Common use of Account Warranties and Covenants Clause in Contracts

Account Warranties and Covenants. Except as otherwise disclosed to Agent in writing, as to each Account that, at the time of its creation, the Account is a valid, bona fide account, representing an undisputed indebtedness incurred by the named account debtor for goods actually sold and delivered or for services completely rendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account; the Account does not represent a sale to an Affiliate or a consignment, sale or return or a bill xxx hold transaction; no agreement exists permitting any deduction or discount (other than the discount stated on the invoice); Borrower is the lawful owner of the Account and has the right to assign the same to Agent, for the benefit of Lenders; the Account is free of all security interests, liens and encumbrances other than those in favor of Agent, on behalf of Lenders, and the Account is due and payable in accordance with its terms. Borrower shall, at its own expense: (a) cause all invoices evidencing Accounts and all copies thereof to bear a notice that such invoices are payable to the lockboxes established in accordance with subsection 4.26 and (b) use its best efforts to assure prompt payment of all amounts due or to become due under the Accounts. No credits or allowances will be issued, granted or allowed by Borrower to customers and no returns will be accepted without Agent's prior written consent; provided, that until Agent notifies Borrower to the contrary, Borrower may presume consent. Borrower will immediately notify Agent in the event that a customer alleges any dispute or claim with respect to an Account or of any other circumstances known to Borrower that may impair the validity or collectibility of an Account. Agent shall have the right, at any time or times hereafter, to verify the validity, amount or any other matter relating to an Account, by mail, telephone or in person. After the occurrence of a Default or an Event of Default, Borrower shall not, without the prior consent of Agent, adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any customer or obligor thereof, or allow any credit or discount thereon.

Appears in 1 contract

Samples: Loan and Security Agreement (Skechers Usa Inc)

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Account Warranties and Covenants. Except as otherwise disclosed to Agent in writing, as to each Account (excluding Accounts in an aggregate amount not exceeding $100,000 at any time) that, at the time of its creation, the Account is a valid, bona fide account, representing an undisputed indebtedness incurred by the named account debtor for goods actually sold and delivered or for services completely rendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account; the Account does not represent a sale to an Affiliate or a consignment, sale or return or a bill xxx xxxx and hold transaction; no agreement exists permitting any deduction or discount (other than the discount stated on the invoice); Borrower the applicable Obligor is the lawful owner of the Account and has the right to assign the same to Agent, for the benefit of Agent and Lenders; the Account is free of all security interests, liens and encumbrances other than those in favor of Agent, on behalf of itself and Lenders, and the Account is due and payable in accordance with its terms. Borrower Each Obligor shall, at its own expense: (a) cause all invoices evidencing Accounts and all copies thereof to bear a notice that such invoices are payable to the lockboxes established in accordance with subsection 4.26 SUBSECTION 4.25 and (b) use its best diligent efforts to assure prompt payment of all amounts due or to become due under the Accounts. No discounts, credits or allowances will be issued, granted or allowed by Borrower any Obligor to customers and no returns will be accepted without Agent's prior written consent; providedPROVIDED, that HOWEVER, until Agent notifies Borrower to the contrary, Borrower Obligors may presume consent. Borrower will immediately notify Agent in the event that a customer alleges any dispute or claim with respect to an Account or of any other circumstances known to Borrower any Obligor that may impair the validity or collectibility of an Account. Agent shall have the right, at any time or times hereafter, to verify the validity, amount or any other matter relating to an Account, by mail, telephone or in person. After the occurrence of a Default or an Event of DefaultDefault and upon notice from Agent to Borrower, Borrower shall notno Obligor shall, without the prior consent of Agent, adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any customer or obligor thereof, or allow any credit or discount thereon.

