(I) ANY LACK OF
VALIDITY OR ENFORCEABILITY OF ANY LETTER OF CREDIT OR THIS AGREEMENT, OR ANY
TERM OR PROVISION THEREIN; (II) ANY DRAFT OR OTHER DOCUMENT PRESENTED UNDER A
LETTER OF CREDIT PROVING TO BE FORGED, FRAUDULENT, INVALID OR INSUFFICIENT IN
ANY RESPECT OR ANY STATEMENT THEREIN BEING UNTRUE OR INACCURATE IN ANY RESPECT;
(III) PAYMENT BY THE ISSUING BANK UNDER A LETTER OF CREDIT AGAINST PRESENTATION
OF A DRAFT OR OTHER DOCUMENT THAT DOES NOT SUBSTANTIALLY COMPLY WITH THE TERMS
OF SUCH LETTER OF CREDIT; (IV) ANY OTHER EVENT OR CIRCUMSTANCE WHATSOEVER,
WHETHER OR NOT SIMILAR TO ANY OF THE FOREGOING, THAT MIGHT, BUT FOR THE
PROVISIONS OF THIS SECTION 2.18, CONSTITUTE A LEGAL OR EQUITABLE DISCHARGE OF,
OR PROVIDE A RIGHT OF SETOFF AGAINST, THE OBLIGATIONS OF BORROWER HEREUNDER;
(V) THE FACT THAT A DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING; AND (VI) ANY ADVERSE CHANGE IN THE BUSINESS, ASSETS, PROPERTY,
RESULTS OF OPERATIONS, PROSPECTS OR CONDITION, FINANCIAL OR OTHERWISE, OF
BORROWER AND ITS SUBSIDIARIES.
NONE OF THE AGENTS, THE LENDERS, THE ISSUING
BANK OR ANY OF THEIR AFFILIATES, SHALL HAVE ANY LIABILITY OR RESPONSIBILITY BY
REASON OF OR IN CONNECTION WITH THE ISSUANCE OR TRANSFER OF ANY LETTER OF CREDIT
OR ANY PAYMENT OR FAILURE TO MAKE ANY PAYMENT THEREUNDER (IRRESPECTIVE OF ANY OF
THE CIRCUMSTANCES REFERRED TO IN THE PRECEDING SENTENCE), OR ANY ERROR,
OMISSION, INTERRUPTION, LOSS OR DELAY IN TRANSMISSION OR DELIVERY OF ANY DRAFT,
NOTICE OR OTHER COMMUNICATION UNDER OR RELATING TO ANY LETTER OF CREDIT
(INCLUDING ANY DOCUMENT REQUIRED TO MAKE A DRAWING THEREUNDER), ANY ERROR IN
INTERPRETATION OF TECHNICAL TERMS OR ANY CONSEQUENCE ARISING FROM CAUSES
46
BEYOND THE CONTROL OF THE ISSUING BANK; PROVIDED THAT THE FOREGOING SHALL NOT BE
CONSTRUED TO EXCUSE THE ISSUING BANK FROM LIABILITY TO BORROWER TO THE EXTENT OF
ANY DIRECT DAMAGES (AS OPPOSED TO CONSEQUENTIAL DAMAGES, CLAIMS IN RESPECT OF
WHICH ARE HEREBY WAIVED BY BORROWER TO THE EXTENT PERMITTED BY APPLICABLE LAW)
SUFFERED BY BORROWER THAT ARE CAUSED BY THE ISSUING BANK'S FAILURE TO EXERCISE
CARE WHEN DETERMINING WHETHER DRAFTS AND OTHER DOCUMENTS PRESENTED UNDER A
LETTER OF CREDIT COMPLY WITH THE TERMS THEREOF.
THE PARTIES HERETO EXPRESSLY
AGREE THAT, IN THE ABSENCE OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART
OF THE ISSUING BANK (AS FINALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION), THE ISSUING BANK SHALL BE DEEMED TO HAVE EXERCISED CARE IN EACH
SUCH DETERMINATION.
IN FURTHERANCE OF THE FOREGOING AND WITHOUT LIMITING THE
GENERALITY THEREOF, THE PARTIES AGREE THAT, WITH RESPECT TO DOCUMENTS PRESENTED
WHICH APPEAR ON THEIR FACE TO BE IN SUBSTANTIAL COMPLIANCE WITH THE TERMS OF A
LETTER OF CREDIT, THE ISSUING BANK MAY, IN ITS SOLE DISCRETION, EITHER ACCEPT
AND MAKE PAYMENT UPON SUCH DOCUMENTS WITHOUT RESPONSIBILITY FOR FURTHER
INVESTIGATION, REGARDLESS OF ANY NOTICE OR INFORMATION TO THE CONTRARY, OR
REFUSE TO ACCEPT AND MAKE PAYMENT UPON SUCH DOCUMENTS IF SUCH DOCUMENTS ARE NOT
IN STRICT COMPLIANCE WITH THE TERMS