Defaulting Banks. Notwithstanding any provision of this Agreement to the contrary, if any Bank becomes a Defaulting Bank, then the following provisions shall apply for so long as such Bank is a Defaulting Bank: (a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Bank pursuant to Section 2.8; (b) the Bank Percentage of such Defaulting Bank shall not be included in determining whether all Banks or the Required Banks have taken or may take any action hereunder (including any... consent to any amendment or waiver pursuant to Section 10.08), provided that this clause (b) shall not apply to the vote of a Defaulting Bank in the case of an amendment, waiver or other modification requiring the consent of such Bank or each Bank affected thereby; (c) if any L/C Obligations exist at the time a Bank becomes a Defaulting Bank then: (i) all or any part of such Defaulting Bank's Bank Percentage of the L/C Obligations shall be reallocated among the non-Defaulting Banks in accordance with their respective Bank Percentages but only to the extent the sum of all non-Defaulting Banks' Standby Loans and their Bank Percentages of the L/C Obligations and the outstanding Competitive Loans expressed as a dollar amount plus such Defaulting Bank's Bank Percentage of the L/C Obligations does not exceed the total of all non-Defaulting Banks' Commitments; (ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Agent, cash collateralize such Defaulting Bank's Bank Percentage of the L/C Obligations (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Article VIII for so long as such Defaulting Bank's Bank Percentage of the L/C Obligations is outstanding; (iii) if the Borrower cash collateralizes any portion of such Defaulting Bank's Bank Percentage of the L/C Obligations pursuant to Section 2.23(c)(ii), the Borrower shall not be required to pay any fees to such Defaulting Bank pursuant to Section 3.03 with respect to such Defaulting Bank's Bank Percentage of the L/C Obligations during the period such Defaulting Bank's Bank Percentage of the L/C Obligations is cash collateralized; (iv) if the Bank Percentages of the L/C Obligations of the non-Defaulting Banks are reallocated pursuant to Section 2.23(c)(i), then the fees payable to the Banks pursuant to Section 2.06 and Section 3.03 shall be adjusted in accordance with such non-Defaulting Banks' Bank Percentages; and (v) if any Defaulting Bank's Bank Percentage of the L/C Obligations is neither cash collateralized nor reallocated pursuant to this Section 2.23(c), then, without prejudice to any rights or remedies of the Issuing Bank or any Bank hereunder, all Facility Fees that otherwise would have been payable to such Defaulting Bank (solely with respect to the portion of such Defaulting Bank's Commitment that was utilized by such Defaulting Bank's Bank Percentage of the L/C Obligations) and letter of credit fees payable under Section 3.03 with respect to such Defaulting Bank's Bank Percentage of the L/C Obligations shall be payable to the Issuing Bank until such Defaulting Bank's Bank Percentage of the L/C Obligations is cash collateralized and/or reallocated; and (d) so long as any Bank is a Defaulting Bank, the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Commitments of the non-Defaulting Banks and/or cash collateral provided by the Borrower in accordance with Section 2.23(c), and participating interests in any such newly issued or increased Letter of Credit shall be allocated among non-Defaulting Banks in a manner consistent with Section 2.23(c)(i) (and Defaulting Banks shall not participate therein); and (e) any amount payable to such Defaulting Bank hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Bank) shall, in lieu of being distributed to such Defaulting Bank, be retained by the Agent in a segregated account and, subject to any applicable requirements of law, be applied at such time or times as may be determined by the Agent (i) first, to the payment of any amounts owing by such Defaulting Bank to the Agent hereunder, (ii) second, pro rata, to the payment of any amounts owing by such Defaulting Bank to the Issuing Bank hereunder, (iii) third, if so determined by the Agent or requested by an Issuing Bank, held in such account as cash collateral for future funding obligations of the Defaulting Bank in respect of any existing or future participating interest in any Letter of Credit, (iv) fourth, to the funding of any Loan in respect of which such Defaulting Bank has failed to fund its portion thereof as required by this Agreement, as determined by the Agent, (v) fifth, if so determined by the Agent and the Borrower, held in such account as cash collateral for future funding obligations of the Defaulting Bank in respect of any Loans under this Agreement, (vi) sixth, to the payment of any amounts owing to the Banks or an Issuing Bank as a result of any judgment of a court of competent jurisdiction obtained by any Bank or such Issuing Bank against such Defaulting Bank as a result of such Defaulting Bank's breach of its obligations under this Agreement, (vii) seventh, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Bank as a result of such Defaulting Bank's breach of its obligations under this Agreement, and (viii) eighth, to such Defaulting Bank or as otherwise directed by a court of competent jurisdiction, provided, with respect to this clause (viii), that if such payment is (x) a prepayment of the principal amount of any Loans or Reimbursement Obligations which a Defaulting Bank has funded its participation obligations and (y) made at a time when the conditions set forth in Section 5.01 are satisfied, such payment shall be applied solely to prepay the Loans of, and Reimbursement Obligations owed to, all non-Defaulting Banks pro rata prior to being applied to the prepayment of any Loans, or Reimbursement Obligations owed to, any Defaulting Bank. In the event that the Agent, the Borrower and the Issuing Bank each agrees that a Defaulting Bank has adequately remedied all matters that caused such Bank to be a Defaulting Bank, then the Bank Percentages of the L/C Obligations of the Banks shall be readjusted to reflect the inclusion of such Bank's Commitment and on such date such Bank shall purchase at par such of the Standby Loans of the other Banks as the Agent shall determine may be necessary in order for such Bank to hold such Loans in accordance with its Bank Percentage.View More
