Letters of Credit. (a) Until the Termination Date with respect to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“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 reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3. (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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above. (c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request. (d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral. (f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender. (i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing 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) Until the Termination Date with respect to the Line of Credit and The Lender agrees, subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue issue, at any time after the Funding Date and prior to the Termination Date, one or more of its standard irrevocable standby or documentary letters of credit (each, a “Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a for the Borrower’s account. The Lender will not issue any Letter of Credit Application completed to if the reasonable satisfaction of Lender, together with the proposed form face amount of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed 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 terms and (iii) conditions set forth in each such other L/C Application shall supplement the terms and conditions of the Standby Letter of Credit Documents that Lender then customarily requires in Agreement or the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Commercial Letter of Credit ifAgreement, after giving effect to the proposed as applicable.
(b) No Letter of CreditCredit 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, there would exist whichever is earlier.
(c) Any request for issuance of a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will shall be deemed to be a representation by Borrowers the Borrower that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the rules or customs conditions set forth in the Letter of Credit and (B) the internal laws Section 4.2 have been satisfied as of the State date of Ohio and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 If a draft is obligated to fund a drawing or make any expenditure or any other payment submitted under a Letter of Credit when the Borrower is unable, because a Default Period exists or incurs for any cost or expense under any Letter of Creditother reason, to reimburse obtain a Revolving Advance to pay the Obligation of Reimbursement, the Borrower shall pay to the Lender for any drawingon demand and in immediately available funds, expenditure or other payment made, or cost or expense incurred, by Lender debiting any Borrower’s loan account(s) with Lender as an advance the amount of the Revolving Loans pursuant to Section 2.1. If Obligation of Reimbursement together with interest, accrued from 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 draft until payment in full at the Default Rate. Notwithstanding the Borrower’s inability to and including the expiry date thereof (or, if earlierobtain a Revolving Advance for any reason, the date on which Lender is irrevocably authorized, in its sole discretion, to make a Revolving Advance in an amount sufficient to discharge the Letter Obligation of Credit is returned to Lender Reimbursement 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 accountall accrued but unpaid interest thereon.
(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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 2 contracts
Samples: Credit and Security Agreement (Christopher & Banks Corp), Credit and Security Agreement (Christopher & Banks Corp)
Letters of Credit. (a) Until Subject to the Termination Date terms and conditions hereof, each Issuing Lender agrees to issue Letters of Credit 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 (i) the Total Outstanding Amount shall not exceed the aggregate amount of the Commitments and (ii) the aggregate Dollar Amount of 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 the Administrative Agent shall promptly notify each Lender of the contents thereof and of the amount of such Lender’s participation in such Letter of Credit. The issuance by the Issuing Lender of each Letter of Credit shall, in addition to the conditions precedent set forth in Article 3, be subject to the conditions precedent that (i) such Letter of Credit shall be in such form and contain such terms as shall be satisfactory to the Issuing Lender and the Borrower shall have executed and delivered such other instruments and agreements relating to such Letter of Credit as the Issuing Lender shall have reasonably requested and (ii) no Stop Issuance Notice shall be in effect. The Borrower shall also pay to the Issuing Lender for its own account issuance, drawing, amendment and extension charges in the amounts and at the times as agreed between the Borrower and the Issuing Lender.
(c) The extension, renewal or amendment of any Letter of Credit shall be deemed to be 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 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 issuance of a Letter of Credit have also theretofore been met with respect to the Line such extension. Each Letter of Credit and subject to shall expire at or before the other terms and conditions close of this Agreement, Borrowers may request Lender to issue business on the date that is one or more of its standard standby letters of credit (“Standby year after such Letter of Credit”) Credit is issued (or, in favor the case of any renewal or extension thereof, one year after such beneficiary(ies) as are designated by Borrowers by delivering to Lender: renewal or extension); provided that (i) a Letter of Credit Application completed may contain a provision pursuant to which it is deemed to be extended on an annual basis unless notice of termination is given by the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), Issuing Bank and (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, no event will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed expire (including pursuant to be a representation by Borrowers that renewal or extension thereof) on a date later than the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3LC Termination Date.
(bd) Each Letter Upon receipt from the beneficiary 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt notice of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue drawing under such Letter of Credit, the Issuing Lender will communicate in writing shall notify the Administrative Agent and the Administrative Agent shall promptly notify the Borrower and each other Lender as to Borrowers the reason(s) why Lender has declined amount to be paid as a result of such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in drawing and the applicable Letter of Credit Documentspayment date. Borrowers jointly The Borrower shall be irrevocably and severally promise unconditionally obligated forthwith to pay reimburse the Issuing Lender for any amounts paid by the amount of all other Letter of Credit Obligations immediately when due, irrespective of Issuing Lender upon 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 CreditCredit in the currency of such payment (a “Reimbursement Obligation”) without presentment, to reimburse Lender for any drawingdemand, expenditure protest or other formalities of any kind. All such amounts paid by the Issuing Lender and remaining unpaid by the Borrower shall bear interest, payable on demand, for each day from the date of payment madeunder the Letter of Credit until paid at a rate per annum equal to the sum of 2% plus (i) if such amount is denominated in Dollars, or cost or expense incurredthe Base Rate for such day and (ii) if such amount is denominated in an Alternative Currency, by Lender debiting any Borrower’s loan account(s) with Lender as an advance the sum of the Revolving Loans pursuant 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 Section 2.1the Administrative Agent, for the account of the Issuing Lender, immediately upon the Issuing Lender’s demand at any time during the period commencing after such drawing until reimbursement therefor in full by the Borrower, an amount equal to such Lender’s ratable share of such drawing (in proportion to its participation therein), together with interest on such amount for each day from the date of the Issuing Lender’s demand for such payment (or, if such demand is made after 12:00 Noon (New York City time) on such date, from the next succeeding Domestic Business Day) to the date of payment by such Lender of such amount at a rate of interest per annum equal to the (i) if 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 the Administrative Agent in the London interbank market for such day. If The Issuing Lender will pay to each Lender ratably all amounts received from the advance Borrower for application in payment of a Revolving Loan to reimburse Lender for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender its reimbursement obligations in respect of any Letter of Credit results (or Credit, but only to the extent that it results) such Lender has made payment to the Issuing Lender in any respect of such Letter of Credit Deficiencypursuant hereto.
(e) The obligations of the Borrower and each Lender under subsection 2.19(d) above shall be absolute, then Borrowers will immediately eliminate any Letter of Credit Deficiency unconditional and irrevocable, and shall be performed strictly in accordance with the terms of Section 2.1(a).this Agreement, under all circumstances whatsoever, including without limitation the following circumstances:
(ei) All Letter any lack of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken validity 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 extended or amended unless the requirements enforceability 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 (Agreement 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 document related hereto or enhancement in connection therewith exclusive of claims, demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by the gross negligence or willful misconduct of Lender. The agreement in this Section 2.3(g) shall survive repayment of all other Obligations.thereto;
(hii) As between Borrowers and Lender, Borrowers assume any amendment or waiver of or any consent to departure from all risks of the acts and omissions of, or misuse of any of the Letters 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 made of the Letter of Credit by, or any acts or omission of, a beneficiary of a Letter of Credit (or any Person for whom the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, Lender shall not beneficiary may be responsible for: acting);
(iiv) the existence of any claim, set-off, defense or other right which any rights that the Borrower may have at any time against any beneficiary, or any transferee, a beneficiary of any a Letter of Credit (or any Persons Person for whom any such the beneficiary or any such transferee may be acting), Lender the Lenders (including the Issuing Lender) or any other Person, whether in connection with this Agreement or the other Loan Documents, the transactions contemplated in this Agreement, Letter of Credit or any document related hereto or thereto or any unrelated transaction; ;
(iiv) any statement or any other document presented under any a Letter of Credit proving to be forged, fraudulent, fraudulent or invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; respect whatsoever;
(iiivi) payment under a Letter of Credit to the beneficiary of such Letter of Credit against presentation to the Issuing Lender of a draft or certificate that does not comply with the terms of the Letter of Credit;
(vii) any defaulttermination of the Commitments prior to, negligenceon or after the Payment Date for any Letter of Credit, misfeasancewhether at the scheduled termination thereof, suspension, insolvency, by operation of Article 6 or bankruptcy otherwise; or
(viii) any other act or omission to act or delay of any shipper kind by any Lender (including the Issuing Lender), the Administrative Agent or any other Person involved in any transaction covered thereby or any correspondent other event or agent circumstance whatsoever that might, but for the provisions of this subsection (viii), constitute a legal or equitable discharge of the Borrower’s or the Lender’s obligations hereunder.
(f) 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 whom fulfill or comply with its obligations to such Issuing Lender hereunder (but nothing herein contained shall affect any draftsrights the Borrower may have against such defaulting Lender)), documents and none of the Lenders (including the Issuing Lender) nor the Administrative Agent nor any of their officers or instruments may directors or employees or agents shall be entrusted; 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 of Credit, including without limitation any of the circumstances enumerated in subsection 2.19(e) above, as well as (ivi) any delayerror, interruptionomission, omission interruption or error delay in transmission or delivery of any documentmessages, certificateby mail, draftcable, 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 messageany 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 (vbut not consequential) payment 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 against presentation of a draft or certificate which substantially complies complied with the terms of such Letter of Credit; Credit or (viy) the invalidity or unenforceability 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; (vii. Nothing in this subsection 2.19(f) is intended to limit the examination obligations of documents presented the Borrower under a Letter of Credit exclusively by 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 provision of this Agreement. IfTo the extent the Borrower does not indemnify the Issuing Lender as required by this subsection, however, either the financial statements or the Compliance Certificate required Lenders agree 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 do so ratably in accordance with their Commitments.
(g) If the Required Lenders reasonably determine at any time that the conditions set forth in Section 4.3 3.02 would not be satisfied in respect of this Agreementa Borrowing at such time, thenthen the Required Lenders may request that the Administrative Agent issue a “Stop Issuance Notice”, at and the Administrative Agent shall issue such notice to each Issuing Lender’s option. Such Stop Issuance Notice shall be withdrawn 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, commencing and shall consider reasonably and in good faith a request from the Company for withdrawal of the same on the date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, basis that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 conditions in Section 3.02 are satisfied; provided that the Administrative Agent and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateIssuing 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) Until the Termination Date with respect to the Line of Credit and The Issuing Bank agrees, subject to the other terms and conditions of this Agreement, Borrowers may upon request Lender of the Borrower to issue one or more from time to time for the account of its standard standby letters the Borrower Letters of credit (“Standby Credit upon delivery to the Issuing Bank of an Application and Agreement for Letter of Credit”) Credit relating thereto in favor of such beneficiary(ies) as are designated by Borrowers by delivering form and content acceptable to Lender: the Issuing Bank; provided, that (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with Outstandings shall not exceed the applicable requirements Total Letter of Section 2.3(b)), Credit Commitment and (ii) a Borrowing Base Certificate which calculates the no Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit shall be issued if, after giving effect to the proposed Letter of Creditthereto, there would exist a Letter of Credit DeficiencyOutstandings plus the Revolving Credit Outstandings plus Swing Line Outstandings shall exceed the Total Revolving Credit Commitment. The making of each No Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that shall have an expiry date (including all rights of the Borrower or any beneficiary named in such Letter of Credit may be issued in accordance with, and will not violate to require renewal) or payment date occurring later than the terms of, this Section 2.3earlier to occur of one year after the date of its issuance or the fifth Business Day prior to the Stated Termination Date.
(b) Each Subject to the approval by the 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 Borrower Letters of Credit payable in such Alternative Currency. For purposes of determining Outstanding Letters of Credit, any Letter of Credit issued under this Agreement will, among other things, (i) in an Alternative Currency shall 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 recorded 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, Agent's account in addition to Dollars based on the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than Alternative Currency Equivalent Amount on the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of such Letter of Credit; provided, however, that the Agent shall determine the Dollar Equivalent Amount of any Letter of Credit issued in an Alternative Currency on the date of any Advance or Conversion for the purpose of determining the amount of Outstandings. Any draw on a Letter of Credit issued in an Alternative Currency shall be repaid in the same Alternative Currency Equivalent Amount (vi) determined based on the invalidity or unenforceability Spot Rate of Exchange on the date of drawing under the Letter of Credit; (vii) ). To the examination extent that the Agent shall determine at any time that the sum of documents presented under a Letter of Credit exclusively by 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 the Dollar Value of outstanding Loans 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 Outstanding Letters of Credit Credit, in each case determined on the date of each Advance or any related certificates, if taken or omitted in good faith in the absence issuance of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each a Letter of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each Letter of Credit from, made or issued in Alternative Currencies 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 outstanding Loans 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 Outstanding Letters of Credit made or issued in Dollars exceeds the Total Revolving Credit Commitment, the Borrower shall immediately repay Loans so that are issued or renewed on and after giving effect to such payment the first day outstanding Loans plus Outstanding Letters of Credit do not exceed 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateTotal Revolving Credit Commitment.
Appears in 2 contracts
Samples: Credit Agreement (Wackenhut Corrections Corp), Credit Agreement (Wackenhut Corrections Corp)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line terms and conditions hereof, the Fronting Bank agrees to issue Letters of Credit from time to time for the account of the Borrower (or to extend the stated maturity thereof or to modify or amend the terms thereof) for the purposes set forth in Section 7.9 on not less than five Business Days’ prior notice thereof by delivery of a Request for Issuance to the Agent (which shall promptly distribute copies thereof to the Lenders) and the Fronting Bank. Each Request for Issuance shall specify (i) 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 (which shall be no later than one year following the date of such issuance), (ii) the proposed stated amount of such Letter of Credit, (iii) the name and address of the beneficiary of such Letter of Credit and subject (iv) a statement of drawing conditions applicable to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby such Letter of Credit”) in favor , and if such Request for Issuance relates to an amendment or modification of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed to Credit, it shall be accompanied by the reasonable satisfaction consent of Lender, together with the proposed form beneficiary of the Letter of Credit thereto. Each Request for Issuance shall be irrevocable unless modified or rescinded by the Borrower not less than two Business Days prior to the proposed date of issuance (whichor effectiveness) specified therein. Not later than 12:00 noon (Milwaukee, Wisconsin time) on the proposed date of issuance (or effectiveness) specified in all respectssuch Request for Issuance, will comply with and upon fulfillment of the applicable conditions precedent and the other requirements set forth herein, the Fronting Bank shall issue (or extend, amend or modify) such Letter of Section 2.3(b))Credit and provide notice and a copy thereof to the Agent, which shall promptly furnish copies thereof to the Lenders. The Fronting Bank shall provide to the Agent, on a monthly basis, a list of the amounts and expiration dates of all undrawn Letters of Credit, a copy of which list the Agent shall furnish to each Lender that requests such list.
(b) No Letter of Credit shall be requested or issued hereunder if, after the issuance thereof, (i) the Outstanding Credits would exceed the aggregate Commitments or (ii) a Borrowing Base Certificate which calculates the LC Outstandings would exceed the LC Commitment Amount.
(c) In the event that any Letter of Credit Availability by giving effect remains outstanding beyond the fifteenth day prior to the proposed Maturity Date, the Borrower shall either (i) pay to the Agent an 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 to the Agent securing the Borrower’s reimbursement obligations with respect to such Letter of Credit in 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 (iii) 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 other Lender’s Commitment Percentage of the obligations arising under such Letter of Credit Documents that Lender then customarily requires Credit. Without limiting the scope and nature of each Lender’s participation in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed any Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with that the rules Fronting Bank has not been reimbursed as required hereunder or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request from Borrowers to open under 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, each Lender will communicate shall pay to the Fronting Bank its Commitment Percentage of such unreimbursed drawing in writing same day funds on the day of notification by the Fronting Bank of an unreimbursed drawing pursuant to Borrowers the reason(s) why provisions of subsection (e). The obligation of each Lender has declined such request.
(d) All Letter so to reimburse the Fronting Bank shall be absolute and unconditional and shall not be affected by the occurrence of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter a Default, an Event of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective of any claim, setoff, defense or other right which any Borrower may have at any time against Lender Default or any other Personoccurrence or event. Subject Any such reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse 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 Fronting Bank 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) together with Lender interest 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)hereinafter provided.
(e) All Letter In the event of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay any drawing under any Letter of Credit, Lender the Fronting Bank will promptly notify the Borrower. Unless the Borrower shall immediately notify the Fronting Bank of its intent otherwise to reimburse the Fronting Bank for any drawing made prior to the Maturity Date, the Borrower shall be deemed to have requested a Base Rate Advance in the amount of such drawing as provided in subsection (f), the proceeds of which will be responsible only used to confirm 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 good faith that 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 documents required to have been delivered drawing made under a any Letter of Credit appear prior to comply substantially the Maturity Date, the Borrower shall reimburse the Fronting Bank on their face the day such drawing is paid either with the requirements proceeds of an Advance obtained hereunder or otherwise in same day funds as provided herein. If the Borrower shall fail to reimburse the Fronting Bank as provided herein, the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the Base Rate plus two percent (2%) per annum. The Borrower’s reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment that the applicable account party or the Borrower may claim or have against the Fronting Bank, the Lenders, the beneficiary of the Letter of Credit, 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 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 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 drawn upon or any other Person, whether in connection with this Agreement including, without limitation, any defense based on any failure of the applicable account party or the other Loan DocumentsBorrower to receive consideration or the legality, the transactions contemplated in this Agreementvalidity, 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 draft or certificate which substantially complies with the terms of such Letter of Credit; (vi) the invalidity regularity or unenforceability of the Letter of Credit; (vii) . The Fronting Bank will promptly notify the examination of documents presented under a Letter of Credit exclusively by electronic or electro-optical means; or (viii) any other circumstances or happening whatsoever, whether or not similar to any Lenders of the foregoing, including any act or omission, whether rightful or wrongful, amount of any present or future de jure or de facto governmental authority. None of the foregoing unreimbursed drawing and each Lender 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will promptly pay to the Fronting Bank, in immediately available funds, the amount of such Lender, with respect to each Letter ’s Commitment Percentage of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum such unreimbursed drawing. Such payment shall be made on the amount available to be drawn under each Letter of Credit fromday such notice is received by such Lender from the Fronting Bank if such notice is received at or before 2:00 p.m., 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 otherwise 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it payment shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.made at or before
Appears in 2 contracts
Samples: Credit Agreement (Wisconsin Energy Corp), Credit Agreement (Wisconsin Energy Corp)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreementhereof, Borrowers may request Lender each LC Issuing Bank agrees to issue Letters of Credit from time to time for the account of the Borrower (or to extend the stated maturity thereof or to amend or modify the terms thereof), in an aggregate stated amount not exceeding such LC Issuing Bank’s Fronting Commitment, up to a maximum aggregate stated amount for all Letters of Credit at any one or more time outstanding equal to the LC Commitment Amount. With respect to Letters of its standard standby letters of credit (“Standby Letter Credit that are not Bond Letters of Credit”) in favor , such issuance shall occur on not less than two Business Days’ prior notice thereof by delivery of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (ix) a Request for Issuance for such Letter of Credit Application completed to the reasonable satisfaction of Lender, together with Administrative Agent and the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed LC Issuing Bank for such Letter of Credit, and (iiiy) such other LC Issuing Bank’s standard form of Letter of Credit Documents that Lender then customarily requires in application for the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed requested Letter of Credit if(including, after giving effect for direct pay Letters of Credit, any reimbursement agreement or other standard form required by such LC Issuing Bank) to the proposed letter of credit department of such LC Issuing Bank for the account of the Borrower. With respect to each Bond Letter of Credit, there would exist such issuance shall occur after receipt of (x) a Request for Issuance for such Bond Letter of Credit to the Administrative Agent and the LC Issuing Bank for such Bond Letter of Credit, (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 Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be that is not a representation by Borrowers that the 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 issued 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, and will not violate the terms of, this with Section 2.32.17(f).
(b) Each Letter The Borrower may from time to time appoint one or more additional Lenders (with the consent of Credit issued under this Agreement willany such Lender, among other things, (i) which consent may 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 withheld in the ordinary course sole discretion of Borrowers’ respective businesses each Lender) to act, either directly or through an Affiliate of such Lender, as presently conducted an LC Issuing Bank hereunder. Any such appointment and the terms thereof shall be evidenced in a separate written agreement executed by them. In no event will any Letter the Borrower and the relevant LC Issuing Bank, a copy of Credit have a term of more than one year; furthermore, and, in addition which agreement shall be delivered by the Borrower to the foregoing term limitationAdministrative 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 will shall have no any obligation to issue any Letter of Credit with an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line of Credit. Each hereunder or any Letter of Credit Application issued by such Lender shall remain outstanding, such Lender shall be deemed to be, and each Letter of Credit will set forth which rules or customs apply to shall have all the Letter of Credit. Such rules rights and customs may includeobligations of, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce an “LC Issuing Bank” under this Agreement.
(“ISP”c) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the No Letter of Credit shall be governed by requested, issued or modified hereunder if, after the issuance or modification thereof, (Ai) the rules or customs set forth Outstanding Credits would exceed the Commitments then scheduled to be in effect until the Letter latest Termination Date, (ii) that portion of the LC Outstandings arising from Letters of Credit and issued by an LC Issuing Bank would exceed the amount of such LC Issuing Bank’s Fronting Commitment or (Biii) the internal laws of LC Outstandings would exceed the State of Ohio and the United States of America, except LC Commitment Amount. No LC Issuing Bank shall be under any obligation to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request from Borrowers to open issue any Letter of Credit and if any order, judgment or decree of all attendant Letter of Credit Documents completed any Governmental Authority shall by its terms purport to Lender’s reasonable satisfaction, Lender, within three (3) Business Days, may either (i) issue the requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, enjoin or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue restrain such LC Issuing Bank from issuing such Letter of Credit, Lender will communicate 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 writing particular or shall impose upon the LC Issuing Bank with respect to Borrowers such Letter of Credit any restriction, reserve or capital requirement (for which the reason(sLC 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) why Lender has declined such requestthat was not applicable on the date hereof and that the LC Issuing Bank in good xxxxx xxxxx material to it.
(d) All 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 Obligations are 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 Lender’s demand or payable as otherwise set forth demand, from the date so paid by such LC Issuing Bank until repayment to such LC Issuing Bank in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective of any claim, setoff, defense or other right which any Borrower may have full at any time against Lender or any other Person. Subject a fluctuating interest rate per annum equal to the terms of Section 6.6interest rate applicable to Base Rate Loans plus, Borrowers hereby irrevocably instruct Lender, on the same Business Day that Lender is obligated to fund a drawing or make if any expenditure or any other payment amount paid by such LC Issuing Bank under a Letter of Credit or incurs any cost or expense 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 any Letter Section 2.02 (and which Borrowing shall be subject to the conditions in Section 2.02) in the amount of Creditsuch Reimbursement Amount, and the proceeds of such Borrowing may be applied to reimburse Lender for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender debiting any satisfy the Borrower’s loan account(s) with Lender obligations to such LC Issuing Bank or the Lenders, 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)case may be.
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under If any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to LC Issuing Bank shall not have been delivered under reimbursed in full for any Reimbursement Amount in respect of a Letter of Credit appear 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 comply substantially 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 their face with such amount at a rate per annum equal to the requirements Federal Funds Effective Rate, for the first three days from the date of the Letter payment by such LC Issuing Bank, and, thereafter, until the date of Creditpayment to such LC Issuing Bank by such Lender, and any action taken or omitted by Lender in good faith under or in connection with any Letter at a rate 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 interest equal to the extent, but only rate applicable to the extent, of any direct, as opposed to consequential, damages suffered Base Rate Loans. Each such payment by Borrowers from Lender’s gross negligence or willful misconduct. a Lender shall be made not be obligated later than 3:00 P.M. (New York City Time) on the later to cause any Letter occur of Credit to be 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 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 Business Day immediately following the date 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 payment by 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; LC Issuing Bank and (ii) any statement 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 occurrence or continuance of a Default or the failure of 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 make 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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(j2.04(e). 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 date upon which further agrees that each such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it payment shall be assumed for purposes of determining the Applicable LOC Fee Percentagemade without any offset, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e.abatement, Pricing Grid Level 1) will be applicable on the then applicable Determination Datewithholding or reduction whatsoever.
Appears in 2 contracts
Samples: Credit Agreement (Pacificorp /Or/), Credit Agreement (Pacificorp /Or/)
Letters of Credit. (a) Until On the Termination Date with respect to the Line of Credit terms and subject to the conditions set forth in this Agreement (and any other terms and conditions reasonable documentation required by the applicable Issuing Lender for the benefit of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) Lenders from Borrower in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together connection with the proposed form issuance of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed any Letter of Credit, and (iii) such as a master letter of credit agreement or other Letter of Credit Documents that Documents), and provided there does not then exist a Default or an Event of Default, Issuing Lender then customarily requires (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 Section 2.1(c) hereof, (y) the outstanding aggregate principal amount of the Revolving Loans and (z) all Letter of Credit Obligations, and (ii) an amount to be mutually agreed upon between Borrower, Required Lenders and Administrative Agent. The Letters of Credit must be in form and substance reasonably acceptable to Issuing Lender. Borrower shall promptly and duly execute and deliver any other customary documentation reasonably required by Administrative Agent, Issuing Lender or Lenders in connection with the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed any such Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 expiration date on any Letter of Credit have a term of will not be more than one year; furthermore, and, in addition to (1) year from the foregoing term limitation, Lender will have no obligation to issue any date of issuance for such Letter of Credit with an expiry date and not later than the date that is 30 days five (5) Business Days prior to the stated Credit Termination Date applicable to the Line Date.
(b) Borrower shall, without duplication of Credit. Each Letter of Credit Application amounts provided for in Section 2.19, jointly and severally reimburse each Issuing Lender, Administrative Agent and each Letter of Credit will set forth which rules Lender, immediately upon demand, for any payments made by such Lender, Issuing Lender or customs apply Administrative Agent to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the rules or customs set forth in the Person with respect to any Letter of Credit and (B) the internal laws of the State of Ohio for any other customary fees and the United States of Americacharges and reasonable out-of-pocket costs, except to the extent such laws are inconsistent fees and expenses incurred by Issuing Lender, Administrative Agent or any Lender in connection with the rules application for, issuance of, administration of, or customs adopted in the amendment to any Letter of Credit Documents and, until Issuing Lender or Administrative Agent for benefit of Lenders is so reimbursed by Borrower, such payments will be deemed to be Revolving Loans. Without limiting the generality of the foregoing, Administrative Agent or Issuing Lender, at its sole discretion, may deduct, or require Administrative Agent to deduct, any such amounts due and Letter owing from any account of Credit as set forth aboveBorrower with Administrative Agent.
(c) Upon receipt By the issuance of a request from Borrowers to open any Letter of Credit and of all attendant (or an amendment to a Letter of Credit Documents completed to Lender’s reasonable satisfaction, increasing the amount thereof) by the Issuing Lender, within three (3) Business Daysand without any further action on the part of the Issuing Lender or the other Lenders, may either (i) issue the requested 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 beneficiary thereof and transmit a copy aggregate amount available to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed be drawn under such Letter of Credit. If Each Lender elects not acknowledges and agrees that its obligation to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 acquire participations 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 this paragraph in respect of any Letter Letters 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) All Letter of Credit Obligations will constitute part of the Obligations is absolute and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, unconditional 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 affected by any Letter of Credit to be extended circumstance whatsoever, including any amendment, renewal 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 extension of any Letter of Credit or the provision occurrence and continuance of a Default or Event of Default or reduction or termination of the Revolving Loan Commitments, and that each such payment shall be made without any credit support offset, counterclaim, defense, abatement, withholding or enhancement in connection therewith exclusive of claims, demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by the gross negligence or willful misconduct of Lender. The agreement in this Section 2.3(g) shall survive repayment of all other Obligationsreduction whatsoever.
(hd) As between Borrowers In consideration 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 in furtherance and not in limitation of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Lender, such Lender’s Pro Rate Share of each L/C Disbursement made by the Issuing Lender promptly upon the request of such Issuing Lender (made through the Administrative Agent) at 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 payment shall be made in the same manner as provided herein with respect to Revolving Loans made by such Lender, and the Administrative Agent shall promptly pay to the Issuing Lender the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of 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 its obligation to reimburse such L/C Disbursement.
(e) If the Issuing Lender shall make any L/C Disbursement in respect of a Letter of Credit, Borrower shall 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 such Lender’s Pro Rate Share thereof, and upon the written request (which may be responsible for: 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 herewith.
(f) The obligations of Borrower with respect to 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) the existence any lack of any claim, set-off, defense validity or other right which any Borrower may have at any time against any beneficiary, or any transferee, enforceability of any Letter of Credit, any other Letter of Credit (Document 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 Financing Agreement, or any unrelated transaction; term or provision therein, (ii) any statement draft or any other document presented under any 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) 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 the Issuing Lender under any a Letter of Credit against presentation of a draft or certificate which substantially complies other document that does not comply strictly with the terms of such Letter of Credit; (vi) , or any payment by the invalidity Issuing Lender under any Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or unenforceability other representative of the 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, (viiiv) the examination existence of documents presented under a 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 exclusively (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by electronic such Letter of Credit or electro-optical means; any agreement or instrument relating thereto, or any unrelated transaction, (viiiv) any other circumstances event or happening 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 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 insolvency of any Person issuing any documents 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 which any Letter of Credit is issued, including any act 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, whether rightful insolvency or wrongful, failure of business of any present 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 future de jure 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 any Letter of Credit issued by Issuing Lender to ascertain that the same appear on their face to be in conformity with the 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 de facto 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 Lenders, will make payment to the beneficiary in accordance with the terms of such Letter of Credit. 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 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 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 extent arising out 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, 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 authorityauthorities. 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 foregoing shall affectabove affects, impair impairs or prevent prevents the vesting of any of Administrative Agent’s, each Issuing Lender’s or Lenders’ rights or powers of Lender under this Section 2.3Agreement or Borrower's obligation to make reimbursement.
(i) In furtherance and extension, and not in limitation, No Issuing Lender shall be under any obligation to issue any Letter of Credit if:
(i) the issuance of such Letter of Credit would violate one or more policies of the specific Issuing Lender applicable to letters of credit generally;
(ii) except as otherwise agreed by the Administrative Agent and the Issuing Lender, such Letter of Credit is in an initial stated amount less than $100,000, in the case of a commercial Letter of Credit, or $500,000, in the case of a standby Letter of Credit;
(iii) except as otherwise agreed by the Administrative Agent and the Issuing Lender, such Letter of Credit is to be denominated in a currency other than Dollars;
(iv) such Letter of Credit contains any provisions set forth above, any action taken or omitted by Lender under or in connection with any for automatic reinstatement of the Letters of Credit 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 any related certificates, if taken or omitted in good faith in such Lender to eliminate the absence of gross negligence or willful misconduct, shall not put Lender under any resulting liability Issuing Lender’s risk with respect to Borrowers or relieve Borrowers of any of their obligations hereunder to such Lender.
(ij) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 Without 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 way negating Sections 4.3(a), 4.3(b2.2(c) and 4.3(d(d) (hereof, BoA shall be under no obligation, as applicable) of this Agreement for the applicable Fiscal Quarter or Fiscal Year then endedIssuing Lender hereunder, 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 issue any Letters of Credit that are issued or renewed on and after the first day Closing Date, and any Letters 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 Credit issued by BoA on 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 after the date upon which such financial statements or Compliance Certificate should have been delivered hereof may be made in accordance with Section 4.3 of this Agreement its sole and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Dateabsolute discretion.
Appears in 2 contracts
Samples: Loan and Security Agreement (ExamWorks Group, Inc.), Loan and Security Agreement (ExamWorks Group, Inc.)
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) Until advance notice to be received by the Termination Date with respect 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 Line date of the renewal or extension, of a Letter of Credit and subject hereunder or (B) 30 calendar days prior to the last date upon which the Issuing Bank is required to give notice of cancellation or non-renewal of such Letter of Credit thereunder, which request shall specify (i) the amount of such Letter of Credit, (ii) the date (which shall be a Business Day) such Letter of Credit 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. Subject to the terms and conditions of this Agreement, Borrowers may request Lender to issue one on the date specified for the issuance, renewal or more extension of its standard standby letters of credit (“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 reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) the Administrative Agent shall issue, renew or extend such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 Creditthereof. 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 conjunction 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 Borrower shall execute a Letter of Credit Agreement. In the event of any conflict between any provision of a Letter of Credit Agreement and this Agreement, the Borrower, the Issuing Bank, the Administrative Agent and the Lenders hereby agree that the provisions of this Agreement shall govern. The LOC Fee Issuing Bank will be calculated on send to the basis Borrower and each Lender, immediately upon issuance 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 thereofCredit, any LOC Fee paid in advance will not be refunded or an amendment thereto, a true 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 complete copy of such Fiscal Quarter Letter of Credit, 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Dateamendment thereto.
Appears in 2 contracts
Samples: Revolving Credit Agreement (Wca Waste Corp), First Lien Credit Agreement (Wca Waste Corp)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other 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 this Agreement, Borrowers Credit under the Commitment as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: ; PROVIDED that (i) a giving effect to all such Letters of Credit, 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 Application completed shall be in a form reasonably acceptable to the reasonable satisfaction Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the term of Lender, together with the proposed form of the any Letter of Credit (which, in all respects, will comply with shall not exceed one year or extend beyond the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Maturity Date.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) submitted to the rules or customs set forth in 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 and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Lender whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, 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 receipt the issuance of a request Letter of Credit, each Lender shall be deemed to have purchased at par a pro rata participation in such Letter of Credit from Borrowers the Issuing Lender in an amount equal to open 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, 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 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such requesttogether with interest as hereinafter provided.
(d) All 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 Obligations are payable 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’s demand or payable as otherwise . 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 applicable 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 Pro Rata Shares of the Commitment in an aggregate amount equal to the amount paid by the Issuing Lender with respect to that Letter of Credit Documentsand, for this purpose, the conditions precedent set forth in Article 8 shall not apply. Borrowers jointly and severally promise 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 Borrower to pay to the Issuing Lender the amount of all other any payment made by the Issuing Lender under any Letter of Credit Obligations immediately when dueshall be absolute, irrespective 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 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 defense, or other right rights which any Borrower may have at any time against Lender the Issuing Lender, the Administrative Agent 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 beneficiary 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 persons or entities 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 DocumentsLetter of Credit, the transactions contemplated in this Agreement, or any other agreement or instrument relating thereto, or any unrelated transaction; transactions;
(iiiv) any statement demand, statement, or any other document presented under any the Letter of Credit proving to be forged, fraudulent, invalid invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iii) respect whatsoever so long as any default, negligence, misfeasance, suspension, insolvency, or bankruptcy such document appeared to comply with the terms of any shipper or any other Person involved in any transaction covered thereby or any correspondent or agent the Letter 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; Credit;
(v) payment by the Issuing Lender in good faith under any the Letter of Credit against presentation of a draft or certificate any accompanying document which substantially complies does not strictly comply with the terms of such Letter of Credit; (vi) the invalidity or unenforceability 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 described in such documents;
(vii) the examination time, place, manner, order or contents of shipments or deliveries of Property as described in documents presented under 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 exclusively not caused by electronic the Issuing Lender, or electro-optical meansany 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 (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 Issuing Lender in connection with a Letter of Credit; or and
(viiixiv) where the Issuing Lender has acted in good faith and observed general business usage, 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 extensionThe Issuing Lender shall be entitled to the protection accorded to the Administrative Agent pursuant to Article 10, 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to LenderMUTATIS MUTANDIS.
(ij) Borrowers will pay to LenderThe Uniform Customs and Practice for Documentary Credits, with respect to each Letter as published in its most current version by the International Chamber of CreditCommerce, shall be deemed a fee (“LOC Fee”) equal to the 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) part 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 Section and shall apply to all Letters of Credit that are issued or renewed on and after to 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 extent not inconsistent with 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateLaw.
Appears in 2 contracts
Samples: Loan Agreement (Wdra Food Service Inc), Loan Agreement (Wheeling Land Development Corp)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions hereof, each Letter of this Agreement, Borrowers may request Lender 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 delivery of a Request for Issuance to issue one or more 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 its standard standby letters of credit (“Standby drawing conditions applicable to such Letter of Credit”) in favor , and if such Request for Issuance relates to an amendment or modification of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed to Credit, it shall be accompanied by the reasonable satisfaction consent of Lender, together with the proposed form beneficiary of the Letter of Credit (which, in all respects, will comply with the applicable requirements thereto. The expiry of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the such Letter of Credit Availability shall be no later than five Business Days' prior to the Termination Date. Each Request for Issuance shall be irrevocable unless modified or rescinded by giving effect the Borrower not less than one day prior to the proposed Letter date of Creditissuance (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 issue (iiior extend, amend or modify) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition and provide notice and a copy thereof to the other terms of this AgreementAgent, will have no obligation to issue the proposed Letter of Credit if, after giving effect which shall promptly furnish copies thereof to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Lenders.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the No Letter of Credit shall be governed by (A) requested or issued hereunder if, after the rules or customs set forth in issuance thereof, the Letter of Credit and (B) Outstanding Credits would exceed the internal laws of the State of Ohio and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth abovetotal Commitments.
(c) Upon receipt The Borrower hereby agrees to pay to the Agent for the account of a request from Borrowers the LC Issuing Bank and, if they shall have purchased participations in the reimbursement obligations of the Borrower pursuant to open 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 pay any amount under any Letter of Credit and of all attendant issued by the LC Issuing Bank, a sum equal to the amount so paid plus interest on such amount from the date so paid by the LC Issuing Bank until repayment to the LC Issuing Bank in full at a fluctuating interest rate per annum equal to the interest rate applicable to Base Rate Advances plus, if any amount paid by the LC Issuing Bank under a Letter of Credit Documents completed to Lender’s reasonable satisfaction, Lender, is not reimbursed by the Borrower within three (3) Business Days, may either (i) issue the requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request2%.
(d) All 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 Obligations are payable issued by the LC Issuing Bank on Lender’s demand or payable as otherwise set forth 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 applicable Letter reimbursement obligation of Credit Documentsthe 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. Borrowers jointly 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 severally promise (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 pay Lender make each such payment to the amount Agent for the account of all other Letter the LC Issuing Bank shall be several and shall not be affected by the occurrence or continuance of Credit Obligations immediately when due, irrespective an Event of Default or the failure of any claim, setoff, defense other Lender to make any payment under this Section 2.03(d) or other right which any Borrower may have at any time against Lender or any other Person. Subject the failure of the LC Issuing Bank to provide the terms of Section 6.6, Borrowers hereby irrevocably instruct Lender, LC Payment Notice by 12:00 noon on the same Business Day that Lender is obligated to fund a drawing or make any expenditure or any other 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 incurs reduction whatsoever.
(e) The failure of any cost or expense Lender to make any payment to the Agent for the account of the LC Issuing Bank in accordance with subsection (d) above shall not relieve any other Lender of its obligation to make payment, but no Lender shall be responsible for the failure of any other Lender. If any Lender (a "NON-PERFORMING LENDER") shall fail to make 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 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 subsection (d) above until the date such amount is paid to the Agent at (i) in the case of the Borrower, the interest rate applicable at the time to Base Rate Advances and (ii) in the case of such Lender, the rate applicable to Base Rate Advances plus 1%.
(f) 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 of CreditCredit by the LC Issuing Bank shall be unconditional and irrevocable, 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 and shall be paid strictly in accordance with the terms of Section 2.1(a).this Agreement under all circumstances, including, without limitation, the following circumstances:
(ei) All Letter any lack of Credit Obligations will constitute part validity or enforceability of the Obligations and be secured by the this Agreement, any other Loan Collateral.
(f) In determining whether Document or any other agreement or instrument relating thereto or to pay under any such Letter of Credit;
(ii) any amendment or waiver of, Lender will be responsible only or any consent to confirm in good faith that departure from, the terms of this Agreement, any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the other Loan Document or such Letter of 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 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 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: (iiii) the existence of any claim, set-off, defense or other right which any the Borrower may have at any time against any beneficiary, or any transferee, of any such Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), Lender the LC Issuing Bank, or any other Person, whether in connection with this Agreement or the other Loan DocumentsAgreement, the transactions contemplated in this Agreementhereby, thereby or by such Letter of Credit, or any unrelated transaction; ;
(iiiv) any statement or any other document presented under any such Letter of Credit reasonably 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 in good faith by Lender the LC Issuing Bank under any the Letter of Credit issued by the LC Issuing Bank against presentation of a draft or certificate which substantially complies that does not comply with the terms of such Letter of Credit; or
(vi) the invalidity or unenforceability of the Letter of Credit; (vii) the examination of documents presented under a Letter of Credit exclusively by electronic or electro-optical means; or (viii) any other circumstances circumstance 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.
(g) 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) In furtherance and extension, and not in limitation, the use that may be made of the specific provisions set forth above, any action taken or omitted by Lender under or in connection with any of the Letters such Letter of Credit or any related certificates, if taken acts or omitted in good faith in the absence of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers omissions of any beneficiary or transferee thereof in connection therewith; (ii) the validity, sufficiency or genuineness of their obligations hereunder documents, or of any endorsement thereon, even if such documents should prove to Lender.
be in any or all respects invalid, insufficient, fraudulent or forged; (iiii) Borrowers will pay to Lender, payment by the LC Issuing Bank against presentation of documents that do not comply with respect to each the terms of such Letter of Credit, a fee including failure of any documents to bear any reference or adequate reference to such Letter of Credit; or (“LOC Fee”iv) equal any other circumstances whatsoever in making or failing to make payment under such Letter of Credit. Notwithstanding any provision to the Applicable LOC Fee Percentage per annum on contrary contained in any Loan Document, the amount available Borrower and each Lender shall have the right to bring suit against the LC Issuing Bank, and the LC Issuing Bank shall be drawn 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 each such Letter of Credit from, following the presentation to it by the beneficiary thereof of a draft and includingaccompanying 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 issuance date of 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 including payment against such documents shall not constitute willful misconduct or gross negligence by the expiry date thereof 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.
(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. h) If any Letter of Credit contains a provision pursuant to which it is cancelled for any reason before deemed to be automatically renewed unless notice of termination of such Letter of Credit is given by the stated expiry date thereofLC Issuing Bank, any LOC Fee paid in advance will the LC Issuing Bank shall timely give notice of termination if (i) as of close of business on the seventeenth day prior to the last day upon which the LC Issuing Bank's notice of termination may be given to the beneficiaries of such Letter of Credit, the LC Issuing Bank has received a notice of termination from the Borrower or a notice from the Agent that the conditions to issuance of such Letter of Credit have not be refunded and will be retained by Lender solely for its account.
been satisfied or (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 renewed Letter 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(awould have a term not permitted by Section 2.03(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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 2 contracts
Samples: Credit Agreement (Wisconsin Power & Light Co), Credit Agreement (Interstate Power & Light Co)
Letters of Credit. (a) Until the Termination Date with respect The Banks agree to make available to the Line Borrower letters of Credit and subject 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 other terms and conditions aggregate principal amount of this all then outstanding Surety Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity Agreement, Borrowers may request Lender to issue one or more . The availability of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering will be subject to Lender: (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together Agent being satisfied with the proposed form terms of the Letter letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b))credit, (ii) a Borrowing Base Certificate which calculates the Letter Borrower’s executing and delivering such letter of Credit Availability credit and reimbursement agreements and related documents as required by giving effect to the proposed Letter of CreditAgent, and (iii) such other Letter the satisfaction of Credit Documents that Lender then customarily requires 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 letters 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. LenderNo 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 other terms Revolving Loans, except as otherwise expressly stated herein, the stated amount of this Agreementthe letters of credit shall be treated as principal of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, will have no obligation the Borrower shall give the Agent written notice (including by way of facsimile transmission) thereof prior to issue 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 if, after giving effect to the proposed Letter of Credit, there would exist a Request”). Each Letter of Credit DeficiencyRequest shall include an application for such letter of credit and any other documents that the Agent customarily requires in connection therewith. The making Agent shall promptly notify each Bank of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the 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, with and will not violate the terms of, requirements of this Section 2.3.
(b) Each Letter of Credit issued under this Agreement will, among other things, (i) be in such form requested by Borrowers 3.01 and shall include a representation and warranty 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the aggregate principal amount of all other Letter of Credit Obligations 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 Personthen outstanding Surety Bonds. Subject to the terms of Section 6.6, Borrowers hereby irrevocably instruct LenderThe Agent shall, on the same Business Day that Lender is obligated date of each issuance of or amendment or modification to fund a drawing or make any expenditure or any other payment under a Letter letter of Credit or incurs any cost or expense under any Letter of Creditcredit by it, 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 give each Bank and the Borrower written notice of the Revolving Loans pursuant issuance of or amendment or modification to Section 2.1. If the advance such letter 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateralcredit.
(f) In determining whether to pay under any Letter letter of Creditcredit, Lender will be responsible only the Agent shall not have any obligation relative to confirm in good faith the Banks other than to determine that any documents required to be delivered under such letter of credit have been delivered under a Letter of Credit and that they appear to comply substantially on their face with the requirements of the Letter letter of Credit, and any credit. 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 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 taken by the gross negligence or willful misconduct Agent with respect to a letter 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 credit issued by Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies with the terms of 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 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, it if taken or omitted in good faith in the absence of gross negligence or willful misconduct, shall not put Lender under create any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lenderfor the Agent.
(ig) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal Immediately prior to the 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 effectiveness of this Agreement, then, at Lender’s option, commencing the outstanding letters of credit issued under the 2002 Credit Agreement and/or the 2004 Credit Agreement are as listed on the date upon which Exhibit C hereto and such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 letters of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it credit shall be assumed for purposes deemed to be, and hereby are converted into, outstanding letters of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Datecredit hereunder.
Appears in 2 contracts
Samples: Credit Agreement (Forest City Enterprises Inc), Credit Agreement (Forest City Enterprises Inc)
Letters of Credit. (a) Until On the Termination Date Closing Date, each of the Letters of Credit outstanding under the Existing Loan Agreement shall be deemed to have been issued hereunder. The 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 respect appropriate information regarding the amount, beneficiary, and tenor of any such Letter of Credit upon request. Subject to the Line of Credit and subject to the other terms and conditions hereof, at any time and from time to time from the Closing Date through the Maturity Date, the Issuing Lender shall issue such Letters of this Agreement, Borrowers Credit under the Revolving Commitment as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Request for Letter of Credit Application completed to which do not result in the reasonable satisfaction aggregate effective face amount of Lender, together with the proposed form of the Letter all outstanding Letters of Credit (which, being in all respects, will comply with the applicable requirements excess of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents $25,000,000; provided that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter all such Letters of Credit, there would exist a 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 applicable Revolving Commitment. Each Letter of Credit Deficiencyshall be in a form reasonably acceptable to the Issuing Lender. The making Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the terms of each the 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 by Borrowers will be deemed to be a representation by Borrowers that the any Letter of Credit may be issued which is not reasonably necessary in accordance with, and will not violate the terms of, this Section 2.3ordinary course of business of Borrower.
(b) Each Request for Letter of Credit issued under this Agreement willshall be submitted to the Issuing Lender, among other thingswith a copy to the Administrative Agent, (i) at least three Business Days prior to the date upon which the related Letter of Credit is proposed to be in issued. The Administrative Agent shall promptly notify the Issuing Lender whether such form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faith, (ii) be denominated in DollarsRequest 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.
(iiic) Upon the issuance of a Letter of Credit, each Lender shall be issued deemed to support Borrowers’ obligations have purchased a pro rata participation from the Issuing Lender, in an amount equal to that finance 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 business needs incurred in Pro Rata Share of the ordinary course Revolving Commitment, reimburse the Issuing Lender promptly upon demand for the amount of Borrowers’ respective businesses as presently conducted 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 themthe occurrence of an Event of Default or any other occurrence or event. In no event will 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 have a term of more than one year; furthermore, and, in addition together with interest as hereinafter provided.
(d) Borrower agrees to pay to the foregoing term limitation, Issuing Lender will have no obligation through the Administrative Agent an amount equal to issue any payment made by the Issuing Lender with respect to each Letter of Credit with an expiry date later than upon the date that is 30 days prior 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 stated Termination Date 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 Line 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 Application 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 aggregate amount equal to the amount paid by the Issuing Lender with respect to that Letter of Credit will and, for this purpose, the conditions precedent set forth which rules or customs apply in Article 10 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. Such rules Advances shall be payable upon demand and customs may includeshall bear interest at the Default Rate.
(f) The issuance of any supplement, but are not limited tomodification, the International Standby Practicesamendment, as published by the International Chamber renewal, or extension to or of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) treated in all respects the rules or customs set forth in same as the issuance of a new Letter of Credit and (B) the internal laws of the State of Ohio and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth aboveCredit.
(cg) Upon receipt The obligation of a request from Borrowers Borrower to open 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 all attendant Letter 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 Credit Documents completed to Lender’s reasonable satisfaction, Lender, within three (3) Business Days, may either the following circumstances:
(i) issue any lack of validity or enforceability of the requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.this Agreement, or any other agreement or instrument relating thereto;
(dii) All any amendment or waiver of or any consent to departure from the Letter of Credit Obligations are payable on Lender’s demand Credit, this Agreement, or payable as otherwise set forth in any other agreement or instrument relating thereto;
(iii) the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective existence of any claim, setoff, defense defense, or other right rights which any Borrower may have at any time against Lender the Issuing Lender, the Administrative Agent 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements beneficiary of the Letter of 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 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 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 DocumentsLetter of Credit, the transactions contemplated in this Agreement, or any other agreement or instrument relating thereto, or any unrelated transaction; transactions;
(iiiv) any statement demand, statement, or any other document presented under any the Letter of Credit proving to be forged, fraudulent, invalid 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; respect whatsoever;
(v) payment by the Issuing Lender in good faith under any the Letter of Credit against presentation of a draft or certificate any accompanying document which substantially complies does not strictly comply with the terms of such Letter of Credit; (vi) the invalidity or unenforceability 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 examination time, place, manner, order or contents of shipments or deliveries of property as described in documents presented under 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 exclusively not caused by electronic the Issuing Lender, or electro-optical means; any delay or interruption in any such message;
(viiixi) any other circumstances error, neglect or happening whatsoever, whether or not similar to default of any correspondent 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 Issuing 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 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 Letters of Credit or any related certificates, if taken or omitted Issuing Lender;
(xiii) so long as the Issuing Lender in good faith in determines that the absence contract or document appears to comply with the terms of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each the Letter of Credit, a fee (“LOC Fee”) equal the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to the 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 Issuing 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 in connection with respect to each a Letter of Credit. The LOC Fee is fully earned by ; and
(xiv) where the Issuing Lender when paid has acted in good faith 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 thereofobserved general banking usage, customs or practices, any LOC Fee paid in advance will not be refunded and will be retained by Lender solely for its accountother circumstances whatsoever.
(iih) For purposes of determining The Issuing Lender shall be entitled to the Applicable LOC Fee Percentage, protection accorded to 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 Administrative Agent pursuant to Sections 4.3(a)Section 12.6, 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Datemutatis mutandis.
Appears in 2 contracts
Samples: Loan Agreement (Mohegan Tribal Gaming Authority), Loan Agreement (Mohegan Tribal Gaming Authority)
Letters of Credit. (a) Until Each Issuing Bank severally agrees, on the Termination Date with respect to the Line of Credit and subject to the other terms and conditions of this Agreementhereinafter set forth, Borrowers may request Lender to issue one (or more of cause its standard standby Affiliate that is a commercial bank to issue on its behalf) letters of credit denominated in U.S. Dollars (“Standby Letter such letters 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 reasonable satisfaction of Lendercredit, together with the Existing Letters of Credit, the “Letters of Credit”), for the account of the Borrower from time 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 Available Amount (i) for all Letters of Credit not to exceed at any time the Letter of Credit Facility at such time, (ii) for all Letters of Credit issued by such Issuing Bank not to exceed such Issuing Bank’s Letter of Credit Commitment at such time, and (iii) for each such Letter of Credit not to exceed the Unused Revolving Credit Commitments of 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 to Citibank of a request for an issuance of a Letter of Credit. No Letter of Credit shall have an expiration date (including all rights of the Borrower or the beneficiary to require renewal) later than the earlier of 30 days before the Maturity Date in respect of the Revolving Credit Facility and (A) in the case of a Standby Letter of Credit one year after the date of issuance thereof, but may by its terms be renewable annually upon notice (a “Notice of Renewal”) given to the Issuing Bank that issued such Standby Letter of Credit and the Administrative Agent on or prior to any date for notice of renewal set forth in such Letter of Credit but in any event at least three Business Days prior to the date of the proposed form 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. If 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 on which it otherwise would have been automatically renewed; provided, however, that even in the absence of receipt of a Notice of Renewal the applicable Issuing Bank may in its discretion, unless instructed to the contrary by the Administrative Agent or the Borrower, deem that a Notice of Renewal had been timely delivered and in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under this Agreement. Within the limits of the Letter of Credit (whichFacility, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect and subject to the proposed Letter of Creditlimits referred to above, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the Borrower may request the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter Letters of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, under this Section 2.3.
(b) Each Letter of Credit issued under this Agreement will2.01(b), 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 repay any Letter of Credit have a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request Advances resulting 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 drawings thereunder 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 results2.04(c) 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 request 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 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 additional 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 draft or certificate which substantially complies with the terms of 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 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 2.32.01(b).
(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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 2 contracts
Samples: Credit Agreement (Hersha Hospitality Trust), Credit Agreement (Hersha Hospitality Trust)
Letters of Credit. (a) Until The Borrower may request the Termination Issuer to issue letters of credit (the “Letters of Credit”; each, individually, a “Letter of Credit”) during the period from the Effective Date with respect to the Line thirtieth Business Day prior to the Revolving Maturity Date, provided that immediately after the issuance of each Letter of Credit (i) the Letter of Credit Exposure of all Lenders would not exceed the Letter of Credit Commitment and (ii) the Aggregate Revolving Exposure would not exceed the Aggregate Revolving Commitment. To request the issuance of a Letter of Credit, the Borrower shall 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 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 subject 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 and expiration. Such Credit Request shall be 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 Issuer and such other certificates, documents (including a reimbursement agreement) and other information as may be required by the Issuer 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 other satisfaction of the terms and conditions of this Agreement, Borrowers may request Lender to the Issuer shall issue one or more each requested Letter of its standard standby 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 “Standby Letter 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 favor accordance with the terms of such beneficiary(ies) as are designated by Borrowers by delivering this Section 2.11 with respect to Lender: (i) a Letter all Reimbursement Obligations related thereto and (ii) all other amounts owing by the Borrower to the issuer of the Existing Letters of Credit Application completed pursuant to the reasonable satisfaction of Lender, together with the proposed form of Original Credit Agreement and the Letter of Credit Documentation (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires as defined in the issuance of letters of credit. Lender, Original Credit Agreement) executed and delivered in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3connection therewith.
