outstandings plus the Revolving Credit Outstandings plus Swing Line Outstandings shall exceed the Total Revolving Credit Commitment. No Letter of Credit shall have an expiry date (including all rights of a Borrower or any beneficiary named in such Letter of Credit to require renewal) or payment date occurring later than the earlier to occur of one year after the date of its issuance or the fifth Business Day prior to the Stated Termination Date. To the extent that there shall be any conflict between the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks Agreement and the Borrower agree. The Borrower shall not be entitled to obtain letters Applications and Agreements for Letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of Credit this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agentshall control.
(b) In Upon completion of a proper Application and Agreement for Letter of Credit, NationsBank shall, subject to the event other provisions of this Article IV, ---------- issue upon request and for the Agent pays any amount under or on account of a letter an applicable Borrower or Borrowers Letters of credit (the payment by the Agent under or on account Credit payable in an Alternative Currency. For purposes of a letter determining Outstanding Letters of credit being herein called a “Draw”)Credit, a Revolving Loan any Letter of Credit issued in an Alternative Currency shall be deemed to be made to recorded in the Borrower by each Bank to Agent's account in Dollars based on the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) Alternative Currency Equivalent Amount on the date of issuance of such notice andLetter of Credit; provided, not later than 1:00 p.m. (Cleveland time) however, that the Agent shall determine the Dollar -------- ------- Equivalent Amount of any Letter of Credit issued in an Alternative Currency on the date of such notice, each Bank will make available to any Advance or Conversion for the Agent its Pro rata portion purpose of determining the Draw deemed to be amount of Revolving Credit Outstandings and compliance with the Total Alternative Currency Sublimit. Any draw on a Revolving Loan. All amounts Letter of Credit issued in an Alternative Currency shall be made available to reimbursed in the Agent in U.S. Dollars and immediately available funds at its office listed same Alternative Currency Equivalent Amount (determined based on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest Spot Rate of Exchange on such corresponding amount in respect of each day from the date such corresponding amount was made available by of drawing under the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate Letter of interest, calculated in accordance with Article IV, for the Revolving LoansCredit). In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires shall determine at any time that (i) the Dollar Value of outstanding Loans and Outstanding Letters of Credit, in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, case determined on the date of each Advance or issuance of a Letter of Credit, made or amendment issued in Alternative Currencies exceeds the Total Alternative Currency Sublimit or modification (ii) that the sum of the Dollar Value described in subclause (i) plus Revolving Loan Outstandings plus Swing Line Outstandings and Letters of Credit Outstanding made or issued in Dollars exceeds the Total Revolving Credit Commitment, then the Borrowers shall immediately repay Revolving Loans so that after giving effect to a letter such payment the Revolving Loan Outstandings plus Swing Line Outstandings plus Letters of credit by it, give each Bank Credit Outstanding do not exceed the Total Revolving Credit Commitment and the Borrower written notice Loans advanced in an Alternative Currency plus Letters of Credit Outstanding issued in and Alternative Currency do not exceed the issuance of or amendment or modification to such letter of creditTotal Alternative Currency Sublimit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree In addition to make available to the Borrower letters of credit, issued by the Agent, Loans made pursuant to their respective Commitments up Section 2.1, but subject to an aggregate amount satisfaction of the conditions precedent set forth in Section 8, Lender will, upon receipt of duly executed Applications and such other documents, instruments and/or agreements as Lender may reasonably require, issue Letters of Credit on such terms as are satisfactory to Lender; provided, however, that Lender shall not be required to issue any Letter of Credit at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to time:
(i) if, before or after giving effect to such Letter of Credit, the Agent being satisfied Letter of Credit Obligations would exceed the lesser of (A) the Revolving Credit Amount minus the outstanding principal balance of the Revolving Loans or (B) $2,500,000; and
(ii) which has an expiration date which is (A) more than one (1) year after the date of issuance (provided that a Standby Letter of Credit may provide for an annual renewal if such renewal is consented to by Lender and all conditions precedent to the issuance of Letters of Credit are met at the time of such renewal), or (B) after sixty (60) Business Days immediately preceding the scheduled Termination Date. Borrower and Lender acknowledge the issuance of the Letters of Credit which are outstanding on the Restatement Date in accordance with the terms of the letter Existing Loan Agreement and agree that, from and after the Restatement Date, such Letters of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions Credit shall continue to be outstanding pursuant to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form terms and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentAgreement.
(b) In Borrower agrees to pay Lender, on demand, Lender's standard administrative operating fees and charges in effect from time to time for issuing and administering any Letters of Credit. Borrower further agrees to pay Lender a commission (i) on each Standby Letter of Credit and related L/C Draft accepted by Lender but not yet paid equal to two and one-half percent (2.5%) per annum (calculated on the event the Agent pays any amount under or on account basis of a letter year consisting of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent 360 days and paid for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland timeactual days elapsed) on the date aggregate daily average amount available to be drawn under such Standby Letter of Credit and aggregate unpaid amount under such notice andL/C Drafts, not later than 1:00 p.m. payable quarterly in arrears, and (Cleveland timeii) on each Commercial Letter of Credit, and related L/C Draft accepted by Lender but not yet paid equal to two and one-half percent (2.5%) per annum (calculated on the basis of a year consisting of 360 days and paid for actual days elapsed) for the period from the date of such notice, each Bank will make available issuance to the Agent its Pro rata portion date of expiry, of the Draw deemed original face amount of such Commercial Letter of Credit payable upon the initial draw under, or acceptance of any L/C Draft with respect to, such Letter of Credit. Lender may provide for the payment of any fees, charges or commission due by advancing the amount thereof to be borrower as a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters Borrower agrees to reimburse Lender, on demand, for each payment made by Lender under or pursuant to any Letter of credit are outstandingCredit or L/C Draft. Borrower further agrees to pay to Lender, on demand, interest at the Default Rate applicable to Revolving Loans on any amount paid by Lender under or pursuant to any Letter of Credit or L/C Draft from the date of payment until the date of reimbursement to Lender. Lender may provide for the payment of any reimbursement obligations and any interest accrued thereon by advancing the amount thereof to Borrower as a Revolving Loan; provided, however, that, subject to the conditions precedent set forth in Section 8.2, if at the time Lender makes a payment under or pursuant to a Letter of Credit or L/C Draft the Revolving Loans that Loan Availability is at least equal to Borrower's reimbursement obligation with respect to such payment, Borrower hereby authorizes Lender, and Lender will, immediately and without any request by or notice to Borrower, provide for the payment of any reimbursement obligations due to Lender and any interest accrued thereon by making a Revolving Loan to Borrower is entitled to obtain under Article II in the amount thereof, which reimbursement obligation shall be reduced by thereupon satisfied to the LC Obligations then outstanding and, in addition to otherwise constituting part extent of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving LoansLoan so made.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including Borrower's obligation to reimburse Lender for payments and disbursements made by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Lender under any Letter of Credit Request”)shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which Borrower may have or have had against Lender or any other Person. Each Borrower assumes all risks of the acts or omissions of the users of the Letters of Credit and all risks of the misuse of the Letters of Credit. Neither Lender nor any of its correspondents shall be responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document specified in the Applications 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 Request shall include an application or any of the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for such letter any reason; (iii) for failure of credit and any other documents that L/C Draft to bear any reference or adequate reference to any Letter of Credit, or failure of anyone to note the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank amount of each any draft on the reverse of any Letter of Credit Requestor to surrender or to take up any Letter of Credit or to send forward any such document apart from drafts as required by the terms of any Letter of Credit, each of which provisions, if contained in the Letter of Credit itself, it is agreed, may be waived by Lender; (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 any error, neglect, default, suspension or insolvency of any correspondents of Lender; (vi) for errors in translation or for errors in interpretation of technical terms; (vii) for any loss or delay, in the transmission or otherwise, of any such document or draft or of proceeds thereof; or (viii) for any other in making or failing to make payment under any Letter of Credit, except only that Borrower shall have a claim against Lender, and Lender shall be liable to Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential, damages suffered by Borrower which Borrower proves were caused by Lender's willful misconduct or gross negligence in determining whether documents presented under any Letter of Credit comply with the terms of such Letter of Credit. None of the above shall affect, impair or prevent the vesting of any of the rights or powers of Lender. Lender shall have the right to transmit the terms of any Letter of Credit without translating them.
(e) The delivery Notwithstanding anything to the contrary herein or in any Application, upon the occurrence and during the continuance of each an Event of Default, an amount equal to the aggregate amount of the outstanding Letter of Credit Request shall Obligations shall, at Lender's option and without demand upon or further notice to Borrower, be deemed a representation (as between Lender and warranty Borrower) to have been paid or disbursed by Lender under the Borrower Letters of Credit and L/C Drafts accepted by Lender (notwithstanding that such letter amounts may not in fact have been so paid or disbursed), and a Revolving Loan to Borrower in the amount of credit as requested in such Letter of Credit Request may Obligations to have been made and accepted, which Loan shall be issued in accordance with immediately due and will not violate payable. In lieu of the requirements foregoing, at the election of this Section 3.01 Lender at any time after an Event of Default has occurred and shall include a representation and warranty as is continuing, Borrower shall, upon Lender's demand, deliver to Lender cash collateral equal to the aggregate principal amount Letter of Credit Obligations. Any such cash collateral and/or any amounts received by Lender in payment of the Loan made pursuant to this paragraph (e) shall be held by Lender in the Assignee Deposit Account or a separate account appropriately designated as a cash collateral account in relation to this Agreement and the Letters of Credit and shall be retained by Lender as collateral security in respect of, first, Borrower's Liabilities under or in connection with the Letters of Credit and L/C Drafts and, then, all other Liabilities. Such amounts shall not be used by Lender to pay any amounts drawn or paid under or pursuant to any Letter of Credit or L/C Draft, but may be applied to reimburse Lender for drawings or payments under or pursuant to Letters of Credit or L/C Drafts which Lender has paid, or if no such reimbursement is required, to payment of such other Liabilities as Lender shall determine. Any amounts remaining in any cash collateral account established pursuant to this paragraph (e) following payment in full of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification Liabilities shall be returned to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditBorrower.