Appears in 1 contract

Samples: Loan and Security Agreement (Beacon Roofing Supply Inc)

Account Warranties and Covenants. Except as otherwise disclosed to Agent in writing, as to each Account (excluding Accounts in an aggregate amount not exceeding $200,000 at any time) that, at the time of its creation, the Account is a valid, bona fide account, representing an undisputed indebtedness incurred by the named account debtor for goods actually sold and delivered or for services completely rendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account; the Account does not represent a sale to an Affiliate or a consignment, sale or return or a bill xxx xxxx and hold transaction; no agreement exists permitting any deduction or discount (other than the discount stated on the invoice); Borrower the applicable Obligor is the lawful owner of the Account and has the right to assign the same to Agent, for the benefit of Agent and Lenders; the Account is free of all security interests, liens and encumbrances other than those in favor of Agent, on behalf of itself and Lenders, and the Account is due and payable in accordance with its terms. Borrower Each Obligor shall, at its own expense: (a) cause all invoices evidencing Accounts and all copies thereof to bear a notice that such invoices are payable to the lockboxes established in accordance with subsection 4.26 4.25 and (b) use its best diligent efforts to assure prompt payment of all amounts due or to become due under the Accounts. No discounts, credits or allowances will be issued, granted or allowed by Borrower any Obligor to customers and no returns will be accepted without Agent's ’s prior written consent; provided, that however, until Agent notifies Borrower to the contrary, Borrower Obligors may presume consent. Borrower will immediately notify Agent in the event that a customer alleges any dispute or claim with respect to an Account or of any other circumstances known to Borrower any Obligor that may impair the validity or collectibility of an Account. Agent shall have the right, at any time or times hereafter, to verify the validity, amount or any other matter relating to an Account, by mail, telephone or in person. After the occurrence of a Default or an Event of DefaultDefault and upon notice from Agent to Borrower, Borrower shall notno Obligor shall, without the prior consent of Agent, adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any customer or obligor thereof, or allow any credit or discount thereon.

Appears in 1 contract

Samples: Loan and Security Agreement (Beacon Roofing Supply Inc)

Account Warranties and Covenants. Except as otherwise disclosed to Agent in writing, as to each Account that, at the time of its creation, to the best of Borrower's knowledge, the Account is a valid, bona fide account, representing an undisputed indebtedness incurred by the named account debtor for goods actually sold and delivered or for services completely rendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account; the Account does not represent a sale to an Affiliate or a consignment, sale or return or a bill xxx xxxx and hold transaction; no agreement exists permitting any deduction or discount (other than the discount stated on the invoice); Borrower is the lawful owner of the Account and has the right to assign the same to Agent, for the benefit of Agent and Lenders; the Account is free of all security interests, liens and encumbrances other than those in favor of Agent, Agent and Permitted Encumbrances on behalf of itself and Lenders, and the Account is due and payable in accordance with its terms. Borrower shall, at its own expense: (a) cause all invoices evidencing Accounts and all copies thereof to bear a notice that such invoices are payable to the lockboxes established in accordance with subsection 4.26 4.25 and (b) use its best efforts to assure prompt payment of all amounts due or to become due under the Accounts. No Without Agent's prior written consent, which Borrower may presume until Agent notifies Borrower to the contrary, no discounts, credits or allowances in excess of $250,000 will be issued, granted or allowed by Borrower to customers and no returns will be accepted without Agent's prior written consent; provided, that until Agent notifies Borrower to the contrary, Borrower may presume consentaccepted. Borrower will immediately promptly notify Agent in the event that a customer alleges any dispute or claim with respect to an Account or of any other circumstances known to Borrower that may which has a reasonable likelihood to impair the validity or collectibility of an AccountAccount in excess of $250,000. Agent shall have the right, at any time or times hereafter, to verify the validity, amount or any other matter relating to an Account, by mail, telephone or in person. After the occurrence of a Default or an Event of Default, Borrower shall not, without the prior consent of Agent, adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any customer or obligor thereof, or allow any credit or discount thereon, other than an individual account equal to or less than $250,000 (provided the aggregate amount of such individual Accounts does not exceed $1,000,000).