(b) Each Letter of Credit issued under this Agreement will, among other things, shall (i) be denominated in such form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faithdollars, (ii) be denominated issued for the account of the Borrower and in Dollarssupport 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 issued not later than one year from the date of issuance thereof, but in any event, with respect to support Borrowers’ obligations all Letters of Credit, five Business Days before the Revolving Loan Maturity Date, provided that finance its business needs incurred in the ordinary course expiration date of Borrowers’ respective businesses as presently conducted by them. In no event will any such Letter of Credit have a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any may be extended or such Letter of Credit with an may be renewed, provided, further, that any renewal, or any extension of any expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line date, of Credit. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the a Letter of Credit shall be governed by (A) constitute the rules or customs set forth in the issuance of such Letter of Credit and (B) the internal laws for all purposes of the State of Ohio and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth abovethis Agreement.
(c) Upon receipt Immediately upon the issuance of a request Letter of Credit, the 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 Borrowers the Issuer, without recourse or warranty, an undivided interest and participation, to open any the extent of such Lender’s Revolving Percentage thereof, in such Letter of Credit and the obligations of all attendant Letter of Credit Documents completed to Lender’s reasonable satisfaction, the Borrower with respect thereto and any security therefor and any guaranty pertaining thereto at any time existing. Each Lender, within three (3) Business Days, may either (i) issue the requested Letter of Credit with respect to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such each Existing Letter of Credit, Lender will communicate hereby purchases, without recourse or warranty, an undivided interest and participation, to the extent of such Lender’s Revolving Percentage thereof, in writing to Borrowers each Existing Letter of Credit and the reason(s) why Lender has declined obligations of the Borrower with respect thereto and any such requestsecurity therefor and guaranty pertaining thereto at any time existing.
(d) All The Issuer shall promptly notify (i) each Lender of the Issuer’s receipt of a drawing request under any Letter of Credit, stating the amount of such Lender’s Revolving Percentage of such drawing request and the date on which such request will be honored and (ii) the Administrative Agent and the Borrower of the amount of such drawing request and the date on which such request will be honored. Any failure of the Issuer to give or any delay in the Issuer’s giving any such notice shall not release or diminish the obligations of the Borrower or any Lender hereunder. In determining whether to pay under any Letter of Credit, the Issuer shall have no obligation to any Lender or the Borrower other than to confirm that any documents required to be delivered under such Letter of Credit Obligations are payable have been delivered and that they appear to comply on Lender’s demand or payable as otherwise set forth in their face with the applicable requirements of such Letter of Credit DocumentsCredit. Borrowers jointly and severally promise In the absence of 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 Lender to the Administrative Agent for the account of the Issuer on demand therefor, in dollars in immediately available funds, the amount of all other Reimbursement Obligations then owing to the Issuer under any Letter of Credit Obligations immediately when dueCredit, together with interest thereon as provided in Section 3.01, irrespective of any claim, setoff, defense or other right which any the Borrower may have at any time against Lender the Issuer or any other Person. Subject to In the terms of Section 6.6, Borrowers hereby irrevocably instruct Lender, on event that the same Business Day that Lender is obligated to fund a drawing or make Issuer makes any expenditure or any other payment under a Letter of Credit or incurs any cost or expense under any Letter of CreditCredit 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 reimburse Lender the Administrative Agent, 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 the account of the Issuer, the amount of such Lender’s Revolving Loans pursuant 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 Section 2.1. If the advance 12:00 Noon or, if such notice is given after 12:00 Noon, such Lender shall make its Revolving Percentage of a Revolving Loan to reimburse Lender for any drawing, expenditure or other such payment made, or cost or expense incurred, by Lender in respect of any Letter of Credit results (or available 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 Issuer prior to 12:00 Noon on the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateralnext succeeding Business Day.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, If 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 extent any direct, as opposed to consequential, damages suffered by Borrowers from Lender’s gross negligence or willful misconduct. Lender shall not be obligated make such Lender’s Revolving Percentage of any Reimbursement Obligations available to cause any Letter 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 Credit to be extended or amended unless the requirements of Lenders under this Section 2.3 2.11(f) are met as though a new Letter several and not joint or joint and several, and the failure of Credit were being requested and issuedany 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) In addition Whenever the Issuer receives a payment of a Reimbursement Obligation from or on behalf of the Borrower as to amounts payable as elsewhere provided in this which the Issuer has received any payment from a Lender pursuant to Section 2.32.11(e), Borrowers will protectthe 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, indemnifyeach 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, pay and save Lender harmless from and against any and all claimsupon the demand of the Issuer, demandsshall reimburse the Issuer, liabilitiesto the extent the Issuer has not been reimbursed by the Borrower after demand therefor, damages, losses, costs, charges for the reasonable costs and expenses (including reasonable attorneys’ fees) which Lender (provided that it acts (or omits to act) incurred by the Issuer in good faith connection with the collection of amounts due under, and except for Lender’s gross negligence or willful misconduct) may incur or be subject to as a consequencethe preservation and enforcement of any rights conferred by, direct or indirect, of the issuance of any Letter of Credit or the provision 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 credit support or enhancement in connection therewith exclusive portion of claimssuch liabilities, demandsobligations, liabilitieslosses, damages, lossespenalties, actions, judgments, suits, costs, charges and expenses or disbursements to the extent caused by the same result solely from the gross negligence or willful misconduct of Lenderthe Issuer. The agreement 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 2.3(g) 2.11 shall survive repayment 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 other Obligations.
(h) As between Borrowers and Lendercircumstances, Borrowers assume all risks of the acts and omissions of, or misuse of including any of the Letters following circumstances: (1) any lack of Credit by, the respective beneficiaries validity or enforceability of such Letters of Credit. In furtherance and not in limitation this Agreement or any of the foregoingother Loan Documents, Lender shall not be responsible for: (i2) the existence of any claim, set-offsetoff, defense or other right which any the Borrower may have at any time against a beneficiary named in a Letter of Credit, any beneficiary, or any transferee, transferee of any Letter of Credit (or any Persons Person for whom any such beneficiary or any such transferee may be acting), the Issuer, any Lender or any other Person, whether in connection with this Agreement or the Agreement, any other Loan DocumentsDocument, any Letter of Credit, the transactions contemplated in this Agreement, the Loan Documents or any unrelated transaction; transactions (iiincluding any underlying transaction between the Borrower and the beneficiary named in any such Letter of Credit), (3) any statement 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; , (iii4) any default, negligence, misfeasance, suspension, insolvency, the surrender or bankruptcy impairment of any shipper collateral for the performance 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 observance of any document, certificate, draft, or message; (v) payment by Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies with the terms of such Letter any of Credit; the Loan Documents, (vi5) the invalidity occurrence of any Default or unenforceability Event of the Letter of Credit; (vii) the examination of documents presented under a Letter of Credit exclusively by electronic or electro-optical means; Default or (viii6) any other circumstances event or happening circumstance whatsoever, whether or not similar to any of the foregoing, including 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 act liability or omission, whether rightful or wrongful, responsibility by reason 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 the issuance or transfer of any of the Letters Letter of Credit or any related certificatespayment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), if taken or omitted any error, omission, interruption, loss or delay in good faith 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 misconductmisconduct on the part of the Issuer (as finally determined by a court of competent jurisdiction), the Issuer shall not put Lender under any resulting liability be deemed to Borrowers or relieve Borrowers have exercised care in each such determination. In furtherance of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lenderthe foregoing and without limiting the generality thereof, the parties agree that, with respect to each documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, a fee (“LOC Fee”) equal the Issuer 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 Applicable LOC Fee Percentage per annum on contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the amount available to be drawn under each Letter terms 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 such 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 2 contracts
Samples: Credit Agreement (Lifetime Brands, Inc), Credit Agreement (Lifetime Brands, Inc)
Letters of Credit. (a) Until the Termination Date with respect to the Line Provided that no Event of Credit and Default then exists, Lender agrees, subject to the other terms and conditions of this Agreementfollowing additional conditions, Borrowers may request Lender to issue from time to time one or more Letters of its standard standby letters of credit (“Standby Letter of Credit”) Credit in favor of such beneficiary(ies) a governmental unit or agency or other beneficiary approved by Lender as are designated by Borrowers by delivering security for the completion of the construction of Improvements in an Approved Subdivision on Lender’s standard form and otherwise in form and substance acceptable to Lender: (i) a Letter of Credit Application completed Lender in an aggregate amount not to the reasonable satisfaction of Lender, together with the proposed form of exceed the Letter of Credit (whichLoan set out in Paragraph 1 above, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(b) Each Letter with respect to obligations 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 Personrelated or affiliated entity of Borrower as Lender may elect. Subject to the terms of Section 6.6, Borrowers hereby irrevocably instruct Lender, on the same Business Day that Any amounts disbursed by 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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, and from time to time shall be deemed disbursements 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each Letter of Credit from, and including, the issuance date proceeds of the Letter of Credit to Loan and including shall be evidenced by 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 yearExisting Note. If any Letter of Credit is cancelled for any reason before outstanding on the stated expiry date thereofBusiness Day immediately preceding the Maturity Date (or if an amount has then been drawn on a Letter of Credit which has not been reimbursed or repaid), any LOC Fee paid Lender may demand delivery of cash collateral in advance will not be refunded an amount equal to the then outstanding Letter of Credit Liability, and will such cash collateral may be retained by Lender solely for its account.
until such time as the Letter of Credit Liability is reduced to zero (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”-0-). The “First Pricing Grid Determination Date” occurring after Lender may apply such cash collateral to the Effective Date will be December 31, 2010. On Lender’s receipt payment 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 any amounts thereafter drawn on the Fixed Charge Coverage Ratio as Letters of Credit immediately upon the end funding of any draw under any Letter of Credit. The failure to deliver such Fiscal Quarter cash collateral upon demand shall constitute an immediate Event of Default under the Loan Documents without notice or Fiscal Year then ended further demand. The repayment of any draws on any Letter of Credit shall be secured by the Loan Documents, and so long as no any Letter of Credit is outstanding, Lender shall not be required to issue a full release of the Security Instrument. It shall be an Event of Default is existing as of under 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 Loan Documents should Lender of the financial statements and Compliance Certificate ever be required to be delivered to Lender pursuant to Sections 4.3(a), 4.3(b) and 4.3(d) (as applicable) disburse funds under any Letter 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.Credit
Appears in 2 contracts
Samples: Loan Agreement (LGI Homes, Inc.), Loan Agreement (LGI Homes, Inc.)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreementset forth herein, Borrowers may request Lender agrees (1) to issue one or more Letters of its standard standby letters Credit for the account of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering the Borrower from time to Lender: time on any Business Day during the period from the Closing Date until (i) a Letter with regard to Letters of Credit Application completed issued under the Revolving Commitment, the Maturity Date, and (ii) with regard to the reasonable satisfaction Letters of Lender, together with the proposed form of Credit issued under the Letter of Credit (whichCommitment, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of CreditExpiration Date, and (iii2) such other Letter to honor drafts under the Letters of Credit Documents Credit; provided that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will shall not be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation obligated to issue any Letter of Credit with an expiry date later than if as of the date that is 30 days prior to of such issuance, (x) the stated Termination Date applicable to the Line aggregate amount of Credit. Each all Letter of Credit Application and each Exposure with regard to Letters of Credit issued under the Revolving Commitment would exceed the amount available under the Revolving Commitment, or (y) the outstanding amount of the Letter of Credit will set forth which rules or customs apply Exposure with regard to Letters of Credit issued under the Letter of CreditCredit Commitment would exceed the amount available under the Letter of Credit Commitment. Such rules Within the foregoing limits, and customs may includesubject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All amounts Lender is required to advance under any Letter of Credit issued under the Revolving Commitment shall be deemed an Advance hereunder and shall bear interest as provided herein. Borrower shall be liable for all costs and expenses, including, but are not limited to, the International Standby Practicesattorney’s fees and court costs, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 relating to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 action related 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 such 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, 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 2 contracts
Samples: Credit Agreement (Tyler Technologies Inc), Credit Agreement (Tyler Technologies Inc)
Letters of Credit. (a) Until From time to time, at the Termination Date with respect to the Line of Credit Issuing Bank’s discretion, and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“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 reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation at any time prior to the Revolving Maturity Date, the Issuing Bank may issue letters of credit for the proposed 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 ifSublimit, after giving effect to and for purposes of determining availability under the proposed Letter Revolving Line, aggregate of Credit, there would exist a Letter outstanding amounts under the Letters of Credit Deficiency. The making (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 request shall be subject to approval by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 Issuing Bank 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 sole discretion. The Borrower shall immediately reimburse 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line Issuing Bank for drawings made under Letters of Credit. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may includeThe Borrower shall indemnify, but are not limited todefend, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Creditprotect, and hold the Issuing Bank harmless from any action taken loss, cost, expense or omitted by Lender in good faith under liability, including, without limitation, reasonable attorneys’ fees, arising out of or in connection with any Letter Letters of Credit will not subject Lender to any liability to any Borrower; providedCredit, however, nothing in this Section 2.3(f) will relieve Lender of any liability it may have to Borrowers to except for expenses caused by the extent, but only to the extent, of any direct, as opposed to consequential, damages suffered by Borrowers from LenderIssuing Bank’s gross negligence or willful misconduct. Lender The Issuing Bank shall not 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 obligated issued for a term designated by the Borrower or its authorized applicant acceptable to cause the Issuing Bank. To the extent that any Letter of Credit to be extended or amended unless the requirements shall remain outstanding after any termination of this Section 2.3 are met as though a new Agreement or any Event of Default thereunder, the Borrower agrees to promptly pledge sufficient cash security in an amount equal to 110% of the aggregate amount of such Letter of Credit were being requested and issuedto the Issuing Bank’s satisfaction.
b) Each Letter of Credit shall be subject to the terms and conditions of a Letter of Credit Agreement, application and related documents as may be required by the Issuing Bank in connection with the issuance of such Letter of Credit.
c) If the Borrower does not reimburse the Issuing Bank for a drawing made under a Letter of Credit as required by this Section, the Borrower shall be deemed to have requested an Advance in the amount of such drawing. The Administrative Agent shall notify the Lenders of such deemed request and three (g3) In addition 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 of any such Advance shall be required in connection with such deemed request, and the Lenders shall be obligated to amounts payable 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 for the amount of any such drawing made under a Letter of Credit.
d) Until any drawing made under a Letter of Credit is reimbursed in full by the Borrower or refinanced in full as elsewhere provided an Advance, the amount of any unreimbursed or refinanced drawing shall accrue interest under Section 2.3 as if such drawing were an Advance. Such interest shall be paid to the Issuing Bank for its own account.
e) Upon the issuance or amendment of each Letter of Credit 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 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 absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.3Agreement, Borrowers will and such Letters of Credit and related documents, under all circumstances whatsoever. The Borrower shall indemnify, defend, protect, indemnify, pay and save Lender hold the Issuing Bank harmless from and against any and all claimsloss, demandscost, liabilitiesexpense or liability, damagesincluding, losseswithout limitation, costs, charges and expenses (including reasonable attorneys’ fees) which Lender (provided that it acts (, arising out of or omits to act) in good faith and connection with any Letters of Credit, except for Lenderexpenses caused by the Issuing Bank’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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 2 contracts
Samples: Loan and Security Agreement (TechTarget Inc), Loan and Security Agreement (TechTarget Inc)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions hereof, the Revolving Commitments may be utilized, upon the request of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“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 reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. LenderBorrower, in addition to the other terms Revolving Loans provided for in Section 2.1 hereof, by the issuance by the Issuing Bank of this Agreement, will have no obligation to issue the proposed Letter one or more Letters of Credit iffor the account of Borrower; provided, after giving effect to the proposed Letter of Credithowever, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the no Letter of Credit may be issued in accordance withif (i) after giving effect thereto (A) the Letter of Credit Exposure (including the amount of the requested Letter of Credit) would exceed the Letter of 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 will not violate (ii) the expiration date thereof extends beyond the earlier of one year from issuance or 5 Business Days prior to the Revolving Commitment Termination Date. In addition to the applicable provisions of Article 3, all Letters of Credit shall be issued upon the request of Borrower on the terms of, and conditions set forth in this Section 2.3.2.14; and the provisions hereof that are applicable to the issuance of a Letter of Credit shall be correspondingly applicable to each renewal, extension or reissuance thereof, or amendment thereto. Upon the date of
(b) Each Borrower shall give the Agent and the Issuing Bank at least 5 Business Days' prior written notice specifying the date 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 and describing the proposed terms of such Letter of Credit, including without limitation, the date, face amount, beneficiary and expiry date thereof, the nature of the transactions proposed to support Borrowers’ obligations that finance its business needs incurred be supported thereby and such other information as the Issuing Bank shall reasonably request, all in detail reasonably satisfactory to the ordinary course Issuing Bank. Upon receipt of Borrowers’ respective businesses as presently conducted such notice, 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 them. In no event will any the Issuing Bank of each Letter of Credit have a term of more than one year; furthermore, andshall, in addition to the foregoing term limitationconditions precedent set forth in Article 3, Lender will have no obligation be subject to issue any the conditions precedent that such Letter of Credit with an expiry date later than the date that is 30 days prior shall be in such form, contain such terms and support such transactions as shall be reasonably satisfactory to the stated Termination Date applicable Agent and the Issuing Bank, and that Borrower shall have executed and delivered a reimbursement agreement acceptable to the Line Issuing Bank, and such other instruments and agreements relating to such Letter of CreditCredit as either the Agent or the Issuing Bank shall have reasonably requested. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply shall, to the Letter 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 CreditCommerce Publication No. Such rules and customs may include, but are not limited to, the International Standby Practices, as published 500 (together with any subsequent revisions thereof approved by a Congress of the International Chamber of Commerce and adhered to by the Issuing Bank (“ISP”) or the Uniform Customs "UCP")), and Practice for Documentary Creditsshall, as published to matters not governed by ISP. In any eventthe UCP, be governed by, and construed and interpreted in accordance with, the Letter of Credit shall be governed by (A) the rules or customs set forth in the Letter of Credit and (B) the internal laws of the State of Ohio and the United States Texas (other than conflict of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth abovelaw principles).
(c) Upon receipt Borrower agrees to pay the following fees, by remittance to the Agent, in respect of a request from Borrowers Letters of Credit issued hereunder: (i) with respect to open any each Letter of Credit and which is issued as a standby letter of all attendant credit, for the account of the Issuing Bank, a fee equal to $175.00; (ii) with respect to each Letter of Credit Documents completed which is issued as a standby letter of credit, for the ratable account of the Banks, a fee equal to Lender’s reasonable satisfaction, Lender, within three (3x) Business Days, may either the per annum rate of interest equal to the Applicable Margin in effect for Revolving Loans on the date of issuance multiplied by (iy) issue the requested face amount of such Letter of Credit to for the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter stated term of Credit. If Lender elects not to issue 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 will communicate in writing of Credit); and (iv) with respect to Borrowers the reason(snegotiation 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) why Lender has declined such request.fees under clause
(d) All Upon receipt from the beneficiary of any Letter of Credit Obligations are payable on Lender’s of any demand or payable as otherwise set forth in the applicable for payment under such Letter of Credit Documents. Borrowers jointly Credit, the Issuing Bank shall promptly notify Borrower, the Agent and severally promise to pay Lender each Bank of Borrower's Reimbursement Obligations as a result of such demand and the amount of all other Letter of Credit Obligations immediately when due, irrespective of any claim, setoff, defense or other right date on which any payment is to be made to such beneficiary in respect of such demand. Borrower may have at any time against Lender or any other Person. Subject to the terms of Section 6.6shall, Borrowers hereby irrevocably instruct Lender, by 1:00 P.M. (St. Louis time) on the same Business Day that Lender is obligated to fund date on which a drawing is to be made, reimburse the Issuing Bank for any amount paid or make to be paid by the Issuing Bank upon any expenditure or any other payment under a Letter of Credit or incurs any cost or expense 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 Lender the Issuing Bank as provided in Section 2.14(d), for any drawingwhatever reason, expenditure or other payment madethe Issuing Bank shall promptly notify the Agent, or cost or expense incurred, by Lender debiting any Borrower’s loan account(s) with Lender as an advance and the Agent shall promptly notify each Bank of the Revolving Loans pursuant 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 Section 2.1. If the advance existence of a Revolving Loan Default or Event of Default, to reimburse Lender 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 any drawingeach 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 Issuing Bank shall pay to each Bank such Bank's pro rata portion of all amounts received from Borrower for payment, expenditure in whole or other payment madein part, or cost or expense incurred, by Lender of the Reimbursement Obligation in respect of any Letter of Credit results (or Credit, but only to the extent that it results) such Bank has made payment to the Issuing Bank in any respect of such Letter of Credit Deficiency, then Borrowers will immediately eliminate any Letter pursuant to this Section 2.14(e).
(f) Reimbursement Obligations of Borrower in respect of the Letters of Credit Deficiency shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of Section 2.1(a).this Agreement, under all circumstances whatsoever, including, without limitation, the following circumstances:
(e1) All Letter any lack of Credit Obligations will constitute part validity or enforceability of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that or any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Creditagreement or instrument related thereto, and or 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 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.other Loan Documents;
(g2) In addition any amendment or waiver of, or any consent to amounts payable as elsewhere provided in this Section 2.3departure from, 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 terms of any Letter of Credit or any other Loan Document, without the provision express prior written consent of any credit support or enhancement in connection therewith exclusive of claims, demands, liabilities, damages, losses, costs, charges the Issuing Bank and expenses to the extent caused by the gross negligence or willful misconduct of Lender. The agreement in this Section 2.3(g) shall survive repayment of all other Obligations.Required Banks;
(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: (i3) the existence of any claim, set-off, defense or other right rights which any Borrower may have at any time against any beneficiary, beneficiary or any transferee, transferee of any Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), Lender any Bank or any other Person, whether in connection with such Letter of Credit, this Agreement or the Agreement, any other Loan DocumentsDocument or any agreement or instrument related thereto, the transactions contemplated in this Agreementherein, or any unrelated transaction; ;
(ii4) any statement 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; respect whatsoever;
(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; (v5) payment by Lender the Issuing Bank under any Letter of Credit against presentation of a draft draft, demand, certificate or certificate other document which substantially complies appears on its face to comply but does not in fact comply with the terms of such Letter of 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
(vi) the invalidity or unenforceability of the Letter of Credit; (vii) the examination of documents presented under a Letter of Credit exclusively by electronic or electro-optical means; or (viii) 8) 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 2 contracts
Samples: Credit Agreement (Hastings Entertainment Inc), Credit Agreement (Hastings Entertainment Inc)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreementhereof, Borrowers may request Lender the Issuing Bank agrees to issue one or more Letters of Credit hereunder from time to time before the eleventh day before its standard standby letters Termination Date upon the request of credit (“Standby the Borrower; PROVIDED that, immediately after each Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Credit is issued (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form aggregate amount of the Letter of Credit (which, in Liabilities plus the aggregate outstanding amount of all respects, will comply with Loans shall not exceed the applicable requirements aggregate amount of Section 2.3(b)), the Commitments and (ii) a Borrowing Base Certificate which calculates the aggregate Letter of Credit Availability 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 proposed 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 the Administrative Agent shall promptly notify each Bank of the contents thereof and of the amount of such Bank's participation in such Letter of Credit. The issuance by the Issuing Bank of each Letter of Credit shall, 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 and 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 Issuing Bank shall have reasonably requested. The Borrower shall also pay to the Issuing Bank for its own account issuance, drawing, amendment and extension charges in the amounts and at the times as agreed between the Borrower and the Issuing Bank. The extension or renewal of any Letter of Credit shall be deemed to be an issuance of such Letter of Credit, and (iii) such other if any Letter of Credit Documents that Lender then customarily requires in contains a provision pursuant to which it is deemed to be extended unless notice of termination is given by the Issuing Bank, 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 letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed have also theretofore been met with respect to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth aboveextension.
(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 a request from Borrowers to open any Letter of Credit and of all attendant Letter any notice of Credit Documents completed to Lender’s reasonable satisfaction, Lender, within three (3) Business Days, may either (i) issue the requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue drawing under such Letter of Credit, Lender will communicate in writing the Issuing Bank shall notify the Administrative Agent and the Administrative Agent shall promptly notify the Borrower and each other Bank as to Borrowers the reason(s) why Lender has declined amount to be paid as a result of such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in drawing and the applicable Letter of Credit Documentspayment date. Borrowers jointly The Borrower shall be irrevocably and severally promise unconditionally obligated forthwith to pay Lender reimburse the amount of all other Letter of Credit Obligations immediately when due, irrespective of Issuing Bank for any claim, setoff, defense or other right which amounts paid by the Issuing Bank upon 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 drawingwithout presentment, expenditure demand, protest or other payment madeformalities of any kind. All such amounts paid by the Issuing Bank and remaining unpaid by the Borrower shall bear interest, or cost or expense incurredpayable on demand, by Lender debiting any Borrower’s loan account(s) with Lender as an advance for each day until paid at a rate per annum equal to the Base Rate for such day plus, if 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 Revolving Loans pursuant Issuing Bank, immediately upon the Issuing Bank's demand at any time during the period commencing after such drawing until reimbursement therefor in full by the Borrower, an amount equal to Section 2.1such Bank's ratable share of such drawing (in proportion to its participation therein), together with interest on such amount for each day from the date of the 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 next succeeding Domestic Business Day) to the date of payment by such Bank of such amount at a rate of interest per annum equal to the Federal Funds Rate. If The Issuing Bank will pay to each Bank ratably all amounts received from the advance Borrower for application in payment of a Revolving Loan to reimburse Lender for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender its reimbursement obligations in respect of any Letter of Credit results (or Credit, but only to the extent that it results) such Bank has made payment to the Issuing Bank in any respect of such Letter of Credit Deficiencypursuant hereto.
(e) The obligations of the Borrower and each Bank under subsection 2.16(d) above shall be absolute, then Borrowers will immediately eliminate any Letter of Credit Deficiency unconditional and irrevocable, and shall be performed strictly in accordance with the terms of Section 2.1(a).this Agreement, under all circumstances whatsoever, including without limitation the following circumstances:
(ei) All the use which may be made of the Letter of Credit Obligations will constitute part by, or any acts or omission of, a beneficiary of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with (or any Person for whom the requirements of the Letter of 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 beneficiary 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 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.acting);
(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 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: (iii) the existence of any claim, set-off, defense or other right which any rights that the Borrower may have at any time against any beneficiary, or any transferee, a beneficiary of any a Letter of Credit (or any Persons Person for whom any such the beneficiary or any such transferee may be acting), Lender the Banks (including the Issuing Bank) or any other Person, whether in connection with this Agreement or the other Loan Documents, the transactions contemplated in this Agreement, Letter of Credit or any document related hereto or thereto or any unrelated transaction; ;
(iiiii) any statement or any other document presented under any a Letter of Credit proving to be forged, fraudulent, fraudulent or invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respectrespect whatsoever;
(iv) payment under a Letter of Credit to the beneficiary of such Letter of Credit against presentation to the Issuing Bank of a draft or certificate that does not comply with the terms of the Letter of Credit; PROVIDED that the determination by the Issuing Bank to make such payment shall not have been the result of its willful misconduct or gross negligence; or
(iiiv) any default, negligence, misfeasance, suspension, insolvency, other act or bankruptcy omission to act or delay of any shipper kind by any Bank (including the Issuing Bank), the Administrative Agent or any other Person involved in any transaction covered thereby or any correspondent other event or agent circumstance whatsoever that might, but for the provisions of Lender this subsection (v), constitute a legal or equitable discharge of the Borrower's or the Bank's obligations hereunder.
(f) 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 whom fulfill or comply with its obligations to such Issuing Bank hereunder (but nothing herein contained shall affect any draftsrights the Borrower may have against such defaulting Bank)), documents and none of the Banks (including the Issuing Bank) nor the Administrative Agent nor any of their officers or instruments may directors or employees or agents shall be entrusted; 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 of Credit, including without limitation any of the circumstances enumerated in subsection 2.16(d) above, as well as (ivi) any delayerror, interruptionomission, omission interruption or error delay in transmission or delivery of any documentmessages, certificateby mail, draftcable, 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 messageany 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 a claim for direct (vbut not consequential) payment damage suffered by Lender 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 Bank in determining whether a request presented under any Letter of Credit against presentation of a draft or certificate which substantially complies complied with the terms of such Letter of Credit; Credit or (viy) the invalidity or unenforceability 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 of Credit; (vii. Nothing in this subsection 2.16(f) is intended to limit the examination obligations of documents presented the Borrower under a Letter of Credit exclusively by 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 provision of this Agreement. IfTo the extent the Borrower does not indemnify the Issuing Bank as required by this subsection, however, either the financial statements or the Compliance Certificate required Banks agree 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 do so ratably in accordance with Section 4.3 of this Agreement, then, at Lender’s option, commencing on the date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Datetheir Commitments.
Appears in 2 contracts
Samples: Credit Agreement (Duke Capital Corp), Credit Agreement (Duke Energy Corp)
Letters of Credit. (a) Until Subject to and upon the Termination Date with respect to the Line of Credit and subject to the other terms and conditions of this Agreementherein set forth, Borrowers the Borrower may request that any Issuing Lender issue, at any time on and after the Effective Date and prior to issue one or more the 30th day prior to the Maturity Date, for the account of its standard any Credit Party, irrevocable sight standby letters of credit credit, in a form customarily used by such Issuing Lender or in such other form as has been approved by such Issuing Lender (each such letter of credit, a “Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a ); provided that the Issuing Lender shall not issue any Letter of Credit Application completed to that would mature after a Scheduled Commitment Reduction Date if the reasonable satisfaction Stated Amount of Lender, together with the proposed form of the such Letter of Credit (which, in together with all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter other Letters of Credit Availability by giving effect to expiring after such Scheduled Commitment Reduction Date would exceed the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, Total Commitment after giving effect to the proposed Letter of Credit, there Scheduled Commitment Reduction on such Scheduled Commitment Reduction Date would exist a Letter exceed the Total Commitment. All Letters of Credit Deficiency. The making shall be denominated in Dollars, or one of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may Alternate Currencies, and shall be issued in accordance with, and will not violate the terms of, this Section 2.3on a sight draft basis.
(b) Each Subject to the 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 Effective Date and prior to the 30th day prior to the Maturity Date, following its receipt of the respective Letter of Credit issued under this Agreement willRequest, among other things, (i) be issue for the account of any Credit Party one or more Letters of Credit in support of 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 do not violate the ordinary course corporate policy of Borrowers’ the Issuing Lender and as are permitted to remain outstanding without giving rise to a Default or Event of Default hereunder, provided that the 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 foregoing term limitation, Issuing Lender will have 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 an expiry date later than 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 (for which such Issuing Lender is not otherwise compensated) not in effect on the date that is 30 days 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 stated Termination Date applicable to the Line issuance of Credit. Each such Letter of Credit Application of the 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 it and the Borrower to eliminate such Issuing Lender’s risk with respect to the 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 will set forth which rules or customs apply Outstandings with respect to such Letters of Credit in an amount equal to 105% of such Defaulting Lender’s Percentage of Letter of Credit Outstandings is satisfactory) (such arrangements, the “Letter of Credit Back-Stop Arrangements”).
(c) Notwithstanding anything to the Letter of Credit. Such rules and customs may includecontrary contained in this Agreement, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”i) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the no Letter of Credit shall be governed issued the Stated Amount of which, when added to the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and prior to the issuance of, the respective Letter of Credit) at such time would exceed either (x) $10,000,000 or (y) when added to the aggregate principal amount of all Loans then outstanding, 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 rules or customs set forth in date which occurs 12 months after the date of the issuance thereof (although any such Letter of Credit shall be extendible for successive periods of up to 12 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) the internal laws of the State of Ohio and the United States of America, except 10 Business Days prior to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such requestMaturity Date.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay If any Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective of any claim, setoff, defense or other right which any Borrower may have becomes a Defaulting Lender 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 Percentageoutstanding, the Fixed Charge Coverage Ratio will, on and Borrower shall enter into Letter of Credit Back-Stop Arrangements with the relevant Issuing Lender no later than five Business Days after the First Pricing Grid Determination Date, be determined date such Lender becomes a Defaulting Lender (or such later date 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”Issuing Lender shall otherwise agree in its sole discretion). 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers during the applicable Commitment Period, the Fronting Lender, shall, in its own name, but only as agent for the General Revolving Lenders, issue such Letters of Credit for the account of Borrower, as Borrower may from time to time request. Borrower shall not request any Letter of Credit (and the Fronting Lender shall not be obligated to issue one or more of its standard standby letters of credit (“Standby any Letter of Credit”) in favor if, after giving effect thereto, (A) the Letter of such beneficiary(iesCredit Exposure would exceed the Letter of Credit Commitment, (B) as are designated by Borrowers by delivering to Lender: the General Revolving Commitment Exposure would exceed the Maximum General Revolving Commitment Amount, or (iC) the Alternate Currency Exposure would exceed the Alternate Currency Maximum Amount. Borrower may request that a Letter of Credit Application completed to be issued in Dollars or an Alternate Currency. The issuance of each Letter of Credit shall confer upon each General Revolving Lender the reasonable satisfaction benefits and liabilities of Lender, together with the proposed form a participation consisting of an undivided pro rata interest in the Letter of Credit to the extent of the Applicable Commitment Percentage of such General Revolving Lender. Each request for a Letter of Credit shall be delivered to the Global Agent and the Fronting Lender not later than 11:00 A.M. (whichCleveland, in all respects, will comply with Ohio time) three Business Days prior to the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate day upon which calculates the Letter of Credit Availability is to be issued (or such shorter time period as may be agreed to by giving effect the Fronting Lender). Each such request shall be in a form acceptable to the proposed Global Agent and the Fronting Lender and specify the face amount thereof, whether such Letter of Credit shall be a commercial documentary or a standby Letter of Credit, the type of currency, the account party, the beneficiary, the intended date of issuance, the expiry date thereof, and the nature of the transaction to be supported thereby. Concurrently with each such request, Borrower, shall execute and deliver to the Fronting Lender an appropriate application and agreement, being in the standard form of the Fronting Lender for such letters of credit, as amended to conform to the provisions of this Agreement if required by the Global Agent. Global Agent shall give each General Lender notice of each such request for a Letter of Credit. In respect of each Letter of Credit that shall be a commercial documentary letter of credit and the drafts thereunder, if any, Borrower agrees (1) to pay to the Global Agent, for the pro rata benefit of the General Revolving Lenders, a non-refundable commission based upon the Dollar Equivalent of the face amount of such Letter of Credit, which shall be paid on the date that any draw shall have been made on such Letter of Credit, at a rate equal to (y) one-half (1/2) of the Applicable Margin (in effect on the date such payment is to be made, times (z) the Dollar Equivalent amount drawn under such Letter of Credit, and (iii2) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to pay to the other terms of this AgreementFronting Lender such issuance, will have no obligation amendment, negotiation, draw, acceptance, telex, courier, postage and similar transactional fees as shall be generally charged by the Fronting Lender under its fee schedule as in effect from time to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiencytime. The making In respect of each Letter of Credit request that shall be a standby letter of credit and the drafts thereunder, if any, Borrower agrees (a) to pay to the Global Agent, for the pro rata benefit of the Lenders, a non-refundable commission based upon the Dollar Equivalent of the face amount of such Letter of Credit, which shall be paid quarterly in arrears, at a rate per annum equal to (i) the then current Applicable Margin (and specifically including any additional amount payable pursuant to subpart (c) of the definition of Derived Fixed Rate) for Eurodollar Loans (i.e., the Applicable Margin for Eurodollar Loans in effect on the date such Letter of Credit shall be issued and, as to each quarterly payment thereafter, the Applicable Margin for Eurodollar Loans in effect on the date of such quarterly payment), times (ii) the Dollar Equivalent of the average undrawn face amount of such Letter of Credit during such fiscal quarter, (b) to pay to the Fronting Lender, for its sole account, an additional Letter of Credit fee, which shall be paid on each date that such Letter of Credit shall be issued or renewed at the rate of one-eighth percent (1/8 of 1%) of the face amount of such Letter of Credit, and (c) to pay to the Fronting Lender for its sole account, such other issuance, amendment, negotiation, draw, acceptance, telex, courier, postage and similar transactional fees as shall be generally charged by Borrowers will the Fronting Lender under its fee schedule as in effect from time to time.
Whenever a Letter of Credit shall have been drawn, Borrower shall immediately reimburse the Fronting Lender for the amount drawn in Dollars or in the Alternate Currency in which such Letter of Credit shall have been issued, as the case may be. If the amount drawn in Dollars shall not be reimbursed by Borrower within one Business Day of the drawing of such Letter of Credit, at the sole option of the Fronting Lender, Borrower shall be deemed to have requested a General Revolving Loan, subject to the provisions of Section 2.1(a)(i), in the amount drawn. Such General Revolving Loan shall be evidenced by the General Revolving Notes. Each General Revolving Lender agrees to make a General Revolving Loan on the date of such notice, subject to no conditions precedent whatsoever. Each General Revolving Lender acknowledges and agrees that its obligation to make a General Revolving Loan pursuant to Section 2.1(a)(i) hereof, when required by this Section 2.1(a)(ii) shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that its payment to the Global Agent, for the account of the Fronting Lender, of the proceeds of such General Revolving Loan shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the General Revolving Commitment of such General Revolving Lender shall have been reduced or terminated. Borrower irrevocably authorizes and instructs the Global Agent to apply the proceeds of any borrowing pursuant to this paragraph to reimburse, in full, the Fronting Lender for the amount drawn on such Letter of Credit. Each such General Revolving Loan shall be deemed to be a representation by Borrowers that Base Rate Loan. Each General Revolving Lender is hereby authorized to record on its records relating to its General Revolving Note such Lender's Pro Rata Share of the Letter amounts paid and not reimbursed on the Letters of Credit may Credit. If, for any reason, the Fronting Lender shall be issued in accordance withunable to or, and will not violate the terms of, this Section 2.3.
(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 opinion of Borrowers’ respective businesses as presently conducted by them. In no event will the Global Agent, it shall be impracticable to, convert any Letter of Credit have to a term of more than one year; furthermore, and, in addition General Revolving Loan pursuant to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited topreceding paragraph, the International Standby Practices, as published by Fronting Lender shall have the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the rules or customs set forth right to request that each General Revolving Lender purchase a participation in the Letter of Credit and (B) the internal laws of the State of Ohio and the United States of America, except amount due with respect to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, and the Global Agent shall promptly notify each General Revolving Lender will communicate thereof (by facsimile or telephone, confirmed in writing writing). Upon such notice, but without further action, the Fronting Lender hereby agrees to Borrowers grant to each General Revolving Lender, and each General Revolving Lender hereby agrees to acquire from the reason(s) why Lender has declined Fronting Lender, an undivided participation interest in the amount due with respect to such request.
(d) All Letter of Credit Obligations are payable on in an amount equal to such General Revolving Lender’s demand or payable 's Applicable Commitment Percentage of the Dollar Equivalent of the aggregate principal amount of the amount due with respect to such Letter of Credit. In consideration and in furtherance of the foregoing, each General Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as otherwise set forth provided above, to pay in Dollars to the applicable Global Agent, for the account of the Fronting Lender, such General Revolving Lender's ratable share of the Dollar Equivalent of the amount due with respect to such Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 determined in accordance with the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 Applicable Commitment Percentage of such Letters of CreditGeneral Revolving Lender). In furtherance Each General Revolving Lender acknowledges and not agrees that its obligation to acquire participations 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 amount due under any Letter of Credit proving that shall have been drawn but not reimbursed by Borrower pursuant to this Section 2.1(a)(ii) shall be forgedabsolute and unconditional and shall not be affected by any circumstance whatsoever, fraudulentincluding, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iii) any defaultwithout limitation, 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 the occurrence and continuance of a draft Default or certificate which substantially complies with the terms Event of Default, and that each such Letter of Credit; (vi) the invalidity payment shall be made without any offset, abatement, recoupment, counterclaim, withholding or unenforceability of the Letter of Credit; (vii) the examination of documents presented under a Letter of Credit exclusively by electronic or electro-optical means; or (viii) any other circumstances or happening whatsoever, reduction whatsoever and whether or not similar to any the General Revolving Commitment of the foregoing, including any act such General Revolving Lender shall have been reduced or omission, whether rightful or wrongful, of any present or future de jure or de facto governmental authorityterminated. None of the foregoing Each General Revolving Lender shall affect, impair or prevent the vesting of any rights or powers of Lender comply with its obligation under this Section 2.3.
2.1 (ia)(ii) In furtherance and extensionby wire transfer of immediately available funds, in the same manner as provided in Section 2.2 hereof with respect to General Revolving Loans. Each General Revolving Lender is hereby authorized to record on its records such General Revolving Lender's Pro Rata Share of the amounts paid 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 reimbursed on 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to LenderCredit.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender Foothill agrees to issue one or more of its standard standby letters of credit for the account of Borrower (“Standby Letter each, an "L/C") or to issue guarantees of Credit”payment (each such guaranty, an "L/C Guaranty") in favor of such beneficiary(ies) as are designated by Borrowers by delivering with respect to Lender: (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of creditcredit issued by an issuing bank for the account of Borrower. Lender, in addition to the other terms of this Agreement, will Foothill shall have no obligation to issue the proposed a Letter of Credit ifif any of the following would result:
(i) the aggregate amount of all undrawn and unreimbursed Letters of Credit, after giving effect would exceed the Borrowing Base less the amount of ---- outstanding Advances; or
(iii) the outstanding Obligations would exceed the Maximum Revolving Amount. Borrower expressly understands and agrees that Foothill shall have no obligation to arrange for the issuance by issuing banks of the letters of credit that are to be the subject of L/C Guarantees. Borrower and Foothill acknowledge and agree that certain of the letters of credit that are to be the subject of L/C Guarantees may be outstanding on the Closing Date. Each Letter of Credit shall have an expiration date no later than 60 days prior to the proposed date on which this Agreement is scheduled to terminate under Section 3.4 (without regard to any potential renewal term) and all such Letters of Credit shall be in form and substance acceptable to Foothill in its sole discretion. If Foothill is obligated to advance funds under a Letter of Credit, there would exist a Letter Borrower immediately shall reimburse such amount to Foothill and, in the absence of Credit Deficiency. The making of each Letter of Credit request by Borrowers will such reimbursement, the amount so advanced immediately and automatically shall be deemed to be a representation by Borrowers that an Advance hereunder and, thereafter, shall bear interest at the Letter of Credit may be issued in accordance with, and will not violate the terms of, this rate then applicable to Advances under Section 2.32.6.
(b) Each Letter of Credit issued under this Agreement willBorrower hereby agrees to indemnify, among other thingssave, (i) be in such form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faith, (ii) be denominated in Dollarsdefend, 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 hold Foothill harmless from any Letter of Credit have a term of more than one year; furthermoreloss, andcost, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowersexpense, or (ii) electliability, in its discretion exercised in good faithincluding payments made by Foothill, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Creditexpenses, and any action taken or omitted reasonable attorneys fees incurred by Lender in good faith under Foothill arising out of or in connection with any Letter of Credit will not subject Lender Credit. Borrower agrees to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve Lender be bound by the issuing bank's regulations and interpretations of any liability it may have Letters of Credit guarantied by Foothill and opened to Borrowers to the extent, but only to the extent, or for Borrower's account or by Foothill's interpretations of any directL/C issued by Foothill to or for Borrower's account, as opposed to consequentialeven though this interpretation may be different from Borrower's own, damages suffered by Borrowers from Lender’s gross negligence or willful misconduct. Lender and Borrower understands and agrees that Foothill shall not be obligated to cause liable for any Letter error, negligence, or mistake, whether of Credit to be extended omission or amended unless commission, in following Borrower's instructions or those contained in 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 any modifications, amendments, or supplements thereto. Borrower understands that the provision L/C Guarantees may require Foothill to indemnify the issuing bank for certain costs or liabilities arising out of claims by Borrower against such issuing bank. Borrower hereby agrees to indemnify, save, defend, and hold Foothill harmless with respect to any loss, cost, expense (including reasonable attorneys fees), or liability incurred by Foothill under any L/C Guaranty as a result of Foothill's indemnification 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 gross negligence or willful misconduct of Lender. The agreement in this Section 2.3(g) shall survive repayment of all other Obligationssuch issuing bank.
(hc) As between Borrowers Borrower hereby authorizes and Lender, Borrowers assume all risks of the acts and omissions of, or misuse of directs 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 bank that issues a draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 feesguaranteed by Foothill to deliver to Foothill all instruments, charges documents, and out of pocket expenses with respect to each Letter of Credit. The LOC Fee is fully earned other writings and property received 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 issuing bank pursuant to Sections 4.3(a)such letter of credit, 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 accept and rely upon Foothill's instructions and agreements with respect to all Letters matters that it would otherwise accept and rely upon Borrower's instructions and agreements, arising in connection with such letter of Credit that are issued credit and the related application. Borrower may or renewed on may not be the "applicant" or "account party" with respect to such letter of credit.
(d) Any and after all charges, commissions, fees, and costs incurred by Foothill relating to the first day letters of the first calendar month following delivery to Lender of the financial statements and Compliance Certificate required to credit guaranteed by Foothill shall be delivered to Lender pursuant to Sections 4.3(a), 4.3(b) and 4.3(d) (as applicable) of this Agreement considered Foothill Expenses 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 purposes of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it immediately shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 reimbursable by Borrower to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateFoothill.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other 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 Lender shall issue such Letters of this Agreement, Borrowers Credit as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for 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 reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if; provided that, after giving effect to the proposed issuance of such Letter of Credit, there would exist a (i) in no event shall Letter of Credit Deficiency. The making of each Usage exceed $10,000,000 at any time, and (ii) Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that Usage plus the Letter then aggregate outstanding principal amount of Credit may be issued in accordance with, and will the Line A Loans shall not violate exceed the terms of, this Section 2.3Line A Commitment.
(b) Each Unless all the Lenders otherwise consent in a writing delivered to the Agent, the terms of Letters of Credit shall not exceed one year and shall not extend beyond the Maturity Date.
(c) Unless the Issuing Lender otherwise agrees in writing, each Request for Letter of Credit issued under this Agreement will, among other things, (i) shall be in such form requested by Borrowers as is acceptable submitted to the Issuing Lender in its discretion exercised in good faith, (ii) be denominated in Dollars, and (iii) be issued at least five Business Days prior to support Borrowers’ obligations that finance its business needs incurred in the ordinary course date when the issuance of Borrowers’ respective businesses as presently conducted by them. In no event will any a Letter of Credit is requested. Upon issuance of a Letter of Credit, the Issuing Lender shall promptly notify the Agent, and the Agent shall thereafter promptly notify the Lenders, of the amount and terms thereof.
(d) Upon the issuance of a Letter of Credit, each Lender shall be deemed to have purchased a term of more than one year; furthermore, andpro rata participation from the Issuing Lender, in addition an amount equal to the foregoing term limitation, Lender will have no obligation to issue any Letter that Lender's Pro Rata Share of Credit with an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line A Commitment, of Credit. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules Without limiting the scope and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber nature of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In each such Lender's participation in any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why extent that the Issuing Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in not been reimbursed by Borrower for any payment required to be made by the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Issuing Lender the amount of all other Letter of Credit Obligations 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, each such Lender shall reimburse the Agent for the account of the Issuing Lender promptly upon demand for the amount of such payment in accordance with its Pro Rata Share of the Line A Commitment. The obligation of each such 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 drawingpayment made by the Issuing Lender under any Letter of Credit together with interest as hereinafter provided.
(e) After the making by the Issuing Lender of any payment with respect to any Letter of Credit issued for the account of Borrower, expenditure or other Borrower agrees to pay to the Issuing Lender, within one Business Day after demand therefor, a principal amount equal to any payment mademade by the Issuing Lender under that Letter of Credit, or cost or expense incurred, together with interest at the Base Rate plus the Base Margin applicable to Line A Loans if the payment is made within one Business Day after demand (and there after at the Default Rate) on such amount from the date of any payment made by the Issuing Lender debiting through the date of payment by Borrower. The principal amount of any Borrower’s loan account(s) with such payment made to the Issuing Lender as an advance 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 Revolving Loans Issuing Lender pursuant to Section 2.12.5(d) for its Pro Rata Share of any payment made by the Issuing Lender under a Letter of Credit shall thereupon acquire a participation, to the extent of such reimbursement, in the claim of the Issuing Lender against Borrower under this Section 2.5(e).
(f) If Borrower fails to make the payment required by Section 2.5(d), the Agent may but is not required to, without notice to or the consent of Borrower, cause Advances to be made by the Lenders having a Pro Rata Share of the Line A Commitment in accordance with their respective Pro Rata Shares in an aggregate amount equal to the amount paid by the Issuing Lender on that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. If The proceeds of such Advances shall be paid to the advance of a Revolving Loan Issuing Lender to reimburse Lender it for the payment made by it under the Letter of Credit.
(g) The issuance of any drawingsupplement, expenditure or other payment mademodification, amendment, renewal, or cost extension to or expense incurred, by Lender in respect of any Letter of Credit results which has the effect of increasing the amount or tenor thereof shall be treated in all respects the same as the issuance of a new Letter of Credit, and shall require the submission of a new Request for Letter of Credit; provided however that nothing contained in this clause (g) shall require the payment of any additional issuance fees in respect thereof by Borrower other than with respect to any extension of the term thereof or renewal thereof or any increase in the amount of such Letter of Credit.
(h) The obligation of Borrower to pay to the extent that it results) in Issuing Lender the amount of any payment made by the Issuing Lender under any Letter of Credit Deficiencyissued to Borrower shall be absolute, then Borrowers will immediately eliminate unconditional, and irrevocable, subject only to performance by the Issuing Lender of its obligations to Borrower under California Commercial Code Section 5108. Without limiting the foregoing, the obligations of Borrower to pay to the Issuing Lender the amount of any payment made by the Issuing Lender under any Letter of Credit Deficiency in accordance with issued to Borrower shall not be affected by any of the terms of Section 2.1(a).following circumstances:
(ei) All Letter any lack of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements validity or enforceability of the Letter of Credit, and this Agreement, or any action taken other agreement or omitted by Lender in good faith under instrument relating thereto;
(ii) any amendment or in connection with waiver of or any consent to departure from the Letter of Credit will not subject Lender to Credit, this Agreement, or 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 other agreement or willful misconduct. Lender shall not be obligated to cause any Letter of Credit to be 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.instrument relating thereto;
(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 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: (iiii) the existence of any claim, set-offsetoff, defense defence, or other right rights which any Borrower may have at any time against any beneficiaryLender, or any transferee, beneficiary of any the Letter of Credit (or any Persons persons or entities 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 DocumentsLetter of Credit, the transactions contemplated in this Agreement, or any unrelated transaction; other agreement or instrument relating thereto, or any underlying transactions;
(iiiv) any statement demand, statement, or any other document presented under any the Letter of Credit proving to be forged, fraudulent, invalid invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iii) respect whatsoever so long as 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 such document appeared 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 draft or certificate which substantially complies comply with the terms of such Letter of Credit; (vi) the invalidity or unenforceability 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 examination transmission of documents presented under any message relating to a Letter of Credit exclusively not caused by electronic the Issuing Lender, or electro-optical means; any delay or interruption in any such message;
(viii) any other circumstances error, neglect or happening whatsoever, whether or not similar to default of any correspondent of the foregoingIssuing Lender in connection with a Letter of Credit;
(ix) any consequence arising from acts of God, including any act war, insurrection, disturbances, labor disputes, emergency conditions or omissionother causes beyond the control of the Lenders;
(x) so long as the Issuing Lender in good faith determines that the draft, whether rightful contract or wrongfuldocument appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any present contract or future de jure or de facto governmental authority. None document referred to in any document submitted to the Issuing Lender in connection with a Letter of Credit; and
(xi) where the foregoing shall affectIssuing Lender has acted in good faith and without gross negligence, impair or prevent the vesting of any rights or powers of other circumstance whatsoever; provided, in each case, that payment by Issuing Lender under this Section 2.3the applicable Letter of Credit shall not have constituted gross negligence or willful misconduct of Issuing Lender under the circumstances in question.
(i) In furtherance and extension, and not in limitation, of the specific provisions set forth above, any action taken or omitted by The Issuing 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal be entitled to the Applicable LOC Fee Percentage per annum on protection accorded to 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 Agent pursuant to Sections 4.3(a)Article 10, 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Datemutatis mutandis.
Appears in 1 contract
Letters of Credit. (a) Until The Issuing Bank agrees, on the Termination Date with respect to the Line of Credit and subject to the other terms and conditions of this Agreementhereinafter set forth, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“the "Letters of Credit") for the account of any Borrower from time to time on any Business Day during the period from the date hereof until 60 days before the Termination Date (i) in an aggregate Available Amount for all Letters of Credit not to exceed at any time the Issuing Bank's Letter of Credit Commitment at such time and (ii) in an Available Amount for each such Letter of Credit not to exceed the Unused Revolving Credit Commitments of the Lenders at such time. No Letter of Credit shall have an expiration date (including all rights of the applicable Borrower or the beneficiary to require renewal) later than the earlier of 60 days before the Termination Date and (A) in the case of a Standby Letter of Credit”, one year after the date of issuance thereof, but may by its terms be renewable annually upon notice (a "Notice of Renewal") given to the Issuing Bank and the Administrative Agent on or prior to any date for notice of renewal set forth in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed but in any event at least three Business Days prior to the reasonable satisfaction date of Lender, together with the proposed form renewal of such Standby Letter of Credit and upon fulfillment of the applicable conditions set forth in Article III unless the Issuing Bank has notified the applicable 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 that the terms of each Standby Letter of Credit that is automatically renewable annually shall (x) require the Issuing Bank 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 60 days before the Termination Date. If either a Notice of Renewal is not given by the applicable Borrower or a Notice of Termination is given by the Issuing Bank pursuant to the immediately preceding sentence, such Standby Letter of Credit shall expire on the date on which it otherwise would have been automatically renewed; provided, however, that even in the absence of receipt of a Notice of Renewal the Issuing Bank may in its discretion, unless instructed to the contrary by the Administrative Agent or the applicable Borrower, deem that a Notice of Renewal had been timely delivered and in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under this Agreement. Within the limits of the Letter of Credit (whichFacility, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect and subject to the proposed Letter of Creditlimits referred to above, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the Borrowers may request the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter Letters of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, under this Section 2.3.