(f) In determining whether to pay make any payment under or pursuant to any letter Letter of creditCredit or any related L/C Draft, the Agent Lender shall not have no obligation to Borrower or any obligation relative to the Banks other Person other than to determine confirm that any documents required to be delivered under such letter of credit have been delivered and that they appear to such documents comply on their face with the requirements of the letter such Letter of creditCredit. Any No action taken or omitted to be taken by the Agent Lender under or in connection with respect to a letter any Letter of credit issued by it Credit or L/C Draft, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create put Lender under any resulting liability for the Agentto Borrower.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Letters of credit under the Revolving Facility will be issued by the Agent and, if included as an additional Issuing Bank, one or more Lenders acceptable to the Borrower and the Agent that agree to issue letters of credit (each, an “Issuing Bank”); provided, that each Initial Lender that holds commitments under the Revolving Facility as of the Closing Date shall have a letter of credit commitment that is proportionate with its commitment under the Revolving Facility and shall issue letters of credit pro rata based on such letter of credit commitment; provided, further, that Jefferies and Barclays shall not be required to issue trade or commercial letters of credit, issued by the Agent, pursuant Jefferies shall not be required to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of issue letters of credit will denominated in currencies other than United States dollars and Credit Suisse shall only be subject required to (i) the Agent being satisfied with the terms of the letter issue standby letters of credit, (ii) the Borrower’s executing and delivering such . Each letter of credit and reimbursement agreements and related documents shall expire not later than the earlier of (a) 12 months after its date of issuance (or such longer period as required may be agreed by the Agent, relevant Issuing Bank and the Borrower) and (iiib) the satisfaction of all conditions fifth business day prior to the Borrower obtaining a Loan in the amount final maturity of the requested letter of credit. The Borrower shall pay a fee for each Revolving Facility; provided, however, that any letter of credit may provide for renewal thereof for additional periods of up to 12 months (which in no event shall extend beyond the date referred to in clause (b) above, except to the Agent for extent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the Pro rata benefit of the Banks, upon issuance of each letter relevant Issuing Bank). Existing letters of credit and, thereafter, upon may be rolled over or back-stopped under the annual anniversary of Revolving Facility on the issuance of each such letter Closing Date. Letters of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled issued in United States dollars or other currencies to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banksbe agreed. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for Drawings under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No any letter of credit shall be issued having an expiration date after reimbursed by the Termination DateBorrower on terms consistent with the Documentation Precedent. All To the extent that the Borrower does not reimburse the Issuing Bank on such time frame, the Lenders under the Revolving Facility shall be irrevocably obligated to reimburse the Issuing Bank pro rata based upon their respective Revolving Facility commitments. The issuance of all letters of credit shall be in such form and substance as subject to the Agent, customary procedures of the Banks and the Borrower agreerelevant Issuing Bank. The Borrower shall not be entitled definitive documentation for the First Lien Facilities will include customary provisions consistent with the Documentation Precedent to obtain letters of credit from protect the Agent unless the Borrower is then entitled to obtain Loans from the Banks Issuing Bank in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event any Lender under the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called Revolving Facility is a “Draw”), a Revolving Loan shall be deemed Defaulting Lender” (to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of defined in a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained manner consistent with the AgentDocumentation Precedent).
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Additional Initial Lender Agreement (Aspen Merger Sub, Inc.)
Letters of Credit. (a) The Banks agree to make available to An Originator may request that the Borrower letters of credit, issued Purchase Price for Receivables sold on a Payment Date be paid by the AgentBuyer procuring the issuance of a Letter of Credit by an LC Bank. Upon the request of an Originator, pursuant to their respective Commitments up to an aggregate amount at and on the terms and conditions for issuing Letters of Credit under the Receivables Purchase Agreement (including any one time outstanding of $100,000,000 minus limitations therein on the aggregate principal amount of all then outstanding Surety Bonds issued any such issuance), the Buyer agrees to cause such LC Bank to issue, on the Payment Dates specified by a Surety such Originator, Letters of Credit on behalf of the Parent Buyer (and, if applicable, on behalf of, or for the account of, such Originator or an Affiliate of such Originator) in favor of the beneficiaries elected by such Originator or Affiliate of such Originator, with the consent of the Buyer. The aggregate stated amount of the Letters of Credit being issued on any Payment Date on behalf of any Originator or an Affiliate of such Originator shall constitute a credit against the aggregate Purchase Price otherwise payable by the Buyer to such Originator on such Payment Date pursuant to Section 3.2. To the extent that the aggregate stated amount of the Letters of Credit being issued on any Payment Date exceeds the aggregate Purchase Price payable by the Buyer to an Indemnity Agreement. The availability of letters of credit will Originator on such Payment Date, such excess shall be subject deemed to be a (i) reduction in the Agent being satisfied outstanding principal balance of (and, to the extent necessary, the accrued but unpaid interest on) the Intercompany Loan payable to such Originator, to the extent the outstanding principal balance (and accrued interest) is greater than such excess and/or (ii) a reduction in the Purchase Price payable on the Payment Dates immediately following the date any such Letter of Credit is issued. In the event that any such Letter of Credit issued pursuant to this Section 3.4 (i) expires or is cancelled or otherwise terminated with the terms all or any portion of the letter of creditits stated amount undrawn, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and has its stated amount decreased (for a reason other than a drawing having been made thereunder) or (iii) the satisfaction Buyer’s Reimbursement Obligation in respect thereof is reduced for any reason other than by virtue of all conditions a payment made in respect of a drawing thereunder, then an amount equal to such undrawn amount or such reduction, as the case may be, shall either be paid in cash to such Originator on the next Payment Date or, if the Buyer does not then have cash available therefor, shall be deemed to be (x) solely in the case of a Contributing Originator, if elected by such Contributing Originator in its sole discretion, a contribution to the Borrower obtaining a Loan in the amount capital of the requested letter of credit. The Borrower shall pay a fee for each letter of credit Buyer, and (y) otherwise, added to the Agent for the Pro rata benefit outstanding principal balance of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each Intercompany Loan issued to such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Originator. Under no circumstances shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less any Originator (or any Affiliate thereof (other than the stated amount Buyer)) have any reimbursement or recourse obligations in respect of the letter any Letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentCredit.
(b) In the event that any Originator requests that any purchases be paid for by the Agent pays any amount under or on account issuance of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request hereunder, such Originator shall include an application on a timely basis provide the Buyer with such information as is necessary for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in Buyer to obtain such Letter of Credit Request may be issued in accordance with and will not violate from the requirements of this Section 3.01 applicable LC Bank, and shall include a representation notify the Buyer, the Servicer, each Group Agent and warranty as to the aggregate principal amount Administrative Agent of all then outstanding Surety Bondsthe allocations described in clause (a) above. The Agent shall, Such allocations shall be binding on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank Buyer and the Borrower written notice of the issuance of or amendment or modification to such letter of creditapplicable Originator, absent manifest error.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Ashland Global Holdings Inc)
Letters of Credit. (a) The Banks agree Subject to make available to and upon the terms and conditions contained herein and in the Letter of Credit Documents, at the request of a Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety (or Administrative Borrower on behalf of any Obligor or Additional L/C Debtor), Agent agrees to cause an Issuing Bank to issue, and each such Issuing Bank agrees to issue, for the Parent account of such Obligor or Additional L/C Debtor one or more Letters of Credit, for the ratable risk of each Lender according to its Pro Rata Share, containing terms and conditions reasonably acceptable to Agent and such Issuing Bank.
(b) The Borrower (or Administrative Borrower on behalf of such Borrower) or Additional L/C Debtor requesting such Letter of Credit shall give Agent and the applicable Issuing Bank two (2) Business Days’ prior written notice of such Borrower’s or Additional LC Debtor’s request for the issuance of a Letter of Credit. Such notice shall be irrevocable and shall specify the original face amount of the Letter of Credit requested, the effective date (which date shall be a Business 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 year from the date of issuance except as otherwise agreed by Agent and the applicable Issuing Bank), the purpose for which such Letter of Credit is to be issued, and the beneficiary of the requested Letter of Credit. The Borrower or Additional L/C Debtor requesting the Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall attach to such notice the proposed terms of the Letter of Credit. The 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. Any Issuing Bank (other than Xxxxx Fargo) shall notify Agent in writing on each Business Day of all Letters of Credit issued on the prior Business Day by such Issuing Bank unless otherwise agreed to by Agent and such Issuing Bank.
(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 reasonably satisfactory to Agent: (i) the Borrower (or Administrative Borrower on behalf of such Borrower) or Additional L/C Debtor requesting such Letter of Credit shall have delivered to the applicable Issuing Bank at such times and in such manner as such Issuing Bank may require, an application, in form and substance reasonably satisfactory to such 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 an Indemnity Agreement. The availability the terms thereof, and the form and terms of the proposed Letter of Credit shall be reasonably satisfactory to Agent and such Issuing Bank, (ii) as of the date of issuance, no order of any court, arbitrator or other Governmental Authority shall by its terms 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, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over money center banks generally shall prohibit the issuance of letters of credit will be subject to (i) generally or request that such Issuing Bank refrain from the Agent being satisfied with issuance of letters of credit generally or the terms issuance of the letter proposed Letter of creditCredit, (iiiii) after giving effect to the Borrower’s executing and delivering issuance of such letter Letter of credit and reimbursement agreements and related documents as required by Credit, the AgentLetter of Credit Obligations shall not exceed the Letter of Credit Limit, and (iiiiv) no Lender is at such time a Defaulting Lender, unless the satisfaction applicable Issuing Bank has entered into satisfactory arrangements with Borrowers and/or such Lender with respect to such Defaulting Lender.
(d) Except in Agent’s discretion, with the consent of all conditions Lenders, the amount of all outstanding Letter of Credit Obligations shall not at any time exceed the Letter of Credit Limit.
(e) Each Borrower shall reimburse the applicable Issuing Bank immediately for any draw under any Letter of Credit issued by such Issuing Bank for the account of such Borrower by such Issuing Bank and pay each Issuing Bank the amount of all other charges and fees payable to such Issuing Bank in connection with any Letter of Credit issued for the account of such Borrower immediately, irrespective of any claim, setoff, defense or other right which such Borrower may have at any time against any Issuing Bank or any 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 obtaining for whose account such Letter of Credit was issued to Agent for a Swing Line Loan in the amount of such drawing or other amount then due, and shall be made by Agent on behalf of Lenders as a Swing Line Loan (or Special Agent Advance, as the requested letter of credit. The Borrower shall pay a fee for each letter of credit to case may be) provided, however, that in the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in event the amount of such drawing or other amount then due exceeds the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided thatavailable to be drawn as Swing Line Loans, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan request shall be deemed to be a request for a Revolving Loan which is a Base Rate Loan. The date of such Swing Line Loan or Base Rate Loan, as the case may be, 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 an Issuing Bank and/or related parties in connection with any Letter of Credit shall constitute additional Swing Line Loans or Revolving Loans to such Borrower pursuant to this Section 2 (or Special Agent Advances as the case may be).