Appears in 1 contract

Samples: Loan and Security Agreement (Banctec Inc)

Account Warranties and Covenants. Except as otherwise disclosed to Senior Agent in writing, as to each Account that, at the time of its creation, the Account is a valid, bona fide account, representing an undisputed indebtedness incurred by the named account debtor for goods actually sold and delivered or for services completely renderedrendered and such Account is not evidenced by a judgment, Instrument or chattel paper; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the AccountAccount other than any credit balances in the ordinary course of business; the Account does not represent a sale to an Affiliate (other than for sales in the ordinary course of business to employees or directors in accordance with Section 7.8 of the Loan Agreement) or a consignment, sale or return or a bill xxx xxxx and hold transaction; no agreement exists permitting any deduction or discount (other than the discount stated on the invoice)) and deductions for allowances in accordance with market expansion agreements in the ordinary course of business; Borrower is the lawful owner of Debtor lawfully owns the Account and has the right to assign the same to Senior Agent, for the benefit of Agents, Senior Lenders, Subordinated Agent and Subordinated Creditors; the Account is free of all security interests, liens and encumbrances other than those in favor favour of Senior Agent, on behalf of Agents, Senior Lenders, Subordinated Agent and Subordinated Creditors, and the Account is due and payable in accordance with its terms. Borrower shall, at its own expense: (a) cause all invoices evidencing Accounts terms and all copies thereof to bear a notice that such invoices are payable to the lockboxes established in accordance with subsection 4.26 and (b) use its best efforts to assure prompt payment amount of all amounts due Accounts set forth on any Collateral report or invoice delivered to become due under the AccountsSenior Agent are actually owing to Debtor and not contingent. No discounts, credits or allowances will be issued, granted or allowed by Borrower Debtor to customers and no returns will be accepted without Senior Agent's ’s prior written consent; provided, that until Senior Agent notifies Borrower Debtor to the contrary, Borrower Debtor may presume consent. Borrower No payment shall be made on any Account except payment immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will immediately promptly notify Senior Agent in the event that a customer alleges any dispute or claim with respect to an Account or of any other circumstances known to Borrower Debtor that may impair the validity or collectibility of an AccountAccount (it is understood and agreed that notification by delivery of the Borrowing Base Certificate (as defined in the Loan Agreement) shall be considered delivery of “prompt” notice). Senior Agent shall have the right, at any time or times hereafter, to verify the validity, amount or any other matter relating to an Account, by mail, telephone or in person. After the occurrence of a Default or an Event of Default, Borrower Debtor shall not, without the prior consent of Senior Agent, adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any customer or obligor thereof, or allow any credit or discount thereon. Debtor shall, at its own expense: (a) cause all invoices evidencing Accounts and all copies thereof to bear a notice that such invoices are payable to the lockboxes established in accordance with Section Collection of Accounts and Payments. Debtor shall establish lockboxes and blocked accounts (collectively, “Blocked Accounts”) in Debtor’s name with such banks (“Collecting Banks”) as are reasonably acceptable to Senior Agent (subject to irrevocable instructions acceptable to Senior Agent as hereinafter set forth) to which all account debtors shall directly remit all payments on Accounts and in which Debtor will immediately deposit all payments it otherwise directly receives for Inventory or other payments constituting proceeds of Collateral in the identical form in which such payment was made, whether by cash or cheque. The Collecting Banks shall acknowledge and agree, pursuant to an agreement substantially in the form of Exhibit A and with such changes which shall be satisfactory to the Agents, that all payments made to the Blocked Accounts are the sole and exclusive property of Senior Agent, on behalf of Agents, Senior Lenders, Subordinated Agent and Subordinated Creditors, and that the Collecting Banks have no right to setoff against the Blocked Accounts and that all such payments received will be promptly transferred to the Senior Agent’s Account. Debtor hereby agrees that all payments made to such Blocked Accounts or otherwise received by Senior Agent and whether on the Accounts or as proceeds of other Collateral or otherwise will be the sole and exclusive property of Senior Agent, on behalf of Agents, Senior Lenders, Subordinated Agent and Subordinated Creditors. Debtor shall irrevocably instruct each Collecting Bank to promptly transfer all payments or deposits to the Blocked Accounts into the Senior Agent’s Account. If Debtor, Loan Parties or any of their Affiliates, employees, agents or other Person acting for or in concert with Debtor, shall receive any monies, cheques, notes, drafts or any other payments relating to and/or proceeds of Accounts or other Collateral, Debtor or such Person shall hold such instrument or funds in trust for Senior Agent, on behalf of Agents, Senior Lenders, Subordinated Agent and Subordinated Creditors, and, immediately upon receipt thereof, shall remit the same or cause the same to be remitted, in kind, to the Blocked Accounts or to Senior Agent at its address set forth in the Subordination Agreement. For the purpose of calculating interest on the Secured Obligations, all proceeds received in the Agent’s Account shall be credited to the Secured Obligations on the Business Day of Senior Agent’s receipt of immediately available federal funds. and (b) use its best efforts to assure prompt payment of all amounts due or to become due under the Accounts. Senior Agent may at any time after a Default or Event of Default shall have occurred and be continuing, without prior notice to Debtor, notify account debtors, parties to all contracts (as defined in the PPSA and UCC) and obligors in respect of instruments and chattel paper, that the Accounts and the right, title and interest of Debtor in and under such contracts, instruments and chattel paper have been assigned to Senior Agent, for the benefit of the Agents and Senior Lenders, Subordinated Agent and Subordinated Creditors, and that payments shall be made directly to Senior Agent, for the benefit of the Agents, Senior Lenders, Subordinated Agent and Subordinated Creditors. Upon the request of Senior Agent, during the occurrence and continuation of an Event of Default, Debtor shall so notify account debtors, parties to such contracts and obligors in respect of instruments and chattel paper.