(b) Each Letter of Credit issued under this Agreement will2.01(c), 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 repay any Letter of 23 19 Credit have a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request Advances resulting 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 drawings thereunder 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 results2.03(c) 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 request 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 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 additional 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 draft or certificate which substantially complies with the terms of 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 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 2.32.01(c).
(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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Credit Agreement (Amdocs LTD)
Letters of Credit. (a) Until Subject to the Termination Date 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 any Letter of Credit Extension with respect to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby any Letter of Credit”) , and no Lender shall be obligated to participate in favor any Letter of Credit if as of the date of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Letter of Credit Extension, (i) a the Outstanding Amount of all Letter of Credit Application completed to Usage and all Loans would exceed the reasonable satisfaction Aggregate Commitments, (ii) the aggregate Outstanding Amount of the Committed Loans of any Lender, together with plus such Lender’s Pro Rata Share of the proposed form 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 (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates Usage would exceed the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Sublimit. Each Letter of Credit Documents that Lender then customarily requires shall be in the issuance of letters of credit. Lender, in addition a form acceptable to the other terms Issuing Lender. Unless all Lenders, Administrative Agent, and the Issuing Lender otherwise consent in a writing delivered to Administrative Agent, the term of this Agreement, will have no obligation to issue the proposed any Letter of Credit if, after giving effect to shall not exceed the proposed Letter of Credit, there would exist a Maturity Date. Each commercial Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3require drafts drawn at sight.
(b) Each Borrowers may irrevocably request the issuance, supplement, modification, amendment, renewal, or extension of a Letter of Credit issued under this Agreement willby delivering a duly completed Letter of Credit Application therefor to the Issuing Lender, among other thingswith a copy to Administrative Agent, (i) 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 form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faith, (ii) be denominated in DollarsLetter 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 (iii“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 issued to support Borrowers’ obligations that finance its business needs incurred agreed upon at the time each such Letter of Credit is issued. This Agreement shall control in the ordinary course event of Borrowers’ respective businesses as presently conducted by them. In no event will any conflict with any Letter of Credit have a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth aboveApplication.
(c) Upon receipt the issuance of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If , each Lender elects not shall be deemed to issue 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 will communicate in writing an amount equal to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on that Lender’s demand or payable as otherwise set forth Pro Rata Share. Without limiting the scope and nature of each Lender’s participation in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 the extent that the Issuing Lender has not been reimbursed by Borrowers for any drawing, expenditure or other payment made, or cost or expense incurred, required to be made by the Issuing 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 under any Letter of Credit results (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 extent that it results) in Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit Deficiency, then together with interest as hereinafter provided.
(d) Borrowers will immediately eliminate 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 Deficiency 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 the terms of Section 2.1(a)that pro rata participation, in any payment made by Borrowers with respect to such claim.
(e) All 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 Obligations will constitute part 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 Obligations 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 secured payable by Borrowers upon demand and shall bear interest at the Loan CollateralDefault Rate.
(f) In determining whether 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 CreditCredit shall be joint and several, Lender will absolute, unconditional, and irrevocable. Without limiting the foregoing, Borrowers’ obligations shall not be responsible only to confirm in good faith that affected by any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit, and this Agreement, or any action taken other agreement or omitted by Lender in good faith under instrument relating thereto;
(ii) any amendment or in connection with waiver of or any consent to departure from the Letter of Credit will not subject Lender to Credit, this Agreement, or any liability to any Borrower; providedother agreement or instrument relating thereto, however, nothing in this Section 2.3(f) will relieve Lender with the consent 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 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.Borrowers;
(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 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: (iiii) the existence of any claim, set-off, defense defense, or other right rights which any Borrower Borrowers may have at any time against any beneficiarythe Issuing Lender, Administrative Agent or any transfereeLender, any beneficiary of any the Letter of Credit (or any Persons persons or entities 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 DocumentsLetter of Credit, the transactions contemplated in this Agreement, or any other agreement or instrument relating thereto, or any unrelated transaction; transactions;
(iiiv) any statement demand, statement, or any other document presented under any the Letter of Credit proving to be forged, fraudulent, invalid invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iii) respect whatsoever so long as any default, negligence, misfeasance, suspension, insolvency, or bankruptcy such document appeared to comply with the terms of any shipper or any other Person involved in any transaction covered thereby or any correspondent or agent the Letter 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; Credit;
(v) payment by the Issuing Lender in good faith under any the Letter of Credit against presentation of a draft or certificate any accompanying document which substantially complies does not strictly comply with the terms of such Letter of Credit; (vi) the invalidity or unenforceability 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 examination time, place, manner, order or contents of shipments or deliveries of Property as described in documents presented under 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 exclusively not caused by electronic the Issuing Lender, or electro-optical meansany 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; or and
(viiixiv) where the Issuing Lender has acted in good faith and observed general banking usage, any other circumstances or happening 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), whether or not similar to any (i) the rules of the foregoingISP shall apply to each standby Letter of Credit, including any act or omission, whether rightful or wrongful, of any present or future de jure or de facto governmental authority. None and (ii) the rules of the foregoing Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance shall affect, impair or prevent the vesting apply to each commercial Letter of any rights or powers of Lender under this Section 2.3Credit.
(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 Concurrently 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 , Borrowers shall pay a letter of credit issuance fee to the basis Issuing Lender, for the sole account of the actual number of days elapsed Issuing Lender, 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 an amount 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 adjustmentLetter. The foregoing adjustmentBorrowers shall also pay to Administrative Agent, 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 ratable account 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 Lenders in accordance with Section 4.3 their Pro Rata Share, a Letter of this AgreementCredit fee in an amount equal to the Applicable Margin times the average daily maximum amount available to be drawn on such outstanding Letter of Credit, then, at Lender’s optioncomputed and payable in arrears on the last day of each calendar quarter, commencing on June 30, 2005, through the date upon which the outstanding Letter of Credit shall expire, with the final payment to be made on such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 expiration date (provided that the minimum fee for each Letter of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it Credit shall be assumed $500 per annum). Borrowers shall also pay to the Issuing Lender for purposes its own account, from time to time on demand, the Issuing Lender’s standard processing fees, costs and charges with respect to Letters of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 Credit. The Letter of Credit issuance fee and the pricing associated therewith Letter of Credit fee are nonrefundable.
(i.e.j) As of the Closing Date, Pricing Grid Level 1) Bank of America has issued for the account of RSA certain existing letters of credit listed on Schedule 2.4 hereto (collectively, the “Existing Letters of Credit”). On the Closing Date, each Lender will be applicable on purchase a participation in the then applicable Determination DateExisting 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 Closing Date the letter of credit fee for the ratable account of Lenders will accrue and the undrawn amount thereof shall constitute Letter of Credit Usage.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect The Existing Letters of Credit described in SCHEDULE 2.4 shall be Letters of Credit for all purposes under this Agreement. Subject to the Line of Credit and subject to the other terms and conditions hereof, at any time and from time to time from the Closing Date through the Maturity Date, the Issuing Lender shall issue such Letters of this Agreement, Credit under the Commitment as Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: ; PROVIDED that (i) a giving effect to all such Letters of Credit, the SUM of (A) the aggregate principal amount outstanding under the Notes PLUS (B) the Swing Line Outstandings PLUS (C) the Aggregate Effective Amount of all outstanding Letters of Credit, does not exceed the then applicable Commitment, and (ii) the Aggregate Effective Amount under all outstanding Letters of Credit does not exceed $6,000,000. Each Letter of Credit Application completed shall be in a form acceptable to the reasonable satisfaction Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the term of Lender, together with the proposed form of the any Letter of Credit shall not exceed one (which, in all respects, will comply with 1) year or extend beyond the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Maturity Date.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by submitted to the Issuing Lender, with a copy to the Administrative Agent, at least five (A5) Banking Days prior to the rules or customs set forth in date upon which the related Letter of Credit and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Lender whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, 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 receipt the issuance of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, each Lender will communicate shall be deemed to have purchased a pro rata participation in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on from the Issuing Lender in an amount equal to that Lender’s demand or payable as otherwise set forth 's Pro Rata Share. Without limiting the scope and nature of each Lender's participation in the applicable any Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when dueCredit, 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, extent that the Issuing Lender has not been reimbursed by the Borrowers hereby irrevocably instruct Lender, on for any payment required to be made by the same Business Day that Issuing 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, each Lender shall, pro rata according to its Pro Rata Share, reimburse the Issuing Lender through the Administrative Agent promptly upon demand 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 the amount of the Revolving Loans pursuant to Section 2.1such payment. If the advance The obligation 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject each Lender to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve so reimburse the Issuing 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 be absolute and unconditional and shall not be obligated to cause any Letter of Credit to be 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 affected by the gross negligence or willful misconduct occurrence of Lender. The agreement in this Section 2.3(g) shall survive repayment an Event 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 Default or any other Person, whether in connection with this Agreement occurrence or event. Any such reimbursement shall not relieve or otherwise impair the other Loan Documents, obligation of the transactions contemplated in this Agreement, or any unrelated transaction; (ii) any statement or any other document presented under any Letter of Credit proving Borrowers 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 reimburse the Issuing Lender for the amount 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 made by the Issuing Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies together with the terms of 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 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 2.3interest as hereinafter provided.
(id) 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 put Lender under any resulting liability The Borrowers agree to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of CreditCredit within one (1) Banking Day after demand made by the Issuing Lender therefor, a fee (“LOC Fee”) equal to together with interest on such amount from the 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 any payment made by the Issuing Lender (with the understanding that the Issuing Lender promptly shall notify the Borrowers of such payment date) 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 and including the expiry date thereof (or, if earlier, extent that the date on which Lenders have not reimbursed 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 Issuing Lender pursuant to Sections 4.3(aSection 2.4(c), 4.3(b) and 4.3(d) (as applicable) the interest amount of this Agreement any such payment shall be 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 account of the end of such Fiscal Quarter or Fiscal Year then ended so long as no Event of Default is existing as of Issuing Lender. Each Lender that has reimbursed 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 Issuing 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.2.4
Appears in 1 contract
Letters of Credit. 3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS THEREIN.
A. LETTERS OF CREDIT. Company acknowledges and confirms that Schedule 3.1 annexed hereto sets forth each letter of credit issued under the Existing Credit Agreement (collectively, the "EXISTING LETTERS OF CREDIT") and outstanding as of the Effective Date. Company hereby represents, warrants, agrees, covenants and (a) Until the Termination Date with respect reaffirms that it has no (and it permanently and irrevocably waives and releases Agents and Lenders from any, to the Line 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 subject (b) reaffirms its obligation to reimburse the other applicable Issuing Lenders for honored drawings under such Existing Letters of Credit in accordance with the terms and conditions of this AgreementAgreement and the other Loan Documents applicable to Letters of Credit issued hereunder. Based on the foregoing, Borrowers may request 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 issue one or more be a Standby Letter of its standard standby 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 (“Standby Letter 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 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 be 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 that Swing Line Lender make Swing Line Loans pursuant to subsection 2.1A(iv), Company may request, in accordance with the provisions of this 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 favor accordance with the provisions of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: this subsection 3.1; provided that Company shall not request that any Lender issue (and no Lender shall issue):
(i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed 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, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
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Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreementhereof, Borrowers may request Lender each LC Issuing Bank agrees to issue Letters of Credit from time to time for the account of the Borrower (or to extend the stated maturity thereof or to amend or modify the terms thereof), in an aggregate stated amount not exceeding such LC Issuing Bank’s Fronting Commitment, up to a maximum aggregate stated amount for all Letters of Credit at any one or more time outstanding equal to the LC Commitment Amount. With respect to Letters of its standard standby letters of credit (“Standby Letter Credit that are not Bond Letters of Credit”) in favor , such issuance shall occur on not less than three Business Days’ prior notice thereof by delivery of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (ix) a Request for Issuance for such Letter of Credit Application completed to the reasonable satisfaction of Lender, together with Administrative Agent and the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed LC Issuing Bank for such Letter of Credit, and (iiiy) such other LC Issuing Bank’s standard form of Letter of Credit Documents that Lender then customarily requires in application for the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed requested Letter of Credit if(including, after giving effect for direct pay Letters of Credit, any reimbursement agreement or other standard form required by such LC Issuing Bank) to the proposed letter of credit department of such LC Issuing Bank for the account of the Borrower. With respect to each Bond Letter of Credit, there would exist such issuance shall occur after receipt of (x) a Request for Issuance for such Bond Letter of Credit to the Administrative Agent and the LC Issuing Bank for such Bond Letter of Credit, (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 Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be that is not a representation by Borrowers that the 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 issued 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 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 Xxxxxx’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 withwith Section 2.17(f). Notwithstanding anything herein to the contrary, and will not violate the terms ofBarclays Bank PLC, this Section 2.3as an LC Issuing Bank, shall only be required to issue standby Letters of Credit.
(b) Each Letter The Borrower may from time to time appoint one or more additional Lenders (with the consent of Credit issued under this Agreement willany such Lender, among other things, (i) which consent may 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 withheld in the ordinary course sole discretion of Borrowers’ respective businesses each Lender) to act, either directly or through an Affiliate of such Lender, as presently conducted an LC Issuing Bank hereunder. Any such appointment and the terms thereof shall be evidenced in a separate written agreement executed by them. In no event will any Letter the Borrower and the relevant LC Issuing Bank, a copy of Credit have a term of more than one year; furthermore, and, in addition which agreement shall be delivered by the Borrower to the foregoing term limitationAdministrative 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 will shall have no any obligation to issue any Letter of Credit with an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line of Credit. Each hereunder or any Letter of Credit Application issued by such Lender shall remain outstanding, such Lender shall be deemed to be, and each Letter of Credit will set forth which rules or customs apply to shall have all the Letter of Credit. Such rules rights and customs may includeobligations of, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce an “LC Issuing Bank” under this Agreement.
(“ISP”c) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the No Letter of Credit shall be governed by requested, issued or modified hereunder if, after the issuance or modification thereof, (Ai) the rules or customs set forth Outstanding Credits would exceed the Commitments then scheduled to be in effect until the Letter latest Termination Date, (ii) that portion of the LC Outstandings arising from Letters of Credit and issued by an LC Issuing Bank would exceed the amount of such LC Issuing Bank’s Fronting Commitment or (Biii) the internal laws of LC Outstandings would exceed the State of Ohio and the United States of America, except LC Commitment Amount. No LC Issuing Bank shall be under any obligation to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request from Borrowers to open issue any Letter of Credit and if any order, judgment or decree of all attendant Letter of Credit Documents completed any Governmental Authority shall by its terms purport to Lender’s reasonable satisfaction, Lender, within three (3) Business Days, may either (i) issue the requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, enjoin or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue restrain such LC Issuing Bank from issuing such Letter of Credit, Lender will communicate 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 writing particular or shall impose upon the LC Issuing Bank with respect to Borrowers such Letter of Credit any restriction, reserve or capital requirement (for which the reason(sLC 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) why Lender has declined such requestthat was not applicable on the date hereof and that the LC Issuing Bank in good xxxxx xxxxx material to it.
(d) All 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 Obligations are 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 Lender’s demand or payable as otherwise set forth demand, from the date so paid by such LC Issuing Bank until repayment to such LC Issuing Bank in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective of any claim, setoff, defense or other right which any Borrower may have full at any time against Lender or any other Person. Subject a fluctuating interest rate per annum equal to the terms of Section 6.6interest rate applicable to Base Rate Loans plus, Borrowers hereby irrevocably instruct Lender, on the same Business Day that Lender is obligated to fund a drawing or make if any expenditure or any other payment amount paid by such LC Issuing Bank under a Letter of Credit or incurs any cost or expense 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 any Letter Section 2.02 (and which Borrowing shall be subject to the conditions in Section 2.02) in the amount of Creditsuch Reimbursement Amount, and the proceeds of such Borrowing may be applied to reimburse Lender for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender debiting any satisfy the Borrower’s loan account(s) with Lender obligations to such LC Issuing Bank or the Lenders, 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)case may be.
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under If any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to LC Issuing Bank shall not have been delivered under reimbursed in full for any Reimbursement Amount in respect of a Letter of Credit appear 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 comply substantially 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 their face with such amount at a rate per annum equal to the requirements Federal Funds Effective Rate, for the first three days from the date of the Letter payment by such LC Issuing Bank, and, thereafter, until the date of Creditpayment to such LC Issuing Bank by such Lender, and any action taken or omitted by Lender in good faith under or in connection with any Letter at a rate 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 interest equal to the extent, but only rate applicable to the extent, of any direct, as opposed to consequential, damages suffered Base Rate Loans. Each such payment by Borrowers from Lender’s gross negligence or willful misconduct. a Lender shall be made not be obligated later than 3:00 P.M. (New York City Time) on the later to cause any Letter occur of Credit to be 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 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 Business Day immediately following the date 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 payment by 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; LC Issuing Bank and (ii) any statement 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 occurrence or continuance of a Default or the failure of 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 make 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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(j2.04(e). 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 date upon which further agrees that each such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it payment shall be assumed for purposes of determining the Applicable LOC Fee Percentagemade without any offset, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e.abatement, Pricing Grid Level 1) will be applicable on the then applicable Determination Datewithholding or reduction whatsoever.
Appears in 1 contract
Letters of Credit. (a) Until The Issuing Bank agrees, on the Termination Date with respect to the Line of Credit terms and subject to the other terms and conditions of this Agreementherein set forth, Borrowers may request Lender to issue one or more of its standard standby letters of credit (the “Standby Letter Letters of Credit”) in favor 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. The Issuing Bank shall have no obligation to issue, and no Borrower shall request the issuance of, any Letter of Credit hereunder if the Available Amount of such beneficiary(ies) Letter of Credit exceeds, immediately before the time of such issuance, an amount equal to the total Unused Commitments of the Lenders at such time (as are designated such amount shall be advised by Borrowers the Administrative Agent to the Issuing Bank as contemplated by delivering Section 2.04). No Issuing Bank shall have any obligation to Lenderissue, and no Borrower shall request the issuance of, any Letter of Credit hereunder if the aggregate Available Amounts or the aggregate stated amount of all Letters of Credit issued by such Issuing Bank would exceed, after giving effect to such issuance, the maximum amount set forth in a letter agreement between such Issuing Bank and Parent, on behalf of the Borrowers. The Issuing Bank shall have no obligation to issue, and no Borrower shall request the issuance of, any Letter of Credit except within the following limitations: (i) a each Letter of Credit Application completed shall be denominated in U.S. dollars (unless issued pursuant to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)2.21), (ii) a Borrowing Base Certificate which calculates the each Letter of Credit Availability by giving effect to the proposed Letter of Credit, shall be payable only against sight drafts (and not time drafts) and (iii) such other no Letter of Credit Documents that Lender then customarily requires in shall have an expiration date (including all rights of the issuance applicable Borrower or the beneficiary to require renewal) later than the earlier of letters of credit. Lender, in addition 10 days prior to the other terms Termination Date and one year after the date of this Agreementissuance thereof, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist but a Letter of Credit Deficiency. The making may by its terms be automatically renewable annually unless the Issuing Bank notifies the beneficiary thereof of its election not to renew such Letter of Credit; provided that the terms of each Letter of Credit request by Borrowers will be deemed that is automatically renewable annually shall not permit the expiration date (after giving effect to be a representation by Borrowers that the any renewal) of such Letter of Credit may in any event to be issued in accordance with, and will not violate the terms of, this Section 2.3.
(b) Each Letter of Credit issued under this Agreement will, among other things, (i) be in such form requested by Borrowers as is acceptable extended 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 date later than one year; furthermore, and, in addition 10 days prior to the foregoing term limitation, Lender will Termination Date. The Issuing Bank shall have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 feeswhich is unsatisfactory in form, charges and out of pocket expenses with respect substance or beneficiary 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 Issuing Bank in the definition exercise 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 its reasonable judgment consistent 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Dateits customary practice.
Appears in 1 contract
Samples: Credit Agreement (Ace LTD)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions hereof, at any time and from time to time from the Closing Date through the day prior to the Revolver Termination Date, the Issuing Lender shall issue such Letters of this Agreement, Borrowers Credit as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor ; PROVIDED that, giving effect to the issuance of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Letter of Credit, (i) a in no event shall the Letter of Credit Application completed Usage exceed $500,000 at any time, and (ii) after giving effect to the reasonable satisfaction requested Letter of LenderCredit, together with Revolving Usage does not exceed the proposed form Maximum Revolving Credit Amount.
(b) Unless all the Lenders otherwise consent in writing, no Letter of Credit shall have a term which exceeds one year or extends more than 90 days beyond the Revolver Termination Date.
(c) Each Request for Letter of Credit shall be submitted to the Issuing Lender at least five Business Days prior to the date when the issuance of the Letter of Credit (which, in all respects, will comply with the applicable requirements is requested. Upon issuance of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed each Letter of Credit, the Issuing Lender shall promptly notify the Administrative Agent, and the Administrative Agent shall thereafter promptly notify the Lenders, of the amount and terms thereof.
(iiid) such other Letter of Credit Documents that Lender then customarily requires in Upon the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed each Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will Lender shall be deemed to be have purchased a representation by Borrowers that pro rata participation from the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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, andIssuing Lender, in addition an amount equal to that Lender's Pro Rata Share of the foregoing term limitationRevolving Commitment, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules Without limiting the scope and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber nature of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In each such Lender's participation in any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why extent that the Issuing Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in not been reimbursed by Borrower for any payment required to be made by the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Issuing Lender the amount of all other Letter of Credit Obligations 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 each such Lender shall reimburse Lender the Administrative Agent for any drawingthe account of the Issuing Lender, expenditure or other promptly upon demand for the amount of such payment made, or cost or expense incurred, by Lender debiting any Borrower’s loan account(s) in accordance with Lender as an advance its Pro Rata Share of the Revolving Loans Commitment. The obligation of each such 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.
(e) After the making by the Issuing Lender of any payment with respect to any Letter of Credit issued for the account of Borrower, Borrower agrees to pay to the Issuing Lender, within one Business Day after demand therefor, a principal amount equal to any payment made by the Issuing Lender under that Letter of Credit, together with interest at the Default Rate on such amount from the date of any payment made by the Issuing Lender through the date of payment by Borrower. The principal amount of any such payment made to the Issuing Lender 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 2.12.5(d) for its Pro Rata Share of any payment made by the Issuing Lender under a Letter of Credit shall thereupon acquire a participation, to the extent of such reimbursement, in the claim of the Issuing Lender against Borrower under this Section 2.5(e).
(f) If Borrower fail to make the payment required by Section 2.5(d), the Administrative Agent may but is not required to, without notice to or the consent of Borrower, cause Advances to be made by the Lenders having a Pro Rata Share in the Revolving Commitment in accordance with their respective Pro Rata Shares of the Revolving Commitment in an aggregate amount equal to the amount paid by the Issuing Lender on that Letter of Credit and, for this purpose, the conditions precedent set forth in Article 8 shall not apply. If The proceeds of such Advances shall be paid to the advance of a Revolving Loan Issuing Lender to reimburse Lender it for the payment made by it under the Letter of Credit.
(g) The issuance of any drawingsupplement, expenditure or other payment mademodification, amendment, renewal, or cost extension to or expense incurred, by Lender in respect of any Letter of Credit results (or to shall be treated in all respects the extent that it results) in any Letter same as the issuance of Credit Deficiency, then Borrowers will immediately eliminate any Letter of Credit Deficiency in accordance with the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the new Letter of Credit, and shall require the submission of a new Request for Letter of Credit; PROVIDED however that nothing contained in this clause (h) shall require the payment of any action taken additional issuance fees in respect thereof by Borrower OTHER THAN with respect to any extension of the term thereof or omitted renewal thereof or any increase in the amount of such Letter of Credit.
(h) The obligation of Borrower to pay to the Issuing Lender the amount of any payment made by the Issuing Lender in good faith under or in connection with any Letter of Credit will not issued to Borrower shall be absolute, unconditional, and irrevocable, subject Lender only to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve performance by the Issuing Lender of its obligations to Borrower under California Commercial Code Section 5109. Without limiting the foregoing, the obligations of Borrower shall not be affected by any liability it may have to Borrowers to of the extent, following circumstances but only to the extent, extent such circumstances are not a result 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 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 gross negligence or willful misconduct of the Issuing Lender. The agreement in this Section 2.3(g) shall survive repayment of all other Obligations.:
(hi) As between Borrowers and Lender, Borrowers assume all risks any lack of validity or enforceability of the acts and omissions ofLetter of Credit, this Agreement, or misuse any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any of consent to departure from the Letters of Credit by, the respective beneficiaries of such Letters Letter of Credit. In furtherance and not in limitation of the foregoing, Lender shall not be responsible for: this Agreement, or any other agreement or instrument relating thereto;
(iiii) the existence of any claim, set-offsetoff, defense defense, or other right rights which any Borrower may have at any time against any beneficiaryLender, or any transferee, beneficiary of any the Letter of Credit (or any Persons persons or entities 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 DocumentsLetter of Credit, the transactions contemplated in this Agreement, or any other agreement or instrument relating thereto, or any unrelated transaction; transactions;
(iiiv) any statement demand, statement, or any other document presented under any the Letter of Credit proving to be forged, fraudulent, invalid invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iii) respect whatsoever so long as 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 such document appeared 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 draft or certificate which substantially complies comply with the terms of such Letter of Credit; (vi) the invalidity or unenforceability 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 examination transmission of documents presented under any message relating to a Letter of Credit exclusively not caused by electronic the Issuing Lender, or electro-optical means; any delay or interruption in any such message;
(viii) any other circumstances error, neglect or happening whatsoever, whether or not similar to default of any correspondent of the foregoingIssuing Lender in connection with a Letter of Credit;
(ix) any consequence arising from acts of God, including any act war, insurrection, disturbances, labor disputes, emergency conditions or omissionother causes beyond the control of the Lenders;
(x) so long as the Issuing Lender in good faith determines that the draft, whether rightful contract or wrongfuldocument appears to comply with the terms of the Letter of Credit, the form, accuracy, genuineness or legal effect of any present contract or future de jure or de facto governmental authority. None document referred to in any document submitted to the Issuing Lender in connection with a Letter of Credit; and
(xi) where the foregoing shall affectIssuing Lender has acted in good faith and without gross negligence, impair or prevent the vesting of any rights or powers of Lender under this Section 2.3other circumstance whatsoever.
(i) In furtherance and extension, and not in limitation, of the specific provisions set forth above, any action taken or omitted by The Issuing 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal be entitled to the Applicable LOC Fee Percentage per annum on protection accorded to 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 Administrative Agent pursuant to Sections 4.3(a)Article 10, 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateMUTATIS MUTANDIS.
Appears in 1 contract
Samples: Loan Agreement (Landec Corp \Ca\)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other 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 this Agreement, Borrowers Credit under the Commitment as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor ; provided that giving effect to all such Letters of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Credit, (i) a 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 Application completed shall be in a form reasonably acceptable to the reasonable satisfaction of LenderIssuing Bank. Unless all the Banks otherwise consent in a writing delivered to the Administrative Agent, together with the proposed form of the no Letter of Credit (which, in all respects, will comply with shall have a term which exceeds one year or which extends beyond the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Maturity Date.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by submitted to the Issuing Bank, with a copy to the Administrative Agent, at least five (A5) Banking Days prior to the rules or customs set forth in date upon which the related Letter of Credit and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Bank whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, 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 receipt the issuance of a request Letter of Credit, each Bank shall be deemed to have purchased a pro rata participation in such Letter of Credit from Borrowers the Issuing Bank in an amount equal to open 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 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such requesttogether with interest as hereinafter provided.
(d) All 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 Obligations are payable 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 Lender’s demand or payable as otherwise 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 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 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 applicable 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 equal to the amount paid by the Issuing Bank with respect to that Letter of Credit Documentsand, for this purpose, the conditions precedent set forth in Article 8 shall not apply. Borrowers jointly and severally promise 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 Lender to the Issuing Bank the amount of all other any payment made by the Issuing Bank under any Letter of Credit Obligations immediately when dueshall be absolute, irrespective 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 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 defense, or other right rights which any Borrower may have at any time against Lender the Issuing Bank or any other Person. Subject to the terms of Section 6.6Creditor, 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 beneficiary 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 persons or entities 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 DocumentsLetter of Credit, the transactions contemplated in this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactiontransactions; (iiiv) any statement demand, statement, or any other document presented under any the Letter of Credit proving to be forged, fraudulent, invalid 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 messagerespect whatsoever; (v) payment by Lender the Issuing Bank under any the Letter of Credit against presentation of a draft or certificate any accompanying document which substantially complies does not strictly comply with the terms of such the Letter of Credit; (vi) the invalidity existence, character, quality, quantity, condition, packing, value or unenforceability 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 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; (viiix) any failure or delay in notice of shipments or arrival of any Property; (x) any error in the examination transmission of documents presented under any message relating to a Letter of Credit exclusively not caused by electronic the Issuing Bank, or electro-optical meansany delay or interruption in any such message; or (viiixi) any other circumstances error, neglect or happening whatsoever, whether or not similar to default of any correspondent 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 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 Letters of Credit or any related certificates, if taken or omitted Issuing Bank; (xiii) so long as the Issuing Bank in good faith in determines that the absence contract or document appears to comply with the terms of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each Letter of Credit from, (and including, no payment is made by the issuance Issuing Bank after the expiration date of the Letter of Credit to and including or in amounts greater than the expiry date thereof (or, if earlieramount thereof), the date on which 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 is returned Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to Lender and is canceled). In addition, Borrowers will pay in any document submitted 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 the Issuing Bank in connection with respect to each a Letter of Credit. ; and (xv) where the Issuing Bank has acted in good faith and observed general banking usage, any other circumstances whatsoever.
(i) The LOC Fee is fully earned by Lender when paid and will Issuing Bank shall be due and payable on entitled to the issuance of each Letter of Credit. The LOC Fee will be calculated on pro- tection accorded to the basis of the actual number of days elapsed in a 360-day year. If any Administrative Agent pursuant to Section 10.6, mutatis mutandis.
(j) Each Letter of Credit which is cancelled for any reason before outstanding under 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 Existing Loan 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 Closing Date shall be deemed 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of issued under, and shall be outstanding under this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Dateconstitute an Obligation.
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Letters of Credit. (ai) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions hereof, Issuing Bank will issue Letters of this Agreement, Borrowers may request Lender Credit in form and substance acceptable to issue one or more Issuing Bank for the account of its standard standby letters Borrower on any Business Day before the Revolving Maturity Date. The aggregate undrawn amount of credit (“Standby all issued and outstanding Letters of Credit plus the aggregate amount of all drawn but unreimbursed amounts under any Letter of Credit”) in favor Credit shall at all times reduce the amount otherwise available for Advances under the Revolving Line. Unless otherwise agreed by the Lenders, each Letter of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Credit shall (i) be denominated in Dollars and (ii) expire no later than the earlier of (A) 30 days prior to the Revolving Maturity Date (unless cash collateral is provided therefor as provided hereunder) and (ii) the 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 Application completed by delivering to the reasonable satisfaction Issuing Bank an application and such other documents as Issuing Bank may request. Issuing Bank shall furnish a copy of Lender, together with the proposed form of the such Letter of Credit to Borrower and Lenders promptly following the issuance thereof.
(whichiii) Borrower shall pay Issuing Bank such fees as are incurred or charged by Issuing Bank in issuing, in all respectsnegotiating, will comply with the applicable requirements of Section 2.3(b))effecting payment under, (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed amending or otherwise administering any Letter of Credit.
(iv) Issuing Bank grants to each Lender, and (iii) each Lender irrevocably agrees to accept and purchase from Issuing Bank, on the terms and conditions set forth below, an undivided interest equal to such other Letter of Credit Documents that Lender then customarily requires Lender’s Commitment Percentage in the issuance of letters of credit. Lender, Issuing Bank’s obligations and rights under and in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making respect of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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, each draft paid by Lender debiting any Borrower’s loan account(s) with Lender as an advance of the Revolving Loans pursuant to Section 2.1Issuing Bank thereunder. 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft is paid under any Letter of Credit proving for which Issuing Bank is not reimbursed in full by Borrower, such Lender shall pay 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 Issuing Bank upon demand an
11. amount equal to such Lender’s Commitment Percentage of any shipper or any other Person involved in any transaction covered thereby or any correspondent or agent the amount 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, such draft, or message; (v) payment by Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies with the terms of 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 electronic or electro-optical means; or (viii) any other circumstances or happening whatsoeverpart thereof, whether or that is 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 authorityso reimbursed. 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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, Each 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 obligation 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 pay 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it amount shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 absolute and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Dateunconditional.
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Letters of Credit. (a) Until If any Event of Default shall occur and be continuing, on the Termination Date with respect Business Day on which the Borrower receives notice from the Collateral Agent demanding the deposit of cash collateral pursuant to this paragraph, the Line of Credit and subject Borrower agrees to deposit into the other terms and conditions of this AgreementXX Xxxx Collateral Account, Borrowers may request Lender an amount in Dollars in cash equal to issue one or more of its standard standby letters of credit (“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 reasonable satisfaction of Lender, together with the proposed form 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 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 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 (which, in all respects, will comply with and the applicable requirements of Section 2.3(b)Acceleration Date shall not have occurred), such amount (iito the extent not applied as aforesaid) a Borrowing Base Certificate which calculates shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived. If at any time either (x) the amount of cash held in the XX Xxxx Collateral Account exceeds 105% of the Letter of Credit Availability by giving effect 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 be (A) if the Acceleration Date shall have occurred or Event of Default shall be continuing, applied to the proposed Letter of Creditother Obligations, if any, in the order set forth in Section 7.06 above and (B) otherwise, returned to the Borrower.
(b) On the Acceleration Date, the Administrative Agent shall request the Deposit Bank to withdraw from the Deposit Account and to pay same over to it, and (iii) shall return to each Participant such other 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 Documents that Lender then customarily requires 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 issuance XX Xxxx Collateral Account pursuant to Section 7.07(a), the Administrative Agent shall request the Deposit Bank to withdraw a portion of letters each Participant’s Deposits (if any) in an amount equal to such Participant’s Pro Rata Share of credit. Lender, in addition such unreimbursed LC Disbursements and deliver such amount to the other terms Issuing Bank in satisfaction of this Agreementthe obligations of the respective Participants under Section 2.01(c) (but not the Borrower’s Reimbursement Obligation under Section 2.01(c), will have no which obligation to issue shall only be satisfied by payment by the proposed Letter of Credit if, after giving effect Borrower to the proposed Letter Administrative Agent for application in accordance with Section 2.01(c) or by application of Credit, there would exist a Letter of Credit Deficiencyamounts held in the XX Xxxx Collateral Account as set forth in Section 7.07(a) above). The making 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 or accounts for each applicable Participant maintained with the Collateral Agent (each a “LC Reserve Account”). The Administrative Agent shall deposit in each Participant’s LC Reserve Account such Participant’s Pro Rata Share of the amounts received from the Deposit Account as provided above. The Collateral Agent shall have sole dominion and control over each LC Reserve Account, and the amounts deposited in each LC Reserve Account shall be held in such LC Reserve Account until withdrawn as provided in paragraph (c), (d), or (e) below. The Collateral Agent shall maintain records enabling it to determine the amounts paid over to it and deposited in the LC Reserve Accounts in respect of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that and the Letter amounts on deposit in respect of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 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, shall be the property of such Participant, shall not constitute a loan to or customs apply give rise to any claim of or against any Loan Party and shall not give rise to any obligation on the Letter part of Credit. Such rules and customs may includeany Loan Party to pay interest to such Participant, but are not limited to, it being agreed that the International Standby Practices, as published by the International Chamber reimbursement obligations in respect of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter Letters of Credit shall be governed by (A) the rules or customs set forth arise only at such times as drawings are made thereunder, as provided 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth aboveSection 2.01.
(c) Upon receipt In the event that after the Acceleration Date any drawing shall be made in respect of a 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 Borrowers the LC Reserve Account of each Participant any amounts, up to open any the amount of such Participant’s Pro Rata Share of such drawing deposited in respect of such 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 requested Letter of Credit remaining on deposit and deliver such amounts to the beneficiary thereof and transmit a copy 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 to Borrowers, the Administrative Agent for application in accordance with Section 2.01(c) or (iiby application of amounts held as cash collateral as set forth in Section 7.07(a) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such requestabove).
(d) All In the event that after the Acceleration Date any Letter of Credit Obligations are payable shall expire undrawn, the Collateral Agent shall withdraw from the LC Reserve Account of each Participant the amount remaining on Lender’s demand or payable as otherwise set forth deposit therein in the applicable respect of such Letter of Credit Documents. Borrowers jointly and severally promise distribute such amount to pay Lender such Participant.
(e) With the prior written approval of the Collateral Agent and the Issuing Bank, any Participant may withdraw the amount of all other Letter of Credit Obligations immediately when dueheld in its LC Reserve Account. Any Participant making such a withdrawal shall be unconditionally obligated, 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 in the terms of Section 6.6, Borrowers hereby irrevocably instruct Lender, on the same Business Day that Lender is obligated to fund event there shall subsequently be 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 pay over to the Collateral Agent, 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 the account of the Revolving Loans pursuant to Section 2.1. If the advance Issuing Bank on demand, its Pro Rata Share of a Revolving Loan to reimburse Lender for any drawing, expenditure such drawing 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateralpayment.
(f) In determining whether Pending the withdrawal by any Participant of any amounts from its LC Reserve Accounts as contemplated by the above paragraphs, the Collateral Agent will, at the direction of such Participant and subject to pay under any Letter such rules as the Collateral Agent may prescribe for the avoidance of Creditinconvenience, Lender will be responsible only to confirm in good faith invest such amounts. Each Participant that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements has not withdrawn all of the Letter of Credit, and any action taken or omitted by Lender amounts 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, its LC Reserve Accounts 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 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 2.3paragraph (e) above shall have the right, 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 at intervals reasonably specified by the gross negligence or willful misconduct of Lender. The agreement Collateral Agent, to withdraw the earnings on investments so made by the Collateral Agent with amounts remaining in this Section 2.3(g) shall survive repayment of all other Obligations.
(h) As between Borrowers its LC Reserve Accounts 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 to retain 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 earnings for its own 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
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Letters of Credit. (a) Until the Termination Date with respect to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“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 reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 6.6and conditions hereof, Borrowers hereby irrevocably instruct Lender, on at any time and from time to time from 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 Closing Date through 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 Maturity Date (or to such earlier date upon which the extent that it results) in any Letter of Credit Deficiency, then Borrowers will immediately eliminate any Letter of Credit Deficiency Combined Commitments are terminated in accordance with the terms of Section 2.1(athis Agreement).
(e) All , the Issuing Lender shall take such Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 BorrowerActions as Borrower may request; provided, however, nothing in this Section 2.3(f) will relieve Lender of any liability it may have to Borrowers to that 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. Issuing Lender shall not be obligated to cause take any Letter of Credit Action with respect to be extended or amended unless the requirements of this Section 2.3 are met as though a new any Letter of Credit were being requested Credit, and issued.
(g) In addition no Lender shall be obligated to amounts payable as elsewhere provided participate 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 if as of the date of such Letter of Credit Action, the aggregate outstanding principal amount of all Loans plus the Letter of Credit Usage would exceed the Combined Commitments or if the provision requested Letter of Credit would result in a violation of the limitations expressed in Section 2.01(c)(ii). Each Letter of Credit Action shall be in a form acceptable to Issuing Lender and shall not violate any credit support or enhancement in connection therewith exclusive policies of claims, demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by the gross negligence or willful misconduct of Issuing 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 Standby Letters of Credit by, shall be issued only for the respective beneficiaries purpose 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 securing workers’ compensation and other right which any insurance coverages for Borrower may have and its Subsidiaries in an amount not at any time against any beneficiaryto exceed the minimum amount required by Holdings’, Borrower’s, or any transfereeof 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 its Subsidiaries. The obligation of the Issuing Lender to take 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 Action and the obligation of the Lenders to participate 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 subject 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 such Letter of Credit against presentation of a draft or certificate which substantially complies with Action shall be subject to the terms of 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 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.following limitations:
(i) In furtherance and extension, and not The Letter of Credit Usage in limitation, respect of the specific provisions set forth above, any action taken or omitted by Lender under or in connection with any of the standby Letters of Credit or any related certificates, if taken or omitted in good faith issued to support obligations of Borrower and its Subsidiaries incurred in the absence construction of gross negligence or willful misconduct, stores and related shopping centers shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.exceed $2,000,000;
(iii) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each The Letter of Credit from, and including, the issuance date Usage in respect of the 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 to and including shall expire more than 12 months after the expiry date thereof (or, if earlier, the date on which the issuance thereof. No commercial 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 shall expire more than 180 days after 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 yearthereof. 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 Usage remains outstanding after the First Pricing Grid Determination Date, be determined as of June 30th and December 31st of each Fiscal Year ending on and after Maturity Date or any earlier date upon which 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 Combined Commitments are terminated 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 terms of this Agreement, then, at Lender’s option, commencing on the date upon which Borrower shall immediately deposit cash in an amount equal to such financial statements or Compliance Certificate should have been delivered Letter of Credit Usage in accordance with Section 4.3 a Letter of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateCredit Cash Collateral Account.
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Letters of Credit. (a) Until On the Termination Date with respect to Closing Date, the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“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 issued under the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, Existing Loan Agreement and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will listed on Schedule 2.4 shall be deemed to be outstanding hereunder (and each Lender which is a representation party to the Existing Loan Agreement as of the Closing Date agrees to rebate that portion of the fees payable with respect to such Letters of Credit which relates to the period following the Closing Date to the Borrower through the Administrative Agent). Thereafter, 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 Lender shall issue such Letters of Credit under the Commitment as Borrower may request by Borrowers 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 $150,000,000. Each Letter of Credit may shall be issued in accordance witha form reasonably acceptable to the Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, and will not violate no Letter of Credit shall have a term which exceeds one year or which extends beyond the terms of, this Section 2.3Maturity Date.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) submitted to the rules or customs set forth in 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 and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Lender whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, 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 receipt the issuance of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, each Lender will communicate shall be deemed to have purchased a pro rata participation in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on from the Issuing Lender in an amount equal to that Lender’s demand or payable as otherwise set forth 's Pro Rata Share. Without limiting the scope and nature of each Lender's participation in the applicable any Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when dueCredit, 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 extent that the same Business Day that Issuing Lender is obligated has not been reimbursed by Borrower for any payment required to fund a drawing or make any expenditure or any other payment under a Letter of Credit or incurs any cost or expense 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 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 the amount of the Revolving Loans pursuant to Section 2.1such payment. If the advance The obligation 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject each Lender to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve so reimburse the Issuing 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 be absolute and unconditional and shall not be obligated to cause any Letter of Credit to be 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 affected by the gross negligence or willful misconduct occurrence of Lender. The agreement in this Section 2.3(g) shall survive repayment an Event 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 Default or any other Person, whether in connection with this Agreement occurrence or event. Any such reimbursement shall not relieve or otherwise impair the other Loan Documents, obligation of Borrower to reimburse 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 Issuing Lender for the amount 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 made by the Issuing Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies together with the terms of 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 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 2.3interest as hereinafter provided.
(id) 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 put Lender under any resulting liability Borrower agrees to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, the Issuing Lender an amount equal to any payment made by the Issuing Lender with respect to each Letter of CreditCredit within one 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), a fee (“LOC Fee”) equal to together with interest on such amount from the 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 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 and including the expiry date thereof (or, if earlier, extent that the date on which Lenders have not reimbursed 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 Issuing Lender pursuant to Sections 4.3(aSection 2.4(c), 4.3(b) and 4.3(d) (as applicable) the interest amount of this Agreement any such payment shall be 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 account of the end of such Fiscal Quarter or Fiscal Year then ended so long as no Event of Default is existing as of Issuing Lender. Each Lender that has reimbursed 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 Issuing 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.2.4
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Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Agreement and upon (i) the execution by the Borrower and the Bank of a Master Letter of Credit Agreement in form and substance acceptable to the Bank (together with all amendments, modifications and restatements thereof, the “Master Letter of Credit Agreement”), and (ii) the execution and delivery by the Borrower, and the acceptance by the Bank, in its reasonable discretion, of a Letter of Credit Application, the Bank agrees to issue for the account of the Borrower from time to time up to, but not including, the Facility A Loan Maturity Date or the Facility B Loan Maturity Date, as applicable, such Letters of Credit in the standard form of the Bank and otherwise in form and substance acceptable to the Bank, provided that the Facility A Loan Letter of Credit Obligations may not at any time exceed the Facility A Loan Letter of Credit Commitment and that the Facility B Loan Letter of Credit Obligations may not at any time exceed the Facility B Loan Letter of Credit Commitment, and provided further, that no Letter of Credit shall have an expiration date later than the Facility A Loan Maturity Date or the Facility B Loan Maturity Date, as applicable. Letters of Credit requested by a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the shall first be issued as Facility B Loan Letter of Credit Obligations, and if the issuance of a Letter of Credit would result in the Facility B Loan Letter of Credit Obligation at any time exceeding the Facility B Loan Letter of Credit Commitment, Letters of Credit requested by a Letter of Credit Application shall be issued as Facility A Letter of Credit Obligations if the issuance of such Letters of Credit do not exceed the Facility A Loan Availability. In the event that the Borrower fails to reimburse the Bank for the amount of any payments made by the Bank with respect to draws made by a beneficiary under a Letter of Credit within two (which2) Business Days from the date of such payment to such beneficiary by the Bank, the Bank may make a Facility A Loan pursuant to a loan request and the terms and conditions of this Agreement for the purpose of reimbursing the Bank for the amount of such payment to such beneficiary by the Bank in all respectsan amount equal to the lesser of (i) the amount of such payment to such beneficiary by the Bank, will comply with the applicable requirements of Section 2.3(b)), or (ii) in an amount equal to any remaining Facility A Loan Availability. The Borrower shall reimburse the Bank for any part of a Borrowing Base Certificate which calculates payment made by the Bank under a Letter of Credit Availability by giving effect that is not converted to a Facility A Loan within two (2) Business Days of the payment to the proposed beneficiary by the Bank. Upon the occurrence of an Event of a Default and at the option of the Bank, all Letter of Credit Obligations shall be converted to Facility A Loans or Facility B Loans, as applicable, consisting of Prime Loans, all without demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower. All amounts advanced on such Facility A Loans or Facility B Loans shall be held in a restricted cash collateral account to be maintained with Bank as additional Collateral for the Obligations. Bank may apply the balance of any such cash collateral account to the payment of any Letters of Credit subsequently drawn. Upon discharge of all Obligations and the expiration of all Letters of Credit, and (iii) the funds remaining in such other accounts shall be paid to the Persons who have a beneficial interest therein. To the extent the provisions of the Master Letter of Credit Documents that Lender then customarily requires in Agreement differ from, or are inconsistent with, the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Dategovern.
Appears in 1 contract
Samples: Loan and Security Agreement (Argyle Security, Inc.)
Letters of Credit. (a) Until As of the Termination Date with respect Closing Date, the Existing Wxxxx Fargo Bank L/Cs shall be Letters of Credit for all purposes under this Agreement. Subject to the Line of Credit and subject to the other terms and conditions hereof, at any time and from time to time from the Closing Date through the Maturity Date, the Issuing Lender shall issue such Letters of this Agreement, Borrowers Credit under the Revolving Facility for the benefit of Borrower and/or its wholly-owned Subsidiaries as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor ; provided that giving effect to all such Letters of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Credit, (i) a Revolving Credit Facility Usage does not exceed the Maximum Revolving Credit Amount and (ii) the Aggregate Effective Amount under all outstanding Letters of Credit shall not exceed $15,000,000. Each Letter of Credit Application completed shall be in a form reasonably acceptable to the reasonable satisfaction Issuing Lender. Unless the Issuing Lender and the Requisite Lenders otherwise consent, the term of Lender, together with the proposed form of the any Letter of Credit (whichshall not exceed 365 days. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, in all respects, will comply with the applicable requirements term of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the any Letter of Credit Availability by giving effect to shall not extend beyond the proposed Letter of Credit, and (iii) such other Maturity Date. A Request for Letter of Credit Documents that Lender then customarily requires in shall be irrevocable absent the issuance consent of letters of credit. the Issuing Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by submitted to the Issuing Lender, with a copy to the Administrative Agent, at least three (A3) Banking Days prior to the rules or customs set forth in date upon which the related Letter of Credit and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws of the State of Ohio Issuing Lender whether such request, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents 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 not less than three (3) days prior to the date of any Request for Letter of Credit, 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 set forth abovea result of so acting.
(c) Upon receipt issuance of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, each Lender will communicate shall be deemed to have purchased a pro rata participation in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on from the Issuing Lender in proportion to that Lender’s demand or payable as otherwise set forth 's Pro Rata Share of the Revolving Facility. Without limiting the scope and nature of each Lender's participation in the applicable any Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when dueCredit, 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 extent that the same Business Day that Issuing Lender is obligated has not been reimbursed by Borrower for any payment required to fund a drawing or make any expenditure or any other payment under a Letter of Credit or incurs any cost or expense be made by the Issuing Lender under any Letter of Credit, each Lender shall, pro rata according 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 its Pro Rata Share of the Revolving Loans pursuant to Section 2.1Facility, reimburse the Issuing Lender through the Administrative Agent promptly upon demand for the amount of such payment. If the advance The obligation 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject each Lender to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve so reimburse the Issuing 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 be absolute and unconditional and shall not be obligated to cause any Letter of Credit to be 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 affected by the gross negligence or willful misconduct occurrence of Lender. The agreement in this Section 2.3(g) shall survive repayment an Event 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 Default or any other Person, whether in connection with this Agreement occurrence or event. Any such reimbursement shall not relieve or otherwise impair the other Loan Documents, obligation of Borrower to reimburse 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 Issuing Lender for the amount 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 made by the Issuing Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies together with the terms of 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 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 2.3interest as hereinafter provided.
(id) 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 put Lender under any resulting liability Borrower agrees to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of CreditCredit within one (1) Banking Day after demand made by the Issuing Lender therefor, a fee (“LOC Fee”) equal to together with interest on such amount from the 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 any payment made by the Letter of Credit Issuing Lender at the rate applicable to and including Alternate Base Rate Advances under 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 Revolving Facility 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, period commencing on the date upon which of any such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement payment and continuing until through the first Banking Day following such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 demand and thereafter at the Default Rate. The principal amount of this Agreement, it any such payment shall be assumed used to reimburse the Issuing Lender for purposes of determining the Applicable LOC Fee Percentage, that payment made by it under the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.Letter of
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Letters of Credit. (a) Until the Termination Date with respect to the Line of Credit and The Issuing Bank agrees, subject to the other terms and conditions of this Agreement, Borrowers may upon request Lender of any Borrower to issue one or more from time to time for the account of its standard standby letters such Borrower Letters of credit (“Standby Credit upon delivery to the Issuing Bank of an Application and Agreement for Letter of Credit”) Credit relating thereto in favor of such beneficiary(ies) as are designated by Borrowers by delivering form and content acceptable to Lender: the Issuing Bank; PROVIDED, that (i) a the Issuing Bank shall not be obligated to issue (or renew) any Letter of Credit Application completed to if it has been notified by the reasonable satisfaction Administrative Agent or has actual knowledge that a Default or Event of LenderDefault has occurred and is continuing, together with the proposed form of (ii) the Letter of Credit (which, in all respects, will comply with Outstandings shall not exceed the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Total Letter of Credit Availability by giving effect to the proposed Letter of Credit, Commitment and (iii) such other no Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit shall be issued (or renewed) if, after giving effect to thereto, the proposed Letter Dollar Value of Credit, there would exist a Outstandings shall exceed the Total Revolving Credit Commitment. No Letter of Credit Deficiency. The making shall have an expiry date (including all rights of each the respective Borrower or any beneficiary named in such Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers require renewal) or payment date occurring later than the earlier to occur of one year after the date of its issuance or the seventh Business Day prior to the Stated Termination Date. The Borrowers, the Administrative Agent and the Lenders acknowledge and agree that the Letter Existing Letters of Credit may be are deemed Letters of Credit issued in accordance withunder and pursuant to this Agreement as if they had been issued on the Closing Date, and will not violate the terms ofprovided, this Section 2.3Bank Boston, N.A. shall have no obligation to extend or renew any Existing Letters of Credit.
(b) Each Upon completion of a proper Application and Agreement for Letter of Credit, the Issuing Bank may issue upon request and for the account of one or more of Borrowers' Letters of Credit payable in an Alternative Currency. For purposes of determining Letters of Credit Outstandings, any Letter of Credit issued under this Agreement will, among other things, (i) in an Alternative Currency shall 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 recorded in the ordinary course Administrative Agent's account in Dollars based on the Alternative Currency Equivalent Amount on the date of Borrowers’ respective businesses as presently conducted by them. In no event will issuance of such Letter of Credit; PROVIDED, HOWEVER, that the Administrative Agent shall determine the Dollar Equivalent Amount of any Letter of Credit have a term of more than one year; furthermore, and, issued in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than Alternative Currency on the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 Advance or expense under any Letter Continuation for the purpose 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 determining the Dollar Value 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under Outstandings. Any draw on a Letter of Credit appear issued in an Alternative Currency shall be repaid in the same Alternative Currency in an amount equal to comply substantially on their face with the requirements amount of the Letter of Credit, and any action taken or omitted by Lender draw 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 misconductsuch Alternative Currency. Lender shall not be obligated to cause any Letter of Credit to be 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 To the extent caused by that the gross negligence or willful misconduct Administrative Agent shall determine at any time that the sum 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 Dollar Value of Outstandings, in each case determined on any claimValuation Date, set-offmade or issued in Alternative Currencies exceeds the Total Alternative Currency Commitment, defense or other right which any Borrower may have the Borrowers shall immediately repay Alternative Currency Loans so that after giving effect to such payment the Dollar Value outstanding Alternative Currency Loans plus the Dollar Value of outstanding Letters of Credit issued in Alternative Currencies does not exceed the Total Alternative Currency Commitment. If at any time against any beneficiary, or any transferee, of any the 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 Outstandings shall exceed the other Loan Documents, the transactions contemplated in this Agreement, or any unrelated transaction; (ii) any statement or any other document presented under any Total Letter of Credit proving to be forgedCommitment the Borrower shall, fraudulentin its discretion, 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 draft or certificate which substantially complies with the terms of 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 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.
either (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 cause to be terminated Letters of Credit or any related certificates, if taken or omitted in good faith in the absence (ii) cash collateralize Letters of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, Credit so that as a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on result the amount available to be drawn under each of Letter of Credit from, and including, Outstandings do not exceed the issuance date of the Total 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 accountCommitment.