(f) Borrowers 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 an 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 as determined pursuant to a final non-appealable order of a court of competent jurisdiction. Borrowers assume all risks with respect to the acts or omissions of the drawer under or beneficiary of any Letter of Credit and, for such purposes only, the drawer or beneficiary shall be deemed Borrower’s agent. Borrowers assume all risks for, and agrees to pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter of Credit or any documents, drafts or acceptances thereunder. Borrowers hereby release and hold Agent and Lenders harmless from and against any acts, waivers, errors, delays or omissions, whether caused by Borrowers, by any issuer or correspondent or otherwise with respect to or relating to any Letter of Credit, except for the gross negligence or willful misconduct of Agent as determined pursuant to a final, non-appealable order of a court of competent jurisdiction. The provisions of this Section 2.2(f) shall survive the payment of Obligations and the termination of this Agreement.
(g) In connection with Inventory purchased pursuant to any Letter of Credit, Borrowers shall, upon the occurrence and during the continuance of an Event of Default, 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 to deliver them to Agent and/or subject to Agent’s order, and if they shall come into Borrower’s possession, to deliver them, upon Agent’s request, to Agent in their original form. Borrowers shall also, upon the occurrence and during the continuance of an Event of Default, at Agent’s request, designate the applicable Issuing Bank as the consignee on all bills of lading and other negotiable and non-negotiable documents.
(h) Borrowers hereby irrevocably authorize and direct each Issuing Bank to name such Borrower as the account party therein and to deliver to Agent all instruments, documents and other writings and property received by such Issuing Bank pursuant to the Letter of Credit and to accept and rely upon Agent’s instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the Letter of Credit Documents with respect thereto. Nothing contained herein shall be deemed or construed to grant any Obligor any right or authority to pledge the credit of Agent or any Lender in any manner. Agent and Lenders shall have no liability of any kind with respect to any Letter of Credit provided by an issuer other than Agent or any Lender, as specifically set forth in this Agreement unless Agent has duly executed and delivered to such issuer the application or a guarantee or indemnification in writing with respect to such Letter of Credit. Borrowers shall be bound by any reasonable interpretation made in good faith by Agent, or an Issuing Bank under or in connection with any Letter of Credit or any documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of Borrowers, any Additional L/C Debtor or Administrative Borrower. Agent shall have the sole and exclusive right and authority to, and Borrowers, any Additional L/C Debtor or Administrative Borrower shall not: (i) at any time an Event of Default has occurred and is continuing, (A) approve or resolve any questions of non-compliance of documents, (B) give any instructions as to acceptance or rejection of any documents or goods or (C) execute any and all applications for steamship or airway guaranties, indemnities or delivery orders, and (ii) at all times, (A) grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances, or documents, and (B) agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, or documents, drafts or acceptances thereunder or any letters of credit included in the Collateral except (unless an Event of Default or a condition or event which, with notice or the passage of time or both, would constitute an Event of Default has occurred and is continuing), Borrowers and Additional L/C Debtors may waive discrepancies in the presentation of documents required for payment under any Letters of Credit other than for the required presentation or delivery of a xxxx of lading or cargo receipt or other transport document with respect to Eligible Inventory thereunder. Agent may take such actions either in its own name or in the name of any Borrower, any Additional L/C Debtor or Administrative Borrower.
(i) Any rights, remedies, duties or obligations granted or undertaken by Borrowers to any issuer or correspondent in any application for any Letter of Credit Accommodation, or any other agreement in favor of any issuer or correspondent relating to any Letter of Credit, shall be deemed to have been granted or undertaken by Borrowers and Additional L/C Debtors to Agent for the ratable benefit of Lenders. Any duties or obligations undertaken by Agent to any issuer or correspondent in any application for any Letter of Credit, or any other agreement by Agent in favor of any issuer or correspondent relating to any Letter of Credit, shall be deemed to have been undertaken by Borrowers to Agent for the ratable benefit of Lenders and to apply in all respects to Borrowers.
(j) Immediately upon the issuance or amendment of any Letter of Credit, each Bank Lender shall be deemed to have irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided interest and participation to the extent of such Lender’s Pro Rata Share of the liability with respect to such Letter of Credit and the obligations of Borrowers with respect thereto (including all Letter of Credit Obligations with respect thereto). Each Lender shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to such Issuing Bank therefor and discharge when due, its Pro rata share Rata Share of all of such obligations arising under such Letter of Credit. Without limiting the Total Revolving Loan Commitments scope and nature of each Lender’s participation in any Letter of Credit, to reimburse immediately the extent that an Issuing Bank has not been reimbursed or otherwise paid as required hereunder or under any such Letter of Credit, each such Lender shall pay to such Issuing Bank its Pro Rata Share of such unreimbursed drawing or other amounts then due to such Issuing Bank in connection therewith.
(k) The obligations of Borrowers to pay each Letter of Credit Obligations and the obligations of Lenders to make payments to Agent for the amount account of an Issuing Bank with respect to Letters of Credit shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the Draw. The Agent shall notify each Bank terms of this Agreement under any and all circumstances, whatsoever, notwithstanding the occurrence and payment or continuance of a Draw no later than 12:00 p.m. (Cleveland time) on any Default, Event of Default, the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available failure to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent satisfy any other condition set forth in U.S. Dollars and immediately available funds at its office listed on the signature pages heretoSection 4 or any other event or circumstance. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the a Lender when due, Agent shall be entitled to recover such corresponding amount on demand from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand thereforLender with interest thereon, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of for each day from the date such corresponding amount was made available by the Agent to the Borrower to due until the date such corresponding amount is recovered by the paid to Agent at a the interest rate per annum then payable by any Borrower in respect of Loans that are Base Rate Loans. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrowers to reimburse an Issuing Bank under any Letter of Credit or make any other payment in connection therewith.
(l) The Borrower (or Administrative Borrower on behalf of such Borrower) with respect to any banker’s acceptance may, at its option, provide Agent, for itself and the benefit of the applicable Issuing Bank and Lenders, with cash collateral in an amount equal to one hundred (100%) percent of the face amount of the banker’s acceptance so requested, provided, that, (i) if paid by such Bankcash collateral shall be held in one or more investment accounts (the “Banker’s Acceptance Cash Collateral Accounts”) maintained at such securities intermediary reasonably acceptable to Agent, the overnight Federal Funds Effective Rate or and (ii) if paid by the BorrowerAgent shall have received, in form and substance reasonably satisfactory to Agent, an Investment Property Control Agreement among Agent, the then applicable rate of interestObligor and such securities intermediary with respect to the Banker’s Acceptance Cash Collateral Accounts, calculated in accordance with Article IVduly executed and delivered by such Obligor and such securities intermediary. Borrowers and Guarantors hereby pledge and grant to Agent, for itself and the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account benefit of the Borrower maintained with applicable Issuing Bank and Lenders, a security interest in all cash and Cash Equivalents held in the Agent.
(c) Banker’s Acceptance Cash Collateral Accounts from time to time and all proceeds thereof as security for the payment of all Obligations including without limitation all Letter of Credit Obligations in respect of banker’s acceptances, whether or not then due. So long as letters of credit are outstanding, no Cash Dominion Event has occurred and is continuing: (A) any funds in the amount of Revolving Loans that the Borrower is entitled to obtain under Article II Banker’s Acceptance Cash Collateral Accounts shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable applied to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter Obligations in respect of Credit Request banker’s acceptances then due and owing as such banker’s acceptances come due, unless otherwise directed by Administrative Borrower, and (B) any funds in the Banker’s Acceptance Cash Collateral Accounts shall include an application for such letter of credit and be paid to Administrative Borrower or any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit RequestPerson at Administrative Borrower’s request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available As a sublimit under the Revolving Commitment and subject to the Borrower letters of creditterms and conditions hereof, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding and from time to time from the Closing Date through the Letter of $100,000,000 minus Credit Maturity Date, Issuing Lender agrees to issue such Letters of Credit denominated in Dollars for the aggregate principal amount account of all then outstanding Surety Bonds issued Borrower, and as applicable, at the discretion of Issuing Lender, for the account of any Subsidiary, as Borrower may request by a Surety on behalf Request for Letter of Credit; provided, however, that the Parent pursuant to an Indemnity Agreement. The availability form and substance of letters each Letter of credit will Credit shall be subject to approval by Issuing Lender, in its sole discretion; and, provided further, that after giving effect to all such Letters of Credit, (i) the Agent being satisfied with Revolving Facility Usage does not exceed the terms of the letter of creditBorrowing Availability, (ii) the Borrower’s executing and delivering such letter Letter of credit and reimbursement agreements and related documents as required by Credit Usage under all outstanding Letters of Credit does not exceed the AgentLetter of Credit Sublimit, and (iii) the satisfaction of all conditions as to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Lender, such Lender's Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part Rata Share of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal Facility Usage does not exceed such Xxxxxx's Pro Rata Share of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”)Commitment. Each Letter of Credit Request shall include an application for such letter of credit and any other documents that mature on or before the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery Maturity Date and, unless the Issuing Lender and Requisite Lenders otherwise consent in a writing delivered to Administrative Agent, the term of each any Letter of Credit Request shall be deemed not exceed one (1) year or extend beyond the Letter of Credit Maturity Date, provided that in the Issuing Lender’s and Requisite Lenders’ discretion, a representation and warranty by Letter of Credit may mature after the Letter of Credit Maturity Date provided Borrower that such letter of credit as requested in Cash Collateralizes such Letter of Credit Request may be issued in accordance with and will not violate the requirements Section 2.3.11. Each Letter of this Section 3.01 and Credit shall include a representation and warranty as be subject to the aggregate principal amount additional terms and conditions of all then outstanding Surety Bonds. The Agent shallIssuing Lender’s standard agreement for a Letter of Credit and related documents, on the date of each issuance of or amendment or modification to a letter of credit if any, required by it, give each Bank and the Borrower written notice of Issuing Lender in connection with the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of creditthereof; provided, the Agent shall not have any obligation relative however, to the Banks other than to determine extent that any the terms of such documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face are inconsistent with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness terms of this Agreement, the outstanding terms of this Agreement shall control. An Issuing Lender shall not be under any obligation to issue any Letter of Credit if: (a) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Lender from issuing such Letter of Credit, or any Applicable Law applicable to such Issuing Lender shall prohibit, or request that such Issuing Lender refrain from, the issuance of letters of credit issued under 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 2002 Closing Date, or shall impose upon such Issuing Lender any unreimbursed loss, cost or expense that was not applicable on the Closing Date and that such Issuing Lender in good xxxxx xxxxx material to it; (b) the issuance of such Letter of Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and would violate one or more policies of such Issuing Lender applicable to letters of credit generally; or (c) any Lender is at that time a Defaulting Lender, unless such Issuing Lender has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such Issuing Lender (in its sole discretion) with the Borrower or such Lender to eliminate such Issuing Lender’s actual or potential Fronting Exposure (after giving effect to Section 11.5) with respect to the Defaulting Lender arising from either such Letter of Credit then proposed to be issued or such Letter of Credit and all other Letter of Credit Obligations as to which such Issuing Lender has actual or potential Fronting Exposure, as it may elect in its sole discretion. SMRH:4838-5569-6023.10 -61- Xxxxxx Lease Finance Corporation Fourth Amended and Restated Credit Agreement An Issuing Lender shall be deemed under no obligation to beamend any Letter of Credit if (A) such Issuing Lender would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, and hereby are converted into, outstanding letters or (B) the beneficiary of credit hereunderthe Letter of Credit does not accept the proposed amendment to the Letter of Credit.
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Letters of Credit. Subject to Section 1.6 above, at the request of Borrower, Lender may, in its Good Faith Business Judgment, issue or arrange for the issuance of Letters of Credit for the account of Borrower, in each case in form and substance satisfactory to Lender in its sole discretion. Borrower shall pay Lender’s standard fees and charges in connection with all Letters of Credit and all other all bank charges (a) The Banks agree to make available to the Borrower letters including charges of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the BorrowerLender’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by department) in connection with the Agent, and Letters of Credit (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided thatcollectively, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit RequestFees”). Any payment by Lender under or in connection with a Letter of Credit shall constitute a Loan hereunder on the date such payment is made. Each Letter of Credit Request shall include have an application expiry date no later than six months after the Maturity Date. Borrower hereby agrees to indemnify and hold Lender harmless from any loss, cost, expense, or liability, including payments made by Lender, expenses, and reasonable attorneys' fees incurred by Lender arising out of or in connection with any Letters of Credit. Borrower agrees to be bound by the regulations and interpretations of the issuer of any Letters of Credit guarantied by Lender and opened for Borrower's account or by Lender's interpretations of any Letter of Credit issued by Lender for Borrower's account, and Borrower understands and agrees that Lender 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 Letters of Credit or any modifications, amendments, or supplements thereto. Borrower understands that Letters of Credit may require Lender to indemnify the issuing bank for certain costs or liabilities arising out of claims by Borrower against such letter issuing bank. Borrower hereby agrees to indemnify and hold Lender harmless with respect to any loss, cost, expense, or liability incurred by Lender under any Letter of credit Credit as a result of Lender's indemnification of any such issuing bank. The provisions of this Loan Agreement, as it pertains to Letters of Credit, and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter Loan Documents relating to Letters of Credit Requestare cumulative.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Loan and Security Agreement (Accelerize New Media Inc)
Letters of Credit. (a) The Banks agree If any Borrower fails to make available any required payment with respect to the Borrower letters a Loan (for purposes of creditthis Section 3.4, issued by the Agenta “Note Payment Default”) and such Note Payment Default continues for seven days, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding then within 10 Business Days of $100,000,000 minus the aggregate principal amount receipt of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to written notice from Lender Administrator shall either (i) purchase such Loan from Lender for a price equal to all principal and interest outstanding on the Agent being satisfied with the terms Loan as of the letter of creditdate purchase, or (ii) the Borrower’s executing and delivering such cause Parent to deliver to Lender, as beneficiary, a standby letter of credit and reimbursement agreements and related documents as required by the Agent, and (iiia “Collateral LC”) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount 100% of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan Principal Debt of such Borrower. Each Collateral LC shall be in form and substance reasonably acceptable to Lender. If any Note Payment Default continues for a period of 30 days, then Lender may draw on the Borrower has executed Collateral LC and delivered use the proceeds thereof to pay all Revolving Loan Principal Debt of such letter of credit, reimbursement agreements and other related documents as may be required by the AgentBorrower.
(b) In At any time during a Financial Covenant Non-compliance Period, or if any Event of Default occurs and is continuing, then within 10 Business Days of receipt of written notice from Lender, Administrator shall cause Parent to deliver to Lender, as beneficiary, a Collateral LC in an amount not less than 100% of the event Aggregate Revolving Loan Principal Debt not already secured by a Collateral LC issued pursuant to Section 3.4
(a) Each Collateral LC shall permit partial draws and shall be in form and substance reasonably acceptable to Lender. Lender may draw on the Agent pays Collateral LC and use the proceeds thereof to pay the Aggregate Revolving Loan Principal Debt at any amount under or on account time during the continuance of an Event of Default. If a Collateral LC is issued due to the existence of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”)Financial Covenant Non-compliance Period, a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to then (i) if paid by such BankCollateral LC shall be terminated as of the last day of any fiscal quarter of Parent during which the Financial Covenant Non-compliance Period no longer exists, the overnight Federal Funds Effective Rate or and (ii) if paid for so long as such Collateral LC is outstanding, any failure by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed Parent to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained comply with the AgentConsolidated Fixed Charge Coverage Ratio or the Consolidated Leverage Ratio shall not cause an Event of Default.
(c) So long as letters If any Collateral LC will mature by its terms at any time during a Financial Covenant Non-Compliance Period or during the continuance of credit are outstandingan Event of Default, then Lender may in its discretion, within 30 days prior to the amount of date that such Collateral LC matures, either request that such Collateral LC be renewed for a one year period or draw on the Collateral LC and use the proceeds to pay the Aggregate Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving LoansLoan Principal Debt.
(d) Whenever If Lender draws on any Collateral LC to pay the Borrower desires that a letter outstanding Revolving Loan Principal Debt of credit be issuedany Borrower, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent then Lender shall promptly notify each Bank of each Letter of Credit Requestassign such Borrower’s Note and other Loan Documents to which such Borrower or applicable Principal Guarantor is a party to Administrator for collection.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Samples: Franchise Financing Agreement (Rent a Center Inc De)
Letters of Credit. (a) The Banks agree to make available to the Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with Subject to the terms and conditions of this Agreement, from one (1) day after the letter of credit, Closing Date to and until (iibut not including) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and thirty (iii30) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee days prior to the distribution Termination Date, the Lender agrees to issue Letters of Credit for the account of the balance of such fee Pro rata to the Banks. In additionBorrower, as the Borrower shall pay may from time to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agreetime request. The Borrower shall not be entitled to obtain letters request any Letter of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan Credit (and the Borrower has executed and delivered such letter Lender shall not be obligated to issue any Letter of creditCredit) if, reimbursement agreements and other related documents as may be required by after giving effect thereto, (A) the AgentLetter of Credit Exposure would exceed the Letter of Credit Commitment, or (B) the Revolving Credit Exposure would exceed the Maximum Line Amount.
(bii) In the event the Agent pays any amount under or on account Each request for a Letter of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan Credit shall be deemed to be made delivered to the Borrower Lender by each Bank to the extent of its Pro rata share an Officer of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no Borrower not later than 12:00 p.m. 11:00 a.m. Mountain Time three (Cleveland time3) on Business Days prior to the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion proposed issuance of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect Letter of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days Credit (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking DayLender), which written notice . Each such request shall be in a form reasonably acceptable to the form of Exhibit E hereto (eachLender and shall specify the face amount thereof, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in whether such Letter of Credit Request may is a commercial documentary or a standby Letter of Credit, the account party, the beneficiary, the requested date of issuance, amendment, renewal or extension, the expiration date thereof, and the nature of the transaction or obligation to be issued supported thereby. Concurrently with each such request, the Borrower shall execute and deliver to the Lender an appropriate application and agreement, being in accordance with and will not violate the requirements standard form of the Lender for letters of credit, as amended to conform to the provisions of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditAgreement.
(fiii) In determining whether to pay under any letter Whenever a Letter of creditCredit shall be drawn, the Agent Borrower shall promptly reimburse the Lender for the amount drawn. In the event that the amount drawn shall not have any obligation relative to been reimbursed by the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements Borrower within one (1) Business Day of the letter drawing of credit. Any action taken or omitted to be taken by such Letter of Credit, at the Agent with respect to a letter sole option of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this AgreementLender, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit Borrower shall be deemed to behave requested an Advance, subject to the provisions of Section 2.1(a), in the amount drawn. The Borrower irrevocably authorizes and hereby are converted into, outstanding letters instructs the Lender to apply the proceeds of credit hereunderany borrowing pursuant to this Section 2.1(b)(iii) to reimburse in full the Lender for the amount drawn on the applicable Letter of Credit. Any Advance made pursuant to this Section 2.1(b)(iii) shall be deemed to be a Base Rate Loan.
Appears in 1 contract
Letters of Credit. (a) The Banks agree Subject to make available and upon the terms and conditions herein set forth, the Borrower may request that any Issuing Lender issue, at any time on and after the Effective Date and prior to the Borrower 30th day prior to the Maturity Date, for the account of any Credit Party, irrevocable sight standby letters of credit, issued in a form customarily used by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be Issuing Lender or in such other form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have has been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered approved by such Issuing Lender (each such letter of credit, reimbursement agreements a “Letter of Credit”); provided that the Issuing Lender shall not issue any Letter of Credit that would mature after a Scheduled Commitment Reduction Date if the Stated Amount of such Letter of Credit together with all other Letters of Credit expiring after such Scheduled Commitment Reduction Date would exceed the Total Commitment after giving effect to the Scheduled Commitment Reduction on such Scheduled Commitment Reduction Date would exceed the Total Commitment. All Letters of Credit shall be denominated in Dollars, or one of the Alternate Currencies, and other related documents as may shall be required by the Agentissued on a sight draft basis.
(b) In Subject to the event terms and conditions contained herein, each Issuing Lender hereby agrees that it will, at any time and from time to time on or after the Agent pays any amount under or on Effective Date and prior to the 30th day prior to the Maturity Date, following its receipt of the respective Letter of Credit Request, issue for the account of any Credit Party one or more Letters of Credit in support of such obligations that do not violate the corporate policy of the Issuing Lender and as are permitted to remain outstanding without giving rise to a letter Default or Event of Default hereunder, provided that the respective Issuing Lender shall be under no obligation to issue any Letter of Credit of the types described above if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or arbitrator shall purport by its terms to enjoin or restrain such Issuing Lender from issuing such Letter of Credit or any requirement of law applicable to such Issuing Lender or any request or directive (whether or not having the force of law) from any governmental authority with jurisdiction over 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 or reserve or capital requirement (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland timewhich such Issuing Lender is not otherwise compensated) not in effect on the date hereof, or any unreimbursed loss, cost or expense which was not applicable, in effect or known to such Issuing Lender as of the date hereof and which such Issuing Lender in good xxxxx xxxxx material to it; or
(ii) such Issuing Lender shall have received notice from any Lender prior to the issuance of such notice and, not later than 1:00 p.m. (Cleveland time) on the date Letter of such notice, each Bank will make available to the Agent its Pro rata portion Credit of the Draw deemed type described in the second sentence of Section 3.02(b); or
(iii) a Lender Default exists, unless such Issuing Lender has entered into arrangements reasonably satisfactory to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, it and the Borrower shall immediately pay to eliminate such corresponding amount Issuing Lender’s risk with respect to the Agent. The Agent shall also be entitled participation in Letters of Credit of any Defaulting Lender(s) (it being understood that cash collateralizing each Defaulting Lender’s Percentage of the Letter of Credit Outstandings with respect to recover from the Bank or the Borrower, as the case may be, interest on such corresponding Letters of Credit in an amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to 105% of such Defaulting Lender’s Percentage of Letter of Credit Outstandings is satisfactory) (i) if paid by such Bankarrangements, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate “Letter of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the AgentCredit Back-Stop Arrangements”).