(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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
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) Until letters of credit and to continue any Existing Letter of Credit (set forth on Schedule III hereto) (collectively, the “Letters of Credit”), for the account of the Borrower from time to time on any Business Day during the period from the date hereof until 60 days before the Termination Date with respect in an aggregate Available Amount (i) for all Letters of Credit not to exceed at any time the Letter of Credit Facility at such time, (ii) for all Letters of Credit issued by such Issuing Bank not to exceed such Issuing Bank’s Letter of Credit Commitment at such time, and (iii) for each such Letter of Credit not to exceed the Unused Revolving Credit Commitments of the Lenders at such time. No Letter of Credit shall have an expiration date (including all rights of the Borrower or the beneficiary to require renewal) later than the earlier of 60 days before the Termination Date and (A) in the case of a Standby Letter of Credit one year after the date of issuance thereof, but may by its terms be automatically renewable or renewable annually upon notice (a “Notice of Renewal”) given to the Line Issuing Bank that issued such Standby Letter of Credit and subject the Administrative Agent on or prior to any date for notice of renewal set forth in such Letter of Credit but in any event at least three Business Days prior to the other terms and conditions date of this Agreement, Borrowers may request Lender to issue one or more the proposed renewal of its standard standby letters of credit (“such Standby Letter of Credit”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 favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed but in any event at least 30 Business Days prior to the reasonable satisfaction date of Lenderautomatic 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, together with 60 days after the proposed form 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 60 days before the Termination Date. If either a Notice of Renewal is not given by the Borrower or a Notice of Termination is given by the relevant Issuing Bank pursuant to the immediately preceding sentence, such Standby Letter of Credit shall expire on the date on which it otherwise would have been automatically renewed; provided, however, that even in the absence of receipt of a Notice of Renewal the relevant Issuing Bank may in its discretion, unless instructed to the contrary by the Administrative Agent or the Borrower, deem that a Notice of Renewal had been timely delivered and in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under this Agreement. Each Standby Letter of Credit shall contain a provision authorizing the Issuing Bank that issued such Letter of Credit to deliver to the beneficiary of such Letter of Credit, upon the occurrence and during the continuance of an Event of Default, a notice (a “Default Termination Notice”) terminating such Letter of Credit and giving such beneficiary 15 days to draw such Letter of Credit. Within the limits of the Letter of Credit (whichFacility, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect and subject to the proposed Letter of Creditlimits referred to above, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the Borrower may request the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter Letters of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, under this Section 2.3.
(b) Each Letter of Credit issued under this Agreement will2.01(b), 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 repay any Letter of Credit have a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request Advances resulting 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 drawings thereunder 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 results2.04(c) 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 request 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 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 additional 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 draft or certificate which substantially complies with the terms of 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 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 2.32.01(b).
(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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions hereof, Lender shall issue or cause the issuance of standby Letters of Credit by the Issuer ("Letters of Credit") on behalf of Borrowers provided, however, that Lender will not be required to issue or cause to be issued any Letters of Credit to the extent that the face amount of such Letters of Credit would then cause the sum of (A)
(i) the outstanding Revolving Advances plus (ii) outstanding Letters of Credit (with the requested Letter of Credit being deemed to be outstanding for purposes of this Agreement, Borrowers calculation) to exceed the lesser of (x) the Maximum Revolving Amount or (y) the Formula Amount. The maximum amount of outstanding Letters of Credit shall not exceed $1,000,000 in the aggregate at any time. All disbursements or payments related to Letters of Credit shall be deemed to be Revolving Advances and shall bear interest at the Revolving Interest Rate; Letters of Credit that have not been drawn upon shall not bear interest.
(b) Borrowing Agent may request Lender to issue one or more cause the issuance of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit by delivering to Lender at the Payment Office, Lender's and/or Issuer's standard form of Letter of Credit Application and Letter of Credit and Security Agreement (collectively, the "Letter of Credit Application") completed to the reasonable satisfaction of Lender, together with and such other certificates, documents and other papers and information as Lender may reasonably request. Letters of Credit shall be subject to the proposed form of terms and conditions set forth in the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Application.
(bc) Each Letter of Credit issued under this Agreement willshall, among other things, (i) be provide for the payment of sight drafts when presented for honor thereunder in such form requested accordance with the terms thereof and when accompanied by Borrowers as is acceptable to Lender in its discretion exercised in good faith, the documents described therein and (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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date in no event later than the date that is 30 days prior to last day of the stated Termination Date applicable to the Line of CreditTerm. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply shall be subject to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary CreditsCredits (1993 Revision), as published International Chamber of Commerce Publication No. 500, and any amendments or revision thereof adhered to by ISP. In any eventthe Issuer and, to the extent not inconsistent therewith, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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; New York provided, however, nothing in this Section 2.3(f) will relieve Lender of if 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 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 Borrower requests the issuance of any Letter of Credit or having an expiry date later than the provision last day of any credit support or enhancement the Term, then on the last day of the Term Borrowers will cause cash to be deposited and maintained in connection therewith exclusive of claims, demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by the 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 an account with Lender, Borrowers assume all risks of the acts as cash collateral in an amount equal to one hundred and omissions of, or misuse of any of the Letters of Credit by, the respective beneficiaries five percent (105%) of such Letters of Credit. In furtherance and not in limitation of , such cash collateral to be required without the foregoing, Lender shall not be responsible for: (i) the existence necessity of any claimdemand, set-offbut otherwise to be held by Lender in accordance with the second paragraph of Section 5(b)(v).
(d) In connection with the issuance of any Letter of Credit, defense each Borrower shall indemnify, save and hold Lender and each Issuer harmless from any loss, cost, expense or other right which liability, including, without limitation, payments made by Lender or any Borrower may have at any time against any beneficiaryIssuer, and expenses and reasonable attorneys' fees incurred by Lender arising out of, or in connection with, any transferee, Letter of Credit to be issued or created for any Borrower. Borrowers shall be bound by Lender's or any Issuer's regulations and good faith interpretations of any Letter of Credit (or any Persons issued for whom any such beneficiary or any such transferee Borrowers' account, although this interpretation may be acting)different from any Borrower's own; and, Lender neither Lender, nor any Issuer nor any of their correspondents shall be liable for any error, negligence, or any other Personmistakes, whether of omission or commission, in connection with this Agreement following any Borrower's or the other Loan Documents, the transactions contemplated Borrowing Agent's instructions or those contained 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 modifications, amendments or any other Person involved supplements thereto or in any transaction covered thereby issuing 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 paying any Letter of Credit against presentation of a draft Credit, except for Lender's or certificate which substantially complies with any Issuer's or such correspondents' gross (not mere) negligence or willful misconduct.
(e) Borrowing Agent shall authorize and direct Issuer to name the terms of such applicable Borrower as the "Applicant" or "Account Party" therein and to deliver to Lender all instruments, documents, and other writings and property received by the Issuer pursuant to the Letter of Credit; (vi) the invalidity or unenforceability of Credit and to accept and rely upon Lender's instructions and agreements with respect to all matters arising in connection with the Letter of Credit; (vii) , the examination of documents presented under a Letter of Credit exclusively by 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 application therefor or any related certificates, if taken or omitted in good faith in the absence of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lenderacceptance created thereunder.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Revolving Credit and Security Agreement (Spar Group Inc)
Letters of Credit. (a) Until [Intentionally Omitted].
(b) The Borrower may request the Termination Date with respect issuance of Letters of Credit, in a form reasonably acceptable to the Line Administrative Agent and the Issuing Bank, for the account of the Borrower, at any time and from time to time during the Revolving Credit Availability Period; provided that any Letter of Credit shall be issued only if, and subject to each request by the other terms Borrower for the issuance of any Letter of Credit shall be deemed a representation and conditions warranty by the Borrower that, immediately following the issuance of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby such Letter of Credit”) in favor , the sum of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), Exposure and (ii) a Borrowing Base Certificate which calculates the aggregate principal amount of outstanding Revolving Loans shall not exceed the aggregate amount of the Revolving Credit Commitments at such time, provided, however, that the amount of all outstanding Tranche B Letters of Credit (as defined in the Existing Credit Agreement) and the Letters of Credit shall not exceed $12,500,000. Each Letter of Credit Availability shall expire at the close of business on the Maturity Date, unless such Letter of Credit expires by giving effect 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 two Business Days' prior irrevocable written or telecopy notice (or such shorter notice as shall be acceptable to the proposed 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, and (iii) 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 Documents that Lender then customarily requires in 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 (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 letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed any Letter of Credit ifand the amount thereof, after giving effect 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 proposed Issuing Bank, effective upon the issuance of such Letter of Credit, there would exist a participation in such Letter of Credit Deficiencyequal to such Lender's pro rata share (based on such Lender's Revolving Credit Commitment Percentage) of the aggregate amount available to be drawn under such Letter of Credit. The making 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 2.02(d), such Lender's pro rata share (based on such Lender's Revolving Credit Commitment Percentage) of each Letter of Credit request Disbursement made by Borrowers will be deemed to be a representation the Issuing Bank and not reimbursed by Borrowers the Borrower when due in accordance with Section 2.21(g); provided that the Lenders shall not be obligated to make any such payment with respect to any wrongful Letter of Credit may be issued in accordance with, and will not violate Disbursement made as a result of the terms of, this Section 2.3gross negligence or wilful misconduct of the Issuing Bank.
(be) Each Letter Lender acknowledges and agrees that its obligation to acquire participations pursuant to Section 2.21(d) in respect of Letters of Credit issued under this Agreement willis absolute and unconditional and shall not be affected by any circumstance whatsoever, among other thingsincluding 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 proviso set forth in Section 2.21(d)).
(f) During the Revolving Credit Availability Period, the Borrower shall pay to the Administrative Agent, on the last day of March, June, September and December in each year and on the date on which the Revolving Credit Commitments shall be terminated as provided herein, (i) for the account of the Lenders, ratably in proportion to their Revolving Credit Commitments, a fee on the average daily aggregate amount available to be drawn under all outstanding Letters of Credit during the preceding quarter (or shorter period commencing with the date of this Agreement) at a rate per annum equal to the Applicable Eurodollar Margin from time to time in effect during such form requested by Borrowers as is acceptable period pursuant to Lender in its discretion exercised in good faith, Section 2.06 and (ii) for the account of the Issuing Bank, a fee on the average daily aggregate amount available to be denominated drawn under all outstanding Letters of Credit during the preceding quarter (or shorter period commencing with the date of this Agreement) 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 Dollarsa year of 360 days. Such fees shall accrue from and including the date of this Agreement to but excluding the last day of the Revolving Credit Availability Period. In addition to the foregoing, the Borrower shall pay directly to the Issuing Bank, for its account, payable within 15 days after demand therefor by the Issuing Bank, the Issuing Bank's customary processing and documentation fees in connection with the issuance or amendment of or payment on any Letter of Credit.
(g) The Borrower hereby agrees to reimburse the Issuing Bank for any payment or disbursement made by the Issuing Bank under any Letter of Credit, by making payment in immediately available funds to the Administrative Agent within one Business Day after receipt of notice of such payment or disbursement, in an amount equal to the amount of such payment or disbursement, plus interest on the amount so paid or disbursed by the Issuing Bank, to the extent not reimbursed prior to 3:00 p.m. (Boston time) on the date of such payment or disbursement, from and including the date paid or disbursed to but excluding the date the Issuing Bank is reimbursed by the Borrower therefor, at a rate per annum equal to the rate applicable to ABR Revolving Loans during such period pursuant to Section 2.06. If the Borrower shall fail to pay any amount required to be paid by it under this Section 2.21(g) when due, such unpaid amount shall bear interest as provided in Section 2.07. The Issuing Bank shall give the Borrower prompt notice of each drawing under any Letter of Credit, provided that the failure to give any such notice shall in no way affect, impair or diminish the Borrower's obligations hereunder. The Administrative Agent shall promptly pay any such amounts received by it to the Issuing Bank.
(h) The Borrower's obligation to reimburse Letter of Credit Disbursements as provided in Section 2.21(g) 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:
(iiii) be issued to support Borrowers’ obligations that finance its business needs incurred in the ordinary course any lack of Borrowers’ respective businesses as presently conducted by them. In no event will validity or enforceability of any Letter of Credit have a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue or any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.other Loan Document;
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective existence of any claim, setoff, defense or other right which the Borrower, any Borrower Subsidiary or any other Person may have at any time have 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 beneficiary under any Letter of Credit, to reimburse Lender for the Issuing Bank, any drawingAgent, 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 Person in connection with this Agreement or the Agreement, any other Loan Documents, the transactions contemplated in this Agreement, Document or any other related or unrelated agreement or transaction; ;
(iiiii) any statement draft or any other document presented under any 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; (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 the Issuing Bank under any a Letter of Credit against presentation of a draft or certificate other document which substantially complies does not comply with the terms of such Letter of Credit; (vi) the invalidity or unenforceability provided that such payment was not wrongfully made as a result of the Letter gross negligence or wilful misconduct of Creditthe Issuing Bank; and
(vii) the examination of documents presented under a Letter of Credit exclusively by electronic or electro-optical means; or (viiiv) any other circumstances act or happening omission or delay of any kind or any other circumstance or event whatsoever, whether or not similar to any of the foregoingforegoing and whether or not foreseeable, including any act that might, but for the provisions of this Section 2.21(h), constitute a legal or omission, whether rightful or wrongful, of any present or future de jure or de facto governmental authority. None equitable discharge of the foregoing shall affect, impair or prevent the vesting of any rights or powers of Lender under this Section 2.3Borrower's obligations hereunder.
(i) In furtherance It is expressly understood and extensionagreed that, and not in limitation, for purposes of the specific provisions set forth above, any action taken or omitted by Lender determining whether a wrongful payment under or in connection with any of the Letters a Letter of Credit or any related certificates, if taken or omitted in good faith in resulted from the absence of Issuing Bank's gross negligence or willful wilful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay the Issuing Bank's acceptance of documents that appear on their face to Lenderbe in order, with respect without responsibility for further investigation, regardless of any notice or information to each 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, a fee (“LOC Fee”) equal whether or not the amount due to the Applicable LOC Fee Percentage per annum on beneficiary thereunder equals the amount available of such draft and whether or not any document presented pursuant to be drawn under each such Letter of Credit fromproves to be insufficient in any respect (so long as such document on its face appears to be in order), and includingwhether 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 wilful misconduct or gross negligence of the Issuing Bank. It is further understood and agreed that, notwithstanding the proviso to clause (iv) of Section 2.21(h), the issuance date Borrower's obligation hereunder to reimburse Letter of Credit Disbursements will not be excused by the gross negligence or wilful 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, the Borrower; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages suffered by the Borrower that are caused by the 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) The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit, including as to compliance with the Uniform Customs and Practices for Documentary Credits, as then in effect. The Issuing Bank shall as promptly as possible give telephonic notification, confirmed by telex or telecopy, to the Administrative Agent and the Borrower 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 Borrower of its obligation to reimburse any such Letter of Credit Disbursement in accordance with this Section 2.21. The Administrative Agent shall promptly give each Lender notice thereof.
(k) In the event that the Borrower is required or elects pursuant to the terms of this Agreement (other than Sections 2.11(h) and 7.01) to provide cash collateral in respect of the Letter of Credit to and including the expiry date thereof (or, if earlierExposure of any Class, the date on which Borrower shall deposit in an account with the Administrative Agent an amount in cash equal to the Letter of Credit is returned to Lender and is canceledExposure of such Class (or such lesser amount as shall be required or elected hereunder). 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 Any such deposit shall be held 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 Administrative Agent in accordance with the table set forth Cash Collateral Agreement. In the event that the Borrower is required pursuant to the terms of Section 2.11(h) or Section 7.01 of this Agreement to provide cash collateral in the definition of “Applicable LOC Fee Percentage” based on the Fixed Charge Coverage Ratio as respect of the end Letter of Credit Exposure of any Class, the Borrower shall deposit such Fiscal Quarter cash collateral in an account with the Trustee pursuant to the Trust Agreement. Such deposit shall be held by the Trustee in accordance with the Trust Agreement. Any such deposit to be held by the Administrative Agent or Fiscal Year then ended so long the Trustee, as no Event of Default is existing provided herein, shall be accompanied by notice from the Borrower, in form satisfactory to the Administrative Agent or the Trustee, as of the applicable effective date of adjustment. The foregoing adjustmentcase may be, if applicablesetting forth the basis for such deposit, (A) will become effective with respect to all identifying in reasonable detail the Letters of Credit that are issued or renewed on to which such deposit relates, and after setting forth any other information related to such deposit reasonably requested by 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 Administrative Agent or the Compliance Certificate required Trustee, as the case may be. The Borrower shall promptly provide the Administrative Agent with a copy of any such notice to be delivered the Trustee and shall promptly provide the Trustee with a copy of any such notice 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateBorrower.
Appears in 1 contract
Samples: Parity Debt Credit Agreement (Star Gas Partners Lp)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, the Borrowers may request Lender to utilize the Revolving Loans Commitment by requesting that the Issuing Bank issue one or more of its standard standby letters of credit (“Standby Letter Letters of Credit”) in favor ; provided, that the aggregate amount of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a outstanding Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will Liabilities shall not violate the terms of, this Section 2.3at any time exceed $3,000,000.
(b) Each The Issuing Bank irrevocably agrees to grant and hereby grants to each Revolving Loans Lender and each Revolving Loans Lender irrevocably accepts and purchases from the Issuing Bank, on the terms and conditions hereinafter stated, for such Revolving Loans Lender's own account and risk, an undivided interest in proportion to such Lender's Revolving Loans Commitment in the Issuing Bank's obligations and rights under each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Bank thereunder. Each Revolving Loans Lender unconditionally and irrevocably agrees with the Issuing Bank that, if a draft is paid 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, for which the Issuing Bank is not reimbursed in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published full by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 this Agreement, such Revolving Loans Lender shall pay to the Issuing Bank (through the Administrative Agent) upon demand, an amount equal to such Revolving Loans Lender's participation in such draft, or any part thereof, which is not so reimbursed.
(c) If any amount required to be paid by any Revolving Loans Lender to the Issuing Bank pursuant to Section 2.1(a2.14(b) in respect of any unreimbursed portion of any payment made by the Issuing Bank under any Letter of Credit is paid to the Issuing Bank within three Business Days after the date such payment is due, such Revolving Loans Lender shall pay to the Issuing Bank (through the Administrative Agent) on demand an amount equal to the product of (i) such amount, times (ii) the daily average Federal Funds Rate, as quoted by the Issuing Bank, during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Bank, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any Revolving Loans Lender pursuant to Section 2.14(b) is not made available to the Issuing Bank by such Revolving Loans Lender within three Business Days after the date such payment is due, the Issuing Bank shall be entitled to recover from such Revolving Loans Lender, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to Base Rate Loans hereunder. A certificate of the Issuing Bank submitted to any Revolving Loans Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.14(c) shall be conclusive in the absence of manifest error.
(d) Whenever, at any time after the Issuing Bank has made payment under any Letter of Credit and has received from any Revolving Loans Lender its pro rata share of such payment in accordance with Section 2.14(b), the Issuing Bank receives any payment related to such Letter of Credit (whether directly from the Borrowers or otherwise, including proceeds of collateral applied thereto by the Issuing Bank), or any payment of interest on account thereof, the Issuing Bank will distribute to the Administrative Agent (for the account of such Revolving Loans Lender) such Revolving Loans Lender's pro rata share thereof; provided, however, that in the event that any such payment received by the Issuing Bank shall be required to be returned by the Issuing Bank, such Revolving Loans Lender shall return to the Issuing Bank (through the Administrative Agent) the portion thereof previously distributed by the Issuing Bank to it.
(e) All Letter The Borrowers shall give the Issuing Bank at least five Business Days irrevocable prior notice (effective upon receipt) specifying the date of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each Letter of Credit from, and including, the issuance date nature of the transactions to be supported thereby. Each Letter of Credit to and including the expiry shall have an expiration date thereof (or, if earlier, that does not exceed one year from the date on which of issuance and that does not extend beyond 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 Revolving Loans Maturity Date, shall be determined as payable in Dollars, shall support a transaction entered into in the ordinary course of June 30th a Borrower's or its Wholly-Owned Subsidiary's business, shall be satisfactory in form and December 31st of each Fiscal Year ending on substance to the Issuing Bank, 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 shall be December 31, 2010. On Lender’s receipt of the financial statements and Compliance Certificate required to be delivered to Lender issued pursuant to Sections 4.3(a)such agreements, 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.documents and
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue and provided no Default or Event of Default shall occur and be continuing beyond any applicable cure period under this Agreement, upon the application of one or more of its standard Borrowers, Lender shall issue nontransferable irrevocable standby letters of credit (each, a “Standby Letter of Credit”) in favor for the account of such beneficiary(ies) as are designated Borrowers and for the purposes herein described, at any time and from time to time on or before the Last Issuance Date. Borrowers shall be irrevocably and unconditionally obligated, without presentment, demand, protest or other formalities of any kind, to immediately reimburse Lender for any and all amounts paid by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Lender under any Letter of Credit, including, without limitations all fees, costs, expenses and (iii) such other Letter of Credit Documents that reimbursements incurred or paid by Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed connection with any Letter of Credit, there would exist a Letter of Credit Deficiency. .
(a) The making term of each Letter of Credit request by Borrowers will shall initially be deemed to one (1) year from its date of issuance and shall be a representation by Borrowers that automatically renewed for successive one (1) year periods or until the Letter of Credit may be issued in accordance withBusiness Day immediately preceding the Maturity Date, and will not violate the terms of, this Section 2.3whichever first occurs.
(b) Each Borrower applying for a Letter of Credit hereunder shall give Lender at least five (5) Business Days’ prior written notice specifying the date on which a Letter of Credit is to be issued under this Agreement willand identifying the beneficiary thereof. The aforementioned notice shall be accompanied by a copy of the requested Letter of Credit to be issued, among other things, (i) which must be in such a form requested by Borrowers as is reasonably acceptable to Lender in its discretion exercised in good faith, (ii) be denominated in DollarsLender, and by such Borrower’s application for the Letter of Credit in Lender’s standard form and setting forth the specific terms and conditions of such Letter of Credit in form and content reasonably acceptable to Lender.
(iiic) [Reserved]
(d) All Letters of Credit must be issued to and for the benefit of Persons (other than a Borrower or any Affiliate of a Borrower) in support Borrowers’ of a Borrower’s obligations that finance its business needs incurred in the ordinary course 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 foregoing term limitation, Business.
(e) Lender will shall have no obligation to issue any Letter of Credit with an expiry date later than which would cause the date that is 30 days prior to the stated Termination Date applicable to the Line of Credit. Each Total Letter of Credit Application and each Liability immediately after the issuance of such Letter of Credit will set forth which rules or customs apply to exceed the Maximum Letter of Credit Liability.
(f) If the Total Letter of Credit Liability at any time exceeds the Maximum Letter of Credit Liability (the amount of such excess is herein referred to as the “Excess Liability”), then upon ten (10) days’ written notice from Lender to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Borrower for Documentary Credits, as published by ISP. In any event, whose account the Letter of Credit shall be governed by (A) the rules or customs set forth in the has been issued and which Letter of Credit and (B) has caused the internal laws of the State of Ohio and the United States of AmericaExcess Liability, except to the extent Parent or such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 Borrower shall either (i) issue the requested Letter of Credit deposit to the beneficiary thereof and transmit a copy to Borrowersits Treasury Fund Money Market Account additional cash Collateral in an amount not less than such Excess Liability, or (ii) elect, in deliver and deposit to its discretion exercised in good faith, Treasury Securities Account additional Pledged Securities having a Net Current Value of not to issue the proposed Letter of Credit. If Lender elects not to issue less than such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 madeExcess Liability, 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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) deposit to its Treasury Fund Money Market Account and Treasury Securities Account any defaultcombination of cash Collateral and additional Pledged Securities having a total Current Value and Net Current Value, negligenceas applicable, 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 draft or certificate which substantially complies with not less than the terms full amount of such Letter of Credit; (vi) the invalidity Excess Liability. The failure to deposit and deliver such cash Collateral or unenforceability of the Letter of Credit; (vii) the examination of documents presented under a Letter of Credit exclusively by electronic additional Pledged Securities in full on 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal prior to the Applicable LOC Fee Percentage per annum on the amount available to expiration of said ten (10) day period shall 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 an immediate 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateDefault.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this AgreementAgreement and in reliance upon the representations and warranties of the Borrower set forth herein, Borrowers the Borrower may, in accordance with the provisions of this Section 2.04(a), from time to time on and after the Effective Date, request the issuance of Letters of Credit for the account of the Borrower. The Borrower may request select any Lender to issue one or more of its standard standby letters of credit (“Standby be the Issuing Lender in relation to such Letter of Credit”) ; provided that such Lender is reasonably satisfactory to the Administrative Agent; and provided further that each Lender may in favor its discretion decline to issue any Letter of Credit and NBD Bank shall be the Issuing Lender if other Lenders selected by the Borrower decline to issue such beneficiary(ies) as are designated Letter of Credit or if no other Lender selected by Borrowers by delivering the Borrower is reasonably satisfactory to Lender: the Administrative Agent. Such Letters of Credit shall be issued solely for the purpose of supporting the obligations of the Borrower and its Subsidiaries. Issuances of Letters of Credit shall be subject to the following limitations:
(i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed The Borrower shall not request any Letter of Credit if, after giving effect to such issuance, (a) the proposed Letter Total Utilization of Credit, there Commitments would exist a Letter exceed the aggregate amount of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that Commitments as then in effect or (b) the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.Usage would exceed $35,000,000; and
(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 shall any Letter of Credit have a term of more than one year; furthermoreLender take any action to issue, andreissue, in addition to amend or permit the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 extension of any Letter of Credit results if such action would result in: (or to the extent that it resultsx) in any Letter of Credit Deficiencyhaving an expiration date later than the Termination Date in effect at the time of issuance, then Borrowers will immediately eliminate reissuance, amendment or extension (automatic or otherwise) thereof; (y) subject to the foregoing clause (x), any Letter of Credit Deficiency in accordance with having an expiration date more than one year after its date of issuance; provided that subject to the terms of Section 2.1(aforegoing clause (x).
, this clause (ey) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under shall not prevent any Letter of Credit, Issuing Lender will be responsible only to confirm in good faith from agreeing that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with any its 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 automatically be extended or amended unless the requirements of this Section 2.3 are met as though annually for a new Letter of Credit were being requested and issued.
(g) In addition period not to amounts payable as elsewhere provided in this Section 2.3, Borrowers will protect, indemnify, pay and save exceed one year if such Issuing 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 does not cancel such extension. It shall be a condition precedent 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 in accordance with the provision provisions 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 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 draft or certificate which substantially complies with the terms of 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 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 2.04 that each condition 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, Section 3.03 shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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)have been satisfied. 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 Immediately upon the issuance of each Letter of Credit. The LOC Fee will , each Lender shall be calculated on deemed to, and hereby agrees to, have irrevocably purchased from the basis of the actual number of days elapsed Issuing Lender a participation in a 360-day year. If any such Letter of Credit is cancelled for any reason before the stated expiry date thereof, any LOC Fee paid and drawings thereunder in advance will not be refunded and will be retained by Lender solely for its account.
an amount equal to such Lender's ratable share (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 respective Commitments of the end of such Fiscal Quarter or Fiscal Year then ended so long as no Event of Default is existing as Lenders) of the applicable effective date of adjustment. The foregoing adjustment, if applicable, (A) will maximum amount which is or at any time may 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 available 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Datedrawn thereunder.
Appears in 1 contract
Letters of Credit. (a) Until The Issuing Bank agrees, on the Termination Date with respect to the Line of Credit terms and subject to the other terms and conditions of this Agreementherein set forth, Borrowers may request Lender to issue one or more of its standard standby letters of credit (the “Standby Letter Letters of Credit”) in favor 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. The Issuing Bank shall have no obligation to issue, and no Borrower shall request the issuance of, any Letter of Credit hereunder if the Available Amount of such beneficiary(ies) Letter of Credit exceeds, immediately before the time of such issuance, an amount equal to the total Unused Commitments of the Lenders at such time (as are designated such amount shall be advised by Borrowers the Administrative Agent to the Issuing Bank as contemplated by delivering Section 2.04). No Issuing Bank shall have any obligation to Lenderissue, and no Borrower shall request the issuance of, any Letter of Credit hereunder if the aggregate Available Amounts or the aggregate stated amount of all Letters of Credit issued by such Issuing Bank would exceed, after giving effect to such issuance, the maximum amount set forth in a letter agreement between such Issuing Bank and Parent, on behalf of the Borrowers. The Issuing Bank shall have no obligation to issue, and no Borrower shall request the issuance of, any Letter of Credit except within the following limitations: (i) a each Letter of Credit Application completed shall be denominated in U.S. dollars (unless issued pursuant to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)2.21), (ii) a Borrowing Base Certificate which calculates the each Letter of Credit Availability by giving effect to the proposed Letter of Credit, shall be payable only against sight drafts (and not time drafts) and (iii) such other no Letter of Credit Documents that Lender then customarily requires in shall have an expiration date (including all rights of the issuance applicable Borrower or the beneficiary to require renewal) later than the earlier of letters of credit. Lender, in addition 10 days prior to the other terms Termination Date and one year after the date of this Agreementissuance thereof, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist but a Letter of Credit Deficiency. The making may by its terms be automatically renewable annually unless the Issuing Bank notifies the beneficiary thereof of its election not to renew such Letter of Credit; provided that the terms of each Letter of Credit request by Borrowers will be deemed that is automatically renewable annually shall not permit the expiration date (after giving effect to be a representation by Borrowers that the any renewal) of such Letter of Credit may in any event to be issued in accordance with, and will not violate the terms of, this Section 2.3.
(b) Each Letter of Credit issued under this Agreement will, among other things, (i) be in such form requested by Borrowers as is acceptable extended 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 date later than one year; furthermore, and, in addition 10 days prior to the foregoing term limitation, Lender will Termination Date. The Issuing Bank shall have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 feeswhich is unsatisfactory in form, charges and out substance or beneficiary to the Issuing Bank in the exercise of pocket expenses its reasonable judgment consistent with respect to each Letter of Creditits customary practice. The LOC Fee Issuing Bank shall have no obligation to issue a Letter in Credit in favor of a beneficiary that is fully earned by Lender when paid and will be due and payable on a Sanctioned Person or that is organized under the issuance laws 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 accountSanctioned Country.
(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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Credit Agreement (Ace LTD)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other 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 this Agreement, Borrowers Credit under the Commitment as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: ; PROVIDED that (i) a giving effect to all such Letters of Credit, 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 Application completed shall be in a form reasonably acceptable to the reasonable satisfaction Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the term of Lender, together with the proposed form of the any Letter of Credit (which, in all respects, will comply with shall not exceed one year or extend beyond the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Maturity Date.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) submitted to the rules or customs set forth in 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 and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Lender whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, 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 receipt the issuance of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, each Lender will communicate shall be deemed to have purchased at par a pro rata participation in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on from the Issuing Lender in an amount equal to that Lender’s demand or payable as otherwise set forth 's Pro Rata Share. Without limiting the scope and nature of each Lender's participation in the applicable any Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when dueCredit, 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 extent that the same Business Day that Issuing Lender is obligated has not been reimbursed by Borrower for any payment required to fund a drawing or make any expenditure or any other payment under a Letter of Credit or incurs any cost or expense be made by the Issuing Lender under any Letter of Credit, each Lender shall, pro rata according to reimburse Lender its Pro Rata Share, pay the purchase price 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 such participation to the extent that it results) in any Letter Issuing Lender through the Administrative Agent promptly upon demand therefor. The obligation of Credit Deficiency, then Borrowers will immediately eliminate any Letter of Credit Deficiency in accordance with the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject each 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 so pay the participation purchase price 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. Issuing Lender shall be absolute and unconditional and shall not be obligated to cause any Letter of Credit to be 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 affected by the gross negligence or willful misconduct occurrence of Lender. The agreement in this Section 2.3(g) shall survive repayment an Event 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 Default or any other Person, whether in connection with this Agreement occurrence or event. Any such payment of the other Loan Documents, purchase price shall not relieve or otherwise impair the transactions contemplated in this Agreement, or any unrelated transaction; (ii) any statement or any other document presented under any Letter obligation of Credit proving Borrower 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 reimburse the Issuing Lender for the amount 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 made by the Issuing Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies together with the terms of 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 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 2.3interest as hereinafter provided.
(id) 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 put Lender under any resulting liability Borrower agrees to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of CreditCredit within one Business Day after written demand made by the Issuing Lender therefor, a fee (“LOC Fee”) equal to together with interest on such amount from the 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 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 and including the expiry date thereof (or, if earlierextent that the Lenders have not reimbursed the Issuing Lender pursuant to Section 2.4(c), the date on which interest amount of any such payment shall be for the Letter account of Credit is returned the Issuing Lender. Each Lender that has paid the participation purchase price to the Issuing Lender and is canceled). In additionpursuant to Section 2.4(c) shall thereupon acquire a pro rata participation, Borrowers will pay to Lender, on its demand for the extent of such payment, Lender’s then current issuancein the claim of the Issuing Lender against Borrower for reimbursement of principal and interest under this Section 2.4(d) and shall share, openingin accordance with that pro rata participation, closing, transfer, amendment, draw, renewal, negotiation and other letter of credit administration fees, charges and out of pocket expenses in any principal payment made by Borrower with respect to each Letter of Credit. The LOC Fee is fully earned such claim and in any interest payment made 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.
Borrower (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 but only 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 periods subsequent 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining Lender paid the Applicable LOC Fee Percentage, that participation purchase price to the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.Issuing
Appears in 1 contract
Samples: Loan Agreement (MGM Mirage)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreementhereof, Borrowers may request Lender each LC Issuing Bank agrees to issue Letters of Credit from time to time for the account of the Borrower (or to extend the stated maturity thereof or to amend or modify the terms thereof), in an aggregate stated amount not exceeding such LC Issuing Bank’s Fronting Commitment, up to a maximum aggregate stated amount for all Letters of Credit at any one or more time outstanding equal to the LC Commitment Amount. With respect to Letters of its standard standby letters of credit (“Standby Letter Credit that are not Bond Letters of Credit”) in favor , such issuance shall occur on not less than two Business Days’ prior notice thereof by delivery of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (ix) a Request for Issuance for such Letter of Credit Application completed to the reasonable satisfaction of Lender, together with Administrative Agent and the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed LC Issuing Bank for such Letter of Credit, and (iiiy) such other LC Issuing Bank’s standard form of Letter of Credit Documents that Lender then customarily requires in application for the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed requested Letter of Credit if(including, after giving effect for direct pay Letters of Credit, any reimbursement agreement or other standard form required by such LC Issuing Bank) to the proposed letter of credit department of such LC Issuing Bank for the account of the Borrower. With respect to each Bond Letter of Credit, there would exist such issuance shall occur after receipt of (x) a Request for Issuance for such Bond Letter of Credit to the Administrative Agent and the LC Issuing Bank for such Bond Letter of Credit, (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
(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. Upon each modification of a Letter of Credit Deficiency. The making by any LC Issuing Bank which modifies the aggregate amount available to be drawn under such Letter of each 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 request by Borrowers will be deemed to be a representation by Borrowers such that the each Lender’s participation in such Letter of Credit may shall equal such Lender’s Commitment Percentage of such modified aggregate amount available to be issued 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, and will not violate the terms of, this with Section 2.32.17(f).
(b) Each Letter The Borrower may from time to time appoint one or more additional Lenders (with the consent of Credit issued under this Agreement willany such Lender, among other things, (i) which consent may 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 withheld in the ordinary course sole discretion of Borrowers’ respective businesses each Lender) to act, either directly or through an Affiliate of such Lender, as presently conducted an LC Issuing Bank hereunder. Any such appointment and the terms thereof shall be evidenced in a separate written agreement executed by them. In no event will any Letter the Borrower and the relevant LC Issuing Bank, a copy of Credit have a term of more than one year; furthermore, and, in addition which agreement shall be delivered by the Borrower to the foregoing term limitationAdministrative 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 will shall have no any obligation to issue any Letter of Credit with an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line of Credit. Each hereunder or any Letter of Credit Application issued by such Lender shall remain outstanding, such Lender shall be deemed to be, and each Letter of Credit will set forth which rules or customs apply to shall have all the Letter of Credit. Such rules rights and customs may includeobligations of, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce an “LC Issuing Bank” under this Agreement.
(“ISP”c) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the No Letter of Credit shall be governed by requested, issued or modified hereunder if, after the issuance or modification thereof, (Ai) the rules or customs set forth Outstanding Credits would exceed the Commitments then scheduled to be in effect until the Letter latest Termination Date, (ii) that portion of the LC Outstandings arising from Letters of Credit and issued by an LC Issuing Bank would exceed the amount of such LC Issuing Bank’s Fronting Commitment or (Biii) the internal laws of LC Outstandings would exceed the State of Ohio and the United States of America, except LC Commitment Amount. No LC Issuing Bank shall be under any obligation to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request from Borrowers to open issue any Letter of Credit and if any order, judgment or decree of all attendant Letter of Credit Documents completed any Governmental Authority shall by its terms purport to Lender’s reasonable satisfaction, Lender, within three (3) Business Days, may either (i) issue the requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, enjoin or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue restrain such LC Issuing Bank from issuing such Letter of Credit, Lender will communicate 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 writing particular or shall impose upon the LC Issuing Bank with respect to Borrowers such Letter of Credit any restriction, reserve or capital requirement (for which the reason(sLC 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) why Lender has declined such requestthat was not applicable on the date hereof and that the LC Issuing Bank in good xxxxx xxxxx material to it.
(d) All 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 Obligations are 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 Lender’s demand or payable as otherwise set forth demand, from the date so paid by such LC Issuing Bank until repayment to such LC Issuing Bank in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective of any claim, setoff, defense or other right which any Borrower may have full at any time against Lender or any other Person. Subject a fluctuating interest rate per annum equal to the terms of Section 6.6interest rate applicable to Base Rate Loans plus, Borrowers hereby irrevocably instruct Lender, on the same Business Day that Lender is obligated to fund a drawing or make if any expenditure or any other payment amount paid by such LC Issuing Bank under a Letter of Credit or incurs any cost or expense 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 any Letter Section 2.02 (and which Borrowing shall be subject to the conditions in Section 2.02) in the amount of Creditsuch Reimbursement Amount, and the proceeds of such Borrowing may be applied to reimburse Lender for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender debiting any satisfy the Borrower’s loan account(s) with Lender obligations to such LC Issuing Bank or the Lenders, 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)case may be.
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under If any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to LC Issuing Bank shall not have been delivered under reimbursed in full for any Reimbursement Amount in respect of a Letter of Credit appear 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 comply substantially 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 their face with such amount at a rate per annum equal to the requirements Federal Funds Effective Rate, for the first three days from the date of the Letter payment by such LC Issuing Bank, and, thereafter, until the date of Creditpayment to such LC Issuing Bank by such Lender, and any action taken or omitted by Lender in good faith under or in connection with any Letter at a rate 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 interest equal to the extent, but only rate applicable to the extent, of any direct, as opposed to consequential, damages suffered Base Rate Loans. Each such payment by Borrowers from Lender’s gross negligence or willful misconduct. a Lender shall be made not be obligated later than 3:00 P.M. (New York City Time) on the later to cause any Letter occur of Credit to be 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 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 Business Day immediately following the date 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 payment by 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; LC Issuing Bank and (ii) any statement 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 occurrence or continuance of a Default or the failure of 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 make 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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(j2.04(e). 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 date upon which further agrees that each such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it payment shall be assumed for purposes of determining the Applicable LOC Fee Percentagemade without any offset, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e.abatement, Pricing Grid Level 1) will be applicable on the then applicable Determination Datewithholding or reduction whatsoever.
Appears in 1 contract
Samples: Credit Agreement (Pacificorp /Or/)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other 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 this Agreement, Borrowers Credit under the Revolving Facility as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor ; provided that giving effect to all such Letters of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Credit, (i) a Letter of Revolving Credit Application completed to Facility Usage does not exceed the reasonable satisfaction of Lender, together with the proposed form of the Letter of Maximum Revolving Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b))Amount, (ii) a Borrowing Base Certificate which calculates the Letter Aggregate Effective Amount under all outstanding Letters of Credit Availability by giving effect to the proposed Letter of Creditshall not exceed $5,000,000, and (iii) as to each relevant Lender, such other Lender's Pro Rata Share of Revolving Credit Facility Usage does not exceed such Lender's Revolving Commitment. Each Letter of Credit Documents that Lender then customarily requires shall be in the issuance of letters of credit. Lender, in addition a form reasonably acceptable to the other terms Issuing Lender. Unless the Issuing Lender and the Requisite Lenders otherwise consent, neither the term of this Agreement, will have no obligation to issue the proposed any Commercial Letter of Credit if, after giving effect to nor the proposed Letter term of Credit, there would exist a any Standby Letter of Credit Deficiencyshall exceed 365 days. The making Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the term of each any Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that shall not extend beyond the Revolving Facility Maturity Date. A Request for Letter of Credit may shall be issued in accordance with, and will not violate irrevocable absent the terms of, this Section 2.3consent of the Issuing Lender.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by submitted to the Issuing Lender, with a copy to the Administrative Agent, at least three (A3) Banking Days prior to the rules or customs set forth in date upon which the related Letter of Credit and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws of the State of Ohio Issuing Lender whether such request, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents 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 not less than three (3) days prior to the date of any Request for Letter of Credit, 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 set forth abovea result of so acting.
(c) Upon receipt issuance of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, each Lender will communicate shall be deemed to have purchased a pro rata participation in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on from the Issuing Lender in proportion to that Lender’s demand or payable as otherwise set forth 's Pro Rata Share of the Revolving Facility. Without limiting the scope and nature of each Lender's participation in the applicable any Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when dueCredit, 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 extent that the same Business Day that Issuing Lender is obligated has not been reimbursed by Borrower for any payment required to fund a drawing or make any expenditure or any other payment under a Letter of Credit or incurs any cost or expense be made by the Issuing Lender under any Letter of Credit, each Lender shall, pro rata according 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 its Pro Rata Share of the Revolving Loans pursuant to Section 2.1Facility, reimburse the Issuing Lender through the Administrative Agent promptly upon demand for the amount of such payment. If the advance The obligation 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject each Lender to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve so reimburse the Issuing 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 be absolute and unconditional and shall not be obligated to cause any Letter of Credit to be 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 affected by the gross negligence or willful misconduct occurrence of Lender. The agreement in this Section 2.3(g) shall survive repayment an Event 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 Default or any other Person, whether in connection with this Agreement occurrence or event. Any such reimbursement shall not relieve or otherwise impair the other Loan Documents, obligation of Borrower to reimburse 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 Issuing Lender for the amount 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 made by the Issuing Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies together with the terms of 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 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 2.3interest as hereinafter provided.
(id) 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 put Lender under any resulting liability Borrower agrees to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of CreditCredit within one (1) Banking Day after demand made by the Issuing Lender therefor, a fee (“LOC Fee”) equal 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 Advances under the Applicable LOC Fee Percentage per annum Revolving Facility for the period commencing on the amount available to be drawn under each Letter of Credit from, and including, the issuance date of any such payment and continuing through the Letter first Banking Day following such demand and thereafter at the Default Rate. The principal amount of Credit any such payment shall be used to and including reimburse the expiry date thereof (or, if earlier, Issuing Lender for the date on which payment made by it under 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 Each Lender when paid and will be due and payable on that has reimbursed 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 Issuing 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.2.5
Appears in 1 contract
Letters of Credit. (a) Until Subject to and upon the Termination Date with respect terms and conditions contained herein and in the Letter of Credit Documents, at the request of a Borrower (or Administrative Borrower on behalf of such Borrower), Agent agrees to cause Issuing Bank to issue, and Issuing Bank agrees to issue, for the account of such Borrower one or more Letters of Credit, for the 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 Line 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 of this Agreementcontained herein, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby no Letter of Credit”) Credit shall be available unless each of the following conditions precedent have been satisfied in favor of such beneficiary(ies) as are designated by Borrowers by delivering a manner satisfactory to LenderAgent: (i) a the Borrower requesting such Letter of Credit Application completed (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 reasonable satisfaction of Lender, together with the proposed form issuance of the Letter of Credit (whichand such other Letter of Credit Documents as may be required pursuant to the terms thereof, in all respects, will comply with and the applicable requirements form and terms of Section 2.3(b))the proposed Letter of Credit shall be satisfactory to Agent and Issuing Bank, (ii) a Borrowing Base Certificate which calculates as of the Letter date of Credit Availability issuance, no order of any court, arbitrator or other Governmental Authority shall purport by giving effect 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 (iiiwhether or not having the force of law) such other Letter of Credit Documents from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that Lender then customarily requires in Issuing Bank refrain from, the issuance of letters of credit. Lendercredit generally or the issuance of such Letter of Credit, in addition (iii) after giving effect to the other terms issuance of this Agreementsuch Letter of Credit, will have no obligation the Letter of Credit Obligations shall not exceed the Letter of Credit Limit, and (iv) the Excess Availability, prior to issue 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 ifis for the purpose of purchasing Eligible Inventory and the documents of title with respect thereto are consigned to Issuing Bank, after giving effect 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, there would exist Credit is for any other purpose or the documents of title are not consigned to Issuing Bank in connection with a Letter of Credit Deficiencyfor the purpose of purchasing Inventory, an amount equal to one hundred (100%) percent of the Letter of Credit Obligations with respect thereto. The making Effective on the issuance of each Letter of Credit request by Borrowers will Credit, a Reserve shall be deemed established in the applicable amount set forth in Section 2.2(c)(iv)(A) or Section 2.2(c)(iv)(B). Notwithstanding anything to the contrary contained herein, an Issuing Bank shall not be obligated to issue a representation by Borrowers that the Letter of Credit may be issued in accordance withrespect of the obligations of a Borrower or Guarantor arising in connection with a lease of Real Property or an employment contract, and will not violate (a) in the terms of, this Section 2.3.
(b) Each case of a Letter of Credit issued under this Agreement willin connection with such a lease, among other things, with a face amount in excess of the amount equal to (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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (Ax) the rules amount of rent under such lease, without acceleration, for the greater of one year or customs set forth in the Letter of Credit and fifteen (B15%) the internal laws of the State of Ohio and the United States of Americapercent, except not to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 exceed three (3) Business Daysyears, may either of the remaining term of such lease minus (iy) issue the requested amount of any cash or other collateral to secure the obligations of a Borrower or Guarantor in respect of such lease and (b) in the case of a Letter of Credit to in connection with an employment contract, with a face amount in excess of the beneficiary thereof and transmit compensation provided by such contract, without acceleration, for a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such requestone year period.
(d) All Except in Agent’s discretion, with the consent of all Lenders, the amount of all outstanding Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in shall not at any time exceed the applicable Letter of Credit Documents. Borrowers jointly 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 severally promise to pay Lender Issuing Bank the amount of all other charges and fees payable to Issuing Bank in connection with any Letter of Credit Obligations issued for the account of such Borrower immediately when due, irrespective of any claim, setoff, defense or other right which any such Borrower may have at any time against Lender Issuing Bank 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 Each drawing or make under any expenditure or any other payment under a Letter of Credit or incurs other amount payable in connection therewith when due shall constitute a request by the Borrower for whose account such Letter of Credit was issued to Agent for a Prime Rate Loan in the amount of such drawing or other amount then due, and shall be made by Agent on behalf of Lenders as a Revolving Loan (or Special Agent Advance, as the case may be). The date of such Loan shall be the date of the drawing or as to other amounts, the due date therefor. Any payments made by or on behalf of Agent or any cost Lender to Issuing Bank and/or related parties in connection with any Letter of Credit shall constitute additional Revolving Loans to such Borrower pursuant to this Section 2 (or expense under Special Agent Advances as the case may be).
(f) Borrowers and Guarantors shall indemnify and hold Agent and Lenders harmless from and against any and all losses, claims, damages, liabilities, costs and expenses which Agent or any Lender may suffer or incur in connection with any Letter of Credit and any documents, drafts or acceptances relating thereto, including any losses, claims, damages, liabilities, costs and expenses due to any action taken by Issuing Bank or correspondent with respect to any Letter of Credit, to reimburse Lender 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 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 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 Revolving Loans pursuant to Section 2.1. If the advance of a Revolving Loan to reimburse Lender for any drawing, expenditure drawer under or other payment made, or cost or expense incurred, by Lender in respect beneficiary of any Letter of Credit results (and for such purposes the drawer or beneficiary shall be deemed such Borrower’s agent. Each Borrower and Guarantor assumes all risks for, and agrees to the extent that it results) in pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter of Credit Deficiencyor any documents, then Borrowers will immediately eliminate drafts or acceptances thereunder. Each Borrower and Guarantor hereby releases and holds Agent and Lenders harmless from and against any Letter of Credit Deficiency in accordance acts, waivers, errors, delays or omissions with the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether respect to pay under or relating to any Letter of Credit, except for the gross negligence or willful misconduct of Agent or any Lender will be responsible only as determined pursuant to confirm in good faith that 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 documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the 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 consignee on all bills of lading and other negotiable and non-negotiable documents.
(h) Each Borrower and Guarantor hereby irrevocably authorizes and directs Issuing Bank to name such Borrower or Guarantor as the account party therein and to deliver to Agent all instruments, 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 action taken Borrower or omitted Guarantor any right or authority to pledge the credit of Agent or any Lender in any manner. Borrowers and Guarantors shall be bound by Lender any reasonable interpretation made in good faith by Agent, or Issuing Bank under or in connection with any Letter of Credit will not subject Lender to or any liability to documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be inconsistent with any Borrower; provided, however, nothing in this Section 2.3(f) will relieve Lender instructions 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 Borrower or willful misconduct. Lender shall not be obligated to cause any Letter of Credit to be 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 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 draft or certificate which substantially complies with the terms of 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 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 2.3Guarantor.
(i) In furtherance and extension, and not in limitation, of Immediately upon the specific provisions set forth above, any action taken issuance 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 put Lender under any resulting liability to Borrowers or relieve Borrowers amendment of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal each Lender shall be deemed to have irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided interest and participation to the Applicable LOC Fee Percentage per annum on extent of such Lender’s Pro Rata Share of the amount available liability with respect to be drawn under each such Letter of Credit from, and including, the issuance date obligations of the Borrowers with respect thereto (including all 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 canceledObligations with respect thereto). In additionEach Lender shall absolutely, Borrowers will unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to LenderIssuing Bank therefor and discharge when due, on its demand for payment, Lender’s then current issuance, opening, closing, transfer, amendment, draw, renewal, negotiation and other letter Pro Rata Share of credit administration fees, charges and out all of pocket expenses with respect to each such obligations arising under such Letter of Credit. The LOC Fee is fully earned by Lender when paid Without limiting the scope and will be due and payable on the issuance nature of each Lender’s participation in any Letter of Credit. The LOC Fee will be calculated on , to the basis of the actual number of days elapsed in a 360-day year. If extent that Issuing Bank has not been reimbursed or otherwise paid as required hereunder or under any such Letter of Credit is cancelled for any reason before the stated expiry date thereofCredit, any LOC Fee paid 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 advance will not be refunded and will be retained by Lender solely for its accountconnection therewith.
(iij) 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 So long as no Event of Default exists or has occurred and is existing continuing, a Borrower may (i) approve or resolve any questions of non-compliance of documents, (ii) give any instructions as to acceptance or rejection of any documents or goods, (iii) execute any and all applications for steamship or airway guaranties, indemnities or delivery orders, and (iv) with Agent’s consent, grant any extensions of the applicable effective date maturity of, time of adjustment. The foregoing adjustmentpayment for, if applicableor time of presentation of, any drafts, acceptances, or documents, and 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.
(k) At any time an Event of Default exists or has occurred and is continuing, Agent shall have the right and authority to, and Borrowers shall not, without the prior written consent of Agent, (Ai)approve or resolve any questions of non-compliance of documents, (ii) will become effective give any instructions as to acceptance or rejection of any documents or goods, (iii) execute any and all applications for steamship or airway guaranties, indemnities or delivery orders, (iv) grant any extensions of the maturity of, time of payments for, or time of presentation of, any drafts, acceptances, or documents, and (v) 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. Agent may take such actions either in its own name or in any Borrower’s name.
(l) The obligations of Borrowers to pay each Letter of Credit Obligations and the obligations of Lenders to make payments to Agent for the account of Issuing Bank with respect to all Letters of Credit that are issued or renewed on shall be absolute, unconditional and after irrevocable and shall be performed strictly in accordance with 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) terms of this Agreement under any and all circumstances, whatsoever, notwithstanding the occurrence or continuance of any Default, Event of Default, the failure to satisfy any other condition set forth in Section 4 or any other event or circumstance. If such amount is not made available by a Lender when due, Agent shall be entitled to recover such amount on demand from such Lender with interest thereon, for each day from the applicable Fiscal Quarter or Fiscal Year then ended and (B) will remain in effect date such amount was due until the next succeeding effective date such amount is paid to Agent at the interest rate then payable by any Borrower in respect of adjustment pursuant Loans that are Prime Rate Loans. Any such reimbursement shall not relieve or otherwise impair the obligation of Borrowers to this clause (ii) reimburse Issuing Bank under any Letter of Section 2.3(j). Each of the financial statements and Compliance Certificate required to be delivered to Lender must be delivered to Lender Credit or make any other payment 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Dateconnection therewith.