(c) So long as letters Notwithstanding anything to the contrary contained in this Agreement, (i) no Letter of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II Credit shall be reduced by issued the LC Obligations then outstanding andStated Amount of which, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable when added to the Agent) Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and prior to the proposed date of issuance (which shall be a Cleveland Banking Day)of, which written notice shall be in the form of Exhibit E hereto (each, a “respective Letter of Credit Request”). Each Letter of Credit Request shall include an application for Credit) at such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
time would exceed either (ex) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as $10,000,000 or (y) when added to the aggregate principal amount of all Loans then outstanding Surety Bonds. The Agent shalloutstanding, an amount equal to the Total Commitment at such time, and (ii) each Letter of Credit shall by its terms terminate on or before the earlier of (A) the date which occurs 12 months after the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance thereof (although any such Letter of or amendment or modification Credit shall be extendible for successive periods of up to such letter of credit12 months, but, in each case, not beyond the tenth Business Day prior to the Maturity Date, on terms acceptable to the respective Issuing Lender) and (B) 10 Business Days prior to the Maturity Date.
(fd) In determining whether to pay under If any letter Lender becomes a Defaulting Lender at any time that any Letter of creditCredit is outstanding, the Agent Borrower shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter enter into Letter of credit have been delivered and that they appear to comply on their face Credit Back-Stop Arrangements with the requirements of relevant Issuing Lender no later than five Business Days after the letter of credit. Any action taken date such Lender becomes a Defaulting Lender (or omitted to be taken by such later date as the Agent with respect to a letter of credit issued by it if taken or omitted Issuing Lender shall otherwise agree in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agentits sole discretion).
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available to the Borrower letters of credit, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS THEREIN.
A. LETTERS OF CREDIT. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing Company acknowledges and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for confirms that Schedule 3.1 annexed hereto sets forth each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Existing Credit Agreement (collectively, the "EXISTING LETTERS OF CREDIT") and outstanding as of the Effective Date. Company hereby represents, warrants, agrees, covenants and (a) reaffirms that it has no (and it permanently and irrevocably waives and releases Agents and Lenders from any, to the extent arising on or prior to the Effective Date) defense, set off, claim or counterclaim against any Agent or Lender in regard to its Obligations in respect of such Existing Letters of Credit and (b) reaffirms its obligation to reimburse the applicable Issuing Lenders for honored drawings under such Existing Letters of Credit in accordance with the terms and conditions of this Agreement and the other Loan Documents applicable to Letters of Credit issued hereunder. Based on the foregoing, each Lender agrees that (1) each Existing Letter of Credit which is a Standby Letter of Credit shall, as of the Effective Date, be deemed for all purposes of this Agreement to be a Standby Letter of Credit issued hereunder, and (2) each Existing Letter of Credit which is a Commercial Letter of Credit shall, as of the Effective Date, be deemed for all purposes of this Agreement to be a Commercial Letter of Credit issued hereunder. Company also acknowledges that set forth on Schedule 3.1 are certain letters of credit (the "UNION LETTERS OF CREDIT") issued by BankBoston, N.A. for the account of Union and/or its Subsidiaries which are outstanding as of the 2004 Credit Agreement are as listed on Exhibit C hereto Effective Date. Company hereby requests, and the Lenders hereby agree that, from and after the Union Merger Date such letters of credit shall be deemed to bebe Letters of Credit issued and outstanding under this Agreement from and after the Union Effective Date; provided that, the Company hereby releases Agents and Lenders to the extent arising prior to the Union Merger Date, any defense setoff, claim or counterclaim against Agent or Lender in regard to its Obligations in respect of such Letters of Credit. In addition to the foregoing and in addition to Company requesting that Lenders make Revolving Loans pursuant to subsection 2.1A(iii), and hereby are converted intothat Swing Line Lender make Swing Line Loans pursuant to subsection 2.1A(iv), outstanding letters Company may request, in accordance with the provisions of credit hereunderthis subsection 3.1, from time to time during the period from the Effective Date to but excluding the Revolving Loan Commitment Termination Date, that one or more Lenders issue Letters of Credit for the account of Company for the purposes specified in the definitions of Commercial Letters of Credit and Standby Letters of Credit. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, any one or more Lenders may, but (except as provided in subsection 3.1B(ii)) shall not be obligated to, issue such Letters of Credit in accordance with the provisions of this subsection 3.1; provided that Company shall not request that any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance, the Total Utilization of Revolving Loan Commitments would exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance, the Letter of Credit Usage would exceed $15,000,000;
(iii) any Standby Letter of Credit having an expiration date later than the earlier of (a) the Revolving Loan Commitment Termination Date and (b) the date which is one year from the date of issuance of such Standby Letter of Credit; provided that the immediately preceding clause (b) shall not prevent any Issuing Lender from agreeing that a Standby Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each unless such Issuing Lender elects not to extend for any such additional period; provided further that, unless Requisite Lenders otherwise consent, such Issuing Lender shall give notice that it will not extend such Standby Letter of Credit if it has knowledge that an Event of Default has occurred and is continuing on the last day on which such Issuing Lender may give notice to the beneficiary that it will not extend such Standby Letter of Credit;
(iv) any Commercial Letter of Credit (a) having an expiration date later than the earlier of (X) 30 days prior to the Revolving Loan Commitment Termination Date and (Y) the date which is 180 days from the date of issuance of such Commercial Letter of Credit or (b) that is otherwise unacceptable to the applicable Issuing Lender in its reasonable discretion;
(v) any Letter of Credit denominated in a currency other than Dollars; or
(vi) any Letter of Credit during any period when a Lender Default exists, unless each Issuing Lender has entered into arrangements satisfactory to it and Company to eliminate such Issuing Lender's risk with respect to the Defaulting Lender, including by cash collateralizing such Defaulting Lender's Pro Rata Share of the Letter of Credit Usage (after giving effect to the issuance of the proposed Letter of Credit).
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions hereof, at any time and from time to time from the Closing Date through the Revolving Facility Maturity Date, the Issuing Lender shall issue such Letters of Credit under the Revolving Facility as Borrower letters may request by a Request for Letter of creditCredit; provided that giving effect to all such Letters of Credit, issued (i) Revolving Credit Facility Usage does not exceed the Maximum Revolving Credit Amount, (ii) the Aggregate Effective Amount under all outstanding Letters of Credit shall not exceed $1,000,000, and (iii) as to each relevant Lender, such Lender’s Pro Rata Share of Revolving Credit Facility Usage does not exceed such Lender’s Revolving Commitment. Each Letter of Credit shall be in a form reasonably acceptable to the Issuing Lender. Unless the Issuing Lender and the Requisite Lenders otherwise consent, neither the term of any Commercial Letter of Credit nor the term of any Standby Letter of Credit shall exceed 365 days. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the term of any Letter of Credit shall not extend beyond the Revolving Facility Maturity Date. A Request for Letter of Credit shall be irrevocable absent the consent of the Issuing Lender.
(b) Each Request for Letter of Credit shall be submitted to the Issuing Lender, with a copy to the Administrative Agent, at least three (3) Banking Days prior to the date upon which the related Letter of Credit is proposed to be issued, and, if requested by the Issuing Lender, shall be accompanied by an applicable Letter of Credit Agreement executed by Borrower. The Administrative Agent shall promptly notify the Issuing Lender whether such request, and the issuance of a Letter of Credit pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit, the Issuing Lender shall promptly notify the Administrative Agent of the amount and terms thereof. Unless the Issuing Lender has notified, in its sole and absolute discretion, Borrower to the contrary, a Request for Letter of Credit may be delivered to the Issuing Lender by facsimile by a Responsible Official of Borrower, in which case Borrower shall confirm such request by promptly delivering a Request for Letter of Credit (conforming to the preceding sentence) in person to the Issuing Lender. The Issuing Lender shall incur no liability whatsoever hereunder in acting upon any Request for Letter of Credit received by facsimile purportedly made by a Responsible Official of Borrower, and Borrower hereby agrees to indemnify the Issuing Lender from any loss, cost, expense or liability as a result of so acting.
(c) Upon issuance of a Letter of Credit, each Lender shall be deemed to have purchased a pro rata participation in such Letter of Credit from the Issuing Lender in proportion to that Lender’s Pro Rata Share of the Revolving Facility. Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed by Borrower for any payment required to be made by the Issuing Lender under any Letter of Credit, each Lender shall, pro rata according to its Pro Rata Share of the Revolving Facility, reimburse the Issuing Lender through the Administrative Agent promptly upon demand for the amount of such payment. The obligation of each Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrower to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of Credit within one (1) Banking Day after demand made by the Issuing Lender therefor, together with interest on such amount from the date of any payment made by the Issuing Lender at the rate applicable to Base Rate Advances under the Revolving Facility for the period commencing on the date of any such payment and continuing through the first Banking Day following such demand and thereafter at the Default Rate. The principal amount of any such payment shall be used to reimburse the Issuing Lender for the payment made by it under the Letter of Credit. Each Lender that has reimbursed the Issuing Lender pursuant to Section 2.5(c) for its Pro Rata Share of any payment made by the Issuing Lender under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of such reimbursement, in the claim of the Issuing Lender against Borrower under this Section 2.5(d) and shall share, in accordance with that pro rata participation, in any payment made by Borrower with respect to such claim. Upon receipt of any such reimbursement from Borrower, the Issuing Lender shall pay to the Administrative Agent, for the ratable benefit of those Lenders that had reimbursed the Issuing Lender pursuant to Section 2.5(c) for their respective Pro Rata Shares of any payment made by the Issuing Lender under a Letter of Credit to which such reimbursement applies, the amount of such reimbursement.
(e) Borrower may, pursuant to their respective Commitments up a Request for Borrowing, request that Advances be made pursuant to Section 2.1(a) to provide funds for the payment required by Section 2.5(d). The proceeds of such Advances shall be paid directly to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit.
(f) If Borrower fails to make the payment required by Section 2.5(d) within the time period therein set forth, in lieu of the reimbursement to the Issuing Lender under Section 2.5(c) the Issuing Lender may (but is not required to), without notice to or the consent of Borrower, instruct the Administrative Agent to cause Revolving Advances to be made by the Lenders under the Revolving Facility in an aggregate amount at equal to the amount paid by the Issuing Lender with respect to that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. The proceeds of such Advances shall be paid to the Issuing Lender to reimburse it for the payment made by it under the Letter of Credit.
(g) The issuance of any one time outstanding supplement, modification, amendment, renewal, or extension to or of $100,000,000 minus any Letter of Credit shall be treated in all respects the aggregate principal same as the issuance of a new Letter of Credit.
(h) The obligation of Borrower to pay to the Issuing Lender the amount of all then outstanding Surety Bonds issued any payment made by a Surety on behalf the Issuing Lender under any Letter of Credit shall be absolute, unconditional, and irrevocable, subject only to performance by the Issuing Lender of its obligations to Borrower under Section 5108 of the Parent pursuant to an Indemnity AgreementUCC. The availability Without limiting the foregoing, Borrower’s obligations shall not be affected by any of letters of credit will be subject to the following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, with the written consent of Borrower executed by a Responsible Official of Borrower;
(iii) the existence of any claim, setoff, defense, or other rights that Borrower may have at any time against the Issuing Lender, the Administrative Agent or any Lender, any beneficiary of the Letter of Credit (or any Persons for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being satisfied untrue or inaccurate in any respect whatsoever so long as any such document reasonably appeared to comply with the terms of the letter Letter of credit, Credit;
(iiv) payment by the Issuing Lender in good faith under the Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of the Letter of Credit;
(vi) the Borrower’s executing existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by documents presented in connection with any Letter of Credit or for any difference between any such Property and delivering the character, quality, quantity, condition, or value of such letter Property as described in such documents;
(vii) the time, place, manner, order or contents of credit shipments or deliveries of Property as described in documents presented in connection with any Letter of Credit or the existence, nature and reimbursement agreements and related extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any documents as required in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any Property;
(x) any error in the transmission of any message relating to a Letter of Credit not caused by the AgentIssuing Lender, and or any delay or interruption in any such message;
(iiixi) any error, neglect or default of any correspondent of the satisfaction Issuing Lender in connection with a Letter of all Credit;
(xii) any consequence arising from acts of God, war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of the Issuing Lender; and
(xiii) so long as the Issuing Lender in good faith determines that the contract or document appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the Borrower obtaining Issuing Lender in connection with a Loan in the amount Letter of the requested letter of credit. Credit.
(i) The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent Issuing Lender shall be entitled to .125% of such fee prior the protection accorded to the distribution of the balance of such fee Pro rata Administrative Agent pursuant to Section 10.6 (subject to the Banks. In additionstandards set forth therein), the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agentmutatis mutandis.
(bj) In the event the Agent pays any amount under or on account The Uniform Code of a letter of credit (the payment Practice for Documentary Credits, as published in its most current version by the Agent under or on account International Chamber of a letter of credit being herein called a “Draw”)Commerce, a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements part of this Section 3.01 and shall include a representation and warranty as apply to all Letters of Credit to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of creditextent not inconsistent with applicable Law.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Any US Borrower shall submit to the Borrower letters US Administrative Agent and the Issuing Bank a Letter of creditCredit Application not later than 11:00 a.m. Eastern time, issued by the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to not less than three (i3) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee Business Days prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the proposed date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days issuance (or such shorter period as may be acceptable agreed to by the AgentUS Administrative Agent and the Issuing Bank) and at least thirty (30) Business Days prior to the proposed date of issuance amendment, renewal or extension (or such shorter period as may be agreed to by the US Administrative Agent and the Issuing Bank) of a Letter of Credit hereunder. Each Letter of Credit Application shall specify (i) the amount of such Letter of Credit, (ii) the date (which shall be a Cleveland Banking Business Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request is to be issued, amended, renewed or extended, (iii) the duration thereof, (iv) the name and address of the beneficiary thereof, (v) the form of the Letter of Credit, (vi) the name of the elected Issuing Bank and (vii) such other information as the US Administrative Agent and the Issuing Bank may reasonably request, all of which shall be issued in accordance with reasonably satisfactory to the US Administrative Agent and will not violate such Issuing Bank. Subject to the requirements terms and conditions of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shallAgreement, on the date specified for the issuance, amendment, renewal or extension of each issuance a Letter of Credit, the Issuing Bank shall issue, amend, renew or amendment or modification extend such Letter of Credit to a letter of credit by itthe beneficiary thereof. Promptly thereafter, give each the Issuing Bank shall notify the US Administrative Agent and the Borrower written applicable US Borrower, in writing, of such issuance, amendment, renewal or extension, and such notice shall be accompanied by a copy of the issuance such issuance, amendment, renewal or extension. Promptly after receipt of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of creditnotice, the US Administrative Agent shall not have notify each US Tranche Revolving Lender, in writing, of such issuance, amendment, renewal or extension and if any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this AgreementUS Tranche Revolving Lender so requests, the outstanding letters US Administrative Agent shall provide such Lender with copies of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to beissuance, and hereby are converted intoamendment, outstanding letters of credit hereunderrenewal or extension.
Appears in 1 contract
Samples: Senior Secured Credit Agreement (Universal Compression Holdings Inc)
Letters of Credit. (a) The Banks agree to make available Subject to the terms and conditions of this Agreement, the Revolving Credit Commitments may be utilized, upon the request of the relevant Revolving Credit Borrower, in addition to the Revolving Credit Loans to such Borrower provided for by Section 2.01 hereof, by the issuance by the Issuing Banks of letters of creditcredit (collectively, issued "LETTERS OF CREDIT") for account of such Borrower or any of its Subsidiaries (as specified by such Borrower), PROVIDED that in no event shall:
(i) the Agent, pursuant to their respective Commitments up to an sum of (x) the aggregate amount at any one time outstanding of $100,000,000 minus all Letter of Credit Liabilities, together with the aggregate principal amount of the Revolving Credit Loans (including all then outstanding Surety Bonds issued by a Surety on behalf Swingline Loans) PLUS (y) the Reserved Commitments, exceed Credit Agreement ---------------- the aggregate amount of the Parent pursuant Revolving Credit Commitments as in effect from time to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, time;
(ii) the Borrower’s executing and delivering such letter outstanding aggregate amount of credit and reimbursement agreements and related documents as required by the Agent, and all Letter of Credit Liabilities exceed $30,000,000; and
(iii) the satisfaction expiration date of all conditions any Letter of Credit extend beyond the earlier of the date five Business Days prior to the Borrower obtaining a Loan in Commitment Termination Date and the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of date twelve months following the issuance of each such letter Letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee prior to the distribution of the balance of such fee Pro rata to the BanksCredit. In addition, on the Borrower Restatement Effective Date, all "Letters of Credit" outstanding under the Original Credit Agreement on the Restatement Effective Date shall pay to automatically, without any action on the Agent upon issuance part of each letter any Person, become Letters of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the AgentCredit outstanding hereunder.
(b) In The following additional provisions shall apply to Letters of Credit:
(i) The relevant Revolving Credit Borrower shall give the event Administrative Agent at least three Business Days' irrevocable prior notice (effective upon receipt) specifying the Agent pays any amount under Business Day (which shall be no later than 30 days preceding the Commitment Termination Date) each Letter of Credit is to be issued, the Issuing Bank to issue the same and the account party or on account parties therefor and describing in reasonable detail the proposed terms of such Letter of Credit (including the beneficiary thereof) and the nature of the transactions or obligations proposed to be supported thereby (including whether such Letter of Credit is to be a commercial letter of credit (the payment by the Agent under or on account of a standby letter of credit being herein called a “Draw”credit). Upon receipt of any such notice, a the Administrative Agent shall advise the relevant Issuing Bank of the contents thereof.
(ii) On each day during the period commencing with the issuance by an Issuing Bank of any Letter of Credit and Credit Agreement ---------------- until such Letter of Credit shall have expired or been terminated, the Revolving Loan Credit Commitment of each Lender shall be deemed to be utilized for all purposes of this Agreement in an amount equal to such Lender's Revolving Credit Commitment Percentage of the then undrawn face amount of such Letter of Credit. Each Revolving Credit Lender (other than the relevant Issuing Bank) agrees that, upon the issuance of any Letter of Credit hereunder, it shall automatically acquire a participation in such Issuing Bank's liability under such Letter of Credit in an amount equal to such Lender's Revolving Credit Commitment Percentage of such liability, and each Revolving Credit Lender (other than such Issuing Bank) thereby shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and shall be unconditionally obligated to such Issuing Bank to pay and discharge when due, its Revolving Credit Commitment Percentage of such Issuing Bank's liability under such Letter of Credit.
(iii) Upon receipt from the beneficiary of any Letter of Credit of any demand for payment under such Letter of Credit, the relevant Issuing Bank shall promptly notify the relevant Borrower (through the Administrative Agent) of the amount to be paid by such Issuing Bank as a result of such demand and the date on which payment is to be made by such Issuing Bank to such beneficiary in respect of such demand. Notwithstanding the identity of the account party of any Letter of Credit, the relevant Borrower hereby unconditionally agrees to pay and reimburse the Administrative Agent for account of such Issuing Bank for the amount of each demand for payment under such Letter of Credit that is in substantial compliance with the provisions of such Letter of Credit at or prior to the Borrower date on which payment is to be made by each such Issuing Bank to the extent beneficiary thereunder, without presentment, demand, protest or other formalities of any kind. Credit Agreement ----------------
(iv) Forthwith upon its Pro rata share receipt of a notice referred to in paragraph (iii) of this Section 2.03(b), the Total Revolving Loan Commitments relevant Borrower shall advise the Administrative Agent whether or not such Borrower intends to borrow hereunder to finance its obligation to reimburse immediately the Agent relevant Issuing Bank for the amount of the Draw. The Agent shall notify each Bank of the occurrence and related demand for payment of and, if it does, submit a Draw no later than 12:00 p.m. (Cleveland time) on the date notice of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent borrowing as provided in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the AgentSection 4.05 hereof.