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Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreementhereof, Borrowers may request Lender at any time and from time to issue one or more of its standard standby letters of credit (“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 time from the reasonable satisfaction of Lender, together with Closing Date through the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date Banking Date that is 30 days prior to the stated Termination Date Maturity Date, the Issuing Lender shall issue such Letters of Credit under the Commitment as each Borrower may request by a Request for Letter of Credit; provided that (i) after giving effect to such Letter of Credit and any repayments of Loans made, or satisfaction of Obligations in respect of Letters of Credit made, on the same Banking Day, (x) 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 less the Commitment Reserve and (y) with respect to any single Borrower, the sum of (A) the aggregate principal amount of the Loans to such Borrower plus (ii) the Aggregate Effective Amount of all outstanding Letters of Credit issued for the account of such Borrower plus (iii) as applicable, the Swing Loan Outstandings to such Borrower do not exceed such Borrower's Loan Sublimit, (ii) the Aggregate Effective Amount under all outstanding Letters of Credit shall not exceed $15,000,000; and (iii) with respect to a Request for Letter of Credit with respect to a Foreign Currency Letter of Credit, the Issuing Lender shall not be obligated to issue the Foreign Currency Letter of Credit with respect to a particular Foreign Currency if and so long as the Issuing Lender determines that current or reasonably expected market conditions for that Foreign Currency are unusually unstable or would make it unlawful, impossible or impracticable for the Issuing Lender to fund or hedge its obligations under the Foreign Currency Letter of Credit. For purposes of the foregoing, the aggregate principal amount outstanding under the Notes and the Aggregate Effective Amount of outstanding Letters of Credit, to the Line extent consisting of Foreign Currency Loans and Foreign Currency Letters of Credit, respectively, shall be based on the Foreign Currency Equivalents thereof as of the Banking Day immediately preceding the date of the Request for Letter of Credit. Each Letter of Credit Application and each shall be in a 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 will set forth which rules or customs apply shall not exceed one (1) year (subject to extension in accordance with the terms thereof; provided that all conditions precedent to issuance of a Letter of Credit. Such rules and customs may include, but Credit are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”satisfied in connection with any such extension) or extend beyond the Uniform Customs Maturity Date. As of the Closing Date, each Existing Letter of Credit shall constitute, for all purposes of this Agreement and Practice the other Loan Documents, a Letter of Credit issued and outstanding hereunder and shall be deemed to be issued hereunder on the Closing Date.
(b) Each Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by submitted to the Issuing Lender, with a copy to the Administrative Agent, at least two (A2) Banking Days prior to the rules or customs set forth in date upon which the related Letter of Credit and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Lender whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, 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 receipt the issuance of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, each Lender will communicate shall be deemed to have purchased a pro rata participation in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on from the Issuing Lender in an amount equal to that Lender’s demand or payable as otherwise set forth 's Pro Rata Share of the maximum amount available for drawing thereunder. Without limiting the scope and nature of each Lender's participation in the applicable any Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when dueCredit, 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, extent that the Issuing Lender has not been reimbursed by Borrowers hereby irrevocably instruct Lender, on for any payment required to be made by the same Business Day that Issuing 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, each Lender shall, pro rata according to its Pro Rata Share, reimburse the Issuing Lender through the Administrative Agent promptly upon demand 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 the amount of the Revolving Loans pursuant to Section 2.1such payment. If the advance The obligation 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject each Lender to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve so reimburse the Issuing 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 be absolute and unconditional and shall not be obligated to cause any Letter of Credit to be 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 affected by the gross negligence or willful misconduct occurrence of Lender. The agreement in this Section 2.3(g) shall survive repayment an Event 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 Default or any other Person, whether in connection with this Agreement occurrence or event. Any such reimbursement shall not relieve or otherwise impair the other Loan Documents, obligation of the transactions contemplated in this Agreement, or any unrelated transaction; (ii) any statement or any other document presented under any Letter of Credit proving applicable Borrower 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 reimburse the Issuing Lender for the amount 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 made by the Issuing Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies together with the terms of 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 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 2.3interest as hereinafter provided.
(id) 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 put Lender under any resulting liability Each Borrower agrees to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of CreditCredit with respect to such Borrower within one (1) Banking Day after demand made by the Issuing Lender therefor, a fee (“LOC Fee”) equal to together with interest on such amount from the 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 any payment made by the Issuing Lender at the rate applicable to Alternate Base Rate Loans for two (2) Banking Days after 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 and, to and including the expiry date thereof (or, if earlier, extent that the date on which Lenders have not reimbursed 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 Issuing Lender pursuant to Sections 4.3(aSection 2.7(c), 4.3(b) and 4.3(d) (as applicable) the interest amount of this Agreement any such payment shall be 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 account of the end of such Fiscal Quarter or Fiscal Year then ended so long as no Event of Default is existing as of Issuing Lender. Each Lender that has reimbursed 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 Issuing 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.2.7
Appears in 1 contract
Letters of Credit. (a) Until Subject to the Termination terms and conditions hereof, at any time and from time to time from the Restatement Date through 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 (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 amount available for drawing under the outstanding Letters of Credit plus (C) the aggregate amount of all unreimbursed draws with respect to all Letters of Credit, does not exceed the Line then applicable Commitment, and (ii) the aggregate amount available for drawing under all outstanding Letters of Credit and subject to plus the other terms and conditions amount of this Agreement, Borrowers may request Lender to issue one or more all unreimbursed draws under Letters of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Credit shall not exceed $3,000,000. Each Letter of Credit Application completed shall be in a form reasonably acceptable to the reasonable satisfaction of LenderIssuing Bank. Unless all the Banks otherwise consent in a writing delivered to the Administrative Agent, together with the proposed form terms of the Letters of Credit shall not exceed 24 months from the date of issuance thereof, and shall not extend beyond the Maturity Date. No Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect shall be issued except to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires extent reasonably necessary in the issuance ordinary course of letters business of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Borrower.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by submitted to the Issuing Bank, with a copy to the Administrative Agent, at least ten (A10) Banking Days prior to the rules or customs set forth in date upon which the related Letter of Credit and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Bank whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, 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 receipt the issuance of a request from Borrowers to open any Letter of Credit and Credit, each Bank 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 all attendant Letter of Credit Documents completed to Lender’s reasonable satisfaction, Lender, within three (3) Business Days, may either (i) issue the requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed such Letter of Credit. If Lender elects not to issue such Without limiting the scope and nature of each Bank's participation in any Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 extent that the same Business Day that Lender is obligated Issuing Bank has not been reimbursed by Borrower for any payment required to fund a drawing or make any expenditure or any other payment under a Letter of Credit or incurs any cost or expense be made by the Issuing Bank under any Letter of Credit, each Bank shall, pro rata according to its Pro Rata Share, reimburse Lender the Issuing Bank promptly upon demand for any drawing, expenditure or other the amount of such payment made, or cost or expense incurred, by Lender debiting any Borrower’s loan account(s) with Lender as an advance through the Administrative Agent. The obligation of each Bank to so reimburse 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) All Letter of Credit Obligations will constitute part of the Obligations Issuing Bank shall be absolute and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, unconditional 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 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 affected by the gross negligence or willful misconduct occurrence of Lender. The agreement in this Section 2.3(g) shall survive repayment an Event 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 Default or any other Person, whether in connection with this Agreement occurrence or event. Any such reimbursement shall not relieve or otherwise impair the other Loan Documents, obligation of Borrower to reimburse the transactions contemplated in this Agreement, or Issuing Bank for the amount of any unrelated transaction; (ii) any statement or any other document presented payment made by the Issuing Bank 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 draft or certificate which substantially complies together with the terms of 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 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 2.3interest as hereinafter provided.
(id) 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 put Lender under any resulting liability Borrower agrees to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, the Issuing Bank through the Administrative Agent an amount equal to any payment made by the Issuing Bank with respect to each Letter of CreditCredit within one (1) Banking Day after demand made by the Issuing Bank therefor, a fee (“LOC Fee”) equal to together with interest on such amount from the 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 any payment made by the Letter Issuing Bank at the Default Rate. The principal amount of Credit any such payment shall be used to and including reimburse the expiry date thereof (or, if earlier, Issuing Bank for the date on which payment made by it under 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 Each Bank that has reimbursed 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 Issuing Bank 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.2.4
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect The Existing Letters of Credit described in Schedule 2.4 shall be Letters of Credit for all purposes under this Agreement. Subject to the Line of Credit and subject to the other terms and conditions hereof, at any time and from time to time from the Closing Date through the Revolving Loan Maturity Date, the Issuing Lender shall issue such Letters of this Agreement, Borrowers Credit under the Revolving Commitment as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: ; provided that (i) a 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 Letters of Credit does not exceed $10,000,000. Each Letter of Credit Application completed shall be in a form reasonably acceptable to the reasonable satisfaction Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, the term of Lender, together with the proposed form of the any Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter other than any Existing Letters of Credit, and ) shall not exceed one (iii1) such other Letter of Credit Documents that Lender then customarily requires in year or extend one hundred eighty (180) days beyond the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Revolving Loan Maturity Date.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by submitted to the Issuing Lender, with a copy to the Administrative Agent, at least two (A2) Banking Days prior to the rules or customs set forth in date upon which the related Letter of Credit and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Lender whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, 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 receipt the issuance of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, each Lender will communicate shall be deemed to have purchased a pro rata participation in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on from the Issuing Lender in an amount equal to that Lender’s demand or payable as otherwise set forth 's Pro Rata Share of the Revolving Commitment. Without limiting the scope and nature of each Lender's participation in the applicable any Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when dueCredit, 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 extent that the same Business Day that Issuing Lender is obligated has not been reimbursed by Borrower for any payment required to fund a drawing or make any expenditure or any other payment under a Letter of Credit or incurs any cost or expense 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 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 the amount of the Revolving Loans pursuant to Section 2.1such payment. If the advance The obligation 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject each Lender to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve so reimburse the Issuing 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 be absolute and unconditional and shall not be obligated to cause any Letter of Credit to be 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 affected by the gross negligence or willful misconduct occurrence of Lender. The agreement in this Section 2.3(g) shall survive repayment an Event 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 Default or any other Person, whether in connection with this Agreement occurrence or event. Any such reimbursement shall not relieve or otherwise impair the other Loan Documents, obligation of Borrower to reimburse 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 Issuing Lender for the amount 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 made by the Issuing Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies together with the terms of 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 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 2.3interest as hereinafter provided.
(id) 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 put Lender under any resulting liability Borrower agrees to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of CreditCredit within one (1) Banking Day after demand made by the Issuing Lender therefor, a fee (“LOC Fee”) equal to together with interest on such amount from the 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 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 and including the expiry date thereof (or, if earlier, extent that the date on which Lenders have not reimbursed 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 Issuing Lender pursuant to Sections 4.3(aSection 2.4(c), 4.3(b) and 4.3(d) (as applicable) the interest amount of this Agreement any such payment shall be 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 account of the end of such Fiscal Quarter or Fiscal Year then ended so long as no Event of Default is existing as of Issuing Lender. Each Lender that has reimbursed 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 Issuing 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.2.4
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions hereof, at any time 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 this Agreement, Borrowers Credit under the Revolving Commitment as the Domestic Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: ; provided that (i) a giving effect to all such Letters of Credit, the Revolving Usage plus the Euro Reserve shall not exceed the then Revolving Commitment, and (ii) the Aggregate Effective Amount of all outstanding Letters of Credit shall not exceed $15,000,000. Each Letter of Credit Application completed shall be in a form acceptable to the reasonable satisfaction of Issuing Lender. Unless all the Lenders otherwise consent, together with the proposed form of the no Letter of Credit (which, in all respects, will comply with shall have a term which exceeds one year or extends beyond the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Revolver Maturity Date.
(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 Request for a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) submitted to the rules or customs set forth in 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 and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Lender whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, 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 receipt the issuance of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, each Lender will communicate which owns a Pro Rata Share of the Revolving Commitment shall be deemed to have purchased at par a pro rata participation in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on from the Issuing Lender in an amount equal to that Lender’s demand or payable as otherwise set forth 's Pro Rata Share of the Revolving Commitment. Without limiting the scope and nature of each Lender's participation in the applicable any Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when dueCredit, 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 extent that the same Business Day that Issuing Lender is obligated has not been reimbursed by the Domestic Borrower for any payment required to fund a drawing or make any expenditure or any other payment under a Letter of Credit or incurs any cost or expense be made by the Issuing Lender under any Letter of Credit, each Lender shall, pro rata according 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 its Pro Rata Share of the Revolving Loans pursuant to Section 2.1. If Commitment, pay the advance of a Revolving Loan to reimburse Lender purchase price for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender in respect of any Letter of Credit results (or such participation to the extent that it results) in any Letter Issuing Lender through the Administrative Agent promptly upon demand therefor. The obligation of Credit Deficiency, then Borrowers will immediately eliminate any Letter of Credit Deficiency in accordance with the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject each 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 so pay the participation purchase price 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. Issuing Lender shall be absolute and unconditional and shall not be obligated to cause any Letter of Credit to be 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 affected by the gross negligence or willful misconduct occurrence of Lender. The agreement in this Section 2.3(g) shall survive repayment an Event 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 Default or any other Person, whether in connection with this Agreement occurrence or event. Any such payment of the other Loan Documents, purchase price shall not relieve or otherwise impair the transactions contemplated in this Agreement, or any unrelated transaction; (ii) any statement or any other document presented under any Letter obligation of Credit proving the Domestic Borrower 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 reimburse the Issuing Lender for the amount 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 made by the Issuing Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies together with the terms of 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 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 2.3interest as hereinafter provided.
(id) 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, The Domestic Borrower shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, the Issuing Lender through the Administrative Agent an amount equal to any payment made by the Issuing Lender with respect to each Letter of CreditCredit 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 Domestic Borrower has made arrangements for the making of a fee (“LOC Fee”) equal to Loan in the Applicable LOC Fee Percentage per annum amount of such payment on the date thereof or had otherwise arranged for the timely reimbursement of such payment). The principal amount available of any such payment shall be used to be drawn reimburse the Issuing Lender for the payment made by it under each Letter of Credit from, and including, the issuance date of the Letter of Credit and, to and including the expiry date thereof (or, if earlierextent 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 the Domestic 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 the Domestic Borrower with respect to such claim and in any interest payment made by the Domestic Borrower (but only with respect to periods subsequent to the date on which such Lender paid the participation purchase price to the Issuing Lender) with respect to such claim.
(e) Subject to Article 8, the Domestic 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 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 Credit.
(f) If the Domestic 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 returned not required to), without notice to or the consent of the Domestic Borrower, instruct the Administrative Agent 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 amount paid by the Issuing 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 that Letter of Credit is cancelled and, 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 Percentagethis purpose, 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 conditions precedent 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.in
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Agreement and upon (i) the execution by Borrowers of a Letter of Credit Application completed Reimbursement Agreement in form and substance acceptable to Lender, and (ii) the reasonable satisfaction execution and delivery by Borrowers, and the acceptance by Lender, in its sole and absolute discretion, of a Letter of Credit Application, Lender agrees to issue for the account of Borrowers such Letters of Credit in the standard form of Lender and otherwise in form and substance acceptable to Lender, from time to time during the term of this Agreement, provided that the Letter of Credit Obligations may not at any time exceed the Letter of Credit Commitment and provided further, that no Letter of Credit shall have an expiration date later than the Letter of Credit Maturity Date. The amount of any payments made by Lender with respect to draws made by a beneficiary under a Letter of Credit for which Borrowers have failed to reimburse Lender upon the earlier of (i) Lender’s demand for repayment, or (ii) five (5) days from the date of such payment to such beneficiary by Lender, shall be deemed to have been converted to a Revolving Loan as of the date such payment was made by Lender to such beneficiary. Upon the occurrence of an Event of a Default and at the option of Lender, together with all Letter of Credit Obligations shall be converted to Revolving Loans, all without demand, presentment, protest or notice of any kind, all of which are hereby waived by each Borrower. To the proposed form extent the provisions of the Letter of Credit (whichReimbursement Agreement differ from, in all respectsor are inconsistent with, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation the provisions of this Agreement shall govern. Notwithstanding anything to issue the proposed contrary contained herein, each Borrower hereby agrees and acknowledges that Lender has heretofore issued the Workers’ Compensation Insurance Letter of Credit if, after giving effect to the proposed Letter on behalf of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers LTN Staffing and that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 BorrowersWorkers’ 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 Compensation Insurance 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 an existing Letter of Credit is cancelled for any reason before the stated expiry date thereofObligation, any LOC Fee paid in advance will not constitutes an “Obligation” of Borrowers hereunder, and shall be refunded and will be retained secured 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 first prior security interest in and Lien upon all of the financial statements Collateral and Compliance Certificate required by all other security interests, Liens, claims and encumbrances heretofore, now or at any time or times hereafter granted by any Borrower 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender Foothill agrees to issue one or more of its standard standby letters of credit for the account of Borrower (“Standby Letter each, an "L/C") or to issue guarantees of Credit”payment (each such guaranty, an "L/C Guaranty") in favor of such beneficiary(ies) as are designated by Borrowers by delivering with respect to Lender: (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of creditcredit issued by an issuing bank for the account of Borrower. Lender, in addition to the other terms of this Agreement, will Foothill shall have no obligation to issue the proposed a Letter of Credit if, after giving effect if any of the following would result:
(i) 100% of the aggregate amount of all undrawn and unreimbursed Letters of Credit would exceed the Borrowing Base LESS the amount of outstanding Advances and LESS the aggregate amount of all Reserves Against Availability; or
(ii) the aggregate amount of all undrawn or unreimbursed Letters of Credit would exceed the lower of: (x) the Maximum Revolving Amount LESS the amount of outstanding Advances and LESS the aggregate amount of the Reserves Against Availability; or (y) $1,000,000; or
(iii) the outstanding Obligations would exceed the Maximum Revolving Amount. Borrower expressly understands and agrees that Foothill shall have no obligation to arrange for the issuance by issuing banks of the letters of credit that are to be the subject of L/C Guarantees. Borrower and Foothill acknowledge and agree that certain of the letters of credit that are to be the subject of L/C Guarantees may be outstanding on the Closing Date. Each Letter of Credit shall have an expiry date no later than 60 days prior to the proposed date on which this Agreement is scheduled to terminate under SECTION 3.4 (without regard to any potential renewal term) and all such Letters of Credit shall be in form and substance acceptable to Foothill in its sole discretion. If Foothill is obligated to advance funds under a Letter of Credit, there would exist a Letter Borrower immediately shall reimburse such amount to Foothill and, in the absence of Credit Deficiency. The making of each Letter of Credit request by Borrowers will such reimbursement, the amount so advanced immediately and automatically shall be deemed to be a representation by Borrowers that an Advance hereunder and, thereafter, shall bear interest at the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3rate then applicable to Advances under SECTION 2.4.
(b) Each Letter of Credit issued under this Agreement willBorrower hereby agrees to indemnify, among other thingssave, (i) be in such form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faith, (ii) be denominated in Dollarsdefend, 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 hold Foothill harmless from any Letter of Credit have a term of more than one year; furthermoreloss, andcost, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowersexpense, or (ii) electliability, in its discretion exercised in good faithincluding payments made by Foothill, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Creditexpenses, and any action taken or omitted reasonable attorneys fees incurred by Lender in good faith under Foothill arising out of or in connection with any Letter of Credit will not subject Lender Credit. Borrower agrees to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve Lender be bound by the issuing bank's regulations and interpretations of any liability it may have Letters of Credit guarantied by Foothill and opened to Borrowers to the extent, but only to the extent, or for Borrower's account or by Foothill's interpretations of any directL/C issued by Foothill to or for Borrower's account, as opposed to consequentialeven though this interpretation may be different from Borrower's own, damages suffered by Borrowers from Lender’s gross negligence or willful misconduct. Lender and Borrower understands and agrees that Foothill shall not be obligated to cause liable for any Letter error, negligence, or mistake, whether of Credit to be extended omission or amended unless commission, in following Borrower's instructions or those contained in 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 any modifications, amendments, or supplements thereto. Borrower understands that the provision L/C Guarantees may require Foothill to indemnify the issuing bank for certain costs or liabilities arising out of claims by Borrower against such issuing bank. Borrower hereby agrees to indemnify, save, defend, and hold Foothill harmless with respect to any loss, cost, expense (including reasonable attorneys fees), or liability incurred by Foothill under any L/C Guaranty as a result of Foothill's indemnification 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 gross negligence or willful misconduct of Lender. The agreement in this Section 2.3(g) shall survive repayment of all other Obligationssuch issuing bank.
(hc) As between Borrowers Borrower hereby authorizes and Lender, Borrowers assume all risks of the acts and omissions of, or misuse of directs 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 bank that issues a draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 feesguaranteed by Foothill to deliver to Foothill all instruments, charges documents, and out of pocket expenses with respect to each Letter of Credit. The LOC Fee is fully earned other writings and property received 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 issuing bank pursuant to Sections 4.3(a)such letter of credit, 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 accept and rely upon Foothill's instructions and agreements with respect to all Letters matters arising in connection with such letter of Credit that are issued credit and the related application. Borrower may or renewed on may not be the "applicant" or "account party" with respect to such letter of credit.
(d) Any and after all charges, commissions, fees, and costs incurred by Foothill relating to the first day letters of the first calendar month following delivery to Lender of the financial statements and Compliance Certificate required to credit guaranteed by Foothill shall be delivered to Lender pursuant to Sections 4.3(a), 4.3(b) and 4.3(d) (as applicable) of this Agreement considered Foothill Expenses 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 purposes of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it immediately shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 reimbursable by Borrower to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateFoothill.
Appears in 1 contract
Samples: Loan and Security Agreement (Ultimate Electronics Inc)
Letters of Credit. (a) Until Issuance. Upon the Termination Date with respect to the Line of Credit terms and subject to the other terms and conditions of this Agreement, Borrowers may request and in reliance upon the representations, warranties and covenants of the Borrower made herein, the Lender agrees to issue one upon the application of the Borrower, to the extent permitted by law and the Uniform Customs and Practice of the International Chamber of Commerce governing Letters of Credit (Publication No. 500 or more any successor thereto), Letters of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering Credit during the period from the date hereof to Lender: the 30th day prior to the Revolving Credit Maturity Date; provided that (i) a Letter the aggregate Stated Amount of Letters of Credit Application completed to outstanding at any time, plus the reasonable satisfaction aggregate amount of Lender, together with the proposed form of the Letter all unreimbursed draws under such outstanding Letters of Credit (whichshall not at any time exceed $2,000,000, in all respects, will comply with the applicable requirements of Section 2.3(b)), and (ii) a Borrowing Base Certificate which calculates the Letter aggregate principal amount of Revolving Loans outstanding at such time plus the aggregate principal amount of all Letters of Credit Availability by giving effect to outstanding at such time, plus the proposed aggregate principal amount of all unreimbursed draws under outstanding Letters of Credit, shall not exceed the Revolving Credit Maximum Amount at any time; and provided, further, that at the time Borrower requests the issuance of a Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter issuance thereof, no Default or Event of Credit, there would exist a Letter Default shall have occurred or be continuing. All Letters of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 shall have a term of more than stated expiration date not to exceed one year; furthermore, and(1) year and shall, in addition to the foregoing term limitationany event, Lender will have no obligation to issue any Letter of Credit with an expiry date expire not later than the date that is 30 days 15th day prior to the stated Termination Date applicable to the Line of CreditRevolving Credit Maturity Date. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 Amounts drawn 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 byshall become immediately due and payable by the Borrower to the Lender and, if there is availability under the Revolving Credit Maximum Amount and no Default or Event of Default exists or would be caused thereby, upon the request of the Borrower, the respective beneficiaries of Lender shall add the amounts drawn to the Loan Account as Revolving Loans. In order to evidence 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 draft or certificate which substantially complies Borrower shall enter into with the terms of Lender such Letter of Credit; (vi) agreements and execute such instruments and documents as the invalidity or unenforceability of the Letter of Credit; (vii) the examination of documents presented under a Letter of Credit exclusively by 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 2.3customarily requires in like transactions.
(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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Revolving Credit and Term Loan Agreement (Mexican Restaurants Inc)
Letters of Credit. (a) Until Letters of credit under the Termination Date with respect to Revolving Facility will be issued by the Line of Credit and subject to the other terms and conditions of this AgreementAgent and, Borrowers may request Lender to issue if included as an additional Issuing Bank, one or more of its standard standby Lenders acceptable to the Borrower and the Agent that agree to issue letters of credit (each, an “Standby Letter Issuing Bank”); provided, that Jefferies shall not be required to issue trade or commercial letters of Credit”) credit or letters of credit denominated in favor of such beneficiary(ies) as are designated by Borrowers by delivering currencies other than United States dollars and Credit Suisse shall only be required to Lender: (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of issue standby letters of credit; provided, further, 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. Lender, in addition to Each letter of credit shall expire not later than the other terms earlier of this Agreement, will have no obligation to issue the proposed Letter (a) 12 months after its date of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit issuance (or such longer period as may be issued in accordance with, agreed by the relevant Issuing Bank and will not violate the terms of, this Section 2.3.
Borrower) and (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 the fifth 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date that is 30 days day 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the rules or customs set forth in the Letter of Credit and (B) the internal laws final maturity of the State Revolving Facility; provided, however, that any letter of Ohio and credit may provide for renewal thereof for additional periods of up to 12 months (which in no event shall extend beyond the United States of Americadate referred to in clause (b) above, except to the extent such laws are inconsistent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the relevant Issuing Bank). Existing letters of credit may be rolled over or back-stopped under the Revolving Facility on the Closing Date. Letters of credit shall be issued in United States dollars or other currencies to be agreed. Drawings under any letter of credit shall be reimbursed by the Borrower on terms consistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of CreditDocumentation Precedent. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 To the extent that it results) in any Letter of Credit Deficiencythe Borrower does not reimburse the Issuing Bank on such time frame, then Borrowers will immediately eliminate any Letter of Credit Deficiency in accordance with the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part of Lenders under the Obligations and Revolving Facility shall be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 irrevocably obligated to cause any Letter reimburse the Issuing Bank pro rata based upon their respective Revolving Facility commitments. The issuance of Credit to be extended or amended unless the requirements all letters 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 credit shall be subject to as a consequence, direct or indirect, the customary procedures 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 gross negligence or willful misconduct of Lenderrelevant Issuing Bank. The agreement definitive documentation for the Facilities will include customary provisions consistent with the Documentation Precedent to protect the Issuing Bank in this Section 2.3(g) shall survive repayment of all other Obligations.
the event any Lender under the Revolving Facility is a “Defaulting Lender” (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 defined 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 draft or certificate which substantially complies manner consistent with the terms of 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 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 2.3Documentation Precedent).
(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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Additional Initial Lender Agreement (Aspen Merger Sub, Inc.)
Letters of Credit. (a) Until In order to assist the Termination Date Company in establishing or opening Letters of Credit with respect an Issuing Bank, the Company has requested CIT to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts or acceptances thereunder through the issuance of the Letters of Credit Guaranty, thereby lending CIT's credit to the Company and CIT has agreed to do so. These arrangements shall be handled by CIT subject to the terms and conditions set forth below.
5.1 Within the Revolving Line of Credit and subject to Availability, CIT shall assist the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”Company in obtaining Letter(s) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed in an amount not to exceed the reasonable satisfaction of Lender, together with the proposed form outstanding amount of the Letter of Credit (which, Sub-Line. CIT's assistance for amounts in excess of the limitation set forth herein shall at all times and in all respectsrespects be in CIT's sole discretion. It is understood that the term, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, form and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making purpose of each Letter of Credit request by Borrowers will and all documentation in connection therewith, and any amendments, modifications or extensions thereof, must be deemed mutually acceptable to be a representation by Borrowers CIT, the Issuing Bank and the Company, provided that the Letter Letters of Credit may shall not be issued in accordance with, used for the purchase of domestic Inventory or to secure present or future debt of domestic Inventory suppliers. Any and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter all outstanding Letters of Credit shall be governed by (A) reserved dollar for dollar from Availability as an Availability Reserve.
5.2 CIT shall have the 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 Americaright, except without notice to the extent such laws are inconsistent Company, to charge the Company's Revolving Loan Account with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of any and all other Letter indebtedness, liability or obligation of any kind incurred by CIT under the Letters of Credit Obligations immediately when due, irrespective Guaranty at the earlier of any claim, setoff, defense or other right which any Borrower may have at any time against Lender or any other Person. Subject to (a) payment by CIT under 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 Letters of Credit Guaranty; or incurs any cost or expense under any Letter (b) the occurrence of Credit, an Event of Default. Any amount charged 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 Company's Revolving Loans pursuant to Section 2.1. If the advance of Loan Account shall be deemed a Revolving Loan to reimburse Lender for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender hereunder and shall incur interest at the rate provided 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 Paragraph 8.1 of Section 2.1(a)8 of this Financing Agreement.
(e) All Letter of Credit Obligations will constitute part of the Obligations 5.3 The Company unconditionally indemnifies CIT and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 holds CIT harmless from and against any and all claimsloss, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees) which Lender (provided that it acts (claim or omits liability incurred by CIT arising from any transactions or occurrences relating 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 Letters of Credit established or opened for the provision Company'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 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 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 by CIT under the Letters of Credit by, Guaranty. This indemnity shall survive termination of this Financing Agreement. The Company agrees that any charges incurred by CIT for the respective beneficiaries of such Letters of Credit. In furtherance Company account by the Issuing Bank shall be conclusive on CIT and not in limitation of may be charged to the foregoing, Lender Company's Revolving Loan Account.
5.4 CIT shall not be responsible for: (ia) the existence 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 claimdocuments or of any endorsements thereon, set-offeven if such documents should in fact prove to be in any or all respects invalid, defense insufficient, fraudulent or other right 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 Borrower may have at or all of the goods referred to in the Letters of Credit or documents; (f) any time against 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 beneficiarybreach of contract between the shipper or vendors and the Company.
5.5 The Company agrees that any action taken by CIT, if taken in good faith, 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 draft or certificate which substantially complies with the terms of 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 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 any Issuing Bank, under or in connection with the Letters of Credit, the Letter of Credit Guarantees, the drafts or acceptances, or the Collateral, shall be binding on the Company and shall not result in any liability whatsoever of CIT to the Company. In furtherance thereof, CIT 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 CIT'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 CIT, all without any notice to or any consent from the Company. Notwithstanding any prior course of conduct or dealing with respect to the foregoing including amendments and non-compliance with documents and/or the Company's instructions with respect thereto, CIT may exercise its rights hereunder in its sole and reasonable business judgement. In addition, without CIT's express consent and endorsement in writing, the Company agrees: (a) not to execute any and all applications for steamship or airway guaranties, indemnities or delivery orders; to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; or to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or 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 CIT, 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 The Company agrees 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; and (c) any certificates in that regard that CIT may at any time request will be promptly furnished. In connection herewith, the Company warrants and represents 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. The Company assumes 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 Company's risk, liability and responsibility.
5.7 Upon any payments made to the Issuing Bank under the Letter of Credit Guaranty, CIT shall acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Company to the Issuing Bank in any application for Letters of Credit, any standing agreement relating to Letters of Credit or any related certificatesotherwise, if taken or omitted in good faith in the absence all of gross negligence or willful misconduct, which shall not put Lender under any resulting liability be deemed to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered granted to CIT and apply in accordance with Section 4.3 of this Agreement all respects to CIT and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentagein addition to any rights, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e.remedies, Pricing Grid Level 1) will be applicable on the then applicable Determination Dateduties or obligations contained herein.
Appears in 1 contract
Samples: Financing Agreement (Pharmaceutical Formulations Inc)
Letters of Credit. (a) Until the Termination Date with respect to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a The Letter of Credit Application completed Commitment. Subject to the reasonable satisfaction of Lenderterms and ------------------------------- conditions hereof, together with at any time and from time to time from the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than Closing Date through the date that is 30 days prior to the stated Termination Date applicable Maturity Date, the Issuing Lender shall take such Letter of Credit Actions under the Commitments as the Company may request; provided, however, that (i) the Outstanding Obligations of each Lender shall not exceed such Lender's Commitment and the Outstanding Obligations of all Lenders shall not exceed the Aggregate Commitment at any time, (ii) the aggregate outstanding Letter of Credit Usage shall not exceed the Letter of Credit Commitment at any time, (iii) each Letter of Credit Action shall be in a form acceptable to Issuing Lender and shall not violate any policies of Issuing Lender, and (iv) the Line Issuing Lender shall not issue Letters of Credit that have automatic extension or renewal provisions ("evergreen" Letters of Credit) without the consent of all the Lenders. Each Letter of Credit Application and each Letter will be a nontransferable standby letter of Credit will set forth which rules credit to support payment and/or performance obligations of the Company or customs apply to the Letter one of Creditits Subsidiaries. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the No Letter of Credit shall be governed by (A) expire more than 364 days after the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 to remain outstanding after 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 PercentageMaturity Date, the Fixed Charge Coverage Ratio willCompany shall, on and after not later than seven days prior to the First Pricing Grid Determination Maturity Date, be determined as deposit cash in an amount equal to one hundred and two percent (102%) of June 30th and December 31st such Letter of each Fiscal Year ending on and after the First Pricing Grid Determination Date (each such date being Credit Usage in a “Determination Date”)Letter of Credit Cash Collateral Account. The “First Pricing Grid Determination Date” occurring after Issuing Lender shall be under no obligation to issue any Letter of Credit if any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Effective Date will be December 31Issuing Lender from issuing such Letter of Credit, 2010. On Lender’s receipt or any Requirement of Law applicable to the financial statements and Compliance Certificate required to be delivered to Issuing Lender pursuant to Sections 4.3(a)or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Lender shall prohibit, 4.3(b) and 4.3(d) (as applicable) of this Agreement for or request that the applicable Fiscal Quarter or Fiscal Year then endedIssuing Lender refrain from, the LOC Fee will be subject to adjustment issuance of letters of credit generally or such Letter of Credit in accordance with particular or shall impose upon 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 Issuing Lender with respect to all Letters such Letter of Credit that are issued any restriction, reserve or renewed on and after capital requirement (for which the first day of the first calendar month following delivery to Issuing Lender of the financial statements and Compliance Certificate required to be delivered to Lender pursuant to Sections 4.3(a), 4.3(bis not otherwise compensated hereunder) and 4.3(d) (as applicable) of this Agreement for the applicable Fiscal Quarter or Fiscal Year then ended and (B) will remain not 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 date Closing Date, or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be not applicable on the then applicable Determination DateClosing Date and which the Issuing Lender in good xxxxx xxxxx material to it.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Upon Borrower's request therefor, Lender shall, from time to the Line time so long as no Event of Credit Default has occurred and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) in favor is continuing as of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: date of request, issue (i) a Letter standby Letters of Credit Application completed for the account of Borrower, and/or (ii) commercial Letters of Credit for the account of Borrower, provided the aggregate amounts available to the reasonable satisfaction be drawn under such standby and commercial Letters of LenderCredit (or actually drawn but not yet reimbursed by Borrower), together with the proposed form sum of all advances on account of the Letter Revolving Credit Loan then outstanding, shall not exceed the sum of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) $10,000,000.00. Each such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(b) Each Letter of Credit issued under this Agreement will, among other things, (i) be by Lender for the account of Borrower and unreimbursed drafts drawn thereunder shall reduce the amount available to Borrower on account of the Revolving Credit Loan in an amount equal to the stated amount of 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 foregoing term limitation, Lender will have no obligation to issue any so long as such Letter of Credit with an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line of Creditoutstanding or such draw unpaid. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the No Letter of Credit shall be governed issued by Lender for the account of Borrower which has an expiration date later than sixty (A60) the 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 days prior to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 termination date of the Revolving Loans pursuant to Section 2.1Credit Loan described in Paragraph 3B(5) above. 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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) Upon payment by Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies 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 terms 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 Letter charge to Borrower's operating account is made by Lender, the unreimbursed amount of Credit; (vi) the invalidity or unenforceability of the Letter of Credit; (vii) the examination of documents presented under a any drawn Letter of Credit exclusively by electronic or electro-optical means; or (viii) any other circumstances or happening whatsoever, whether or not similar to any shall be considered an advance on account of the foregoing, including any act or omission, whether rightful or wrongful, 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. Lender shall charge Borrower its then-prevailing fee for the issuance 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 such Letters of Credit Credit, based upon the stated amount of each, which fee shall be payable by Borrower to Lender upon the issuance thereof. In the event that Borrower desires either a standby or any related certificates, if taken or omitted in good faith in the absence of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each a commercial Letter of Credit, a the documentation thereof shall consist of Lender's standard forms therefor and Borrower specifically acknowledges that (i) the reimbursement obligation of Borrower and any fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each Letter account of such Letters of Credit from, shall be included in the Obligations; and including, (ii) the issuance date occurrence of an Event of Default hereunder shall constitute a default under the Letter documentation relating to such Letters of Credit and shall entitle Lender 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 exercise 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 rights thereunder 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 accountsuch default.
(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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Loan Agreement (Eastern Co)
Letters of Credit. In order to assist the Borrowers in establishing or opening (ai) Until documentary Letters of Credit with an Issuing Bank to cover the Termination Date purchase and importation of Inventory and (ii) standby Letters of Credit with respect 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 Borrowers and the Lenders, acting through the Agent, have agreed to do so. These arrangements shall be handled by the Agent, acting on behalf of the Lenders, subject to the terms and conditions set forth below.
5.1 Within the Line of Credit and subject to Availibility, the other terms and conditions Agent on behalf of this Agreement, the Lenders shall assist each of the Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter obtaining Letters of Credit Application completed in an amount outstanding not to exceed, at any time, the reasonable satisfaction of Lender, together with the proposed form outstanding amount of the Letter of Credit (whichSub-Line. It is understood that the term, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, form and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making purpose of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued and all documentation in accordance withconnection therewith, and will not violate any amendments, modifications or extensions thereof, must be mutually acceptable to the terms ofAgent, this Section 2.3.
(b) Each Letter the Issuing Bank and the Borrowers. Any and all outstanding Letters of Credit issued under this Agreement will, among other things, (i) hereunder for any Borrower shall be in such form requested by Borrowers reserved dollar for dollar from Borrowers' Availability 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 part of the ordinary course of Borrowers’ respective businesses as presently conducted by themAvailability Reserve. In no event will any Letter of Credit have a term of more than one year; furthermore, and, in addition Notwithstanding anything herein to the foregoing term limitationcontrary, Lender will have no obligation to issue any Letter upon the occurrence of Credit with a Default and/or an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line Event of Credit. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited toDefault, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In Agent's assistance with respect to any event, the Letter Letters of Credit shall be governed in the Agent's sole discretion unless such Event of Default is waived by the Agent in writing, or such Default is cured to the 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 any of the Borrowers, to charge the Borrowers' Revolving Loan Account with the amount of any and all indebtedness, liability or obligation of any kind paid or incurred by the Agent and/or the Lenders under the Letters of Credit Guaranty at the earlier of (Aa) payment by the Agent under the Letters of Credit Guaranty; or (b) the rules or customs set forth termination of 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 the Letter Section 8.1 of Credit and (B) the internal laws this Financing Agreement.
5.3 Each of the State of Ohio and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise 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 pay Lender the amount of all other Letter Letters of Credit established or opened for any Borrower's account, the collateral relating thereto and any drafts or acceptances thereunder, and all Obligations immediately when duethereunder, irrespective 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 claim, setoff, defense or other right which charges incurred by the Agent for any Borrower of the Borrowers' account by the Issuing Bank shall be conclusive on the Agent and may have at any time against Lender or any other Person. Subject be charged 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 Borrowers' 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)Account.
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) 5.4 In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 extended represented by any documents; (b) any difference or amended unless variation in the requirements character, quality, quantity, condition, packing, value or delivery of this Section 2.3 are met as though a new Letter 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 were being requested and issued.
or documents; (f) any deviation from instructions; (g) In addition 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 amounts payable as elsewhere provided or in this Section 2.3, Borrowers will protect, indemnify, pay and save Lender harmless from and against connection with any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees) Inventory 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 is the 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 claimsCredit, demands, liabilities, damages, losses, costs, charges and expenses except to the extent caused by that such act or omission is the result of the gross negligence or willful misconduct of the Agent and/or any 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. 5.5 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 connection with 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 DocumentsLetter of Credit Guaranty, the transactions contemplated Borrowers agree that any action taken by the Agent and/or the Lenders, if taken in this Agreementgood faith, 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 draft or certificate which substantially complies with the terms of 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 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 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 have been granted to the Agent on behalf of the Lenders and apply in all respects to the Agent and shall be in addition to any related certificatesrights, if taken remedies, duties or omitted obligations contained herein.
5.8 Nothing in good faith in the absence of gross negligence or willful misconduct, shall not put Lender under this Section 5 is intended to relieve any resulting Issuing Bank from any liability to Borrowers or relieve Borrowers of any of their obligations hereunder to LenderPerson.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
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Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender Agreement and to issue one or more of its standard standby letters of credit (“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 reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (whichSublimit, in all respects, the Bank will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter issue Letters of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practicesfor Borrower's account, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, soon as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request from Borrowers to open any Letter of Credit and of all attendant Letter of Credit Documents completed to Lender’s reasonable satisfaction, Lender, reasonably practicable but within three (3) Business DaysDays following the date Borrower's request for a Letter of Credit (including a fully completed Letter of Credit Application and a Master Letter of Credit Agreement in the customary form of the Bank) is received by the Bank. Notwithstanding anything herein to the contrary, the Bank may either (i) decline to issue the any requested Letter of Credit on the basis that the terms or the conditions of drawing are unacceptable to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, it in its discretion exercised in good faith, not to issue the proposed reasonable discretion. Each Letter of CreditCredit shall provide that drafts drawn on it shall be payable on sight (or as otherwise specified in the letter of credit). If Lender elects not to issue such Each standby Letter of CreditCredit issued by the Bank shall have a maturity date of 364 days or less from the date issued and each commercial Letter of Credit issued by the Bank shall have a maturity date of 180 days or less from the date issued PROVIDED, Lender will communicate in writing to Borrowers HOWEVER, that no Letter of Credit issued by the reason(s) why Lender has declined such request.
(d) Bank shall have a maturity date extending beyond the Revolver Termination Date. All Letter of Credit Obligations are payable on Lender’s demand or Borrowings made under this Section shall be due and payable as otherwise set forth in the applicable provided below. No Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender shall be issued unless the face amount of all other the Letter of Credit Obligations is less than the Net Availability existing immediately when dueprior to its issuance and such issuance would not cause the Loans and Accommodations outstanding to exceed the Revolving Loan Commitment.
(b) The Borrowers shall pay to the Bank, irrespective of any claim, setoff, defense on each date on which the Bank shall honor a draft or other right which any Borrower may have at any time against Lender demand for payment presented 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 made under any Letter of Credit, an amount equal to reimburse Lender for any drawing, expenditure or other payment made, or cost or expense incurred, the amount paid 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 Bank 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft 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 demand 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 draft or certificate which substantially complies with the terms of such Letter of Credit; (vi) . If the invalidity or unenforceability Borrowers shall fail to pay the full amount due on each such date, any amount due but unpaid shall automatically be paid through the making of a Revolving Credit Loan in the amount due but unpaid as of such date. Upon the making of such an automatic Loan, the obligation of the Letter of Credit; (vii) the examination of documents presented Borrowers to repay amounts drawn under a such Letter of Credit exclusively by electronic or electro-optical means; or shall be deemed satisfied. The automatic Loan under subsection (viiia) 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 above 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available be deemed to be drawn a Prime Rate Loan made under each Letter of Credit fromthe Revolving Loan Commitment and the parties shall be entitled to treat such Loan, 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 all 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 under this Agreement, then, at Lender’s option, commencing on the date upon which such financial statements or Compliance Certificate should have been delivered in accordance with as if it were made under Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date2.1.
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Letters of Credit. (a) Until Subject to and upon the Termination Date with respect 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 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 Line 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 of this Agreementcontained herein, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby no Letter of Credit”) Credit shall be available unless each of the following conditions precedent have been satisfied in favor of such beneficiary(ies) as are designated by Borrowers by delivering a manner satisfactory to Lender: (i) a Letter of Credit Application completed the Borrower shall have delivered to the reasonable satisfaction of Lender at such times and in such manner as Lender may require, an application, in form and substance reasonably satisfactory to Lender, together with for the proposed form issuance of the Letter of Credit (whichand such other Letter of Credit Documents as may be required pursuant to the terms thereof, in all respects, will comply with and the applicable requirements form and terms of Section 2.3(b))the proposed Letter of Credit shall be reasonably satisfactory to Lender, (ii) a Borrowing Base Certificate which calculates 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 Availability by giving effect Credit, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the proposed 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 generally or the issuance of such Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires except in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if’s sole discretion, after giving effect to the proposed issuance of such Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit Obligations shall be governed by (A) the rules or customs set forth in not exceed the Letter of Credit and (B) the internal laws of the State of Ohio and the United States of America, except Limit unless otherwise agreed to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request from Borrowers to open any Letter of Credit and of all attendant Letter of Credit Documents completed to by Lender’s reasonable satisfaction, Lender, within three (3) Business Days, may either (i) issue the requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Borrower shall reimburse Lender immediately in US Dollars, with respect to any draw on any Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit DocumentsCredit. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective of Each drawing under 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 Creditother amount payable in connection therewith, to reimburse Lender if not immediately repaid from the Payment Account, shall constitute a request by Borrower 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 in the amount of such drawing or other payment madeamount then due. The date of such Revolving Loan shall be the date of the drawing or as to other amounts, 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)due date therefor.
(e) All Letter of Credit Obligations will constitute part of the Obligations Borrower shall indemnify and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 hold Lender harmless from and against any and all losses, claims, demandsdamages, liabilities, damages, losses, costs, charges costs and expenses (including reasonable attorneys’ fees) which Lender (provided that it acts (may suffer or omits to act) incur 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 connection with any Letter of Credit and any documents, drafts or the provision of acceptances relating thereto, including any credit support or enhancement in connection therewith exclusive of losses, claims, demandsdamages, 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, lossesliabilities, costs, charges and costs or expenses to the extent caused by that are a direct result of the gross negligence or willful misconduct of LenderLender as determined pursuant to a final non-appealable order of a court of competent jurisdiction. The agreement in this Section 2.3(g) shall survive repayment of all other Obligations.
(h) As between Borrowers and Lender, Borrowers assume Borrower assumes all risks with respect to the acts or omissions of the acts and omissions of, drawer under 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, beneficiary of any Letter of Credit (and for such purposes the drawer or beneficiary shall be deemed Borrower’s agent. Borrower assumes all risks for, and agrees to pay, all foreign, Federal, State and local taxes, duties and levies relating to 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 goods subject to any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue documents, drafts or inaccurate in acceptances thereunder. Borrower hereby releases and holds Lender harmless from and against any respect; (iii) acts, waivers, errors, delays or omissions with respect to or relating to any defaultLetter of Credit, negligence, misfeasance, suspension, insolvency, except for the gross negligence or bankruptcy of any shipper or any other Person involved in any transaction covered thereby or any correspondent or agent willful misconduct of Lender as determined pursuant to whom a final, non-appealable order of a court of competent jurisdiction. The provisions of this subsection (e) shall survive the payment of Obligations and the termination of this Agreement.
(f) In connection with Inventory purchased pursuant to any draftsLetter of Credit, 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 may be entrusted; (iv) any delay, interruption, omission or error in transmission or delivery of any document, certificate, draft, or message; (v) payment by which Lender under any Letter of Credit against presentation of holds a draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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, security interest that upon Lender’s then current issuancerequest, 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 items are 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 and/or subject to adjustment Lender’s order, and if they shall come into such Borrower’s possession, to deliver them, upon Lender’s request, to Lender in their original form. Except as otherwise provided herein, Lender 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 Lender may otherwise specify, Borrower shall designate Lender as the consignee on all bills of lading and other negotiable and non-negotiable documents.
(g) 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 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 terms 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until Upon the Termination Date with respect to the Line of Credit terms and subject to the other terms and conditions of this Agreement, Borrowers may request Lender the Issuing Bank shall, from time to time during the period from the Restated Agreement Date through the tenth Business Day preceding the Maturity Date, issue one or more Letters of its standard standby letters Credit for the account of credit (“Standby Letter the Borrower; provided, that the aggregate principal amount of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a all Letter of Credit Application completed to Participations shall not exceed at any time the reasonable satisfaction lesser of Lender, together with (A) the proposed form aggregate amount of the Commitments at such time minus the aggregate unpaid principal amount of all Loans and Swing Loans outstanding at such time and (B) $15,000,000. Each Letter of Credit (whichshall be in a form and shall contain such terms as shall be reasonably satisfactory to the Issuing Bank. Upon the effectiveness of the amendment and restatement of this Agreement as of the Restated Agreement Date, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter outstanding Letters of Credit Availability by giving effect (as defined in this Agreement prior to the proposed Letter of Credit, such amendment and (iiirestatement) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will shall be deemed to be a representation by Borrowers that the Letter Letters of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3hereunder.
(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) shall be denominated only in DollarsDollars and shall expire on or before the first anniversary of the issuance thereof (provided, 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 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 Business Day preceding the Maturity Date. Any extension of the expiry date, or automatic renewal, of a Letter of 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 a term of more than one year; furthermore, been granted and, in addition the case of any such automatic renewal, on the tenth Business Day preceding the last day on which the Issuing Bank is entitled to the foregoing term limitation, Lender will have no obligation to issue give notice of its election that any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are such renewal shall not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth aboveoccur.
(c) Upon receipt of a request from Borrowers to open any Letter Letters of Credit shall be issued only on a Business Day, and shall be used for the corporate purposes of all attendant Letter of Credit Documents completed to Lender’s reasonable satisfaction, Lender, within three (3) Business Days, may either (i) issue the requested Letter of Credit to Borrower or the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such requestSubsidiaries.
(d) All Letter The Borrower shall request the issuance of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 by furnishing to the Administrative Agent and the Issuing Bank, at least five Business Days before the requested date of such issuance, notice thereof in the form of Schedule 1.02 or incurs such other notice as shall be reasonably satisfactory to the Issuing Bank (and, in the case of any cost or expense under any Letter of Creditsuch notice, the Borrower shall be deemed to reimburse Lender have made the Representation and Warranty with respect to such issuance provided 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 in the final paragraph of the Revolving Loans pursuant to Section 2.1. If the advance form of a Revolving Loan to reimburse Lender for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender notice set forth 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(aSchedule 1.02).
(e) All 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 Obligations will constitute part and any Drawings that may at any time be made thereunder, to the extent of the Obligations and be secured by the Loan Collateralsuch Bank's Participating Bank Percentage thereof.
(f) In determining whether The Issuing Bank shall promptly notify the Borrower of its receipt of each Drawing request with respect to pay under any a Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with stating the requirements date and amount of the Letter Drawing requested thereby and the date and amount of Crediteach Drawing disbursed pursuant to such request. The failure of the Issuing Bank to give, and or delay in giving, 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 such notice shall not be obligated to cause any Letter release or diminish the obligations of Credit to be extended or amended unless the requirements Borrower hereunder in respect of this Section 2.3 are met as though a new Letter of Credit were being requested and issuedsuch Drawing.
(g) The Borrower shall, on the day it receives notice of each Drawing from the Issuing Bank, if such notice is received prior to 10:00 a.m. (New York time) on such day, and on the Business Day following the day it receives such notice from the Issuing Bank, if such notice is received after 10:00 a.m. (New York time) on such day, reimburse such Drawing by paying to the Issuing Bank in immediately available funds the amount of the payment made by the Issuing Bank with respect to such Drawing, together (but only if such Drawing is not reimbursed on the day notice is received) with interest thereon at a rate per annum equal to the Base Rate as in effect from time to time plus the applicable Base Rate Margin until the day such reimbursement is made. In addition the event that the Borrower shall fail to amounts payable make any such payment when due and for so long as elsewhere such failure shall be continuing, the Issuing Bank may give notice of such failure to the Administrative Agent and each Participating Bank, which notice shall include, in the case of a Participating Bank, the amount of such Participating Bank's Participating Bank Percentage of such Drawing, whereupon each such Participating Bank (other than the Issuing Bank) shall promptly remit such amount to the Administrative Agent for the account of the Issuing Bank as provided in Section 1.03(h).
(h) 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 2.31.03(h), Borrowers will protectand any amount payable by the Administrative Agent to the Issuing Bank under this Section 1.03(h), indemnifyshall bear interest for each day from the date due (and including such day if paid after 2:00 p.m. (New York time), pay 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 save Lender harmless from including) the third Business Day after the date due and against any and all claimsthereafter at the Base Rate. Each Participating Bank shall, demandsupon the demand of the Issuing Bank, liabilitiesreimburse the Issuing Bank, damagesto the extent the Issuing Bank has not been reimbursed by the Borrower after demand therefor, losses, costs, charges for the reasonable costs and expenses (including reasonable attorneys’ legal fees) which Lender incurred by it (provided that it acts (other than as a result of its willful misconduct or omits to actgross negligence) in good faith connection with the collection of amounts due under, the administration of, 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 preservation and enforcement of any Letter rights conferred by, the Letters of Credit or the provision performance of any credit support 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 enhancement Swing Loans in connection therewith exclusive of claimsits capacity as the Swing Loan Lender), demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by of such Participating Bank's Participating Bank Percentage (as of the gross negligence or willful misconduct time such costs and expenses are incurred) of Lenderthe amount of such costs and expenses. The agreement 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 2.3(g) 1.03 shall survive repayment 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 other Obligations.
(h) As between Borrowers and Lendercircumstances, Borrowers assume all risks of the acts and omissions ofincluding, or misuse of without limitation, any of the Letters following circumstances:
(i) any lack of Credit by, the respective beneficiaries validity or enforceability of such Letters of Credit. In furtherance and not in limitation this Agreement or any of the foregoing, Lender shall not be responsible for: other Loan Documents;
(iii) the existence of any claim, set-off, defense or other right which the Borrower or any Borrower Subsidiary may have at any time against a beneficiary named in a Letter of Credit, any beneficiary, or any transferee, transferee of any Letter of Credit (or any Persons Person for whom any such beneficiary or any such transferee may be acting), Lender the Administrative Agent, the Issuing Bank, any Participating Bank or any other Person, whether in connection with this Agreement or the other Loan DocumentsAgreement, any Letter of Credit, the transactions contemplated in this Agreement, herein or any unrelated transaction; transactions (iiincluding any underlying transaction between the Borrower or any Subsidiary and the beneficiary named in any such Letter of Credit);
(iii) any statement draft, certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent, fraudulent or 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 the surrender or error in transmission or delivery impairment of any document, certificate, draft, security for the performance or messageobservance of any of the terms of any of the Loan Documents; or
(v) payment by Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies with the terms of 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 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, occurrence 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 2.3Default.
(i) In furtherance and extensionWithout 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 be liable or responsible for, and the obligations of the Borrower to the Participating Banks, the Issuing Bank and the Administrative Agent hereunder shall not in limitation, any manner be affected by: (A) the use that may be made of any Letter of Credit or the specific provisions set forth above, proceeds thereof by the beneficiary thereof or any action taken other Person or omitted by Lender under any acts or omissions of such beneficiary or any other Person; (B) the validity or genuineness of documents presented in connection with any of the Letters of Credit Drawing, or any related certificates, if taken or omitted in good faith in the absence of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lenderendorsements thereon, with respect to each Letter of Crediteven if such documents should, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available in fact, prove to be drawn under each Letter of Credit fromin any or all respects, and includinginvalid, the issuance date of the Letter of Credit to and including the expiry date thereof (fraudulent or forged; 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers the Revolving Loan Line Portions may be utilized, upon the request Lender to issue one or more of its standard standby letters of credit (“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 reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. LenderCompany, in addition to the other terms Revolving Loans provided for by Section 2.01 hereof, for the Issuing Banks to consider the issuance, on an UNCOMMITTED AND ABSOLUTELY DISCRETIONARY basis, of this Agreementletters of credit (collectively, will have “Letters of Credit”) for account of the Company, provided that in no obligation event shall: (i) the aggregate amount of all Credit Exposure exceed the lesser of (x) the Borrowing Base plus, with respect to issue the proposed any commercial Letter of Credit ifto be issued to secure the purchase price of Inventory, after giving effect to 80% of the proposed Letter cost of Credit, there would exist a such Inventory that will be Eligible Inventory Ordered Under L/C once such Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance withis issued, and will not violate (y) the terms of, this Section 2.3.
(b) Each Letter aggregate amount of Credit issued under this Agreement will, among other things, (i) be the Revolving Loan Line Portions as in such form requested by Borrowers as is acceptable effect from time to Lender in its discretion exercised in good faithtime, (ii) be denominated in Dollarsthe outstanding aggregate amount of all Letter of Credit Liabilities exceed $35,000,000 (the “L/C Cap”), (iii) the outstanding aggregate amount of all Letter of Credit Liabilities arising out of standby Letters of Credit exceed $3,500,000, 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (Aiv) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 expiration date of any Letter of Credit results (or to extend beyond the extent that it results) in any Letter of Revolving Credit DeficiencyLine Portion Termination Date, then Borrowers will immediately eliminate any Letter of Credit Deficiency in accordance with the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 additionLiabilities in respect thereof are not in excess of $20,000,000 may be issued that expire after the Revolving Credit Line Termination Date then in effect, 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 but before the stated expiry date thereofthat 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, any LOC Fee paid in advance will not be refunded and will be retained by Lender solely for its accountOR 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.
(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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
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Letters of Credit. (a) Until the Termination Date with respect to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“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 reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 6.6and conditions hereof, Borrowers hereby irrevocably instruct Lender, on at any time and from time to time through 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 Maturity Date (or to such earlier date upon which the extent that it results) in any Letter of Credit Deficiency, then Borrowers will immediately eliminate any Letter of Credit Deficiency Combined Commitments are terminated in accordance with the terms of Section 2.1(athis Agreement).
(e) All , the Issuing Lender shall take such Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 BorrowerActions as Borrower may request; provided, however, nothing in this Section 2.3(f) will relieve Lender of any liability it may have to Borrowers to that 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. Issuing Lender shall not be obligated to cause take any Letter of Credit Action with respect to be extended or amended unless the requirements of this Section 2.3 are met as though a new any Letter of Credit were being requested Credit, and issued.
(g) In addition no Lender shall be obligated to amounts payable as elsewhere provided participate 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 if as of the date of such Letter of Credit Action, the aggregate outstanding principal amount of all Loans plus the Letter of Credit Usage would exceed the Combined Commitments or if the provision requested Letter of Credit would result in a violation of the limitations expressed in Section 2.01(c)(ii). Each Letter of Credit Action shall be in a form acceptable to Issuing Lender and shall not violate any credit support or enhancement in connection therewith exclusive policies of claims, demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by the gross negligence or willful misconduct of Issuing 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 Standby Letters of Credit by, shall be issued only for the respective beneficiaries purpose 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 securing workers’ compensation and other right which any insurance coverages for Borrower may have and its Subsidiaries in an amount not at any time against any beneficiaryto exceed the minimum amount required by Holdings’, Borrower’s, or any transfereeof 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. Commercial Letters of Credit shall only be issued for the purpose of supporting the purchase of inventory by Borrower and its Subsidiaries. The obligation of the Issuing Lender to take 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 Action and the obligation of the Lenders to participate 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 subject 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 such Letter of Credit against presentation of a draft or certificate which substantially complies with Action shall be subject to the terms of 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 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.following limitations:
(i) In furtherance and extension, and not The Letter of Credit Usage in limitation, respect of the specific provisions set forth above, any action taken or omitted by Lender under or in connection with any of the all Letters of Credit or any related certificates, if taken or omitted in good faith in the absence other than Permitted Workers Compensation Letters of gross negligence or willful misconduct, Credit shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.exceed $25,000,000; and
(iii) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each No standby Letter of Credit from, and including, shall expire more than 12 months after the issuance date of the thereof. No commercial 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 shall expire more than 180 days after 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 yearthereof. 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 Usage remains outstanding after the First Pricing Grid Determination Date, be determined as of June 30th and December 31st of each Fiscal Year ending on and after Maturity Date or any earlier date upon which 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 Combined Commitments are terminated 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 terms of this Agreement, then, at Lender’s option, commencing on the date upon which Borrower shall immediately deposit cash in an amount equal to such financial statements or Compliance Certificate should have been delivered Letter of Credit Usage in accordance with Section 4.3 a Letter of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateCredit Cash Collateral Account.
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Letters of Credit. (a) Until The Borrower may request, in accordance with the provisions of this subsection 3.1, from time to time during the period from the Closing Date to but excluding the Revolving Loan Commitment Termination Date Date, that Issuing Lender issue Letters of Credit, denominated in Dollars, for the account of the Borrower or any Subsidiary thereof for the general corporate purposes of the Borrower or such Subsidiary; provided, that for all Letters of Credit, including Letters of Credit issued for the account of any Subsidiary of the Borrower, the Borrower shall be the obligor with respect to the Line of Credit and subject obligations related thereto. Subject to the other terms and conditions of this AgreementAgreement and in reliance upon the representations and warranties of the Borrower herein set forth, Borrowers may Issuing Lender shall issue such Letters of Credit in accordance with the provisions of this subsection 3.1; provided that the Borrower shall not request that Issuing Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: and Issuing Lender shall not issue):
(i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed any Letter of Credit if, after giving effect to such issuance, the proposed Total Utilization of Revolving Loan Commitments would exceed the Revolving Loan Commitment Amount then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance, the Letter of Credit Usage would exceed the Letter of Credit Sublimit then in effect; or
(iii) any Letter of Credit having an expiration date later than the earlier of (a) the fifth (5th) day prior to the Revolving Loan Commitment Termination Date and (b) the date which is one year from the date of issuance of such Letter of Credit; provided that (1) Letters of Credit may have an expiration date after the Revolving Loan Commitment Termination Date if all obligations associated with any Letter of Credit expiring after the Revolving Loan Commitment Termination Date are cash collateralized or otherwise supported in a manner satisfactory to the Administrative Agent and the Issuing Lender on or prior to the fifth (5th) day prior to the Revolving Loan Commitment Termination Date or such earlier date as shall be requested by the Administrative Agent or the Issuing Lender at its reasonable discretion, there would exist and, except with respect to drawings made under any such Letter of Credit prior to the Revolving Loan Commitment Termination Date, each Lender (other than the Issuing Lender) shall be released from its obligation to participate in such Letter of Credit on the Revolving Loan Commitment Termination Date, (2) the preceding clause (b) shall not prevent the Issuing Lender from agreeing that a Letter of Credit Deficiency. The making of will automatically be extended for one or more successive periods not to exceed one year each unless the Issuing Lender elects not to extend for any such additional period and (3) the Issuing Lender shall elect not to extend such Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers if it has knowledge that the Letter an Event of Credit may be issued Default has occurred and is continuing (and has not been waived in accordance withwith subsection 9.6) at the time the Issuing Lender must elect whether or not to allow such extension. Notwithstanding anything contained in this Agreement, and will the Issuing Lender shall not violate the terms of, this Section 2.3.
(b) Each Letter of Credit issued be 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce if (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (Ai) the rules or customs Issuing Lender has received written notice that the conditions precedent 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, subsection 4.3 have not been satisfied or (ii) electa default of any Lender’s obligations to fund under subsection 3.3C exists or any Lender is at such time a Defaulting Lender hereunder, in its discretion exercised in good faith, not to issue unless the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Issuing Lender has declined entered into satisfactory arrangements with the Borrower (including, without limitation, as described in subsection 1.4) or such request.
(d) All Letter of Credit Obligations are payable on Lender to eliminate the Issuing Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, risk with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 such 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Credit Agreement (Unitrin Inc)
Letters of Credit. (a) Until the Termination Date with respect 3.6.1 Subject to the Line of Credit terms and conditions hereof, Borrower and any Wholly-owned Subsidiary may request the Agent to cause to be issued by Agent or, subject to the Intercreditor Agreement among Agent and the Banks dated even date herewith, any other terms and conditions Bank that so agrees Standby Letters of this AgreementCredit or Commercial Letters of Credit for Borrower's or such Subsidiary's account, Borrowers may request Lender to issue one or more each of its standard standby letters of credit (“Standby which, upon the issuance thereof, will constitute a Letter of Credit”) in favor . Any Letter of such beneficiary(ies) as are designated by Borrowers by delivering Credit issued pursuant to Lender: (i) this Agreement shall have a term, not including renewals, not exceeding one year. The Borrower or Wholly-owned Subsidiary for whose account a Letter of Credit Application completed is issued shall execute and deliver to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit Issuing Bank (which, subject in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect any event to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this AgreementAgreement and the Notes) such bank's standard application and reimbursement documents with respect thereto. Borrower shall be obligated, will have no which obligation to issue shall (a) survive the proposed Letter maturity of Credit ifany Loan or Commitment provided for hereunder, after giving effect to (b) be joint and several with the proposed Letter obligations of Credit, there would exist any Wholly-owned Subsidiary for which a Letter of Credit Deficiencyis issued, and (c) be effective regardless of whether there exists any availability under any of the Commitments, to reimburse the Issuing Bank for any funds drawn upon any Letter of Credit. Unreimbursed Letter of Credit amounts shall bear interest from the date the applicable Letter of Credit is honored until satisfaction of the Borrower's reimbursement obligation at an annual rate equal to the Prime Rate. The making Total Line of Credit Loan Commitment shall be reduced by the face amount of each Letter of Credit request issued hereunder until the earlier of (i) the expiration or termination thereof, and (ii) payment by Borrowers will Borrower to the Issuing Bank of its reimbursement obligation with respect thereto. Also, the Single Facility Loan Commitment shall be reduced by the face amount of each Non-participated Letter of Credit until the earlier of (u) the expiration or termination thereof, and (v) payment by Borrower to MNB of its reimbursement obligation hereunder with respect thereto. Provided (w) the Line of Credit Maturity has not passed, and (x) there exists adequate availability under the Total Line of Credit Loan Commitment, at such time as funds are drawn upon a Participated Letter of Credit, the amount of such draw may, in the discretion of the Agent, be deemed to be borrowed under the Total Line of Credit Loan Commitment and immediately will begin to bear interest as a representation Prime Rate Loan. Provided (y) the Single Facility Loan Maturity has not passed, and (z) there exists adequate availability under the Single Facility Loan Commitment, at such time as funds are drawn upon a Non-participated Letter of Credit, the amount of such draw may, at MNB's discretion, be deemed to be borrowed under the Single Facility Loan Commitment and immediately will begin to bear interest as a Prime Rate Loan. Borrower will pay, to the Agent for Participated Letters of Credit (for distribution to the Banks, net of funds paid to the Issuing Bank by Borrowers Borrower or a Wholly-owned Subsidiary for the costs of issuance), and to MNB for Non-participated Letters of Credit, a fee of .50% per annum of the face amount of any newly issued or renewed Standby Letter of Credit at the time of issuance or renewal of such Letter of Credit. Such fee is nonrefundable and Borrower shall not be entitled to any rebate of any portion thereof if such Letter of Credit does not remain outstanding through its stated expiry date or for any other reason. The Banks' agreement to issue Letters of Credit will expire on the Line of Credit Maturity.
3.6.2 Borrower and any Wholly-owned Subsidiary for which a Letter of Credit is issued assumes all risks of the acts or omissions of any beneficiary under any Letter of Credit with respect to the use by such beneficiary of such Letter of Credit. Borrower acknowledges that neither the Banks, the Agent nor any of their officers or directors will be liable or responsible for (a) the use which may be made of any Letter of Credit or for any acts or omissions of any beneficiary in connection therewith, (b) the validity or genuineness of any documents delivered in connection with any Letter of Credit, or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or (c) any other circumstances whatsoever in connection with honoring or dishonoring any Letter of Credit except, in all cases, the foregoing persons shall not be relieved of liability in the case of (i) payment under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of the Letter of Credit, or (ii) acts constituting the gross negligence or willful misconduct of any such Person. The Issuing Bank may, subject to applicable United States law, 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.
3.6.3 Borrower hereby indemnifies Agent and the Banks and agrees to keep Agent and the Banks at all times indemnified against all liabilities (including costs and reasonable attorneys' fees) which Agent and the Banks may incur or which may be claimed against Agent and the Banks by any Person by reason of or relating to any matters arising in connection with any Letter of Credit or any of the transactions contemplated thereby; PROVIDED, HOWEVER, that Borrower shall not be required to indemnify any Bank for any claims, damages, losses, liabilities, costs or expenses arising solely from (i) payment under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of the Letter of Credit, or (ii) acts constituting the gross negligence or willful misconduct of the Issuing Bank, or (iii) the Agent's or Issuing Bank's willful failure to pay under the Letter of Credit may be issued in accordance with, and will not violate after the terms of, this Section 2.3.
(b) Each presentation to the Agent or Issuing Bank by a Letter of Credit issued under this Agreement will, among other things, (ibeneficiary of a sight draft and certificate(s) be in such form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faith, (ii) be denominated in Dollars, complying with the terms and (iii) be issued to support Borrowers’ obligations that finance its business needs incurred in conditions of 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 foregoing term limitation, Lender Credit.
3.6.4 The Banks will have no obligation to issue any Letter of Credit with if, at any date of determination, the sum of (a) the maximum aggregate amount available to be drawn under all Letters of Credit then outstanding, PLUS (b) the aggregate amount of all drawings under Letters of Credit not theretofore reimbursed by the Borrower (either by direct payment or an expiry date later than the date that advance under a Commitment), would exceed $25,000,000.
3.6.5 MNB may elect (but is 30 days prior not obligated) to the stated Termination Date applicable to the Line of Credit. Each issue a Letter of Credit Application and without subjecting the letter to participation by the other Banks (each a "Non-participated Letter of Credit"), if the letter satisfies the following conditions:
(a) The amount available to be drawn under such Letter of Credit does not exceed $25,000; and
(b) The issuance of such Letter of Credit will set forth which rules not cause the sum of (i) the maximum aggregate amount available to be drawn under all Non-participated Letters of Credit then outstanding, PLUS (ii) the aggregate amount of all drawings under Non-participated Letters of Credit not theretofore reimbursed by the Borrower (either by direct payment or customs apply an advance under a Commitment), to exceed $350,000. provided, however, that MNB may, at any time, and in its sole discretion, convert one or more Non-participated Letters of Credit (before or after presentation and honor) to Participated Letters of Credit. Agent will provide written notice to Borrower of the conversion of any Non-participated Letters of Credit to Participated Letters of Credit within 30 days after such conversion.
3.6.6 Borrower shall pay to the Issuing Bank (for distribution to the Banks with respect to Participated Letters of Credit, net of funds paid to the Issuing Bank by Borrower or a Wholly-owned Subsidiary for the costs of issuance), for the issuance or renewal of each Commercial Letter of Credit, a fee of .25% of the face amount of any newly issued or renewed Commercial Letter of Credit at the time of issuance or renewal of such Letter of Credit. Such rules fee is nonrefundable and customs may include, but are Borrower shall not limited to, the International Standby Practices, as published by the International Chamber be entitled to any rebate of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the portion thereof if such Letter of Credit shall be governed by (A) the rules does not remain outstanding through its stated expiry date 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective of any claim, setoff, defense or other right which any Borrower may have at any time against Lender or for any other Personreason. 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to LenderFurther, with respect to each Letter of Credit, a fee (“LOC Fee”) equal in addition to the Applicable LOC Fee Percentage per annum on Loan Documents, Borrower or the amount available to be drawn under each Letter Subsidiary, as applicable, shall execute and deliver such additional documents and agreements as are customarily obtained by the Issuing Bank in connection with letters of Credit from, and including, credit of the issuance date of type requested.
3.6.7 The Agent or another Bank shall issue the Letter of Credit upon Borrower's or a Wholly-owned Subsidiary's request pursuant to and including the expiry date thereof (orterms of this Agreement; provided, if earlierhowever, that neither the date on which the Agent, nor any Bank, shall have any obligation to issue a 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 during 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 time that there exists an Event of Default is existing as or Unmatured Event 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateDefault.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other 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 this Agreement, Borrowers Credit under the Commitment as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor ; provided that giving effect to all such Letters of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Credit, (i) a 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 Application completed shall be in a form reasonably acceptable to the reasonable satisfaction of Lender, together with Issuing Bank. Unless all the proposed form of the Letter of Credit (which, Banks otherwise consent in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect writing delivered to the proposed Letter of CreditAdministrative Agent, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that shall not (x) exceed one (1) year, (y) extend beyond the Letter Maturity Date or (z) extend past the Reduction Date if, giving effect thereto, the aggregate principal amount of the outstanding Eurodollar Loans having Eurodollar Periods ending after the Reduction Date plus the aggregate principal amount of the outstanding Competitive Advances having maturities after the Reduction Date, plus the Aggregate Effective Amount of all Letters of Credit may be issued in accordance with, and will not violate expiring after the terms of, this Section 2.3Reduction Date would exceed the Commitment (as reduced on the Reduction Date).
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by submitted to the Issuing Bank, with a copy to the Administrative Agent, at least five (A5) Banking Days prior to the rules or customs set forth in date upon which the related Letter of Credit and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Bank whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, 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 receipt the issuance of a request Letter of Credit, each Bank shall be deemed to have purchased a pro rata participation in such Letter of Credit from Borrowers the Issuing Bank in an amount equal to open 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 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such requesttogether with interest as hereinafter provided.
(d) All 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 Obligations are payable 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 Lender’s demand or payable as otherwise 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 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 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 applicable 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 equal to the amount paid by the Issuing Bank with respect to that Letter of Credit Documentsand, for this purpose, the conditions precedent set forth in Article 8 shall not apply. Borrowers jointly and severally promise 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 Lender to the Issuing Bank the amount of all other any payment made by the Issuing Bank under any Letter of Credit Obligations immediately when dueshall be absolute, irrespective 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 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 defense, or other right rights which any Borrower may have at any time against Lender the Issuing Bank or any other Person. Subject to the terms of Section 6.6Creditor, 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 beneficiary 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 persons or entities 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 DocumentsLetter of Credit, the transactions contemplated in this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactiontransactions; (iiiv) any statement demand, statement, or any other document presented under any the Letter of Credit proving to be forged, fraudulent, invalid 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 messagerespect whatsoever; (v) payment by Lender the Issuing Bank under any the Letter of Credit against presentation of a draft or certificate any accompanying document which substantially complies does not strictly comply with the terms of such the Letter of Credit; (vi) the invalidity existence, character, quality, quantity, condition, packing, value or unenforceability 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 described in such documents; (vii) the time, place, manner, order or con- tents 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; (viiix) any failure or delay in notice of shipments or arrival of any Property; (x) any error in the examination transmission of documents presented under any message relating to a Letter of Credit exclusively not caused by electronic the Issuing Bank, or electro-optical meansany delay or interruption in any such message; or (viiixi) any other circumstances error, neglect or happening whatsoever, whether or not similar to default of any correspondent 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 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 Letters of Credit or any related certificates, if taken or omitted Issuing Bank; (xiii) so long as the Issuing Bank in good faith in determines that the absence contract or document appears to comply with the terms of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each Letter of Credit from, (and including, no payment is made by the issuance Issuing Bank after the expiration date of the Letter of Credit to and including or in amounts greater than the expiry date thereof (or, if earlieramount thereof), the date on which 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 is returned Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to Lender and is canceled). In addition, Borrowers will pay in any document submitted 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 the Issuing Bank in connection with respect to each a Letter of Credit. The LOC Fee is fully earned by Lender when paid ; and will be due (xv) where the Issuing Bank has acted in good faith 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 thereofobserved general banking usage, any LOC Fee paid in advance will not be refunded and will be retained by Lender solely for its accountother circumstances whatsoever.
(iii) For purposes of determining The Issuing Bank shall be entitled to the Applicable LOC Fee Percentage, pro- tection accorded to 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 Administrative Agent pursuant to Sections 4.3(a)Section 10.6, 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Datemutatis mutandis.
Appears in 1 contract
Letters of Credit. (a) Until Upon the Termination Date with respect to request of the Line of Credit Collection Agent (acting as agent for the Seller as described in subsection (b) below), and subject to on the other terms and conditions for issuing Letters of this AgreementCredit under the Receivables Purchase Agreement (including any limitations therein on the amount of any such issuance), Borrowers may request Lender the Purchaser agrees to issue one or more cause the LC Bank to issue, on the Purchase Dates specified by the Collection Agent (on behalf of its standard standby letters the Seller), Letters of credit (“Standby Letter of Credit”) Credit in favor of such beneficiary(ies) as are designated the beneficiaries specified by Borrowers by delivering to Lender: the Collection Agent (i) a Letter on behalf of the Seller). The aggregate stated amount of the Letters of Credit Application completed being issued on any Purchase Date on behalf of the Seller shall constitute a credit against the aggregate Purchase Price payable by the Purchaser to the reasonable satisfaction of Lender, together with Seller on such Purchase Date pursuant to Section 2.01(c). To the proposed form extent that the aggregate stated amount of the Letter Letters of Credit (which, in all respects, will comply with being issued on any Payment Date exceeds the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates aggregate Purchase Price payable by the Letter of Credit Availability by giving effect Purchaser to the proposed Letter of CreditSeller on such Payment Date, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will excess shall be deemed to be a representation by Borrowers that reduction in the Letter 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 may to be issued in accordance with, 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 will not violate accrued but unpaid interest on the terms of, this Section 2.3.
(b) Each Deferred Purchase Price Note payable to the Seller on such Payment Date. In the event that any such Letter of Credit issued under pursuant to this Agreement will, among other things, Section 2.07 (i) be in such form requested by Borrowers as expires or is acceptable to Lender in cancelled or otherwise terminated with all or any portion of its discretion exercised in good faithstated amount undrawn, (ii) be denominated in Dollars, and has its stated amount decreased (for a reason other than a drawing having been made thereunder) or (iii) the Purchaser’s Reimbursement Obligation in respect thereof is reduced for any reason other than by virtue of 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 the Seller on 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 support Borrowers’ obligations that finance its business needs incurred in the ordinary course of Borrowers’ respective businesses as presently conducted by themSeller. In Under no event will circumstances shall the Seller (or any Letter of Credit have a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later Affiliate thereof (other than the 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 Purchaser)) have any reimbursement or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 recourse obligations in respect of any Letter of Credit.
(b) The Seller appoints the 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 Persons) to act on the 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 results (or and the allocation of the stated amounts of Letters of Credit against the Purchase Price owed to the extent Seller and against the Deferred Purchase Price Note issued to the Seller. In the event that it resultsthe Collection Agent requests a Letter of Credit hereunder, the Collection Agent shall on a timely basis provide the Purchaser with such information as is necessary for the Purchaser to obtain such Letter of Credit from the LC Bank, and shall notify the Seller, the Purchaser and the Administrator of the allocations described in the preceding sentence. Such allocations shall be binding on the Purchaser and the Seller, absent manifest error.
(c) The Seller agrees to be bound by the terms of each Letter of Credit Application referenced in the Receivables Purchase Agreement and by the LC Bank’s interpretations of any Letter of Credit Deficiencyissued for the Purchaser and by the LC Bank’s written regulations and customary practices relating to letters of credit, then Borrowers will immediately eliminate any Letter of Credit Deficiency in accordance with each case subject to the terms and conditions set forth in the Receivables Purchase Agreement.
(c) Section 4.01(f) of the Purchase and Contribution Agreement is hereby amended to delete the year “2008” in the first and last sentences thereof and insert the year “2010” in replacement thereof.
(d) Section 2.1(a)4.01(g) of the Purchase and Contribution Agreement is hereby amended to delete the word “may” and insert the phrase “could reasonably be expected to” in replacement thereof.
(e) All Letter of Credit Obligations will constitute part Section 4.01(q) of the Obligations Purchase and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm Contribution Agreement is hereby amended and restated in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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, its entirety 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.follows:
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect to the Line of Credit and The Lender will, subject to the other terms and conditions of this AgreementAgreement and the Letter of Credit Agreement as hereafter defined, Borrowers may and upon Borrower's request Lender from time to issue one time, cause merchandise letters of credit (the "Merchandise L/C's") or more of its standard standby letters of credit (“the "Standby L/C's") to be issued for the Borrower's account (the Merchandise L/C's and the Standby L/C's being referred to collectively as the "Letters of Credit"). The Lender will not cause to be opened any Letter of Credit if: (a) the maximum face amount of the requested Letter of Credit”) in favor , plus the aggregate undrawn face amount of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter all outstanding Letters of Credit Application completed to under this Agreement would exceed Three Hundred Thousand and No/100 Dollars ($300,000); or (b) the reasonable satisfaction of Lender, together with the proposed form maximum face amount of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed requested Letter of Credit, and (iii) all commissions, fees, and charges due from Borrower to Lender in connection with the opening thereof, would cause the Availability to be exceeded at such other time. In addition, with respect to any Merchandise L/C, the requested term of such Letter of Credit Documents may not exceed 180 days, and no Merchandise L/C may by its terms be scheduled to be outstanding on the Termination Date. Standby L/C's may have terms that Lender then customarily requires in extend beyond the issuance of letters of credit. Lender, in addition to the other terms Termination Date but upon termination of this Agreement, will have no obligation to issue the proposed Letter all Letters of Credit ifmust be either terminated with the consent of the beneficiary thereof, after giving effect replaced with a letter of credit provided by a financial institution acceptable to the proposed Letter of CreditLender, there would exist collateralized by cash or cash equivalent, or otherwise satisfied in a Letter of Credit Deficiencymanner acceptable to Lender. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter Letters of Credit shall be governed by a Letter of Credit Financing Agreement - Supplement to Third Amended and Restated Loan and Security Agreement between the Lender and the Borrower (A) "Letter of Credit Agreement"), in the rules form attached hereto as Exhibit "O" and made a part hereof, in addition to the terms and conditions hereof. All payments made and expenses incurred by the Lender pursuant to or customs set forth in connection with the Letters of Credit and the Letter of Credit and (B) the internal laws of the State of Ohio and the United States of America, except Agreement will be charged to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit Borrower's loan account as set forth aboveRevolving Loans.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request and provided that no Default or Event of Default has occurred and is continuing, Lender to will, upon Borrower's request, issue one or more Letters of its standard standby letters Credit during the Revolving Credit Commitment Period for the account of credit (“Standby Letter of Credit”) in favor Borrower; provided that the aggregate face amount of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter Letters of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers issued shall not exceed the Revolving Credit Available Loan Amount; and further provided that the Letter aggregate face amount of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(b) Each Letter all Letters of Credit issued under pursuant to this Agreement will, among other things, Section 2.08 shall not exceed $1,500,000.00 at any one time. During the Revolving Credit Commitment Period Borrower shall give Lender written notice executed on behalf of Borrower by any Authorized Financial Officer of Borrower (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 "Notice of Credit have Issuance") of any proposed issuance of a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, Notice of Credit Issuance shall be in substantially the International Standby Practices, as published by form of Exhibit D attached hereto. Such Notice of Credit Issuance shall be revocable prior to the International Chamber issuance of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit; provided, however, if such notice is revoked, Borrower shall pay to Lender a fee of $300.00. Each Notice of Credit Issuance, except with respect to Letters of Credit to be opened on the Closing Date, shall be governed by delivered to Lender not less than two (A2) Business Days before the rules or customs set forth in the requested date of issuance thereof. Additionally, each Notice of Letter of Credit and (B) Issuance shall be accompanied by an Application executed by the internal laws of the State of Ohio and the United States of America, except Company relating to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed subject Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 prior to the terms issuance 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith shall request that any documents required to have been delivered under a Letter of Credit appear to comply substantially Borrower provide additional information on their face with the requirements or confirmation of the Letter of CreditBorrowing Base, Borrower agrees to provide same and any action taken or omitted by Lender in good faith under or in connection with shall not issue 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 covered by the Notice 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 extended or amended unless Issuance until Lender is satisfied with Borrower's determination of the requirements of this Section 2.3 are met as though a new Borrowing Base. Each Letter of Credit were being requested shall be on substantially such terms as Borrower may specify in the relevant Application and issued.
must be in form and substance satisfactory to Lender and shall have a fixed expiration date no later than 1:00 P.M. (gHouston, Texas time) In addition to amounts payable as elsewhere provided in this Section 2.3, Borrowers will protect, indemnify, pay and save Lender harmless one (1) year 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 gross negligence or willful misconduct of Lenderthereof. 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 Existing Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, Lender shall not for all purposes be responsible for: (i) the existence of any claim, set-off, defense or other right which any Borrower may deemed to 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 been 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date2.08.
Appears in 1 contract
Samples: Credit Agreement (Dril-Quip Inc)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other 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 this AgreementCredit denominated in Dollars or Offshore Currencies under the Commitments as Borrower may request; PROVIDED, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: HOWEVER, that (i) a the aggregate outstanding Letter of Credit Application completed to the reasonable satisfaction of LenderUsage shall not exceed $20,000,000 at any time; PROVIDED, together with the proposed form of the HOWEVER, that Letter of Credit (whichUsage not relating to the TeleCine Cell Letters of Credit shall not exceed $2,500,000 in the aggregate; PROVIDED, in all respectsFURTHER, will comply with that such limit shall be permanently reduced from time to time to an amount equal to the applicable requirements aggregate remaining outstanding balance of Section 2.3(b))the TeleCine Cell Loan Notes but not less than an amount equal to $2,500,000, (ii) a Borrowing Base Certificate which calculates the aggregate unpaid principal amount of all Loans and Letter of Credit Availability by giving effect to Usage at any one time outstanding shall not exceed the proposed Letter of Creditcombined Commitments, and (iii) such other the aggregate unpaid principal amount of all Offshore Currency Loans and Letter of Credit Documents that Lender then customarily requires Usage denominated in Offshore Currencies at any one time outstanding shall not exceed the issuance of letters of creditcombined Offshore Currency Commitments. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Each Letter of Credit if, after giving effect shall be in a form acceptable to the proposed Letter Issuing Bank. Unless all the Banks otherwise consent in a writing delivered to the Administrative Agent, the term of Credit, there would exist a any Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that shall not exceed the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Maturity Date.
(b) Each Borrower may irrevocably request the issuance, supplement, modification, amendment, renewal, or extension of a Letter of Credit issued under this Agreement willby delivering a duly completed Letter of Credit Application therefor to the Issuing Bank, among other thingswith a copy to the Administrative Agent, (i) be in by Requisite Notice not later than the Requisite Time therefor. The Administrative Agent shall promptly notify the Issuing Bank whether such form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faith, (ii) be denominated in DollarsLetter 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 Bank shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify the Banks, of such action and the amount and terms thereof. Letters of Credit may have automatic extension or renewal provisions (iii"EVERGREEN" Letters of Credit) so long as the Issuing Bank has the right to terminate such evergreen Letters of Credit no less frequently than annually within a notice period to be issued to support Borrowers’ obligations that finance its business needs incurred agreed upon at the time each such Letter of Credit is issued. This Agreement shall control in the ordinary course event of Borrowers’ respective businesses as presently conducted by them. In no event will any conflict with any Letter of Credit Application.
(c) Upon the issuance of a Letter of Credit, each Bank shall be deemed to have purchased a term pro rata participation in such Letter of more than one year; furthermoreCredit, andas from time to time supplemented, amended, renewed, or extended, from the Issuing Bank in addition 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 foregoing term limitationextent 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, Lender will have no 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 such payment. The obligation of each Bank to issue 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 through the Administrative Agent an expiry date later than amount equal to any payment made by the Issuing Bank with respect to each Letter of Credit within one Business Day after demand made by the Issuing Bank therefor, together with interest on such amount from the date that is 30 days prior 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 stated Termination Date applicable to Issuing Bank for the Line 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 Application 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 each shall share, in accordance with that pro-rata participation, in any payment made by Borrower with respect to such claim.
(e) If Borrower fails to make the payment required by subsection (d) above within the time period therein set forth, in lieu of 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 will and, for this purpose, the conditions precedent set forth which rules or customs apply in Section 4 shall not apply. The proceeds of such Loans shall be paid to the Issuing Bank to reimburse it for the payment made by it under the Letter of Credit. Such rules Loans shall be payable upon demand and customs shall bear interest at the Default Rate.
(f) Once an evergreen Letter of Credit is issued, Borrower shall not be required to annually request that the Issuing Bank permit the renewal thereof. Borrower, the Agent and the Banks authorize (but may include, but are not limited require) the Issuing Bank to, in its sole discretion, permit the International Standby Practices, as published by renewal such evergreen Letter of Credit if such Letter of Credit could be issued in the International Chamber first instance at such time.
(g) The obligations of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In Borrower under this Agreement with respect to any event, the Letter of Credit shall be governed by (A) the rules or customs set forth absolute, unconditional and irrevocable and shall be performed strictly 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 such laws are inconsistent accordance with the rules or customs adopted in the Letter terms of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request from Borrowers to open any Letter of Credit this Agreement 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such any application for Letter of Credit, Lender will communicate in writing to Borrowers including without limitation, the reason(s) why Lender has declined such request.following circumstances:
(di) All any lack of validity or enforceability of the Letter of Credit, this Agreement, any application for Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in any other agreement or instrument relating to any of the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender foregoing;
(ii) the amount of all other Letter of Credit Obligations immediately when due, irrespective existence 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 rights 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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, beneficiary or any transferee, transferee of any the Letter of Credit (or any Persons Person for whom any such beneficiary or any such transferee may be acting), Lender the Issuing Bank 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; ;
(iiiii) any statement 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 any a Letter of Credit proving which on its face appears to be forged, fraudulent, conform with the terms and conditions of the Letter of Credit 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 being which is untrue or inaccurate in any respectrespect whatsoever; or
(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; (ivv) any delay, interruptionextension of time, omission renewal, waiver, compromise or error other indulgence or modification granted or agreed to by the Issuing Bank, with or without notice to or approval by Borrower, in transmission or delivery of any document, certificate, draft, or message; (v) payment by Lender under respect to any Letter of Credit against presentation of a draft or certificate which substantially complies with Credit.
(h) Neither the terms of 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 electronic or electro-optical means; or (viii) any other circumstances or happening whatsoever, whether or not similar to Issuing Bank nor any of the foregoing, including any act its officers or omission, whether rightful directors shall be liable 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.responsible for:
(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 use that may be made of the Letters of Credit or for any related certificatesacts or omissions of the beneficiary or any transferee of the Letters of Credit in connection therewith;
(ii) the validity, if taken sufficiency for their intended business purpose or omitted in good faith in the absence genuineness of gross negligence documents, or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any endorsements thereon which on their face appear to conform to the terms and conditions of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each the Letter of Credit, a fee even if such documents should prove to be in any or all respects invalid, insufficient for their intended business purpose, fraudulent or forged; or
(“LOC Fee”iii) equal acceptance of documents that appear on their face to conform to the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each Letter of Credit from, terms and including, the issuance date conditions of the Letter of Credit Credit, without responsibility for further investigation, regardless of any notice or information 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 accountcontrary.
(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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Credit Agreement (Todd Ao Corp)
Letters of Credit. (a) Until the Termination Date with respect to the Line At Borrower's written request, Issuing Bank shall issue Letters of Credit and subject for Borrower's account. Each Bank severally agrees to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter participate in Letters of Credit”, in accordance with such Bank's Percentage Share.
(b) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Issuing Bank shall issue the Letter of Credit Application completed to the reasonable satisfaction upon receipt of Lender, together with the proposed Borrower's written request and Issuing Bank's standard form of application, stating (a) the date Borrower wishes to receive the Letter of Credit (which, in all respects, will comply with which shall be a Business Day); (b) the applicable requirements requested amount of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed such Letter of Credit, ; (c) the aggregate amount of all Advances and (iii) such other Letter Letters of Credit Documents that Lender then customarily requires in outstanding; (d) if appropriate, the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request conditions requested by Borrowers will be deemed to be a representation by Borrowers that Borrower under which the Letter of Credit may be issued in accordance with, drawn upon; and will not violate (e) any other information Issuing Bank might need to issue the terms of, this Section 2.3Letter of Credit. Issuing Bank shall promptly notify all of the Banks upon receipt of a request for a Letter of Credit.
(bc) Each Letter The maximum aggregate obligation at any one time for undrawn and drawn but unreimbursed Letters of Credit issued under this Agreement will, among other things, shall be Five Million Dollars (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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line of Credit$5,000,000). Each Letter of Credit Application shall 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 issuance and shall, on a continuing basis, keep the other Bank informed of the drawn and undrawn but unreimbursed amount of each Letter of Credit will set forth 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 issued hereunder, which rules or customs apply to shall be shared by Banks in accordance with their agreement. On the day on which Issuing Bank honors any drawing made by the beneficiary of a Letter of Credit, Borrower shall pay to Issuing Bank the full amount of the drawing so honored, or at Borrower's option, shall treat the amount of such drawing as an Advance under Section 2.1. Such rules The obligation to reimburse Issuing Bank for the amount of such drawing is absolute, unconditional, and customs irrevocable.
(d) Borrower may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the request that Issuing Bank issue a Letter of Credit shall be governed by (A) the rules or customs set forth payable in the Letter of Credit and (B) the internal laws of the State of Ohio and the a currency other than United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of CreditDollars. If Lender elects not to issue a demand for payment is made under any such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined Issuing Bank shall treat such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 to Borrower of the Revolving Loans pursuant to Section 2.1Equivalent Amount thereof. 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 Upon the issuance of any Letter of Credit or payable in a currency other than United States Dollars, Banks shall create a reserve under the provision Committed Line for letters of any credit support or enhancement against fluctuations in connection therewith exclusive of claimscurrency exchange rates, demands, liabilities, damages, losses, costs, charges and expenses in an amount equal to the extent caused by the gross negligence or willful misconduct of Lender. The agreement in this Section 2.3(gten percent (10%) 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 draft or certificate which substantially complies with the terms face amount of such Letter of Credit; (vi) . The amount of such reserve may be amended by Banks from time to time to account for fluctuations in the invalidity or unenforceability exchange rate. The availability of funds under the Letter Committed Line shall be reduced by the amount of Credit; (vii) the examination of documents presented under a such reserve for so long as such Letter of Credit exclusively by 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 2.3remains outstanding.
(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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until In order to assist the Termination Date Companies in establishing or opening Letters of Credit with respect an Issuing Bank to cover the importation of inventory under documentary Letters of Credit, the purchase of equipment or other general corporate purposes acceptable to CITBC, the Companies have requested CITBC to join in the applications for such Letters of Credit, and/or guarantee payment or performance of such Letters of Credit and any drafts or acceptances thereunder through the issuance of the Letters of Credit Guaranty, thereby lending CITBC's credit to the Companies and CITBC has agreed to do so. These arrangements shall be handled by CITBC subject to the terms and conditions set forth below.
1. Within the Line of Credit and subject to Availability, CITBC shall assist the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”Companies in obtaining Letter(s) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed in an amount not to the reasonable satisfaction of Lender, together with the proposed form of exceed the Letter of Credit (which, Sub-Line in the aggregate outstanding at any one time. CITBC's assistance for amounts in excess of the limitation set forth herein shall at all times and in all respects, will comply with respects be in CITBC's sole discretion. It is understood that the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, form and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making purpose of each Letter of Credit request by Borrowers will must be deemed acceptable to CITBC in its reasonable business judgment. Any and all outstanding Letters of Credit shall be treated as a representation by Borrowers that Revolving Loan for Availability purpose. Notwithstanding anything herein to the contrary, upon the occurrence of a Default and/or Event of Default, CITBC's assistance in connection with the Letter of Credit may Guaranty shall be issued in accordance with, and will not violate the terms of, this Section 2.3CITBC's sole discretion unless such Default and/or Event of Default is cured to CITBC's satisfaction or waived by CITBC in writing.
(2. CITBC shall have the right, without notice to the Companies, to charge the Companies' Revolving Loan Accounts on CITBC's books with the amount of any and all indebtedness, liability or obligation of any kind incurred by CITBC under the Letters of Credit Guaranty at the earlier of a) payment by CITBC under the Letters of Credit Guaranty, or b) Each Letter the occurrence of Credit issued under an Event of Default. Any amount charged to Companies' Revolving Loan Accounts shall be deemed a Revolving Loan hereunder and shall incur interest at the rate provided in Section 8, Paragraph 1 of 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line of CreditFinancing Agreement.
3. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers Companies jointly and severally promise unconditionally indemnifies CITBC and holds CITBC harmless from any and all loss, claim or liability incurred by CITBC arising from any transactions or occurrences relating to pay Lender the amount of all other Letter Letters of Credit Obligations immediately when dueestablished or opened for the Companies' account, irrespective of the collateral relating thereto and any claim, setoff, defense drafts 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Creditacceptances thereunder, and all Obligations thereunder, including any such loss or claim due to any action taken by any Issuing Bank, other than for any such loss, claim or omitted liability arising out of the gross negligence or willful misconduct by Lender in good faith CITBC under the Letters of Credit Guaranty. Each of the Companies further agrees to jointly and severally hold CITBC harmless from any errors or omission, negligence or misconduct by the Issuing Bank, provided that nothing contained herein shall, or shall be deemed to, affect, modify or release any claim that the Companies may now or hereafter have against the Issuing Bank. The Companies' unconditional obligation to CITBC hereunder shall not be modified or diminished for any reason or in connection with any Letter manner whatsoever, other than as a result 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 CITBC's gross negligence or willful misconduct. Lender Each of the Companies agrees that any charges incurred by CITBC for their account by the Issuing Bank shall not be obligated conclusive on CITBC and may be charged to cause any Letter of Credit to be extended or amended unless the requirements of this Section 2.3 are met as though a new Letter of Credit were being requested and issuedtheir account.
(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 gross negligence or willful misconduct of Lender4. 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 CITBC shall not be responsible for: (i) the existence existence, character, quality, quantity, condition, packing, value or delivery of the goods purporting to be represented by any documents; any difference or variation in the character, quality, quantity, condition, packing, value or delivery of the goods from that expressed in the documents; the validity, sufficiency or genuineness of any claimdocuments or of any endorsements thereon, set-offeven if such documents should in fact prove to be in any or all respects invalid, defense insufficient, fraudulent or other right forged; the time, place, manner or order in which shipment is made; partial or incomplete shipment, or failure or omission to ship any Borrower may have at or all of the goods referred to in the Letters of Credit or documents; any time against deviation from instructions; delay, default, or fraud by the shipper and/or anyone else in connection with the Collateral or the shipping thereof; or any beneficiarybreach of contract between the shipper or vendors and the Companies. Furthermore, without being limited by the foregoing, CITBC shall not be responsible for any act or omission with respect to or in connection with any Collateral covered by any Letter of Credit.
5. Each of the Companies agrees that any action taken by CITBC, if taken in good faith, 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 draft or certificate which substantially complies with the terms of 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 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 any Issuing Bank, under or in connection with the Letters of Credit, the guarantees, the drafts or acceptances, or the Collateral, shall be binding on the them and shall not put CITBC in any resulting liability to the Companies. In furtherance thereof, CITBC shall have the full right and authority to clear and resolve any questions of non-compliance of documents; to give any instructions as to acceptance or rejection of any documents or goods; to execute any and all steamship or airways guaranties (and applications therefore), indemnities or delivery orders; to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances, or documents; and to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or acceptances; all in CITBC's sole name, and the Issuing Bank shall be entitled to comply with and honor any and all such documents or instruments executed by or received solely from CITBC, all without any notice to or any consent from the Companies.
6. Without CITBC's express consent and endorsement in writing, each of the Companies agrees: a) not to execute any and all applications for steamship or airway guaranties, indemnities or delivery orders; to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; or to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letters of Credit, drafts or 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 CITBC, not to i) clear and resolve any questions of non-compliance of documents, or ii) give any instructions as to acceptances or rejection of any documents or goods.
7. Each of the Companies agrees that any necessary import, export or other licenses or certificates for the import or handling of the Collateral will have been promptly procured; 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 full complied with; and any certificates in that regard that CITBC may at any time request will be promptly furnished. In this connection, each of the Companies warrants and represents 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. The Companies 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 Companies' risk, liability and responsibility.
8. Upon any payments made to the Issuing Bank under the Letter of Credit Guaranty, CITBC shall acquire by subrogation, any rights, remedies, duties or obligations granted or undertaken by the Companies to the Issuing Bank in any application for Letters of Credit, any standing agreement relating to Letters of Credit or any related certificatesotherwise, if taken or omitted in good faith in the absence all of gross negligence or willful misconduct, which shall not put Lender under any resulting liability be deemed to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered granted to CITBC and apply in accordance with Section 4.3 of this Agreement all respects to CITBC and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentagein addition to any rights, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e.remedies, Pricing Grid Level 1) will be applicable on the then applicable Determination Dateduties or obligations contained herein.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect to the Line of Credit and Each Issuing Bank agrees, subject to the other terms and conditions of this Agreement, Borrowers may upon request Lender of the Borrower to issue one from time to time for the account of the Borrower, or more jointly for the account of its standard standby letters the Borrower and a Designated Subsidiary, Letters of credit (“Standby Credit upon delivery to such Issuing Bank of an Application and Agreement for Letter of Credit”) Credit relating thereto in favor of form and content acceptable to such beneficiary(ies) as are designated by Borrowers by delivering to Lender: Issuing Bank; provided, that (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will Issuing Bank shall be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation obligated to issue any Letter of Credit with an expiry date later than if it has been notified by the date Agent or has actual knowledge that a Default or Event of Default has occurred and is 30 days prior to continuing, (ii) the stated Termination Date applicable to Dollar Equivalent Amount of Commercial Letter of Credit Outstandings shall not exceed the Line Total Commercial Letter of CreditCredit Commitment, (iii) the Dollar Equivalent Amount of Standby Letter of Credit Outstandings shall not exceed the Total Standby Letter of Credit Commitment, and (iv) no Letter of Credit shall be issued if, after giving effect thereto, (a) the Dollar Equivalent Amount of Letter of Credit Outstandings plus Tranche B Outstandings shall exceed the Total Tranche B Commitment or (b) the Dollar Equivalent Amount of Tranche B Outstandings in Offshore Currencies plus Letter of Credit Outstandings in Offshore Currencies shall exceed the Total Offshore Currency Sublimit. Each Letter of Credit Application and each Letter shall be issued upon the irrevocable written request of Credit will set forth which rules or customs apply the Borrower received by the Applicable Issuing Bank three Business Days prior to the Letter proposed Date of Credit. Such rules and customs may includeIssuance; provided, but are not limited tohowever, that if a request is received via the International Standby PracticesApplicable Issuing Bank's electronic letter of credit system on any Business Day, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the such Letter of Credit shall be governed by (A) issued on the rules next succeeding Business Day on or customs set forth in prior to the hour the request was received on the preceding Business Day. No Letter of Credit and shall have an expiry date (B) the internal laws including all rights of the State of Ohio and the United States of America, except to the extent Borrower or any beneficiary named in such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to require renewal) or payment date occurring later than the beneficiary thereof and transmit a copy earlier to Borrowers, occur of one year after the date of its issuance or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 seventh Business Day prior 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 BorrowerTranche B Stated Termination Date; provided, however, nothing in this Section 2.3(f) will relieve Lender that Commercial Letters of any liability it Credit may have an expiration date of up to Borrowers to 120 days after the extentTranche B Stated Termination Date so long as the Borrower shall, but only to on the extentTranche B Stated Termination Date, deposit cash with the Agent in the Dollar Equivalent Amount 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 the Commercial Letter of Credit to be extended or amended unless Outstandings as collateral security for 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 repayment of any Letter of Credit future drawings 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 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 repayments under such Letters of Credit. In furtherance , and not in limitation of such amounts shall be held by 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 Agent pursuant 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 draft or certificate which substantially complies with the terms of 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 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 2.3LC Account Agreement.
(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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Credit Agreement (Kellwood Co)
Letters of Credit. (a) Until Subject to and upon the Termination Date with respect terms and conditions contained herein and in the Letter of Credit Documents, at the request of a Borrower (or Administrative Borrower on behalf of such Borrower), Agent agrees to cause Issuing Bank to issue, and Issuing Bank agrees to issue, for the account of such Borrower one or more Letters of Credit, for the 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 Line 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 of this Agreementcontained herein, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby no Letter of Credit”) Credit shall be available unless each of the following conditions precedent have been satisfied in favor of such beneficiary(ies) as are designated by Borrowers by delivering a manner satisfactory to LenderAgent: (i) a the Borrower requesting such Letter of Credit Application completed (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 reasonable satisfaction of Lender, together with the proposed form issuance of the Letter of Credit (whichand such other Letter of Credit Documents as may be required pursuant to the terms thereof, in all respects, will comply with and the applicable requirements form and terms of Section 2.3(b))the proposed Letter of Credit shall be satisfactory to Agent and Issuing Bank, (ii) a Borrowing Base Certificate which calculates as of the Letter date of Credit Availability issuance, no order of any court, arbitrator or other Governmental Authority shall purport by giving effect 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 (iiiwhether or not having the force of law) such other Letter of Credit Documents from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that Lender then customarily requires in Issuing Bank refrain from, the issuance of letters of credit. Lendercredit generally or the issuance of such Letter of Credit, in addition (iii) after giving effect to the other terms issuance of this Agreementsuch Letter of Credit, will have no obligation the Letter of Credit Obligations shall not exceed the Letter of Credit Limit, and (iv) the Excess Availability of the Borrower requesting such Letter of Credit, prior to issue 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 ifis for the purpose of purchasing Eligible Inventory and the documents of title with respect thereto are consigned to Issuing Bank, after giving effect 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, there would exist Credit is for any other purpose or the documents of title are not consigned to Issuing Bank in connection with a Letter of Credit Deficiencyfor the purpose of purchasing Inventory, an amount equal to one hundred (100%) percent of the Letter of Credit Obligations with respect thereto. The making Effective on the issuance of each Letter of Credit request by Borrowers will Credit, a Reserve shall be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 established 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the rules or customs amount set forth in the Letter of Credit and (BSection 2.2(c)(iv)(A) the internal laws of the State of Ohio and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such requestSection 2.2(c)(iv)(B).
(d) All Except in Agent's discretion, with the consent of all Lenders, the amount of all outstanding Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in shall not at any time exceed the applicable Letter of Credit Documents. Borrowers jointly 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 severally promise to pay Lender Issuing Bank the amount of all other charges and fees payable to Issuing Bank in connection with any Letter of Credit Obligations issued for the account of such Borrower immediately when due, irrespective of any claim, setoff, defense or other right which any such Borrower may have at any time against Lender Issuing Bank 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 Each drawing or make under any expenditure or any other payment under a Letter of Credit or incurs other amount payable in connection therewith when due shall constitute a request by the Borrower for whose account such Letter of Credit was issued to Agent for a Prime Rate Loan in the amount of such drawing or other amount then due, and shall be made by Agent on behalf of Lenders as a Revolving Loan (or Special Agent Advance, as the case may be). The date of such Loan shall be the date of the drawing or as to other amounts, the due date therefor. Any payments made by or on behalf of Agent or any cost Lender to Issuing Bank and/or related parties in connection with any Letter of Credit shall constitute additional Revolving Loans to such Borrower pursuant to this Section 2 (or expense under 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 Issuing Bank or correspondent with respect to any Letter of Credit, to reimburse Lender 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 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 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 Revolving Loans pursuant to Section 2.1. If the advance of a Revolving Loan to reimburse Lender for any drawing, expenditure drawer under or other payment made, or cost or expense incurred, by Lender in respect beneficiary of any Letter of Credit results (and for such purposes the drawer or beneficiary shall be deemed such Borrower's agent. Each Borrower assumes all risks for, and agrees to the extent that it results) in pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter of Credit Deficiencyor any documents, then Borrowers will immediately eliminate drafts or acceptances thereunder. Each Borrower hereby releases and holds Agent and Lenders harmless from and against any Letter of Credit Deficiency in accordance acts, waivers, errors, delays or omissions with the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether respect to pay under or relating to any Letter of Credit, except for the gross negligence or willful misconduct of Agent or any Lender will be responsible only as determined pursuant to confirm in good faith that 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 documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the 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 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 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 action taken Borrower any right or omitted authority to pledge the credit of Agent or any Lender in any manner. Borrowers shall be bound by Lender any reasonable interpretation made in good faith by Agent, or Issuing Bank under or in connection with any Letter of Credit will not subject Lender to Accommodation or any liability to documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of any Borrower; provided, however, nothing in this Section 2.3(f.