(cv) So long as letters Each Revolving Credit Lender (other than the relevant Issuing Bank) shall pay to the Administrative Agent for account of credit are outstandingsuch Issuing Bank at an account specified by the Administrative Agent in Dollars and in immediately available funds, the amount of such Lender's Revolving Loans that Credit Commitment Percentage of any payment under a Letter of Credit upon notice by such Issuing Bank (through the Borrower is entitled Administrative Agent) to obtain such Revolving Credit Lender requesting such payment and specifying such amount. Each such Revolving Credit Lender's obligation to make such payment to the Administrative Agent for account of such Issuing Bank under Article II this paragraph (v), and such Issuing Bank's right to receive the same, shall be reduced absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the failure of any other Revolving Credit Lender to make its payment under this paragraph (v), the financial condition of the relevant Borrower (or any other account party or Obligor), the existence of any Default or the termination of any of the Commitments. Each such payment to an Issuing Bank shall be made without any offset, abatement, withholding or reduction whatsoever. If any Revolving Credit Lender shall default in its obligation to make any such payment to the Administrative Agent for account of such Issuing Bank, for so long as such default shall continue the Administrative Agent may at the request of such Issuing Bank withhold from any payments received by the LC Obligations then outstanding Administrative Agent under this Agreement or any Note for account of such Revolving Credit Lender the amount so in default and, to the extent so Credit Agreement ---------------- withheld, pay the same to such Issuing Bank in addition satisfaction of such defaulted obligation.
(vi) Upon the making of each payment by a Revolving Credit Lender to otherwise constituting an Issuing Bank pursuant to paragraph (v) above in respect of any Letter of Credit, such Lender shall, automatically and without any further action on the part of the Administrative Agent, such Issuing Bank or such Lender, acquire (x) a participation in an amount equal to such payment in the Reimbursement Obligation owing to such Issuing Bank by the relevant Borrower hereunder and under the Letter of Credit Documents relating to such Letter of Credit and (y) a participation in a percentage equal to such Lender's Revolving LoansCredit Commitment Percentage in any interest or other amounts payable by the relevant Borrower hereunder and under such Letter of Credit Documents in respect of such Reimbursement Obligation (other than the commissions, except as otherwise expressly stated hereincharges, the stated amount costs and expenses payable to such Issuing Bank pursuant to paragraph (vii) of this Section 2.03(b)). Upon receipt by an Issuing Bank from or for account of the letters relevant Borrower of credit shall be treated as principal any payment in respect of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice any Reimbursement Obligation or any such interest or other amount (including by way of facsimile transmissionsetoff or application of proceeds of any collateral security) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable Issuing Bank shall promptly pay to the Administrative Agent for account of each Revolving Credit Lender entitled thereto, such Revolving Credit Lender's Revolving Credit Commitment Percentage of such payment, each such payment by such Issuing Bank to be made in the same money and funds in which received by such Issuing Bank. In the event any payment received by an Issuing Bank and so paid to the relevant Revolving Credit Lenders hereunder is rescinded or must otherwise be returned by such Issuing Bank, each Revolving Credit Lender shall, upon the request of such Issuing Bank (through the Administrative Agent), repay to such Issuing Bank (through the Administrative Agent) prior the amount of such payment paid to such Lender, with interest at the proposed date of issuance rate specified in paragraph (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Request.
(ex) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by the Borrower that such letter of credit as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit2.03(b).
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree Issuance of Letters of Credit. From time to make available to time from the Borrower letters of credit, issued by Closing Date until the Agent, pursuant to their respective Commitments up to an aggregate amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to (i) the Agent being satisfied with the terms of the letter of credit, (ii) the Borrower’s executing and delivering such letter of credit and reimbursement agreements and related documents as required by the Agent, and (iii) the satisfaction of all conditions to the Borrower obtaining a Loan in the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided that, the Agent shall be entitled to .125% of such fee Business Day prior to the distribution Termination Date, Company may request Agent to issue standby and commercial Letters of Credit for the balance account of Company. Each request shall be accompanied by a duly executed and completed Application and Agreement For Letter of Credit ("L/C Agreement") in form and substance reasonably satisfactory to Agent and such fee Pro rata other documents as Agent may reasonably require. Except as otherwise provided herein with respect to the Banks. In additionAtlantic Mutual Letter of Credit, the Borrower each Letter of Credit shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having have an expiration date after which shall be the sooner of one year or the Termination Date. All letters of credit shall be in such form and substance as the Agent, the Banks and the Borrower agree. The Borrower Agent shall not be entitled obligated to obtain letters issue any Letter of credit from Credit for the Agent unless account of Company, if, immediately after giving effect thereto, the Borrower is then entitled to obtain Loans from sum of (a) the Banks in an amount not less than the stated amount unpaid principal balance of the letter of credit requestedNotes, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event Letter of Credit Liability would exceed at such time the Agent pays Borrowing Limit; and provided further that the aggregate undrawn amount of all outstanding standby Letters of Credit shall not at any time exceed Five Million and no/100 Dollars ($5,000,000.00). The undrawn amount of all Letters of Credit shall be reserved under or on account of a letter of credit (the payment Facility A Commitment and shall not be available for borrowings thereunder. Each draft paid by the Agent under or on account a Letter of a letter of credit being herein called a “Draw”), a Revolving Loan Credit shall be deemed a Facility A Advance under the Facility A Total Commitment and shall be repaid by Company in accordance with the terms and conditions of this Loan Agreement applicable to be made such Facility A Advances; provided however, that if Facility A Advances are not available, for any reason, at the time any draft is paid by Agent then Company shall immediately pay to Agent the full amount of such draft, together with interest thereon from the date such amount is paid by Agent to the Borrower date such amount is fully repaid by each Bank to the extent of Company. In such event Company agrees that Agent, in its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the sole discretion, may debit any demand deposit account maintained by Company with Agent for the amount of the Drawany such draft. The Any draw or payment by Agent shall notify each Bank under a Letter of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, Credit for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit Company shall be treated as principal a Facility A Advance under each of the Revolving Loans.
(d) Whenever Notes in an amount determined by multiplying the Borrower desires that a letter amount of credit be issued, the Borrower shall give draw or payment under the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter by the Percentage of Credit Request each such Bank, which amount shall include an application for such letter of credit and any other documents that the be promptly remitted to Agent customarily requires in connection therewith. The Agent shall promptly notify by each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a representation and warranty by on the Borrower that such letter of credit same day as requested in such Letter of Credit Request may be issued in accordance with and will not violate the requirements of this Section 3.01 and shall include a representation and warranty as to the aggregate principal amount of all then outstanding Surety Bonds. The Agent shall, on the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and the Borrower written notice of the issuance of or amendment or modification to such letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent with respect to a letter of credit issued by it if taken or omitted in the absence of gross negligence or willful misconduct, shall not create any resulting liability for the Agent.
(g) Immediately prior to the effectiveness of this Agreement, the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on Exhibit C hereto and such letters of credit shall be deemed to be, and hereby are converted into, outstanding letters of credit hereunder.
Appears in 1 contract
Letters of Credit. (a) The Banks agree to make available Upon receipt by the Administrative Agent of at least five (5) Business Days written notice from the Borrower in the form of a Request for Issuance of Letter of Credit, the Administrative Agent shall promptly forward such Request for Issuance of Letter of Credit to the Borrower letters Arranging Agents, the Letter of creditCredit Issuing Bank or, issued if requested by the AgentBorrower, pursuant to their respective Commitments up another Lender agreeing to an aggregate act as the Letter of Credit Issuing Bank (and if such Lender shall accept and countersign such Request for Issuance of Letter of Credit, such Lender shall become the Letter of Credit Issuing Bank with respect to such Letter of Credit) and the Letter of Credit Issuing Bank will issue a Letter of Credit in the amount at any one time outstanding of $100,000,000 minus the aggregate principal amount of all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement. The availability of letters of credit will be subject to requested, provided that (i) the Agent being satisfied with the terms of the letter of creditno Default then exists or would be caused thereby, (ii) after giving effect to the Borrower’s executing and delivering such letter requested issuance, the aggregate face amount of credit and reimbursement agreements and related documents as required by all Letters of Credit outstanding hereunder would not exceed the AgentLetter of Credit Committed Amount, and (iii) after giving effect to the satisfaction requested issuance, the aggregate face amount of all conditions Letters of Credit then Outstanding, plus the aggregate amount of all Revolving Loans then outstanding shall not exceed the Available Commitment. No Letter of Credit shall have a maturity extending beyond the earlier of (x) a term of one (1) year from the date of issuance or (y) the Maturity Date. Subject to the maturity limitations provided herein and so long as no Default then exists or would be caused thereby, Letters of Credit shall be renewable annually upon the request of the Borrower obtaining and with the consent of the Letter of Credit Issuing Bank, which consent shall not be unreasonably withheld but shall be subject to compliance with customary letter of credit practices at the times of any proposed renewal. Each Request for Issuance of Letter of Credit from the Borrower shall specify in reasonable detail the documents which must be presented to draw under such Letter of Credit, which specification shall include all documents which the Letter of Credit Issuing Bank may reasonably require.
(b) If a Loan Letter of Credit provides that it is automatically renewable unless notice is given by the Letter of Credit Issuing Bank that it will not be renewed, the Letter of Credit Issuing Bank and the Borrower shall give at least ten (10) Business Days notice to the Administrative Agent prior to the last date on which a notice of non-renewal may be given to the beneficiary of such Letter of Credit. The Administrative Agent shall promptly notify the Lenders and, unless so directed by the Majority Lenders at least three (3) Business Days prior to the last date on which a notice of non-renewal may be given to the beneficiary of such Letter of Credit, the Letter of Credit Issuing Bank shall not be bound to give notice of non-renewal to the beneficiary of such Letter of Credit.
(c) Provided that no Default then exists or would be caused thereby, each Lender irrevocably authorizes the Letter of Credit Issuing Bank to issue, reconfirm, reissue and extend each Letter of Credit in accordance with the terms of this Agreement. The Letter of Credit Issuing Bank hereby sells, and each other Lender hereby purchases, on a continuing basis, a participation and an undivided interest in (A) the obligations of the Letter of Credit Issuing Bank to honor any draws under the Letters of Credit issued pursuant to this Agreement, and (B) the Indebtedness of the Borrower to the Letter of Credit Issuing Bank under this Agreement in respect of Letters of Credit, such participation being in the amount of such Lender's pro rata share of such obligations and Indebtedness based on such Lender's Commitment Ratio, in each case without further action by any party.