(i) will relieve Lender Immediately upon the issuance or amendment of any liability it may Letter of Credit, each Lender shall be deemed to have to Borrowers irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided interest and participation to the extentextent 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, but only to the extent, of any directunconditionally and irrevocably assume, as opposed to consequentialprimary obligor and not as surety, damages suffered by Borrowers from Lender’s gross negligence or willful misconduct. Lender shall not and be obligated to cause pay to 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 Credit, to be extended the extent that Issuing Bank has not been reimbursed or amended unless the requirements otherwise paid as required hereunder or under any such Letter of this Section 2.3 are met as though a new 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 were being requested Obligations and issued.
(g) In addition the obligations of Lenders to amounts payable as elsewhere provided make payments to Agent for the 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 terms of this Section 2.3, Borrowers will protect, indemnify, pay and save Lender harmless from and against Agreement under any and all claimscircumstances, demandswhatsoever, liabilitiesnotwithstanding the occurrence or continuance of any Default, damagesEvent of Default, lossesthe failure to satisfy any other condition set forth in Section 4 or any other event or circumstance. If such amount is not made available by a Lender when due, costsAgent shall be entitled to recover such amount on demand from such Lender with interest thereon, charges and expenses (including reasonable attorneys’ fees) which Lender (provided for each day from the date such amount was due until the date such amount is paid to Agent at the interest rate then payable by any Borrower in respect of Loans that it acts (are Prime Rate Loans. Any such reimbursement shall not relieve or omits otherwise impair the obligation of Borrowers 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 reimburse Issuing Bank under any Letter of Credit or the provision of make any credit support or enhancement other payment in connection therewith exclusive of claims, demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by the gross negligence or willful misconduct of Lender. The agreement in this Section 2.3(g) shall survive repayment of all other Obligationstherewith.
(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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Loan and Security Agreement (Sed International Holdings Inc)
Letters of Credit. (a) Until The Issuing Lender shall, at the Termination Date with respect to request of the Line of Credit and subject to the other terms and conditions of this AgreementCompany, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter Letters of Credit Application completed to the reasonable satisfaction of Lenderhereunder, together with the proposed form of expiry dates that would occur after the Letter of Credit Expiration Date (which, in all respects, will comply with and after the applicable requirements of Section 2.3(b)Maturity Date), (ii) a Borrowing Base Certificate which calculates based upon the Company’s agreement to fully Cash Collateralize the LOC Obligations relating to such Letters of Credit on the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date that is 30 days prior to the stated Termination Expiration Date applicable to the Line of Credit. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 pursuant to the terms of Section 6.6, Borrowers hereby irrevocably instruct Lender, 2.20(a)(ii). In the event the Company fails to fully Cash Collateralize the outstanding LOC Obligations 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 Expiration Date, each outstanding Letter of CreditCredit shall automatically be deemed to be drawn in full, and the 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 Lender for any drawing, expenditure or other payment made, or cost or expense incurred, by Lender debiting any Borrower’s loan account(s) such drawing (with Lender the proceeds of such Base Rate Loan being used to Cash Collateralize outstanding LOC Obligations as an advance of the Revolving Loans pursuant to set forth in Section 2.12.20). If the advance event a Mandatory LOC Borrowing cannot for any reason be made on such date (including, without limitation, as a result of the occurrence of a Bankruptcy Event) then each such Revolving Loan Lender hereby agrees that it shall fund its Participation Interests in the outstanding LOC Obligations on such day (with the proceeds of such funded Participation Interests being used to reimburse Lender for any drawing, expenditure or other Cash Collateralize outstanding LOC Obligations as set forth in Section 2.20). Each Lender’s obligation to make such 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 DeficiencyIssuing Lender, then Borrowers will immediately eliminate any Letter of Credit Deficiency in accordance with and the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part right of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject Issuing Lender to any liability to any Borrower; providedreceive the same, howevershall be absolute and unconditional, 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 affected by any Letter of Credit to be extended or amended unless the requirements of this Section 2.3 are met as though a new Letter of Credit were being requested circumstance whatsoever 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 without regard to the extent caused by the gross negligence or willful misconduct termination 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 DocumentsCommitments hereunder, 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 existence of a draft Default or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 or the acceleration 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 Obligations hereunder 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentagemade without any offset, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e.abatement, Pricing Grid Level 1) will be applicable on the then applicable Determination Datewithholding or reduction whatsoever.
Appears in 1 contract
Samples: Credit Agreement (Universal Health Realty Income Trust)
Letters of Credit. (a) Until the Termination Date with respect to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers The Borrower may request Lender to issue one or more the issuance of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter Letters of Credit Application completed in dollars, in form and substance reasonably acceptable to the reasonable satisfaction of LenderAdministrative Agent and the Issuing Bank, together with for the proposed form account of the Letter of Credit (whichBorrower or any Subsidiary, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates at any time and from time to time during the Letter of Credit Availability Period; PROVIDED, THAT, any such Letter of Credit shall be issued only if, and each request by giving effect to the proposed 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 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, (ii) Bank One Foreign Currency Letters of Credit, in form and substance reasonably acceptable to the 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 Bank One Foreign Currency Letter of Credit shall be issued only if, and each request by the Borrower 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) such other ABN AMRO Foreign Currency Letters of Credit, in form and substance reasonably acceptable to the 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 Documents that Lender then customarily requires in 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 letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed any such ABN AMRO Foreign Currency Letter of Credit ifshall be deemed a representation and warranty of the Borrower that, after giving effect to immediately following the proposed issuance of such ABN AMRO Foreign Currency Letter of Credit, there would exist (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 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 Deficiency. The making includes the amendment, renewal or extension of each a Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Credit.
(b) Each Letter of Credit issued under this Agreement willshall expire no later than the earlier of (i)(A) in the case of standby Letters of Credit, among other thingsthree years after the date of issuance of such Letter of Credit, subject to extension (iincluding pursuant to an automatic renewal provision in customary form), and (B) be in the case of trade Letters of Credit, 270 days after the date of issuance of such form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faith, Letter of Credit and (ii) be denominated in Dollars, and the fifth Business Day prior to the Revolving Credit Maturity Date.
(iiic) be issued to support Borrowers’ obligations that finance its business needs incurred in the ordinary course Each issuance 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; furthermoreshall be made on at least two Business Days' prior irrevocable written or telecopy notice (such notice to be delivered by 12:00 noon, and, in addition Eastern Standard Time) from the Borrower (or such shorter notice as shall be acceptable to the foregoing term limitation, Lender will have no obligation Issuing Bank) to issue any the Administrative Agent and the Issuing Bank specifying whether such Letter of Credit is a 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 applicable Foreign Currency and whether such Letter of Credit 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 an expiry date later 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 date 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 30 days prior 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 stated Termination Date applicable 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 the Line 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 Application (other than Foreign Currency Letters of Credit) issued hereunder will be subject to the Uniform Customs and each Practices for Documentary Credits, as in effect from time to time. Each Foreign Currency Letter of Credit will set forth which rules or customs apply issued hereunder shall be subject to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or 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 published 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 ISP. In 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 event, inconsistent provision of the Letter UCP or Article 5.
(d) By the issuance of Credit shall be governed by (A) the rules or customs set forth in the a Letter of Credit and (B) without any further action on the internal laws part of the State of Ohio 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 United States of AmericaIssuing Bank, except to the extent a participation in such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter equal to such Lender's Applicable Percentage of Credit as set forth above.
(c) Upon receipt of a request from Borrowers the aggregate amount available 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue 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 will communicate hereby absolutely and unconditionally agrees to pay to the Administrative Agent, on behalf of the Issuing Bank, in writing to Borrowers accordance with Section 2.03(e), such Lender's Applicable Percentage of the reason(s) why Lender has declined amount of each Letter of Credit Disbursement in the currency of such requestdisbursement made by the Issuing Bank and not reimbursed by the Borrower when due in accordance with Section 2.23(g).
(de) All 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 to the Administrative Agent, for the account of the Lenders and the Issuing Bank, as applicable, a nonrefundable Letter of Credit Obligations Fee and Fronting Fee in accordance with Section 2.06(b). In addition to the foregoing fees and commissions, the Borrower shall pay or reimburse the Issuing Bank for such normal and customary costs and expenses, including, without limitation, administrative, issuance, amendment, payment and negotiation charges, as are payable on Lender’s demand incurred or payable as charged by the Issuing Bank in issuing, effecting payment under, amending or otherwise set forth in the applicable administering any Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other (including any Letter of Credit Obligations issued for the account of a Subsidiary).
(g) The Borrower hereby agrees to reimburse the Issuing Bank for any payment or disbursement made by the Issuing Bank under any Letter of Credit (including any Letter of Credit issued for the account of a Subsidiary), by making payment in immediately when dueavailable funds, to the Administrative Agent on the same Business Day after receipt of 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 Issuing Bank, at a rate per annum equal to the greater of (i) the 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 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 Borrower Subsidiary or any other person may have at any time have 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 beneficiary 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 byIssuing Bank, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoingAgents, 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 Personperson, whether in connection with this Agreement or the Amended Agreement, any other Loan Documents, the transactions contemplated in this Agreement, Document or any other related or unrelated agreement or transaction; ;
(iiiii) any statement draft or any other document presented under any 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; (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 the Issuing Bank under any a Letter of Credit against presentation of a draft or certificate other document which substantially complies 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) the invalidity or unenforceability of the Letter of Credit; (vii) the examination of documents presented under a Letter of Credit exclusively by electronic or electro-optical means; or (viii) any other circumstances act or happening omission or delay of any kind or any other circumstance or event whatsoever, whether or not similar to any of the foregoingforegoing and whether or not foreseeable, including any act that might, but for the provisions of this Section 2.23(h), constitute a legal or omission, whether rightful or wrongful, of any present or future de jure or de facto governmental authority. None equitable discharge of the foregoing shall affect, impair or prevent the vesting of any rights or powers of Lender under this Section 2.3Borrower's obligations hereunder.
(i) In furtherance and extension, and not in limitation, Without limiting the generality of the specific provisions set forth above, any action taken or omitted by Lender under or in connection with any of the Letters foregoing paragraph (h), it is expressly understood and agreed that the absolute and unconditional obligation of the Borrower hereunder to reimburse Letter of Credit or any related certificates, if taken or omitted in good faith in Disbursements will not be excused by the absence of gross negligence or willful misconductmisconduct of the Issuing Bank. However, the preceding sentence and the provisions of Section 2.23(h) shall not put Lender be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that 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 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 resulting liability to Borrowers or relieve Borrowers Letter of any of their obligations hereunder to Lender.
Credit (i) Borrowers will pay the Issuing Bank's exclusive reliance in good faith on the documents presented to Lenderit under such Letter of Credit as to any and all matters set forth therein, with respect to each including reliance on the amount of any draft presented under such Letter of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum if such document on the amount available its face appears 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.order,
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may the Agent will, upon a Borrower's request Lender from time to issue one time, cause standby or more of its standard standby merchandise letters of credit to be issued by the Issuing Bank for such Borrower's account (“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 reasonable satisfaction of Lender, together with the proposed form of the Letter DIP Letters of Credit (whichoutstanding on the Closing Date, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter "Letters of Credit"). Upon the Closing Date, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter all DIP Letters of Credit shall constitute Letters of Credit hereunder with the same effect and status as if such DIP Letters of Credit were originally issued pursuant to this Agreement. All fees payable with respect to such DIP Letters of Credit accrued and unpaid through the Closing Date shall be governed by (A) paid on the rules or customs Closing Date. Until the Closing Date, the letter of credit fees with respect to all DIP Letters of Credit shall accrue and be payable at the rates set forth in the Letter of Credit DIP Loan Agreement and (B) on and after the internal laws of Closing Date such fees shall accrue and be payable at the State of Ohio and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as rates set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Creditherein. If Lender elects not to issue such Letter of Credit, Lender The Agent will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 foropened if: (i) the existence Undrawn Amount 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 the requested Letter of Credit, plus the aggregate Undrawn Amount of all outstanding Letters of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting)of all Borrowers, 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 transactionwould exceed $70,000,000; (ii) any statement or any other document presented under any the Undrawn Amount of the requested Letter of Credit proving Credit, if it is to be forgeda merchandise Letter of Credit, fraudulentplus the aggregate Undrawn Amount of all outstanding merchandise Letters of Credit of all Borrowers, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respectwould exceed $5,000,000; (iii) the Letter of Credit Obligations related to the requested Letter of Credit, plus the aggregate principal amount of any defaultRevolving Loans and Swing Line Loans to such Borrower outstanding at such time, negligence, misfeasance, suspension, insolvencyexceed the Revolving Borrowing Capacity of such Borrower at such time, or bankruptcy such Letter of any shipper Credit Obligations plus the aggregate principal amount of all Revolving Loans and all Swing Line Loans to all Borrowers outstanding at such time, exceed the Combined Revolving Borrowing Capacity at such time, or any if a Lender's Revolving Credit Percentage of such Letter of Credit Obligations and all Letter of Credit Obligations related to other Person involved in any transaction covered thereby Letters of Credit then outstanding, plus the aggregate unpaid principal amount of such Lender's Revolving Loans and its Revolving Credit Percentage of Swing Line Loans, which case then outstanding, would exceed such Lender's Revolving Credit Commitment; or any correspondent or agent of Lender to whom any drafts, documents or instruments may be entrusted; (iv) any delay, interruption, omission an Event or error in transmission an Event of Default has occurred and is continuing or delivery of any document, certificate, draft, or message; (v) payment by Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies with would occur after giving effect to the terms opening of such Letter of Credit; (vi) the invalidity or unenforceability of the Letter of Credit; (vii) the examination of documents presented under a . Each Letter of Credit exclusively by electronic shall have an expiry date on or electro-optical means; or (viii) any other circumstances or happening whatsoeverbefore the Revolving Credit Commitment Expiration Date and otherwise shall be satisfactory in form, 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 extensionscope, and substance to the Agent and the Issuing Bank (provided, however, that no merchandise Letter of Credit shall have an expiry date later than 180 days after the date of issuance; provided, further, that the limitation in the preceding proviso does 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 comply that standby Letters of Credit or any related certificates, if taken or omitted in good faith in may not provide for automatic renewal at the absence end of gross negligence or willful misconduct, shall not put Lender under any resulting liability each one-year term subject to Borrowers or relieve Borrowers cancellation by the Issuing Bank). As a condition to the issuance of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each a Letter of Credit, a fee (“LOC Fee”) equal to the 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 Borrower that requested the Letter of Credit shall execute and deliver an application prescribed by the Issuing Bank and such other documents, instruments, and agreements as may be required by the Agent and the Issuing Bank.
(b) Each Revolving Credit Lender hereby severally agrees, irrevocably and unconditionally, to and including purchase from the expiry date thereof (orIssuing Bank, 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 effective upon the issuance of each Letter of Credit. The LOC Fee will be calculated on the basis of the actual number of days elapsed , an undivided interest and participation in a 360-day year. If any each Letter of Credit is cancelled for any reason before and the stated expiry date thereofLetter of Credit Obligations arising in connection therewith, any LOC Fee paid in advance will not be refunded and will be retained by Lender solely for its accounteach case in an amount equal to the Lender's Revolving Credit Percentage of such Letter of Credit Obligations.
(iic) For purposes The Agent shall cause the Issuing Bank to notify the applicable Borrower and each Revolving Credit Lender of determining any drawing under a Letter of Credit and whether the Applicable LOC Fee Percentage, Issuing Bank will pay such draft and the Fixed Charge Coverage Ratio will, date 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 which such date being a “Determination Date”). The “First Pricing Grid Determination Date” occurring after the Effective Date payment will be December 31made.
(d) Each Borrower hereby irrevocably and unconditionally agrees to pay to the Issuing Bank, 2010and reimburse the Issuing Bank for, all Reimbursement Obligations arising from Letters of Credit issued for the account of such Borrower, when due in accordance with this Agreement. On Lender’s receipt Each Borrower shall reimburse the Issuing Bank for the amount of any Reimbursement Obligation under a Letter of Credit issued (or deemed issued) for the financial statements and Compliance Certificate required to be delivered to Lender account of such Borrower not later than the date the Issuing Bank pays the draft in connection with which such Reimbursement Obligation arises, as indicated in its notice pursuant to Sections 4.3(a), 4.3(b) and 4.3(d) subsection (as applicablec) of this Agreement for the applicable Fiscal Quarter or Fiscal Year then endedSection. For that purpose, the LOC Fee will each Borrower hereby agrees that it shall be subject deemed to adjustment in accordance with the table set forth have given a notice of a Revolving Borrowing in the definition of “Applicable LOC Fee Percentage” based on the Fixed Charge Coverage Ratio as of the end amount of such Fiscal Quarter Reimbursement Obligation each time the Issuing Bank gives notice of a drawing under a Letter Credit issued for such Borrower's account, and it hereby authorizes the Agent to make such Revolving Borrowing available by paying the proceeds thereof directly to the Issuing Bank for application to the Reimbursement Obligations. Unless a Lender has notified Fleet Capital that it does not intend to make available its Revolving Credit Percentage of such Revolving Borrowing, Fleet Capital shall make the proceeds of such Revolving Borrowing available to the Issuing Bank as provided above. A Borrower shall not be relieved of any Reimbursement Obligation hereunder in the event that such Revolving Borrowing is not made or Fiscal Year then ended so long as no Event of Default is existing as of not made in full for any reason. In the applicable effective date of adjustment. The foregoing adjustment, if applicable, (A) will become effective with respect to all Letters of Credit event that are issued or renewed on such Borrower could not have made such Revolving Borrowing at such time under the other terms 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 conditions of this Agreement, thenthe Revolving Loans comprising such Revolving Borrowing shall be immediately due and payable.
(e) Each Borrower agrees to pay to the Agent and the Issuing Bank all fees, at Lender’s optionexpenses or other amounts paid or incurred by or on behalf of the Agent or the Issuing Bank in connection with or as a result of the issuance, commencing negotiation, processing or administration of the Letters of Credit issued for the account of such Borrower.
(f) Whenever the Issuing Bank receives a payment on account of a Reimbursement Obligation, including any interest thereon, as to which the date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 Issuing Bank has previously received payments from the proceeds of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreementa Revolving Borrowing, it shall be assumed for purposes promptly pay to the Agent the amount of determining the Applicable LOC Fee Percentagesuch payment, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith Agent shall promptly pay to each Revolving Credit Lender which has funded its Revolving Credit Percentage of such Revolving Borrowing an amount equal to such Revolving Credit Lender's Revolving Credit Percentage of such payment.
(i.e.g) In the event any payment received by the Issuing Bank with respect to a Letter of Credit and distributed by the Agent to the Revolving Credit Lenders on account of their participations is thereafter set aside, Pricing Grid Level 1) will avoided or recovered from the Issuing Bank in connection with any receivership, liquidation or bankruptcy proceeding or otherwise, each Revolving Credit Lender having received such distribution shall, upon demand by the Issuing Bank, contribute such Revolving Credit Lender's Revolving Credit Percentage of the amount set aside, avoided or recovered together with interest at the rate required to be applicable on paid by the then applicable Determination DateIssuing Bank upon the amount so required to be repaid.
Appears in 1 contract
Samples: Revolving Credit and Term Loan Agreement (Penn Traffic Co)
Letters of Credit. (a) Until An Originator may request that the Termination Purchase Price for Receivables sold on a Payment Date with respect to be paid by the Line Buyer procuring the issuance of a Letter of Credit by an LC Bank. Upon the request of an Originator, and subject to on the other terms and conditions for issuing Letters of this AgreementCredit under the Receivables Purchase Agreement (including any limitations therein on the amount of any such issuance), Borrowers may request Lender the Buyer agrees to issue one cause such LC Bank to issue, on the Payment Dates specified by such Originator, Letters of Credit on behalf of the Buyer (and, if applicable, on behalf of, or more for the account of, such Originator or an Affiliate of its standard standby letters of credit (“Standby Letter of Credit”such Originator) in favor of the beneficiaries elected by such beneficiary(ies) as are designated 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 Borrowers 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 delivering the Buyer to Lender: an Originator on such Payment Date, such excess shall be deemed to be a (i) reduction in the outstanding principal balance of (and, to the extent necessary, the accrued but unpaid interest on) the Subordinated Note 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 3.3 (i) expires or is cancelled or otherwise terminated with all or any portion of its stated amount undrawn, (ii) has its stated amount decreased (for a reason other than a drawing having been made thereunder) or (iii) the Buyer’s Reimbursement Obligation in respect thereof is reduced for any reason other than by virtue of 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 Celanese Acetate, if elected by Celanese Acetate in its sole discretion, a contribution to the capital of the Buyer, and (y) otherwise, added to the outstanding principal balance of the Subordinated Note issued to such Originator. Under no circumstances shall any Originator (or any Affiliate thereof (other than the Buyer)) have any reimbursement or recourse obligations in respect of any Letter of Credit.
(b) In the event that any Originator requests that any purchases be paid for by the issuance of a Letter of Credit Application completed hereunder, such Originator shall on a timely basis provide the Buyer with such information as is necessary for the Buyer to the reasonable satisfaction of Lender, together with the proposed form of the obtain such Letter of Credit (which, in all respects, will comply with from the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of CreditLC Bank, and shall notify the Buyer, the Servicer, each Purchaser Agent and the Administrator of the allocations described in clause (iiia) such other Letter of Credit Documents that Lender then customarily requires in above. Such allocations shall be binding on the issuance of letters of credit. LenderBuyer and the applicable Originator, in addition absent manifest error.
(c) Each Originator agrees to be bound by the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 Application referenced 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date Receivables Purchase Agreement and 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 customs apply shall be subject either to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary CreditsCredits (2007 Revision), International Chamber of Commerce Publication No. 600, and any amendments or revisions thereof adhered to by the applicable LC Bank or the International Standby Practices (ISP98-International Chamber of Commerce Publication Number 590), and any amendments or revisions thereof adhered to by the applicable LC Bank, as published determined by ISP. In any eventsuch LC Bank, in each case subject to the Letter of Credit shall be governed by (A) the rules or customs terms and conditions 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth aboveReceivables Purchase Agreement.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until The Concessionaire shall deliver no later than the Termination Date first day of the Lease Year that is five (5) years prior to the final Lease Year of the Term, a Letter of Credit in the 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 the Operating Standards.
(b) Such Letter of Credit shall be replaced on every anniversary of such Lease Year until the date that is two years after (i) the expiration of the Term and (ii) such time as there being no unresolved disputes with respect to the Line Concessionaire complying with, performing, or observing any obligation, covenant, agreement, term, or condition in this Agreement with a Replacement Letter of Credit in the amount of the undrawn balance of such 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. Subject to Approval, the required amount of any Letter of Credit with respect to a 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 the remainder of the Term in light of the condition of the Parking Garage System (including the Engineering Firm’s assessment of the present and subject 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 occurrence of a Concessionaire Default, upon the final decision of the arbitral panel pursuant to ARTICLE 19 that a Concessionaire Default has occurred), the Authority shall have the right (in addition to all other terms rights and conditions of remedies provided in this Agreement, Borrowers but with the understanding that any other monetary damages that the Authority may request Lender recover will be reduced by the amount so drawn, and without the Authority’s exercise of such right being deemed a waiver or a cure of the Concessionaire’s failure to issue one perform and whether or more not this Agreement is thereby terminated), with three Business Days’ prior notice to the Concessionaire, to draw against such Letter of its standard standby letters Credit or any replacement thereof, upon presentation of credit 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 amount due to the Authority with respect to such Concessionaire Default.
(c) The Concessionaire shall replace each Letter of Credit with a replacement Letter of Credit (the “Standby Replacement Letter of Credit”) in favor at least thirty (30) days prior to the expiry date of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed which is expiring. If the Concessionaire does not deliver to the reasonable satisfaction Authority a Replacement Letter of LenderCredit within such time period, together with the proposed form 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 of Credit (which, upon presentation of a sight draft and a certificate confirming that the Authority has the right to draw under such Letter of Credit in all respects, will comply the amount of such sight draft. After the Concessionaire delivers to the Authority a Replacement Letter of Credit complying with the applicable requirements provisions of Section 2.3(b))this Agreement, (ii) a Borrowing Base Certificate which calculates the Authority shall deliver in accordance with the Concessionaire’s instructions the Letter of Credit Availability by giving effect being replaced (except to the proposed Letter of Credit, and (iii) extent that at such other time no sight draft under such Letter of Credit Documents that Lender then customarily requires in the issuance of letters of creditis outstanding and unpaid). Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Any Replacement Letter of Credit shall be governed by (A) upon the rules or customs set forth in same terms and conditions as the Letter of Credit replaced and satisfy the requirements for a Letter of Credit, but in any event (Bi) the internal laws amount of the State each Replacement Letter of Ohio and the United States of AmericaCredit, except to as provided in Section 16.3(b), shall equal or exceed the extent such laws are inconsistent with the rules or customs adopted in amount of the Letter of Credit Documents being replaced at the time of replacement and (ii) the date of the Replacement Letter of Credit as set forth above.
(c) Upon receipt shall be its date of a request from Borrowers to open any Letter issuance. The expiry date 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Replacement Letter of Credit, Lender will communicate in writing as referred to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter opening paragraph of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 such Replacement 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 shall be not earlier than one year later than 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each Letter of Credit from, and including, the issuance expiry date of the Letter of Credit being replaced.
(d) If this Agreement is terminated by the Authority prior to and including the expiry date thereof (or, if earlierexpiration of the Term as a result of a Concessionaire Default, the date on which Authority shall have the Letter right (in addition to all other rights and remedies provided in this Agreement and without the Authority’s exercise of Credit is returned such right being deemed a waiver or a cure of the Concessionaire’s failure to Lender and is canceledperform). In addition, Borrowers will pay with three Business Days’ prior notice to Lenderthe Concessionaire, 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 draw against any 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.,
Appears in 1 contract
Samples: Concession and Lease Agreement
Letters of Credit. (a) Until In addition to Loans made pursuant to Section 2.1, but subject to satisfaction of the Termination Date with respect 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 time:
(i) if, before or after giving effect to such Letter of Credit, the 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 Line 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 subject Lender acknowledge the issuance of the Letters of Credit which are outstanding on the Restatement Date in accordance with the terms of the Existing Loan Agreement and agree that, from and after the Restatement Date, such Letters of Credit shall continue to be outstanding pursuant to the other terms and conditions of this Agreement.
(b) Borrower agrees to pay Lender, Borrowers may request 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 to issue one or more of its standard standby letters of credit a commission (“i) on each Standby Letter of Credit”Credit and related L/C Draft accepted by Lender but not yet paid equal to two and one-half percent (2.5%) in favor per annum (calculated on the basis of a year consisting of 360 days and paid for actual days elapsed) on the aggregate daily average amount available to be drawn under such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Standby Letter of Credit Application completed to the reasonable satisfaction of Lenderand aggregate unpaid amount under such L/C Drafts, together with the proposed form of the Letter of Credit (whichpayable quarterly in arrears, in all respects, will comply with the applicable requirements of Section 2.3(b)), and (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed 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 (iii2.5%) 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 issuance to the date of expiry, of the original face amount of such other Commercial Letter of Credit Documents that payable upon the initial draw under, or acceptance of any L/C Draft with respect to, such Letter of Credit. Lender then customarily requires in may provide for the issuance payment of letters of credit. any fees, charges or commission due by advancing the amount thereof to borrower as a Revolving Loan.
(c) Borrower agrees to reimburse Lender, in addition on demand, for each payment made by Lender under or pursuant to the other terms of this Agreement, will have no obligation to issue the proposed any Letter of Credit ifor L/C Draft. Borrower further agrees to pay to Lender, after giving effect 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 proposed Letter of Creditconditions precedent set forth in Section 8.2, there would exist if at the time Lender makes a payment under or pursuant to a Letter of Credit Deficiency. The making of each Letter of Credit or L/C Draft the Revolving 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 Borrowers will 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 in the amount thereof, which reimbursement obligation shall be deemed thereupon satisfied to be a representation by Borrowers that the Letter extent of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Revolving Loan so made.
(bd) 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 foregoing term limitation, Lender will have no Borrower's obligation to issue reimburse Lender for payments and disbursements made by Lender under any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the rules or customs set forth in the Letter of Credit absolute and (B) the internal laws of the State of Ohio unconditional under any and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents all circumstances and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective of any claim, setoff, counterclaim or defense or other right to payment which any Borrower may have at any time or have had against Lender or any other Person. Subject 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 terms validity or sufficiency of Section 6.6, Borrowers hereby irrevocably instruct Lender, on the same Business Day that Lender is obligated any instrument transferring or assigning or purporting to fund a drawing transfer or make assign any expenditure or any other payment under a Letter of Credit or incurs any cost of the rights or expense 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 any L/C Draft to bear any reference or adequate reference to any Letter of Credit, or failure of anyone to note the amount of any draft on the reverse of any Letter of Credit or 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, 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 except only that Borrower shall have 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Creditclaim against Lender, and any action taken or omitted by Lender in good faith under or in connection with any Letter of Credit will not subject Lender shall be liable 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 Borrower which Borrower proves were caused by Lender’s 's willful misconduct or gross negligence or willful misconduct. Lender shall not be obligated to cause any Letter of Credit to be 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 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, determining 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 documents 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 draft or certificate which substantially complies comply with the terms of 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 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 above shall affect, impair or prevent the vesting of any of the rights or powers of Lender. Lender under this Section 2.3shall have the right to transmit the terms of any Letter of Credit without translating them.
(ie) Notwithstanding anything to the contrary herein or in any Application, upon the occurrence and during the continuance of an Event of Default, an amount equal to the aggregate amount of the outstanding Letter of Credit Obligations shall, at Lender's option and without demand upon or further notice to Borrower, be deemed (as between Lender and Borrower) to have been paid or disbursed by Lender under the Letters of Credit and L/C Drafts accepted by Lender (notwithstanding that such amounts may not in fact have been so paid or disbursed), and a Revolving Loan to Borrower in the amount of such Letter of Credit Obligations to have been made and accepted, which Loan shall be immediately due and payable. In lieu of the foregoing, at the election of Lender at any time after an Event of Default has occurred and is continuing, Borrower shall, upon Lender's demand, deliver to Lender cash collateral equal to the aggregate 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 Liabilities shall be returned to Borrower.
(f) In furtherance determining whether to make any payment under or pursuant to any Letter of Credit or any related L/C Draft, Lender shall have no obligation to Borrower or any other Person other than to confirm that any documents required to be delivered have been delivered and extension, and not in limitation, that such documents comply on their face with the requirements of the specific provisions set forth above, any such Letter of Credit. No action taken or omitted by Lender under or in connection with any of the Letters Letter of Credit or any related certificatesL/C Draft, if taken or omitted in good faith in the absence of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to LenderBorrower.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until Letters of credit under the Termination Date with respect to Revolving Facility will be issued by the Line of Credit and subject to the other terms and conditions of this AgreementAgent and, Borrowers may request Lender to issue if included as an additional Issuing Bank, one or more of its standard standby Lenders acceptable to the Borrower and the Agent that agree to issue letters of credit (each, an “Standby Letter of CreditIssuing Bank”) in favor of such beneficiary(ies) ); provided, that each Initial Lender that holds commitments under the Revolving Facility as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter 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, Jefferies shall not be required to issue letters of credit denominated in currencies other than United States dollars and Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect Suisse shall only be required to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of issue standby letters of credit. Lender, in addition to Each letter of credit shall expire not later than the other terms earlier of this Agreement, will have no obligation to issue the proposed Letter (a) 12 months after its date of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit issuance (or such longer period as may be issued in accordance with, agreed by the relevant Issuing Bank and will not violate the terms of, this Section 2.3.
Borrower) and (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 the fifth 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date that is 30 days day 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the rules or customs set forth in the Letter of Credit and (B) the internal laws final maturity of the State Revolving Facility; provided, however, that any letter of Ohio and credit may provide for renewal thereof for additional periods of up to 12 months (which in no event shall extend beyond the United States of Americadate referred to in clause (b) above, except to the extent such laws are inconsistent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the relevant Issuing Bank). Existing letters of credit may be rolled over or back-stopped under the Revolving Facility on the Closing Date. Letters of credit shall be issued in United States dollars or other currencies to be agreed. Drawings under any letter of credit shall be reimbursed by the Borrower on terms consistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of CreditDocumentation Precedent. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 To the extent that it results) in any Letter of Credit Deficiencythe Borrower does not reimburse the Issuing Bank on such time frame, then Borrowers will immediately eliminate any Letter of Credit Deficiency in accordance with the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part of Lenders under the Obligations and Revolving Facility shall be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 irrevocably obligated to cause any Letter reimburse the Issuing Bank pro rata based upon their respective Revolving Facility commitments. The issuance of Credit to be extended or amended unless the requirements all letters 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 credit shall be subject to as a consequence, direct or indirect, the customary procedures 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 gross negligence or willful misconduct of Lenderrelevant Issuing Bank. The agreement definitive documentation for the First Lien Facilities will include customary provisions consistent with the Documentation Precedent to protect the Issuing Bank in this Section 2.3(g) shall survive repayment of all other Obligations.
the event any Lender under the Revolving Facility is a “Defaulting Lender” (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 defined 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 draft or certificate which substantially complies manner consistent with the terms of 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 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 2.3Documentation Precedent).
(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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Additional Initial Lender Agreement (Aspen Merger Sub, Inc.)
Letters of Credit. (a) Until Subject to and upon the Termination Date with respect terms and conditions contained herein and in the Letter of Credit Documents, at the request of a Borrower (or Administrative Borrower on behalf of such Borrower), Agent agrees to provide or arrange for the 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 Line 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 of this Agreementcontained herein, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby no Letter of Credit”) Credit shall be available unless each of the following conditions precedent have been satisfied in favor of such beneficiary(ies) as are designated by Borrowers by delivering a manner satisfactory to LenderAgent: (i) a the Borrower requesting such Letter of Credit Application completed (or Administrative Borrower on behalf of such Borrower) shall have delivered to the reasonable satisfaction proposed issuer of Lendersuch Letter of Credit at such times and in such manner as such proposed issuer may require, together with an application, in form and substance satisfactory to such proposed issuer and Agent, for the proposed form issuance of the Letter of Credit (whichand such other Letter of Credit Documents as may be required pursuant to the terms thereof, in all respects, will comply with and the applicable requirements form and terms of Section 2.3(b)), the proposed Letter of Credit shall be satisfactory to Agent and such proposed issuer; (ii) a Borrowing Base Certificate which calculates as of the Letter date of Credit Availability issuance, no order of any court, arbitrator or other Governmental Authority shall purport by giving effect 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 (iiiwhether 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 other Letter of Credit Documents that Lender then customarily requires in refrain from, the issuance of letters of credit. Lender, in addition to credit generally or the other terms issuance of this Agreement, will have no obligation to issue the proposed Letter such Letters of Credit if, Credit; (iii) after giving effect to the proposed issuance of such Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit Obligations shall be governed by (A) the rules or customs set forth in not exceed the Letter of Credit Limit; and (Biv) the internal laws of the State of Ohio and the United States of AmericaExcess Availability, except prior to the extent such laws are inconsistent giving effect to any Reserves with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request from Borrowers respect 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate 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 writing to Borrowers the reason(s) why Lender has declined such requestapplicable amount set forth in this Section 2.2(c).
(d) All Each Borrower shall reimburse immediately the issuer of a Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable for any draw under any Letter of Credit Documents. Borrowers jointly issued for the account of such Borrower by such issuer and severally promise to pay Lender such issuer the amount of all other charges and fees payable to issuer in connection with any Letter of Credit Obligations issued for the account of such Borrower immediately when due, irrespective of any claim, setoff, defense or other right which any such Borrower may have at any time against Lender the issuer 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 Each drawing or make under any expenditure or any other payment under a Letter of Credit or incurs any cost or expense under any other amount payable in connection therewith when due shall constitute a request by the Borrower for whose account such Letter of Credit, Credit was issued to reimburse Lender Agent for any drawing, expenditure a Prime Rate Loan in the amount of such drawing or other payment made, or cost or expense incurred, amount then due and shall be made by Lender debiting any Borrower’s loan account(s) with Lender Agent on behalf of Lenders 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 Special Agent Advance, as the extent that it results) in any Letter case may be). The date of Credit Deficiency, then Borrowers will immediately eliminate any Letter of Credit Deficiency in accordance with such Loan shall be the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part date of the Obligations and be secured drawing or as to other amounts, the due date therefor. Any payments made by the Loan Collateral.
(f) In determining whether or on behalf of Agent or any Lender to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or an issuer and/or related parties in connection with any Letter of Credit will not subject Lender shall constitute additional Revolving Loans pursuant to any liability to any Borrower; provided, however, nothing in this Section 2.3(f) will relieve Lender of any liability it 2 (or Special Agent Advances as the case 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 extended or amended unless the requirements of this Section 2.3 are met as though a new Letter of Credit were being requested and issuedbe).
(ge) In addition to amounts payable as elsewhere provided in this Section 2.3, Borrowers will protect, indemnify, pay and save Lender Guarantors shall indemnify and hold Agent and Lenders harmless from and against any and all losses, claims, demandsdamages, liabilities, and reasonable 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 any issuer or correspondent with respect to any Letter of Credit, except for such losses, costsclaims, charges and damages, liabilities, costs or expenses (including reasonable attorneys’ fees) which Lender (provided that it acts (or omits to act) in good faith and except for Lender’s are a direct result of the gross negligence or willful misconduct) may incur wilful misconduct of Agent or be subject any Lender as determined pursuant to as a consequence, direct final non-appealable order of a court of competent jurisdiction. Each Borrower and Guarantor assumes all risks with respect to the acts or indirect, omissions of the issuance drawer under or beneficiary of any Letter of Credit and for such purposes the drawer or the provision beneficiary shall be deemed such Borrower's agent. Each Borrower and 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 or any credit support documents, drafts or enhancement in connection therewith exclusive acceptances thereunder. Each Borrower and Guarantor hereby releases and holds Agent and Lenders harmless from and against any acts, waivers, errors, delays or omissions with respect to or relating to any Letter of claimsCredit, demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by except for the gross negligence or willful wilful misconduct of LenderAgent or any Lender as determined pursuant to a final, non-appealable order of a court of competent jurisdiction. The agreement in provisions of this Section 2.3(g2.2(f) shall survive repayment the payment of all other Obligations.
(h) As between Borrowers Obligations 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 termination 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Loan and Security Agreement (Commerce Energy Group Inc)
Letters of Credit. (ai) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, during the Commitment Period, Issuing Lender shall, but only as Issuing Lender for the Revolving Loan Lenders, issue such Letters of Credit for the account of Borrowers or any other Credit Party, as Borrowers may from time to time request. Borrowers shall not request any Letter of Credit (and Issuing Lender shall not be obligated to issue one or more of its standard standby letters of credit (“Standby any Letter of Credit”) if, after giving effect thereto, (a) the aggregate undrawn face amount of all issued and outstanding Letters of Credit would exceed the Letter of Credit Sublimit or (b) the Revolving Credit Exposure would exceed the Revolving Borrowing Limit. The issuance of each Letter of Credit shall confer upon each Revolving Loan Lender the benefits and liabilities of a participation consisting of an undivided Pro Rata Share in favor the Letter of Credit to the extent of such beneficiary(iesRevolving Loan Lender’s Applicable Commitment Percentage.
(ii) as are designated by Borrowers by delivering to Lender: (i) Each request for a Letter of Credit Application completed shall be delivered to Agent (and the Issuing Lender, if the Issuing Lender is a Lender other than Agent) not later than 12:00 P.M. two (2) Business Days prior to the reasonable satisfaction day upon which the Letter of LenderCredit is to be issued. Each such request shall be in a form acceptable to Agent and specify the face amount thereof, together whether such Letter of Credit is a commercial documentary or a standby Letter of Credit, the account party, the beneficiary, the intended date of issuance, the expiry date thereof, and the nature of the transaction to be supported thereby. Concurrently with each such request, Borrowers, and any other Credit Party for whose benefit the proposed Letter of Credit is to be issued, shall execute and deliver to Agent an appropriate application and agreement, being in the standard form of Agent for such letters of credit, as amended to conform to the provisions of this Agreement if required by Agent. Agent shall give each Revolving Loan Lender notice of each such request for a Letter of Credit.
(iii) In respect of each Letter of Credit that is a commercial documentary letter of credit and the drafts thereunder, Borrowers jointly and severally agree (a) to pay to Agent, on a Pro Rata Basis for the benefit of the Revolving Loan Lenders, a non-refundable commission based upon the face amount of the Letter of Credit (whichCredit, which shall be paid quarterly in all respectsarrears, will comply with on each Regularly Scheduled Payment Date, at the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect rate per annum equal to the proposed Applicable Margin for Revolving Loans which are SOFR Loans multiplied by the amount drawn under such Letter of Credit, and (iiib) to pay to Agent, for its sole account, such other Letter of Credit Documents that Lender then customarily requires issuance, amendment, negotiation, draw, acceptance, telex, courier, postage and similar transactional fees as are generally charged by Agent under its fee schedule as in the issuance of letters of crediteffect from time to time. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making In respect of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line a standby letter of Credit. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the rules or customs set forth in the Letter of Credit and (B) the internal laws of the State of Ohio credit and the United States drafts thereunder, if any, whether issued for the account of AmericaBorrowers or another Credit Party, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
Borrowers agree (ca) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 LenderAgent, on a Pro Rata Basis for 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 benefit of the Revolving Loans pursuant to Section 2.1. If Loan Lenders, a non-refundable commission based upon 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements amount of the Letter of Credit, which shall be paid quarterly in arrears, on each Regularly Scheduled Payment Date, at the rate per annum of the Applicable Margin for Revolving Loans which are SOFR Loans times the face amount of the Letter of Credit; (b) to pay to Issuing Lender, for its sole account, an additional Letter of Credit fee, which shall be paid quarterly in arrears, on each Regularly Scheduled Payment Date, at the rate per annum of 0.25% of the face amount of such Letter of Credit, calculated based on a 360-day year and the actual number of days elapsed; and (c) to pay to Issuing Lender for its sole account, such other issuance, amendment, negotiation, draw, acceptance, telex, courier, postage and similar transactional fees as are generally charged by Agent under its fee schedule as in effect from time to time.
(iv) Whenever a Letter of Credit is drawn, Borrowers shall immediately reimburse Issuing Lender for the amount drawn. In the event that the amount drawn is not reimbursed by Borrowers within one (1) Business Day of the drawing of such Letter of Credit, at the sole option of Agent (and the Issuing Lender, if the Issuing Lender is a Lender other than Agent), Borrowers shall be deemed to have requested a Revolving Loan, subject to the provisions and requirements of subpart 1 of this Section 2.1A and Section 2.2(a) hereof, in the amount drawn. Such Revolving Loan shall be evidenced by the Revolving Credit Notes. Each Revolving Loan Xxxxxx agrees to make a Revolving Loan on the date of such notice, subject to no conditions precedent whatsoever. Each Revolving Loan Lender acknowledges and agrees that its obligation to make a Revolving Loan pursuant to subpart 1 of this Section 2.1A when required by this subpart 2 of this Section 2.1A is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that its payment to Agent, for the account of Agent, of the proceeds of such Revolving Loan shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not such Lender’s Revolving Credit Commitment shall have been reduced or terminated. Each Revolving Loan Lender also agrees with Agent that Agent shall not be responsible for, and each Revolving Loan Lender’s obligations under this subpart 2 of this Section 2.1A shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among Borrowers and any action taken beneficiary of any Letter of Credit or omitted by Lender any other party to which such Letter of Credit may be transferred or any claims whatsoever of Borrowers against any beneficiary of such Letter of Credit or any such transferee. Agent shall not be liable for any error, omission, interruption or delay in good faith under transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit will not subject Lender to any liability to any Borrower; providedissued by it, 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 except for errors or omissions caused by Borrowers from LenderAgent’s gross negligence or willful misconduct. Lender shall not be obligated Borrowers irrevocably authorize and instruct Agent to cause apply the proceeds of any borrowing pursuant to this paragraph to reimburse, in full, Agent for the amount drawn on such Letter of Credit Credit. Each such Revolving Loan shall be deemed a SOFR Loan unless otherwise requested by and available to be 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 Borrowers hereunder. Each Revolving Loan Lender is hereby authorized 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 record on its records relating to act) in good faith and except for its Revolving Loans such Revolving Loan Lender’s gross negligence or willful misconduct) may incur or be subject to as a consequence, direct or indirect, Pro Rata Share of the issuance of any Letter of Credit or amounts paid and not reimbursed on 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 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 addition, each Revolving Loan Lender agrees to risk participate 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 Existing Letters of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), Lender or any other Person, whether as provided 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; subsection (v) payment by Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies with the terms of 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 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 2.3below.
(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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until National City, as Agent, under the Termination Date with respect to the Line of Credit terms and subject to the other terms and conditions of this Agreement, Borrowers may request Lender on behalf of itself and each other Bank in the same proportions as each Bank's Revolving Loan Commitment bears to issue the Aggregate Revolving Loan Commitment, shall provide Letters of Credit to AeroCentury, from time to time prior to the Revolver Termination Date, as requested by AeroCentury, provided that (A) the aggregate amount of Letters of Credit outstanding at any one time shall not exceed $5,000,000 or such lesser amount, if any, as will, when added to the amount of the Revolving Credit Loans then outstanding, aggregate more than the Aggregate Revolving Loan Commitment (or such lesser amount as AeroCentury is entitled to borrow hereunder at such time by reason of its standard standby letters the limitation of credit the Borrowing Base or otherwise), and (“Standby B) no Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) Credit shall be for a term longer than 180 days. AeroCentury shall request a Letter of Credit Application by delivering a completed letter of credit application to National City on such form as may be specified by National City not less than three Business Days prior to the reasonable satisfaction of Lender, together with date specified by AeroCentury as the proposed form of date the Letter of Credit (which, is to be issued. The standard form of National City letter of credit application as currently in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter effect shall be used. Letters of Credit Availability by giving shall not bear interest until drawn upon but shall each be subject to an annual charge, payable quarterly in arrears from the date of issuance, equal to (a) the Applicable Borrowing Margin for LIBO Rate Loans as in effect from time to time times the aggregate amount of all Letters of Credit outstanding which shall be shared among the Banks pro rata in the same proportions that each Bank's Loan Commitment bears to the proposed Letter of CreditAggregate Loan Commitment, and (iiib) such other Letter 25 basis points (1/4 of Credit Documents that Lender then customarily requires in 1%) times the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making face amount of each Letter of Credit request by Borrowers will outstanding which shall be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 payable to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Creditissuing Bank. If Lender elects not to issue such Letter any obligation of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise AeroCentury to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or money in connection with any Letter of Credit will is not subject Lender met when requested by National City, as Agent, as permitted by the applicable letter of credit application and the reimbursement agreement contained therein, the amount due shall be funded automatically by a Revolving Credit Loan which Loan shall be made without regard to any liability minimum borrowing requirement, condition precedent herein, or Event of Default hereunder which would otherwise entitle any Bank or the Banks not to any Borrower; providedprovide such Revolving Credit Loan, however, nothing and each Bank shall make its proportionate share of such Revolving Credit Loan. Any obligation of AeroCentury to pay money 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 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 connection with any Letter of Credit or the provision of any credit support or enhancement application therefor shall be deemed secured as if made as a Loan hereunder. In the event AeroCentury shall terminate the Aggregate Revolving Loan Commitment as provided in connection therewith exclusive of claims, demands, liabilities, damages, losses, costs, charges §2.6 and expenses to shall pay the extent caused by the 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 outstanding principal amount of the acts Revolving Credit Loans in full and omissions of, with interest or misuse of any of the Revolver Termination Date shall occur at a time when one or more Letters of Credit byremain outstanding, then AeroCentury shall furnish to National City, as Agent, within two Business Days such amount of cash, to be held as cash collateral and invested in certificates of deposit of National City with interest payable to AeroCentury, as will pay the respective maximum amount which may be drawn by 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 draft or certificate which substantially complies with the terms of 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 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 outstanding at the absence of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 such termination or 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 Revolver Termination 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Credit Agreement (Aerocentury Corp)
Letters of Credit. (a) Until In order to assist Borrower in establishing or opening Letters of Credit with an Issuing Bank, Borrower shall have requested that Lender join in the Termination Date with respect 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 a Letter of Credit Guaranty, thereby lending the credit of the Lender to Borrower, and Lender has agreed to do so. These arrangements shall be handled by Lender subject to the terms and conditions set forth below.
5.1 Within the Revolving Line of Credit and subject to the other terms and conditions of this AgreementAvailability, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) shall assist Borrower in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter obtaining Letters of Credit Application completed in an aggregate face amount outstanding at any time not to the reasonable satisfaction of Lender, together with the proposed form of exceed the Letter of Credit (which, Sub-Line. Lender's assistance for amounts in excess of the limitation set forth herein shall at all times and in all respectsrespects be in Lender's sole discretion. It is understood that the terms, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, conditions and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making purpose of each Letter of Credit request by Borrowers will (and any modifications thereof) shall be deemed subject to be a representation by Borrowers that the Letter prior approval of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 the exercise of 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 themreasonable discretion. In no event will any Letter of Credit have a term of more than one year; furthermore, and, in addition Notwithstanding anything herein to the foregoing term limitationcontrary, Lender will have no obligation to issue any Letter upon the occurrence of Credit with a Default or an expiry date later than the date that is 30 days prior to the stated Termination Date applicable to the Line Event of Credit. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited toDefault, the International Standby Practices, as published by the International Chamber assistance of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 Guaranty shall be in this Section 2.3(f) will relieve Lender Lender's sole discretion until such Default or Event 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 misconductDefault is waived. Lender shall not be obligated to cause any Letter of Credit to be 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 The undrawn face amount of any Letter of Credit or shall be reserved dollar-for-dollar from Availability as an Availability Reserve.
5.2 Lender shall have the provision right, without notice to Borrower, to charge the Revolving Loan Account with the amount of any credit support and all indebtedness, liability or enhancement in connection therewith exclusive of claims, demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by the 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 obligation 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 kind incurred by Lender under any Letter of Credit against presentation Guaranty at the earlier of a draft or certificate which substantially complies with the terms of (a) payment by Lender under such Letter of Credit; Credit Guaranty, (vib) the invalidity occurrence of an Event of Default or unenforceability (c) the termination of the Letter of Credit; (vii) the examination of documents presented under a Letter of Credit exclusively by 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 Revolving Line of Credit or any related certificatesthis Agreement. Any amount charged to the Revolving Loan Account shall be deemed a Revolving Loan hereunder and shall incur interest at the rate provided in Section 8.1 (or Section 8.2, if taken or omitted in good faith in the absence of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Post Petition Credit Agreement (Archibald Candy Corp)
Letters of Credit. (a) Until Upon the Termination Date with respect to request of CB (acting as agent for the Line of Credit Originators as described in subsection (b) below), and subject to on the other terms and conditions for issuing Letters of this AgreementCredit under the Receivables Financing Agreement (including any limitations therein on the amount of any such issuance), Borrowers may request Lender the Company agrees to issue one cause the LC Bank to issue, on the Purchase Dates specified by CB (on behalf of the Originators), Letters of Credit on behalf of any Originator or more any Originator’s designee, including CB (which designee shall be an Affiliate of its standard standby letters of credit (“Standby Letter of Credit”the Company, the Originators and CB) in favor of such beneficiary(ies) as are designated the beneficiaries specified by Borrowers by delivering to Lender: CB (i) a Letter on behalf of the Originators). The aggregate stated amount of the Letters of Credit Application completed to being issued on any Purchase Date on behalf of any Originator or its designee plus any related fees and expenses payable by the reasonable satisfaction of Lender, together Company in connection with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter Letters of Credit if, after giving effect shall constitute a credit against the aggregate Purchase Price payable by the Company to such Originator on such Purchase Date pursuant to Section 3.1. To the proposed Letter extent that the aggregate stated amount of Credit, there would exist a Letter the Letters of Credit Deficiency. The making being issued on any Payment Date plus any related fees and expenses payable by the Company in connection with the issuance of each Letter the Letters of Credit request exceeds the aggregate Purchase Price payable by Borrowers will the Company to any Originator on such Payment Date, such excess shall be deemed to be a representation reduction in the outstanding principal balance of (and, to the extent necessary, the accrued but unpaid interest on) the applicable Company Note payable to such Originator. The aggregate stated amount of Letters of Credit to be issued on any Payment Date plus any related fees and expenses payable by Borrowers the Company in connection with the issuance of the Letters of Credit shall not exceed the sum of the aggregate Purchase Price payable on such Payment Date to the Originators plus the aggregate outstanding principal balance of, and accrued but unpaid interest on, the Company Notes payable to the Originators on such Payment Date. In the event that the any such Letter of Credit may be issued in accordance with, and will not violate the terms of, pursuant to this Section 2.33.6 (i) expires or is cancelled or otherwise terminated with all or any portion of its stated amount undrawn, (ii) has its stated amount decreased (for a reason other than a drawing having been made thereunder) or (iii) the Company’s Reimbursement Obligation in respect thereof is reduced for any reason other than by virtue of a payment made in respect of a drawing thereunder, then an amount equal to such undrawn amount, such decrease 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 Company does not then have cash available therefor, shall be added to the outstanding principal balance of the Company Note issued to such Originator. Under no circumstances shall any Originator (or any Affiliate thereof (other than the Company)) have any reimbursement or recourse obligations in respect of any Letter of Credit.
(b) Each Originator appoints CB as its agent (on which appointment the Company, each Agent, the Group Agents and the Secured Parties may rely until such Originator provides contrary written notice to all of such Persons) to act on such Originator’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 particular Originators and against the Company Notes issued to particular Originators. In the event that CB requests a Letter of Credit issued under this Agreement willhereunder, among other things, (i) be in CB shall on a timely basis provide the Company with such form requested by Borrowers information as is acceptable necessary for the Company 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 obtain such Letter of Credit have a term from the LC Bank, and shall notify the relevant Originators, the Company and the Administrator of more than one year; furthermore, and, the allocations described in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than preceding sentence. Such allocations shall be binding on the date that is 30 days prior to the stated Termination Date applicable to the Line of Credit. Each Letter of Credit Application Company and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may includeOriginator, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth aboveabsent manifest error.
(c) Upon receipt of a request from Borrowers Each Originator agrees to open any Letter of Credit and of all attendant Letter of Credit Documents completed to Lenderbe bound by the LC Bank’s reasonable satisfaction, Lender, within three (3) Business Days, may either (i) issue the requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 interpretations of any Letter of Credit results (or issued for the Company and by the LC Bank’s written regulations and customary practices relating to letters of credit, in each case subject 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 conditions 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 Receivables Financing 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect to the Line The Letter of Credit and subject to Issuer agrees, on the other terms and conditions of this Agreementherein set forth, Borrowers may request Lender to issue one standby Letters of Credit for the account of any Applicant and to renew, extend, increase, decrease or more of its standard standby letters of credit (“Standby otherwise modify each Letter of Credit”) Credit ("Modify" and each such action a "Modification"), in favor of such beneficiary(ies) as are designated by Borrowers by delivering each case in any Approved Currency, from time to Lender: time on any Business Day during the period from the date hereof until the Maturity Date; provided that (i) the Letter of Credit Issuer shall have no obligation to issue or Modify a Letter of Credit Application completed if the Dollar Equivalent of the aggregate outstanding Letter of Credit Liabilities would exceed the total Commitment after giving effect to such issuance or Modification, and (ii) no Letter of Credit shall have a Stated Expiry Date later than two years from its date of issuance, or such later date agreed by the Letter of Credit Issuer in its sole discretion. The Letter of Credit Issuer shall issue (or Modify) each Letter of Credit on notice received by the Letter of Credit Issuer from the Applicant not later than 12:00 P.M. (New York City time) on the third Business Day prior to the reasonable satisfaction date of Lender, together with the proposed issuance (or Modification) of such Letter of Credit. Each such notice of a Letter of Credit (a "Notice of Letter of Credit") shall be submitted to the Letter of Credit Issuer under the Bolero System or the CitiDirect Electronic Platform (or, if requested by the Letter of Credit Issuer, in accordance with Section 8.02(a)) in substantially the form of Exhibit G, specifying therein (i) the requested date of issuance (or Modification) of such Letter of Credit (which shall be a Business Day), (ii) the requested amount of such Letter of Credit and the Approved Currency in which such amount shall be denominated, (iii) the requested expiration date of such Letter of Credit, (iv) whether such Letter of Credit will be a Secured Letter of Credit and secured by Collateral in accordance with Section 2.13(b), and (v) the purpose and terms of such Letter of Credit and other information contemplated by Exhibit G. Additionally, if requested by the Letter of Credit Issuer, Cameron shall execute and deliver to the Letter of Credit Issuer an application for letter of credit on the Letter of Credit Issuer's standard form or on another form agreed upon by Cameron and the Letter of Credit Issuer. The Letter of Credit Issuer shall decide in its sole discretion, and indicate to the Applicant promptly after receiving any Notice of Letter of Credit, whether such Letter of Credit would be classified for purposes of capital adequacy or reserve requirements as a Financial Letter of Credit or a Performance Letter of Credit. The Letter of Credit Issuer may, at its option, respond to any Notice of Letter of Credit on behalf of an Applicant by causing any foreign or domestic branch or Affiliate of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation Issuer to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making or a Bank Guaranty, in each case supported by a Protective Letter of each Credit; provided that any exercise of such option shall not affect the obligation of the Applicant to repay all drawings and other amounts due under such Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate with the terms of, this Section 2.3.
(b) Each of the Credit Documents. Any Protective Letter of Credit issued under this Agreement will, among and any Bank Guaranty or other things, (i) be in such form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faith, (ii) Letter of Credit it supports must be denominated in Dollarsthe same Approved Currency. On the Effective Date, all Existing Letters of Credit shall automatically, without any action on the part of any Person, be deemed to be Letters of Credit issued and outstanding hereunder, and shall be subject to and governed by the terms and conditions hereof.
(iiib) 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply The relevant Applicant shall pay to the Letter of CreditCredit Issuer each Reimbursement Obligation in accordance with Section 2.03 and the other provisions of the Credit Documents. Such rules The obligations of each Applicant under this Agreement and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) any other agreement or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In instrument relating to any event, the Letter of Credit shall be governed by (A) the rules or customs set forth absolute, unconditional and irrevocable, and shall be paid strictly 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 such laws are inconsistent accordance with the rules terms of this Agreement and such other agreement or customs adopted in instrument under all circumstances, including the Letter of Credit Documents and Letter of Credit as set forth above.following circumstances:
(ci) Upon receipt any lack of a request from Borrowers to open validity or enforceability of this Agreement, any Letter of Credit and of all attendant Letter of Credit Documents completed to Lender’s reasonable satisfactionor any other agreement or instrument relating thereto (collectively, Lender, within three (3) Business Days, may either (i) issue the requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or "L/C Related Documents");
(ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth any change in the applicable Letter time, manner or place of Credit Documents. Borrowers jointly and severally promise to pay Lender payment of, or in any other term of, all or any of the amount of all other Letter of Credit Obligations immediately when due, irrespective obligations 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 Applicant in respect of any Letter of Credit results (or any other amendment or waiver of or any consent 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken departure from all 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 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 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: L/C Related Documents;
(iiii) the existence of any claim, set-off, defense or other right which that any Borrower Applicant may have at any time against any beneficiary, beneficiary or any transferee, transferee of any Letter of Credit (or any Persons Person for whom any such beneficiary or any such transferee may be acting), Lender the Letter of Credit Issuer or any other Person, whether in connection with this Agreement or the other Loan DocumentsAgreement, the transactions contemplated in this Agreement, hereby or any unrelated transaction; (ii) any statement by the L/C Related Documents or any other document presented matter;
(iv) payment by the Letter of Credit Issuer against presentation of any draft, demand or claim for payment under any Letter of Credit proving presented for purposes of drawing under any Letter of Credit ("Drawing Document") that does not comply with the terms of such Letter of Credit or which proves 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 which is signed, issued or any other presented by a 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 a transferee of a draft Person) purporting to be a successor or certificate which substantially complies with transferee of the terms beneficiary of such Letter of Credit; ;
(v) any dispute between or among any Applicant and/or any Subsidiaries, any of their Affiliates, the beneficiary of any Letter of Credit or any financing institution or other party to whom any Letter of Credit may be transferred;
(vi) the invalidity Letter of Credit Issuer or unenforceability any of its branches or Affiliates being the beneficiary of any Letter of Credit;
(vii) the Letter of Credit Issuer or any correspondent honoring a drawing against a Drawing Document up to the amount available under the Letter of Credit;
(viii) the Letter of Credit Issuer or any correspondent having previously paid against fraudulently signed or presented Drawing Documents (whether or not the relevant Applicant reimbursed the Letter of Credit for such drawing);
(ix) any exchange, release or non-perfection of any collateral for, or any release or amendment or waiver of or consent to departure from any guarantee of, all or any of the obligations of any Applicant in respect of any Letter of Credit;
(x) the issuance of a Letter of Credit (or any Modification thereto) in a form other than substantially as requested by the Applicant, unless the Letter of Credit Issuer receives written notice from such Applicant of such error within three Business Days after such Applicant shall have received a copy of the Letter of CreditCredit (or such Modification); or
(vii) the examination of documents presented under a Letter of Credit exclusively by electronic or electro-optical means; or (viiixi) any other circumstances event, circumstance or happening conduct whatsoever, whether or not similar to any of the foregoing, including that might, but for this paragraph, constitute a legal or equitable defense to or discharge of, or provide a right of set-off against, an Applicant's obligations hereunder (whether against the Letter of Credit Issuer, the beneficiary or any act or omissionother Person). however, whether rightful or wrongful, this Section 2.01(b) shall not limit any right of any present or future de jure or de facto governmental authority. None Applicant to make a claim against the Letter of Credit Issuer to the foregoing shall affect, impair or prevent the vesting of any rights or powers of Lender under this extent provided in Section 2.32.01(d).
(ic) In furtherance and extension, and not in limitation, Each Applicant assumes all risks of the specific provisions set forth above, acts or omissions of any action taken beneficiary or omitted by Lender under or in connection with transferee of any of the Letters Letter of Credit or any related certificates, if taken or omitted in good faith in the absence of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each the use of such Letter of Credit. Except as otherwise expressly provided in this Agreement, a fee (“LOC Fee”) equal to neither the Applicable LOC Fee Percentage per annum on the amount available to be drawn under each Letter of Credit fromIssuer nor any branch, and including, the issuance date Affiliate or correspondent bank of the Letter of Credit Issuer nor any of their respective employees, agents, officers or directors shall be liable or responsible for: (i) the use that may be made of any Letter of Credit issued by it or any acts or omissions of any beneficiary or transferee of any Letter of Credit issued by it in connection therewith; (ii) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to and including the expiry date thereof be invalid, insufficient, fraudulent or forged; (or, if earlier, the date on which iii) payment by 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 Issuer against presentation of credit administration fees, charges and out documents that do not strictly comply with the terms of pocket expenses with respect to each the relevant Letter of Credit. The LOC Fee is fully earned by Lender when paid and will be due and payable on , including failure of any documents to bear any reference or adequate reference to the issuance of each relevant Letter of Credit. The LOC Fee will be calculated on the basis ; (iv) any error, omission, interruption or delay in transmission, dispatch or delivery of the actual number any message or advice, however transmitted, in connection with any Letter of days elapsed Credit, or (v) any other circumstances whatsoever in a 360-day year. If making or failing to make payment under any Letter of Credit is cancelled issued by it. In furtherance and not in limitation of the foregoing, the Letter of Credit Issuer may accept documents that appear on their face to be in order and shall be entitled to rely, and shall be fully protected in relying, upon any Letter of Credit, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, without responsibility for further investigation, regardless of any reason before notice or information to the stated expiry date thereof, any LOC Fee paid in advance will not be refunded and will be retained by Lender solely for its accountcontrary.
(iid) For purposes of determining Each Applicant shall have a claim against 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 Letter of Credit Issuer, and the Letter of Credit Issuer shall be liable to such Applicant, to the extent of any direct damages suffered by such Applicant that are issued determined by a court of competent jurisdiction in a final, non-appealable judgment to have been caused by the Letter of Credit Issuer's (i) willful misconduct 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) gross negligence. No provision of Section 2.3(j). Each of the financial statements and Compliance Certificate required 2.01(c) shall be construed to be delivered to Lender must be delivered to Lender in compliance with limit or impair a claim by any Applicant under this 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(a2.01(d), 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1Letter of Credit Issuer's liability to any Applicant under this Section 2.01(d) will shall not be applicable limited by the limitations on the then applicable Determination Dateits liability set out in Section 2.01(c).
Appears in 1 contract
Samples: Continuing Agreement for Letters of Credit (Cameron International Corp)
Letters of Credit. (a) Until At the Termination Date with respect request of the Borrower, at any time prior to the Line of Credit and subject to Expiration Date, the other terms and conditions of this Agreement, Borrowers may request Lender to Bank will issue one or more of its standard standby letters of credit (“Standby Letter with a maximum maturity of Credit”) in favor 365 days but not to extend more than 365 days beyond the Expiration Date. The standby letters of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) credit may include a Letter of Credit Application completed provision providing that the maturity date will be automatically extended each year for an additional year unless the Bank gives written notice to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3contrary.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the rules or customs set forth in the Letter of Credit and (B) the internal laws The amount of the State letters of Ohio credit outstanding at any one time (including the drawn and unreimbursed amounts of the United States letters of America, except to credit) plus the extent such laws are inconsistent with amount of advances made under the rules or customs adopted in Facility and outstanding may not exceed the Letter of Credit Documents and Letter of Credit as set forth aboveCommitment at any time.
(c) Upon receipt of a 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 The Borrower agrees:
(i) issue Any sum drawn under a letter of credit may, at the requested Letter option of Credit the Bank, be added to the beneficiary thereof principal amount outstanding under this Agreement. The amount will bear interest and transmit a copy to Borrowers, or be due as described elsewhere in this Agreement.
(ii) electIf there is an Event of Default hereunder, to make the Bank whole for any outstanding letters of credit to the extent they are undrawn by immediately providing the Bank with cash in its discretion exercised an amount equal to the outstanding letters of credit to the extent they are undrawn.
(iii) The issuance of any letter of credit and any amendment to a letter of credit is subject to the Bank’s written approval and must be in good faith, not form and content satisfactory to issue the proposed 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. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(dv) All Letter of Credit Obligations are payable on Lender’s demand To pay any reasonable issuance and/or other fees that the Bank notifies the Borrower (at or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise prior to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 such letter of Credit or credit) will be charged for issuing and processing letters of credit for 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 gross negligence or willful misconduct of Lender. The agreement in this Section 2.3(g) shall survive repayment of all other ObligationsBorrower.
(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 draft or certificate which substantially complies with the terms of such Letter of Credit; (vi) To allow the invalidity or unenforceability of the Letter of Credit; Bank to automatically charge its checking account for applicable fees, discounts, and other charges.
(vii) To pay the examination of documents presented under Bank a Letter of Credit exclusively by electronic or electronon-optical means; or (viii) any other circumstances or happening whatsoever, whether or not similar re fundable fee equal to any 2.0% per annum of the foregoing, including any act or omission, whether rightful or wrongful, outstanding undrawn amount 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 feescredit, 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 annually in advance, calculated on the basis of the actual number of days elapsed in a 360-face amount outstanding on the day yearthe fee is calculated. If any Letter there is a Default or an Event of Credit is cancelled for any reason before Default, at the stated expiry date thereofBank’s option, any LOC Fee paid in advance will not the amount of the fee shall be refunded and will be retained increased by Lender solely for its account1% per annum, effective starting on the day the Bank provides notice of the increase to the Borrower.
(iiviii) For purposes of determining If the Applicable LOC Fee PercentageExpiration Date is not extended by the Bank (which extension, the Fixed Charge Coverage Ratio willBorrower 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 and after or prior to the First Pricing Grid Determination Expiration Date, be determined as of June 30th with a first priority security interest and December 31st of each Fiscal Year ending on lien in 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 cash collateral in an amount equal 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Dateface amount of all letters of credit then outstanding.
Appears in 1 contract
Samples: Loan Agreement (Martha Stewart Living Omnimedia Inc)
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“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 reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to so long as there has not theretofore occurred an Event of Default, the Borrower may request that the Bank issue letters of credit on the proposed Letter of Credit if, after giving effect Borrower's account for purposes reasonably acceptable to the proposed Letter Bank, such letters of Credit, there would exist a Letter of credit not to exceed One Million Dollars ($1,000,000.00) in the aggregate at any one time and such face amounts to be deducted from the Borrower's availability under the Revolving Credit DeficiencyFacility. The making Borrower hereby agrees to reimburse the Bank for all draws made under such letters of each Letter credit, plus interest and costs including attorneys fees. Each letter of Credit credit request shall be accompanied by Borrowers an application completed by the Borrower to the satisfaction of the Bank whereby the Borrower will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(b) Each Letter of Credit issued under this Agreement willagree, among other things, (i) to reimburse the Bank for any draws made with respect to such letters of credit, plus all interest and costs. Any unpaid reimbursement obligations may, at the Bank's discretion, be in repaid by an Advance hereunder. Each such form requested letter of credit issued 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 Bank shall expire no event will any Letter of Credit have a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date that is 30 thirty (30) days prior to the stated Revolving Credit Termination Date applicable and shall be subject to the Line of Credit. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published Credits ICC Pub. No. 500 and International Standby Practices (ISP 98) promulgated by ISPthe Institute of International Banking Law & Practice. In Upon the occurrence of an Event of Default or in the event of any eventoutstanding letters of credit within thirty (30)days of the Revolving Credit Termination Date, the Letter of Credit shall be governed by (A) Borrower shall, at the rules or customs set forth Bank's request, provide the Bank with cash collateral to secure the Borrower's reimbursement obligations in the Letter of Credit and (B) the internal laws of the State of Ohio and the United States of America, except an amount equal to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the face amount of all other Letter such outstanding letters of Credit Obligations immediately when duecredit, 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.plus ten percent
Appears in 1 contract
Letters of Credit. (a) Until Upon the Termination Date with respect to the Line of Credit terms and subject to the other terms and conditions of this Agreement, Borrowers may request Lender the Bank agrees to issue one or more of its standard standby letters of credit (“Standby Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter Letters of Credit Application completed for the account of the Borrower from time to time between the reasonable satisfaction date of Lender, together with this Agreement and the proposed form of Termination Date in such amounts as the Borrower shall request up to an aggregate amount at any time outstanding not exceeding the Letter of Credit (which, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Sublimit; provided that no Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires will be issued in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit ifany amount which, after giving effect to such issuance, would cause Total Revolving Outstandings to exceed the proposed Letter lesser of Credit(a) the Revolving Commitment Amount, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that or (b) the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Borrowing Base.
(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 request for a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed made by the Borrower in writing received by the Bank by 2:00 P.M. (AMinneapolis time) on a Banking Day which is not less than one Banking Day preceding the rules or customs set forth in requested date of issuance (which shall also be a Banking Day). Each request for a Letter of Credit shall be deemed a representation by the Borrower that on the date of issuance of such Letter of Credit and (B) after giving effect thereto the internal laws applicable conditions specified in Article III have been and will be satisfied. The Bank may require that such request be made on such letter of credit application and reimbursement agreement form as the Bank may from time to time specify, along with satisfactory evidence of the State authority and incumbency of Ohio and the United States officials of America, except to the extent Borrower making such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth aboverequest.
(c) Upon receipt All Letters of Credit must expire not later than the Banking Day preceding the Termination Date. No Letter of Credit may have a term longer than 12 months.
(d) If the Bank has received documents purporting to draw under a Letter of Credit that the Bank believes conform to the requirements of the Letter of Credit, or if the Bank has decided that it will comply with the Borrower written or oral request or authorization to pay a drawing on any Letter of Credit that the Bank does not believe conforms to the requirements of the Letter of Credit, it will notify the Borrower of that fact. The Borrower shall reimburse the Bank by 9:30 A.M. (Minneapolis time) on the day on which such drawing is to be paid in Immediately Available Funds in an amount equal to the amount of such drawing. Any amount by which the Borrower has failed to reimburse the Bank for the full amount of such drawing by 10:00 A.M. on the date on which the Bank in its notice indicated that it would pay such drawing, until reimbursed by the Borrower from Borrowers the proceeds of Loans pursuant to open the next sentences of this Section is an “Unpaid Drawing.” Whenever any Unpaid Drawing exists the Bank is authorized (and the Borrower does here so authorize the Bank) to, and shall, make a Revolving Loan to the Borrower in an amount equal to the amount of the Unpaid Drawing. The Bank shall apply the proceeds of such Revolving Loan directly to reimburse itself for such Unpaid Drawing. If at the time the Bank makes a Revolving Loan pursuant to the provisions of this Section, the applicable conditions precedent specified in Article III shall not have been satisfied, the Borrower shall pay to the Bank interest on the funds so advanced at the rate otherwise applicable to the Revolving Loan plus 5%.
(e) The obligation of the Borrower under the foregoing provisions to repay the Bank for any amount drawn on any Letter of Credit and of all attendant to repay the Bank for any Revolving Loans made under the foregoing subsection (d) to cover Unpaid Drawings shall be absolute, unconditional and irrevocable, shall continue for so long as any Letter of Credit Documents completed to Lender’s reasonable satisfactionis outstanding notwithstanding any termination of this Agreement, Lenderand shall be paid strictly in accordance with the terms of this Agreement, within three (3) Business Daysunder all circumstances whatsoever, may either including without limitation the following circumstances:
(i) issue the requested Any lack of validity or enforceability of any Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or Credit;
(ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when due, irrespective The existence of any claim, setoff, defense or other right which any the 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 claim at any time against any beneficiary, transferee or any transferee, holder of any Letter of Credit (or any Persons Person for whom any such beneficiary beneficiary, transferee or any such transferee holder may be acting), Lender the Bank or any other Person, whether in connection with a Letter of Credit, this Agreement or the other Loan DocumentsAgreement, the transactions contemplated in this Agreementhereby, or any unrelated transaction; or
(iiiii) any 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; respect whatsoever.
(f) Neither the Bank nor its officers, directors or employees shall be liable or responsible for, and the obligations of the Borrower to the Bank shall not be impaired by:
(i) The use which may be made of any Letter of Credit or for any acts or omissions of any beneficiary, transferee or holder thereof in connection therewith;
(ii) The validity, sufficiency or genuineness of documents, or of any endorsements thereon, even if such documents or endorsements should, in fact, prove to be in any or all respects invalid, insufficient, fraudulent or forged;
(iii) any defaultThe acceptance by the Bank of documents that appear on their face to be in order, negligencewithout responsibility for further investigation, misfeasance, suspension, insolvency, or bankruptcy regardless of any shipper notice or any other Person involved in any transaction covered thereby or any correspondent or agent of Lender information to whom any drafts, documents or instruments may be entrustedthe contrary; or
(iv) any delay, interruption, omission Any other action of the Bank in making or error in transmission or delivery of any document, certificate, draft, or message; (v) failing to make payment by Lender under any Letter of Credit if in good faith and in conformity with U.S. or foreign laws, regulations or customs applicable thereto; provided that, notwithstanding the foregoing, the Borrower shall have a claim against presentation the Bank, and the Bank shall be liable to the Borrower, to the extent, but only to the extent, of a draft any direct, as opposed to consequential, damages suffered by the Borrower which the Borrower proves were caused by the Bank’s willful misconduct or certificate which substantially complies with the terms of such Letter of Credit; (vi) the invalidity or unenforceability of the Letter of Credit; (vii) the examination of gross negligence in determining whether documents presented under a Letter of Credit exclusively by 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 comply 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Dateterms thereof.
Appears in 1 contract
Samples: Credit Agreement (Electromed, Inc.)
Letters of Credit. (a) Until the Termination Date with respect The Borrower may from time to time , on or prior to the Line of Credit and subject to Commitment Termination Date, request that the other terms and conditions of this Agreement, Borrowers may request Lender to Issuing Bank issue one or more of its standard irrevocable standby letters of credit (each, a “Standby Letter of Credit”) in favor for the account of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: the Borrower or any of its Subsidiaries. No Letter of Credit shall be issued if (i) a the face amount of that Letter of Credit Application completed to the reasonable satisfaction of LenderCredit, together with the proposed form sum of the Letter then-applicable L/C Amount and the aggregate principal balance of Credit (whichthe Notes then outstanding, in all respectswould exceed the aggregate Commitment Amounts, will comply with the applicable requirements of Section 2.3(b)), or (ii) a Borrowing Base Certificate which calculates the Letter face amount of Credit Availability by giving effect to the proposed that Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in together with the issuance of letters of credit. Lenderthen-applicable L/C Amount, in addition to would exceed the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3L/C Sublimit.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the date that is 30 At least three days prior to the stated Termination Date applicable to the Line issuance of Credit. Each Letter of Credit Application and each Letter of Credit will set forth which rules or customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby PracticesBorrower shall execute a letter of credit application and reimbursement agreement in the Issuing Bank’s standard form, as published required by the International Chamber of Commerce Issuing Bank.
(“ISP”c) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Each Letter of Credit shall be governed issued in a form acceptable to the Issuing Bank. Unless otherwise approved by (A) all of the rules or customs set forth in the Banks, no Letter of Credit and (B) shall have an initial or any renewal term ending more than one year after the internal laws date of the State of Ohio and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such requestissuance.
(d) All A fee shall be due and payable to the Agent for the benefit of the Banks upon issuance of each Letter of Credit, computed at an annual rate equal to the LIBO Rate Margin applied to the undrawn face amount of that Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in outstanding from time to time, from and including the applicable date of issuance of that Letter of Credit Documents. Borrowers jointly until the expiration thereof, payable in arrears on the last day of each calendar quarter and severally promise to pay Lender on the amount Maturity Date and, if later, the expiration date of all other such Letter of Credit Obligations immediately when dueCredit. In addition, irrespective of any claimthe Borrower shall pay or reimburse the Issuing Bank for such normal and customary costs and expenses as are incurred or charged by the Issuing Bank in issuing, setoffeffecting payment under, defense amending or other right which any Borrower may have at any time against Lender otherwise processing 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 administering 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) All Letter of Credit Obligations will constitute part of the Obligations The Borrower shall be irrevocably and be secured by the Loan Collateral.
(f) In determining whether unconditionally obligated to pay the amount of each draft drawn under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of Credit, and any action taken or omitted by Lender in good faith under or in connection with (including any Letter of Credit will not subject Lender to any liability to any Borrower; provided, however, nothing in this Section 2.3(fissued for the account of a Subsidiary) will relieve Lender of any liability it may have to Borrowers to the extentIssuing Bank on demand (or, if demand is not earlier made, on the Commitment Termination Date), together with interest at the Floating Rate from the date that such draft is paid by the Issuing Bank until payment of such amount in full; provided that the Borrower shall not be precluded from asserting a claim against the Issuing Bank for direct (but only to the extent, of any direct, as opposed to not 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 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 Borrower to the extent caused by the gross negligence or willful misconduct of Lender. The agreement the Issuing Bank 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, determining 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 a request 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 issued by Lender under any Letter of Credit against presentation of a draft or certificate which substantially complies it complied with the terms of such Letter of Credit; (vi) . The Issuing Bank shall provide notice to the invalidity or unenforceability Borrower of payment of the Letter draft within one Business Day of Credit; such payment. The Issuing Bank may (viiat its option) charge any deposit account maintained by the examination Borrower with the Issuing Bank for the amount of documents presented any draft drawn under a Letter of Credit exclusively by 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 2.3Credit.
(if) In furtherance and extension, and not Each Bank shall be deemed to hold a participation interest in limitation, each Letter of Credit equal to that Bank’s Percentage of the specific provisions set forth aboveface amount of that Letter of Credit. If the Issuing Bank makes any payment pursuant to the terms of any Letter of Credit and is not promptly reimbursed, the Issuing Bank may request that each other Bank pay such Bank’s Percentage of the unreimbursed amount. Upon receipt of any action taken or omitted such request prior to 1:30 p.m. on a Business Day, the recipient shall be unconditionally and irrevocably obligated to pay its Percentage of the unreimbursed amount to the Issuing Bank in immediately available funds prior to 3:00 p.m. on such date. Notices received after 1:30 p.m. shall be deemed to have been received on the following Business Day. If payment is not made by Lender a Bank when due hereunder, interest on the unpaid amount shall accrue from and including the date of the Issuing Bank’s request to the date of payment at the Federal Funds Rate. After making any payment to the Issuing Bank under or this subsection 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each a particular Letter of Credit, a fee (“LOC Fee”) equal Bank shall be entitled to participate to the Applicable LOC Fee extent of its Percentage per annum on in the amount available to be drawn under each Letter of Credit from, and includingrelated reimbursements received by the Issuing Bank from the Borrower or otherwise. Upon receiving any such reimbursement, the issuance date Issuing Bank will distribute to each Bank its Percentage of such reimbursement. At the option of the Letter of Credit to and including Agent, payment by 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 Banks hereunder may 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 deemed an Advance in accordance with Section 4.3 of this Agreement2.1 and payable under the Notes.
(g) Unless otherwise agreed by each Bank in writing, thenthe Borrower shall deposit in the Cash Collateral Account, at Lender’s option, commencing on the date upon which such financial statements or Compliance Certificate should have been delivered Commitment Termination Date, an amount equal to the then-applicable L/C Amount, less the balance (if any) then outstanding in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateCash Collateral Account.
Appears in 1 contract
Samples: Credit Agreement (Xcel Energy Inc)
Letters of Credit. (a) Until Provided that the Termination Date with respect Borrower has satisfied the conditions precedent contained in Section 2A.1(c) hereof, the Issuing Bank agrees, from time to the Line time, to issue and/or renew Standby Letters of Credit and subject on behalf of the Borrower so long as upon such issuance and/or renewal, after giving to the other terms and conditions of this Agreement, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“such 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 reasonable satisfaction of Lender, together with Outstanding Balance will not exceed the proposed form of Commitment and (ii) the Letter of Credit (which, in all respects, Balance will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates not exceed the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit DeficiencyCommitment. The making expiration date of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Standby Letter of Credit may be issued 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 accordance withfull and the Commitment terminated, and will not violate Borrower shall pay in arrears to the terms ofAdministrative Agent, this Section 2.3for 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) Each 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 issued under this Agreement will, among other thingsCredit, (i) be in such form requested by Borrowers as is acceptable to Lender in its discretion exercised in good faiththe Outstanding Balance, will not exceed the Commitment and (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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the rules or customs set forth in Balance will not exceed the Letter of Credit and (B) the internal laws Commitment. The expiration date of the State of Ohio and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Commercial Letter of Credit Documents and 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 as set forth aboveFee upon the issuance and/or renewal of such Commercial Letter of Credit.
(c) Upon receipt The obligation of a request from Borrowers the Issuing Bank to open 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, specifying the amount of the requested Letter of Credit, the requested term thereof, the Type of 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 Borrowerthereof; 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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.and
(ii) For purposes of determining The Borrower shall pay to the Applicable LOC Fee PercentageIssuing Bank, the Fixed Charge Coverage Ratio willfor its own account, on such reasonable fronting, issuance, drawing, amendment, transfer, obligation and after the First Pricing Grid Determination Date, be determined other fees 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 agreed upon by Borrower and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateIssuing Bank from time to time.
Appears in 1 contract
Letters of Credit. (a) Until The Domestic Borrower, the Termination Date with respect to Issuing Bank and each of the Line Revolving Credit Lenders hereby agree that each of the Existing Letters of Credit shall, on and subject after the Effective Date, continue as and be deemed for all purposes of this Agreement to be a Letter of Credit issued and outstanding under the other terms of this Agreement. The Issuing Bank agrees, on the terms and conditions of this Agreementhereinafter set forth, Borrowers may request Lender to issue one (or more of cause its standard standby Affiliate that is a commercial bank to issue on its behalf) letters of credit (“the "LETTERS OF CREDIT") denominated in US Dollars for the account of the Domestic Borrower from time to time on any Business Day during the period from the date hereof until 60 days before the Termination Date in an aggregate Available Amount (i) for all Letters of Credit not to exceed at any time the lesser of (x) the Letter of Credit Sub-Facility at such time and (y) the Issuing Bank's Letter of Credit Commitment at such time and (ii) for each such Letter of Credit not to exceed an amount equal to the Unused Revolving Credit Commitments of the Revolving Credit Lenders at such time. No Letter of Credit shall have an expiration date (including all rights of the Domestic Borrower or the beneficiary to require renewal) later than the earlier of 20 days before the Termination Date and (A) in the case of a Standby Letter of Credit”, one year after the date of issuance thereof, but may by its terms be renewable annually upon notice (a "NOTICE OF RENEWAL") given to the Issuing Bank and the Administrative Agent on or prior to any date for notice of renewal set forth in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) a Letter of Credit Application completed but in any event at least three Business Days prior to the reasonable satisfaction date of Lender, together with the proposed form renewal of such Standby Letter of Credit and upon fulfillment of the applicable conditions set forth in Article III unless the Issuing Bank has notified the Domestic 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 10 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, 180 days after the date of issuance thereof; provided that the terms of each Standby Letter of Credit that is automatically renewable annually shall (x) require Credit Agreement the Issuing Bank 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 20 days before the Termination Date. If either a Notice of Renewal is not given by the Domestic Borrower or a Notice of Termination is given by the Issuing Bank pursuant to the immediately preceding sentence, such Standby Letter of Credit shall expire on the date on which it otherwise would have been automatically renewed; provided, however, that even in the absence of receipt of a Notice of Renewal the Issuing Bank may in its discretion, unless instructed to the contrary by the Administrative Agent or the Domestic Borrower, deem that a Notice of Renewal had been timely delivered and in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under this Agreement. Each Standby Letter of Credit shall contain a provision authorizing the Issuing Bank to deliver to the beneficiary of such Letter of Credit, upon the occurrence and during the continuance of an Event of Default, a notice (a "DEFAULT TERMINATION NOTICE") terminating such Letter of Credit and giving such beneficiary 15 days to draw such Letter of Credit. Within the limits of the Letter of Credit (whichSub-Facility, in all respects, will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect and subject to the proposed Letter of Creditlimits referred to above, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the Domestic Borrower may request the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter Letters of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, under this Section 2.3.
(b) Each Letter of Credit issued under this Agreement will2.01(e), 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 repay any Letter of Credit have a term of more than one year; furthermore, and, in addition to the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a request Advances resulting 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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 drawings thereunder 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 results2.03(c) 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 request 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 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 additional 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 draft or certificate which substantially complies with the terms of 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 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 2.32.01(e).
(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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Letters of Credit. (a) Until the Termination Date with respect Subject to the Line of Credit and subject to the other terms and conditions hereof, at any time and from time to time from the Closing Date through the Banking Day immediately prior to the Maturity Date, the Issuing Lender shall issue such Letters of this Agreement, Borrowers Credit under the Commitment as Borrower may request Lender to issue one or more of its standard standby letters of credit (“Standby by a Request for Letter of Credit”) in favor of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: ; provided that (i) a giving effect to all such Letters of Credit, 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 $10,000,000. Each Letter of Credit Application completed shall be in a form reasonably acceptable to the reasonable satisfaction of Issuing Lender. Unless all the Lenders otherwise consent in a writing delivered to the Administrative Agent, together with the proposed form of the no Letter of Credit (which, in all respects, will comply with shall have a term which exceeds one year or extends beyond the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates the Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Maturity Date.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice Request for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) submitted to the rules or customs set forth in Issuing Lender, with a copy to the Administrative Agent, at least two Banking Days prior to the date upon which the related Letter of Credit and (B) is proposed to be issued. The Administrative Agent shall promptly notify the internal laws Issuing Lender whether such Request for Letter of the State of Ohio Credit, and the United States issuance of America, except to the extent such laws are inconsistent with the rules or customs adopted in the a Letter of Credit Documents and pursuant thereto, conforms to the requirements of this Agreement. Upon issuance of a Letter of Credit as set forth aboveCredit, the Issuing Lender shall promptly notify the Administrative Agent, who shall promptly notify the Lenders, of the amount and terms thereof.
(c) Upon receipt the issuance of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, each Lender will communicate shall be deemed to have purchased a pro rata participation in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on from the Issuing Lender in an amount equal to that Lender’s demand or payable as otherwise set forth 's Pro Rata Share. Without limiting the scope and nature of each Lender's participation in the applicable any Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations immediately when dueCredit, 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 extent that the same Business Day that Issuing Lender is obligated has not been reimbursed by Borrower for any payment required to fund a drawing or make any expenditure or any other payment under a Letter of Credit or incurs any cost or expense be made by the Issuing 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 drawingpayment 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, expenditure or other together with interest on such amount from the date of any payment mademade 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, or cost or expense incurred, by to the extent that the Lenders have not reimbursed the Issuing Lender debiting any Borrower’s loan account(s) with Lender as an advance of the Revolving Loans pursuant to Section 2.12.4(c), the interest amount of any such payment shall be for the account of the Issuing Lender. If Each Lender that has paid the advance 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 Revolving Loan 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 Base Rate Advances to be made by the Lenders under their Pro Rata Shares of the 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 to Advances 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 drawingsupplement, expenditure or other payment mademodification, amendment, renewal, or cost extension to or expense incurred, by Lender in respect of any Letter of Credit results shall be treated in all respects the same as the issuance of a new Letter of Credit, provided that this clause (or g) shall not require the payment of any letter of credit fees except to the extent that it resultssuch supplementation, modification, amendment, renewal or extension results in an increase to the amount of the related Letter of Credit or any extension of its tenor.
(h) in 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 Deficiencyshall be absolute, then Borrowers will immediately eliminate unconditional, and irrevocable, subject only to performance by the Issuing Lender of its obligations to Borrower under Uniform Commercial Code Section 5109, as in effect in the State of Nevada. Without limiting the foregoing, the obligations of Borrower to the Issuing Lender shall not be affected by any Letter of Credit Deficiency in accordance with the terms of Section 2.1(a).following circumstances:
(ei) All Letter any lack of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements validity or enforceability of the Letter of Credit, and this Agreement, or any action taken other Agreement or omitted by Lender in good faith under instrument relating thereto;
(ii) any amendment or in connection with any waiver of the terms of the Letter of Credit will not subject Lender Credit, or any consent 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 departure from 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 extended Credit, this Agreement, or amended unless the requirements of this Section 2.3 are met as though a new Letter of Credit were being requested and issued.any other Agreement or instrument relating thereto;
(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 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: (iiii) the existence of any claim, set-offsetoff, defense defense, or other right rights which any Borrower may have at any time against any beneficiaryCreditor, or any transferee, beneficiary of any the Letter of Credit (or any Persons persons or entities 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 DocumentsLetter of Credit, the transactions contemplated in this Agreement, or any other Agreement or instrument relating thereto, or any unrelated transaction; transactions;
(iiiv) any statement demand, statement, or any other document presented under any the Letter of Credit proving to be forged, fraudulent, invalid invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iii) respect whatsoever so long as any default, negligence, misfeasance, suspension, insolvency, or bankruptcy such document appeared to comply with the terms of any shipper or any other Person involved in any transaction covered thereby or any correspondent or agent the Letter 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; Credit;
(v) payment by the Issuing Lender in good faith under any the Letter of Credit against presentation of a draft or certificate any accompanying document which substantially complies does not strictly comply with the terms of such Letter of Credit; (vi) the invalidity or unenforceability of the Letter of Credit; , except to the extent that the making of such payment has been determined by a court or arbitrator to result from the gross negligence of the Issuing Lender;
(vi) the existence, character, quality, quantity, condition, packing, value or delivery of any Property purported to be represented by docu- ments 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 described in such documents;
(vii) the examination time, place, manner, order or contents of shipments or deliveries of Property as described in documents presented under 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, or any delay or interruption in any such message, not caused by the Issuing Lender;
(xi) any error, neglect or default of any correspondent of the Issuing Lender in connection with a Letter of Credit exclusively (but without prejudice to any claim by electronic Borrower against such correspondent);
(xii) any consequence arising from acts of God, war, insurrection, civil unrest, disturbances, labor disputes, emergency conditions or electro-optical meansother 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; or and
(viiixiv) where the Issuing Lender has acted in good faith and observed general banking usage, 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 extensionThe Issuing Lender shall be entitled to the protection accorded to the Administrative Agent pursuant to Article 10, 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lendermutatis mutandis.
(ij) Borrowers will pay to LenderThe Uniform Customs and Practice for Documentary Credits, with respect to each Letter as published in its most current version by the International Chamber of CreditCommerce, shall be deemed a fee (“LOC Fee”) equal to the 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) part 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 Section and shall apply to all Letters of Credit that are issued or renewed on and after to 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 extent not inconsistent with 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination DateLaw.
Appears in 1 contract
Samples: Loan Agreement (Coast Resorts Inc)
Letters of Credit. (a) Until the Termination Date with respect to the Line of Credit and The Issuing Bank agrees, subject to the other terms and conditions of this Agreement, upon request of a Borrower or Borrowers may request Lender to issue one from time to time for the account of the Borrower or more Borrowers Letters of its standard standby letters Credit upon delivery to the Issuing Bank of credit (“Standby an Application and Agreement for Letter of Credit”) Credit relating thereto in favor of such beneficiary(ies) as are designated by Borrowers by delivering form and content acceptable to Lender: the Issuing Bank; provided, that (i) a Letter of Credit Application completed to the reasonable satisfaction of Lender, together with the proposed form of the Letter of Credit (which, in all respects, will comply with Outstandings shall not exceed the applicable requirements Total Letter of Section 2.3(b)), Credit Commitment and (ii) a Borrowing Base Certificate which calculates the no Letter of Credit Availability by giving effect to the proposed Letter of Credit, and (iii) such other Letter of Credit Documents that Lender then customarily requires in the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit shall be issued if, after giving effect to the proposed Letter of Creditthereto, there would exist a Letter of Credit DeficiencyOutstandings plus the Revolving Credit Outstandings shall exceed the Total Revolving Credit Commitment. The making of each No Letter of Credit request by Borrowers will be deemed to be shall have an expiry date (including all rights of a representation by Borrowers that the Borrower or any beneficiary named in such Letter of Credit may be issued in accordance with, and will not violate to require renewal) or payment date occurring later than the terms of, this Section 2.3earlier to occur of one year after the date of its issuance or the fifth Business Day prior to the Stated Termination Date.
(b) Each Upon completion of a proper Application and Agreement for Letter of Credit, NationsBank may issue upon request and for the account of an applicable Borrower or Borrowers Letters of Credit payable in an Alternative Currency. For purposes of determining Outstanding Letters of Credit, any Letter of Credit issued under this Agreement will, among other things, (i) in an Alternative Currency shall 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 recorded 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, Agent's account in addition to Dollars based on the foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than Alternative Currency Equivalent Amount on the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 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 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 draft or certificate which substantially complies with the terms of such Letter of Credit; provided, however, that the Agent shall determine the Dollar Equivalent Amount of any Letter of Credit issued in an Alternative Currency on the date of any Advance or Conversion for the purpose of determining the amount of Revolving Credit Outstandings and compliance with the Total Alternative Currency Sublimit. Any draw on a Letter of Credit issued in an Alternative Currency shall be repaid in the same Alternative Currency Equivalent Amount (vi) determined based on the invalidity or unenforceability Spot Rate of Exchange on the date of drawing under the Letter of Credit; (vii) ). In the examination of documents presented under a Letter of Credit exclusively by electronic or electro-optical means; or (viii) event that the Agent shall determine at 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.
time that (i) In furtherance the Dollar Value of outstanding Loans 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 Outstanding Letters of Credit Credit, in each case determined on the date of each Advance or any related certificates, if taken or omitted in good faith in the absence issuance of gross negligence or willful misconduct, shall not put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each a Letter of Credit, a fee (“LOC Fee”) equal to made or issued in Alternative Currencies exceeds the 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.
Total Alternative Currency Sublimit or (ii) For purposes of determining that 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 sum of the financial statements Dollar Value described in subclause (i) plus outstanding Revolving Loans 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 Outstanding Letters of Credit made or issued in Dollars exceeds the Total Revolving Credit Commitment, then the Borrowers shall immediately repay Revolving Loans so that are issued or renewed on and after giving effect to such payment the first day outstanding Revolving Loans plus Outstanding Letters of Credit do not exceed 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 Total Revolving Credit Commitment and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on Loans advanced in an Alternative Currency plus Outstanding Letters of Credit issued in and Alternative Currency do not exceed the then applicable Determination DateTotal Alternative Currency Sublimit.
Appears in 1 contract
Letters of Credit. (a) Until Subject to 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 requesting such Letter of Credit (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, 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 with respect 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 Line Issuing Bank). The renewal or extension of any Letter of Credit and 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 of this Agreementcontained herein, Borrowers may request Lender to issue one or more of its standard standby letters of credit (“Standby no Letter of Credit”) in favor Credit shall be available unless each of such beneficiary(ies) as are designated by Borrowers by delivering to Lenderthe following conditions precedent have been satisfied: (i) a the Borrower requesting such Letter of Credit Application completed (or the Company on behalf of such Borrower) shall have delivered to the reasonable satisfaction of LenderIssuing Bank at such times and in such manner as the Issuing Bank may reasonably require, together with an application, in form and substance reasonably satisfactory to the proposed form Issuing Bank and the Agent, for the issuance of the Letter of Credit (whichand such other Letter of Credit Documents as may be required pursuant to the terms thereof, in all respects, will comply with and the applicable requirements form and terms of Section 2.3(b)), the proposed Letter of Credit shall be reasonably satisfactory to the Agent and the Issuing Bank and (ii) a Borrowing Base Certificate which calculates as of the Letter date of Credit Availability issuance, no order of any court, arbitrator or other Governmental Authority shall purport by giving effect 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 (iiiwhether or not having the force of law) such other Letter of Credit Documents from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that Lender then customarily requires in the Issuing Bank refrain from, the issuance of letters of credit. Lender, in addition to the other terms of this Agreement, will have no obligation to issue the proposed Letter of Credit if, after giving effect to the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3.
(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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) credit generally or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, the Letter issuance of Credit shall be governed by (A) the 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 such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All 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 are payable on Lender’s demand or payable as otherwise set forth in shall not exceed the applicable Letter of Credit Documents. Borrowers jointly Limit, and severally promise to (ii) the aggregate principal amount of the Loans and the Letter of Credit Obligations outstanding shall not exceed the lesser of (1) the Maximum Credit and (2) the 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 pay Lender the Issuing Bank the amount of all other charges and fees payable to the Issuing Bank in connection with any Letter of Credit Obligations 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 Lender the Issuing Bank 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 Each drawing or make under any expenditure or any other payment under a Letter of Credit or incurs other amount payable in connection therewith when due shall constitute a request by the Borrower for whose account such Letter of Credit was issued to the Agent for a Prime Rate Loan in the amount of such drawing or other amount then due, and shall be made by the Agent on behalf of the 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 cost conditions specified in Section 4.2 are then satisfied, (iii) whether a Default or expense under 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 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, to reimburse Lender except for any drawingsuch losses, expenditure claims, damages, liabilities, costs or other payment madeexpenses that are a result of (a) the willful misconduct, bad faith, fraud or cost or expense incurred, by Lender debiting any Borrower’s loan account(s) with Lender as an advance gross negligence of the Revolving Loans 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 Section 2.1. If the advance a final non-appealable order of a Revolving court of competent jurisdiction. Each Loan Party assumes all risks with respect to reimburse Lender for any drawing, expenditure the acts or other payment made, omissions of the drawer under or cost or expense incurred, by Lender in respect beneficiary of any Letter of Credit results 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.
(or g) Each Loan Party hereby irrevocably authorizes and directs the Issuing Bank to name such Loan Party as the extent that it results) account party in any Letter of Credit Deficiencyand to deliver to the Agent all instruments, then Borrowers will immediately eliminate any documents and other writings and property received by the Issuing Bank pursuant to the Letter of Credit Deficiency and to accept and rely upon the Agent’s instructions and agreements with respect to all matters arising in accordance connection with the terms of Section 2.1(a).
(e) All Letter of Credit Obligations will constitute part 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 Obligations and Agent or any Lender in any manner. The Loan Parties shall be secured bound by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm commercially reasonable interpretation made in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with by the requirements of Agent, or the Letter of Credit, and any action taken or omitted by Lender in good faith Issuing Bank under or in connection with any Letter of Credit will not subject Lender to or any liability to documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be inconsistent with any Borrower; provided, however, nothing in this Section 2.3(f) will relieve Lender instructions of any liability it may 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 to Borrowers irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided interest and participation to the extentextent 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, but only to the extent, of any directunconditionally and irrevocably assume, as opposed to consequentialprimary obligor and not as surety, damages suffered by Borrowers from Lender’s gross negligence or willful misconduct. Lender shall not and be obligated to cause 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 Credit, to be extended the extent that the Issuing Bank has not been reimbursed or amended unless otherwise paid as required hereunder or under any such Letter of Credit, each such Lender shall pay to the requirements Issuing Bank its Pro Rata Share of this Section 2.3 are met as though a new 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 of Credit were being requested Obligations and issued.
(g) In addition the obligations of the Lenders to amounts payable as elsewhere provided make payments to the Agent for the account of the Issuing Bank with respect to Letters of Credit shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Section 2.3, Borrowers will protect, indemnify, pay and save Lender harmless from and against Agreement under any and all claimscircumstances whatsoever, demandsnotwithstanding the occurrence or continuance of any Default, liabilitiesEvent of Default, damagesthe failure to satisfy any other condition set forth in Section 4 or any other event or circumstance. If such amount is not made available by a Lender when due, lossesthe Agent shall be entitled to recover such amount on demand from such Lender with interest thereon, costs, charges and expenses (including reasonable attorneys’ fees) which Lender (provided for each day from the date such amount was due until the date such amount is paid to the Agent at the interest rate then payable by any Borrower in respect of Loans that it acts (are Prime Rate Loans. Any such reimbursement shall not relieve 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, otherwise impair the obligation of the issuance of Borrowers to reimburse the Issuing Bank under any Letter of Credit or the provision of make any credit support or enhancement other payment in connection therewith exclusive of claims, demands, liabilities, damages, losses, costs, charges and expenses to the extent caused by the gross negligence or willful misconduct of Lender. The agreement in this Section 2.3(g) shall survive repayment of all other Obligationstherewith.
(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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.
Appears in 1 contract
Samples: Abl Loan and Security Agreement (U.S. Silica Holdings, Inc.)
Letters of Credit. (a) Until the Termination Date with respect occurrence of an Event of Default (as defined in and pursuant to the Line Deed of Credit and Trust) but subject to the other terms limitations contained in this Agreement and conditions in the consent agreement attached hereto signed by Fiscal Agent, Borrower shall have all rights under the Theater Lease to draw upon the Letters of this AgreementCredit as otherwise permitted under the Theater Lease. If prior to an Event of Default under the Deed of Trust, Borrowers may request Lender Borrower has the right under the Theater Lease to issue draw upon one or more of its standard standby letters the Letters of credit Credit, Borrower shall deliver to Lender a written request (“Standby "Letter of Credit Draw Request"), certifying to Lender that Borrower has the right to draw on such Letter of Credit and specifying in detail the nature of the Draw Event (defined below) and the amount of the requested draw amount ("Draw Amount"). Each Letter of Credit Draw Request shall be accompanied by evidence reasonably satisfactory to Lender that a Draw Event has occurred and that Borrower has a right under the Theater Lease to draw upon such Letter of Credit”. Within five (5) in favor days of such beneficiary(ies) as are designated by Borrowers by delivering to Lender: (i) 's receipt of a Letter of Credit Application completed to Draw Request, Lender shall draw down upon the reasonable satisfaction applicable Letter of Lender, together Credit in accordance with the proposed form of the Letter of Credit (which, in all respects, Draw Request and will comply with the applicable requirements of Section 2.3(b)), (ii) a Borrowing Base Certificate which calculates apply the Letter of Credit Availability by giving effect funds so drawn as provided in Subsection (d) below. Tenant irrevocably authorizes Lender, without notice to the proposed Letter of CreditTenant, and (iii) such other to comply with any Letter of Credit Documents that Draw Request received by Lender then customarily requires in the issuance of letters of creditfrom Borrower. Lender, in addition Borrower agrees not to the other terms of this Agreement, will have no obligation to issue the proposed deliver such Letter of Credit if, after giving effect Draw Request unless and until the conditions precedent to such draw under the proposed Letter of Credit, there would exist a Letter of Credit Deficiency. The making of each Letter of Credit request by Borrowers will be deemed to be a representation by Borrowers that the Letter of Credit may be issued in accordance with, and will not violate the terms of, this Section 2.3Theater Lease have been satisfied.
(b) Each Letter From and after the occurrence and during the continuance of an Event of Default under the Deed of Trust, Lender (or its nominee) shall have the automatic and immediate right, but not the obligation, in its sole and absolute discretion, to exercise any and all rights of Borrower under the Theater Lease with respect to the Letters 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 foregoing term limitation, Lender will have no obligation to issue any Letter of Credit with an expiry date later than the 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 customs apply to the Letter of Credit. Such rules and customs may include, but are not limited to, the International Standby Practices, as published by the International Chamber of Commerce (“ISP”) or the Uniform Customs and Practice for Documentary Credits, as published by ISP. In any event, and/or the Letter of Credit Funds. Lender shall also have the right, but not the obligation, to take in its name or in the name of the Borrower such action as Lender may at any time (whether or not an Event of Default has occurred) reasonably determine to be governed by (A) necessary or advisable to protect the rules rights of Borrower or customs set forth in Lender with respect to the Letters of Credit and/or the Letter of Credit and (B) the internal laws of the State of Ohio and the United States of America, except to the extent such laws are inconsistent with the rules or customs adopted in the Letter of Credit Documents and Letter of Credit as set forth above.
(c) Upon receipt of a 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 requested Letter of Credit to the beneficiary thereof and transmit a copy to Borrowers, or (ii) elect, in its discretion exercised in good faith, not to issue the proposed Letter of Credit. If Lender elects not to issue such Letter of Credit, Lender will communicate in writing to Borrowers the reason(s) why Lender has declined such request.
(d) All Letter of Credit Obligations are payable on Lender’s demand or payable as otherwise set forth in the applicable Letter of Credit Documents. Borrowers jointly and severally promise to pay Lender the amount of all other Letter of Credit Obligations 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) All Letter of Credit Obligations will constitute part of the Obligations and be secured by the Loan Collateral.
(f) In determining whether to pay under any Letter of Credit, Lender will be responsible only to confirm in good faith that any documents required to have been delivered under a Letter of Credit appear to comply substantially on their face with the requirements of the Letter of 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 BorrowerFunds; provided, 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 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 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 draft or certificate which substantially complies with the terms of 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 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 put Lender under any resulting liability to Borrowers or relieve Borrowers of any of their obligations hereunder to Lender.
(i) Borrowers will pay to Lender, with respect to each Letter of Credit, a fee (“LOC Fee”) equal to the 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 has occurred, Lender shall not take any such action until it has given Borrower ten (10) prior days written notice thereof and Borrower has failed to take such action within such ten (10) day period, unless in Lender's reasonable judgment, immediate action is existing as necessary to protect the security provided hereby, in which case no prior notice shall be required (provided, however, Lender shall notify Borrower and Tenant of the applicable effective date of adjustmentactions taken by Lender within five (5) days) after such action is taken). The foregoing adjustmentLender shall incur no liability if any action so taken by it, if applicableor on its behalf shall prove to be inadequate or invalid, (A) will become effective with respect to all provided, however, Lender shall draw upon the Letters of Credit only as and when Borrower would be entitled to do so under the Theater Lease.
(c) Borrower shall at all times (i) provide Lender with copies of all notices, requests and other communications concerning any default by Tenant under the Theater Lease, the Letters of Credit, and/or Borrower's request 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 a Tenant Work Cost Deficiency Amount be deposited by Tenant concurrently if delivered to Lender pursuant to Sections 4.3(a), 4.3(bTenant by Borrower or within five (5) 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 date upon which such financial statements or Compliance Certificate should have been delivered in accordance with Section 4.3 of this Agreement and continuing until such financial statements or Compliance Certificate are actually delivered in accordance with Section 4.3 of this Agreement, it shall be assumed for purposes of determining the Applicable LOC Fee Percentage, that the Fixed Charge Coverage Ratio was £ 1.50 to 1.0 and the pricing associated therewith (i.e., Pricing Grid Level 1) will be applicable on the then applicable Determination Date.days if received by Borrower from Tenant;
Appears in 1 contract
Samples: Agreement Regarding Letters of Credit (Cinemastar Luxury Theaters Inc)