(d) Upon receipt of a draw certificate from the beneficiary of a Letter of Credit, the Letter of Credit Issuing Bank shall promptly notify the Administrative Agent, which shall in turn notify the Borrower, the Arranging Agents, and each Lender, by telephone or telecopy, of the amount of the requested letter of credit. The Borrower shall pay a fee for each letter of credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each letter of credit draw and, thereafter, upon the annual anniversary of the issuance of each such letter of credit remaining outstanding, in the amount case of the Indicated Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of the letter of credit; provided thateach Lender, the Agent shall be entitled to .125% such Lender's portion of such fee prior to the distribution of the balance of such fee Pro rata to the Banks. In addition, the Borrower shall pay to the Agent upon issuance of each letter of credit provided for under this Section 3.01 an issuance fee of $500 for the Agent’s services in issuing the letter of credit. No letter of credit shall be issued having an expiration date after the Termination Date. All letters of credit shall be in such form and substance draw amount as the Agent, the Banks and the Borrower agree. The Borrower shall not be entitled to obtain letters of credit from the Agent unless the Borrower is then entitled to obtain Loans from the Banks in an amount not less than the stated amount of the letter of credit requested, the other conditions of Section 5.03 of this Agreement have been satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has executed and delivered such letter of credit, reimbursement agreements and other related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter of credit (the payment by the Agent under or on account of a letter of credit being herein called a “Draw”), a Revolving Loan shall be deemed to be made to the Borrower by each Bank to the extent of its Pro rata share of the Total Revolving Loan Commitments to reimburse immediately the Agent for the amount of the Draw. The Agent shall notify each Bank of the occurrence and payment of a Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and, not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank will make available to the Agent its Pro rata portion of the Draw deemed to be a Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars and immediately available funds at its office listed on the signature pages hereto. If such corresponding Pro rata amount is not in fact made available to the Agent by such Bank the Agent shall be entitled to recover such corresponding amount from such Bank. If such Bank does not pay such corresponding amount forthwith upon the Agent’s demand therefor, the Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Bank or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Article IV, for the Revolving Loans. In the event no Revolving Loan or only a partial Revolving Loan is deemed to be made, the Agent is hereby authorized to charge (without prior notice to the Borrower) the amount of each Draw, together with interest thereon, against any account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving Loans that the Borrower is entitled to obtain under Article II shall be reduced by the LC Obligations then outstanding and, in addition to otherwise constituting part of the Revolving Loans, except as otherwise expressly stated herein, the stated amount of the letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five Cleveland Banking Days (or such shorter period as may be acceptable to the Agent) prior to the proposed date of issuance (which shall be a Cleveland Banking Day), which written notice shall be in the form of Exhibit E hereto (each, a “Letter of Credit Request”). Each Letter of Credit Request shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The Agent shall promptly notify each Bank of each Letter of Credit Requestits Commitment Ratio.
(e) The delivery of Borrower hereby irrevocably requests and the Lenders hereby severally agree to make a Base Rate Advance to the Borrower (notwithstanding the minimum amount requirements otherwise applicable to Base Rate Advances) on each day on which a draw is made under any Letter of Credit Request and in the amount of such draw, and each Lender shall be deemed a representation fund such Lender's share of such Base Rate Advance by payment to the Administrative Agent in accordance with Section 2.3(e) hereof and warranty by its Commitment Ratio, without reduction for any set-off counterclaim of any nature whatsoever. The obligation of each Lender to make payments to the Borrower that such letter Administrative Agent, for the account of credit as requested in such the Letter of Credit Request may be issued Issuing Bank, in accordance with and will not violate the requirements of this Section 3.01 2.12 shall be absolute and unconditional and no Lender shall include a representation and warranty as be relieved of its obligations to make such payments by reason of non-compliance by any other Person with the terms of the Letter of Credit or for any other reason other than the gross negligence or willful misconduct of the Administrative Agent or the Letter of Credit Issuing Bank. The Administrative Agent shall promptly remit to the aggregate principal amount Letter of all then outstanding Surety Bonds. The Agent shall, on Credit Issuing Bank the date of each issuance of or amendment or modification to a letter of credit by it, give each Bank and amounts so received from the Borrower written notice of the issuance of or amendment or modification to such letter of creditLenders.
(f) In determining whether to pay under any letter of credit, the Agent shall not have any obligation relative to the Banks other than to determine The Borrower agrees that any documents required to be delivered under such letter of credit have been delivered and that they appear to comply on their face with the requirements of the letter of credit. Any action taken or omitted to be taken by the Agent Letter of Credit Issuing Bank in connection with any Letter of Credit, except for such actions or omissions as shall constitute gross negligence or willful misconduct on the part of the Letter of Credit Issuing Bank or the Letter of Credit Issuing Bank's willful failure to pay under such Letter of Credit after presentation to it of documents complying with the terms of such Letter of Credit, shall be binding on the Borrower as between the Borrower and the Letter of Credit Issuing Bank, and shall not result in any liability of the Letter of Credit Issuing Bank to the Borrower. The obligation of the Borrower to reimburse the Lenders for Advances made to reimburse the Letter of Credit Issuing Bank for draws under the Letter of Credit shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances whatsoever, including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any Loan Document;
(ii) Any amendment or waiver of or consent to any departure from any or all of the Loan Documents;
(iii) Any improper use which may be made of any Letter of Credit or any improper acts or omissions of any beneficiary or transferee of any Letter of Credit in connection therewith;
(iv) The existence of any claim, set-off, defense or any right which the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or Persons for whom any such beneficiary or any such transferee may be acting) or any Lender (other than the defense of payment to such Lender in accordance with the terms of this Agreement) or any other Person, whether in connection with any Letter of Credit, any transaction contemplated by any Letter of Credit, this Agreement, any other Loan Document, or any unrelated transaction;
(v) Any statement or any other documents presented under any Letter of Credit proving to be insufficient, forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever, provided that such payment shall not have constituted gross negligence of willful misconduct of the Letter of Credit Issuing Bank;
(vi) The insolvency of any Person issuing any documents in connection with any Letter of Credit;
(vii) Any breach of any agreement between the Borrower and any beneficiary or transferee of any Letter of Credit;
(viii) Any irregularity in the transaction with respect to which any Letter of Credit is issued, including any fraud by the beneficiary or any transferee of such Letter of Credit;
(ix) Any errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, wireless or otherwise, whether or not they are in code;
(x) Any act, error, neglect or default, omission, insolvency or failure of business of any of the correspondents of the Letter of Credit Issuing Bank, provided that the same shall not have constituted the gross negligence or willful misconduct of the Letter of Credit Issuing Bank;
(xi) Any other circumstances arising from causes beyond the control of the Letter of Credit Issuing Bank;
(xii) Payment by the Letter of Credit Issuing Bank under any Letter of Credit against presentation of a letter sight draft or a certificate which does not comply with the terms of credit issued by it if taken such Letter of Credit, provided that such payment shall not have constituted gross negligence or omitted in willful misconduct of the absence Letter of Credit Issuing Bank; and
(xiii) Any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, provided that such other circumstances or happenings shall not have been the result of gross negligence or willful misconduct, shall not create wilful misconduct of the Letter of Credit Issuing Bank or any resulting liability for the AgentLender.
(g) Immediately prior to If, after the effectiveness Agreement Date, any change in Applicable Law, any change in the interpretation or administration thereof, or any change in compliance with Applicable Law by the Letter of this AgreementCredit Issuing Bank or any other Lender as a result of any request or directive of any governmental authority, central bank or comparable agency (whether or not having the outstanding force of law) shall (i) impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit, capital adequacy, assessment or other requirements or conditions against letters of credit issued under by the 2002 Letter of Credit Agreement and/or Issuing Bank or against participations by any other Lender in the 2004 Letters of Credit Agreement are or (ii) impose on the Letter of Credit Issuing Bank or any other Lender any other condition regarding any Letter of Credit or any participation therein, and the result of any of the foregoing in the reasonable determination of the Letter of Credit Issuing Bank or such Lender, as listed on Exhibit C hereto and the case may be, is to increase the cost to the Letter of Credit Issuing Bank or such letters Lender of credit issuing or maintaining any Letter of Credit or purchasing or maintaining any participation therein, as the case may be, by an amount (which amount shall be reasonably determined) deemed by the Letter of Credit Issuing Bank or such Lender to be material, and the designation of a different lending office will not avoid the need for (or reduce the amount of) additional compensation, then, on the earlier of ten (10) days following the date of demand (which demand shall be made not later than six (6) months following such Lender's determination of a need for additional compensation) by the Letter of Credit Issuing Bank or such Lender or the Maturity Date, the Borrower shall promptly pay the Letter of Credit Issuing Bank or such Lender, as the case may be, such additional amount or amounts as the Letter of Credit Issuing Bank or such Lender, as the case may be, determines will compensate it for such increased costs. Within sixty (60) days of such written demand by the Letter of Credit Issuing Bank or such Lender, the Borrower may, in its discretion, provide a replacement bank or banks for the Letter of Credit Issuing Bank or such Lender, which replacement bank or banks will be subject to the approval of the Arranging Agents and hereby are converted intothe Majority Lenders (which approval, outstanding letters in each case, will not be unreasonably withheld), and shall take all necessary actions to transfer the rights, duties and obligations of credit the Letter of Credit Issuing Bank or such Lender to such replacement bank or banks within such 60-day period. A certificate of such Lender setting forth the amount, and in reasonable detail the basis for the Letter of Credit Issuing Bank or such Lender's determination of such amount, to be paid to the Letter of Credit Issuing Bank or such Lender by the Borrower as a result of any event referred to in this paragraph shall, absent manifest error, be conclusive. Such certificate shall be delivered to the Borrower with each written demand for payment referenced above. The Letter of Credit Issuing Bank and each Lender further agree that they shall use their best efforts to give the Borrower thirty (30) days prior notice, and in any event shall give prompt notice, of any event referred to in this paragraph which may have the effect of materially increasing the cost to the Letter of Credit Issuing Bank or such Lender of issuing or maintaining the Letter of Credit or purchasing or maintaining any participation therein.
(h) Each Lender shall be responsible for its pro rata share (based on such Lender's Commitment Ratio) of any and all reasonable out-of-pocket costs, expenses (including reasonable legal fees) and disbursements which may be incurred or made by the Letter of Credit Issuing Bank in connection with the collection of any amounts due under, the administrative of, or the presentation or enforcement of any rights conferred by any Letter of Credit, the Borrower's or any Guarantor's obligations to reimburse or otherwise. In the event the Borrower shall fail to pay such expenses of the Letter of Credit Issuing Bank within thirty (30) days of demand for payment by the Letter of Credit Issuing Bank, provided that the Letter of Credit Issuing Bank has, during such thirty-day period, made a diligent collection effort with respect to such expenses, and provided that such costs will not result from the gross negligence or wilful misconduct of the Letter of Credit Issuing Bank, each Lender shall thereupon pay to the Letter of Credit Issuing Bank its pro rata share (based on such Lender's Commitment Ratio) of such expenses within ten (10) days from the date of the Letter of Credit Issuing Bank's notice to the Lenders of the Borrower's failure to pay; provided, however, that if the Borrower or any Guarantor shall thereafter pay such expense, the Letter of Credit Issuing Bank will repay to each Lender the amounts received from such Lender hereunder.
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