Appears in 1 contract

Samples: Security Agreement (Recoton Corp)

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Account Warranties and Covenants. Except as otherwise disclosed to Agent in writing, as As to each Account that, at the time of its creation, the Account is a valid, bona fide account, representing an undisputed indebtedness incurred by the named account debtor for goods actually sold and delivered or for services completely rendered; : there are no rights of cancellation. setoffs, offsets or counterclaims, genuine or otherwise, against the Account; : the Account does not represent a sale to an Affiliate or a consignment, sale or return or a bill xxx hold transaction; no agreement exists permitting any return, deduction or discount (other than the discount stated on the invoice); Borrower is the lawful owner of the Account and has the right to assign the same to Agent, for the benefit of LendersLender; the Account is free of all security interests. liens, liens claims and encumbrances other than those in favor of Agent, on behalf of LendersLender, and the Account is due and payable in accordance with its terms. Borrower shall, at its own expense: (a) cause all invoices evidencing Accounts and all copies thereof to bear a notice that such invoices are payable to the lockboxes established in accordance with subsection 4.26 4.4 and (b) use its best efforts to assure prompt payment of all amounts due or to become due under the Accounts. No credits or allowances will be issued, granted or allowed by Borrower to customers account debtors and no returns will be accepted without AgentLender's prior written consent; provided: PROVIDED HOWEVER, that until Agent the earlier of (i) the occurrence of a Default or Event of Default or (ii) such time as Lender notifies Borrower to the contrary, . Borrower may presume consent. Borrower will immediately notify Agent Lender in the event that a customer an account debtor alleges any dispute or claim in excess of $5,000 or in the aggregate amount in excess of $25,000 with respect to an Account except for Accounts with balances over 90 days as of March 31, 1998, or of any other circumstances known to Borrower that may impair the validity or collectibility of an Account. Agent Lender shall have the right, at any time or times hereafter, to verify the validity, amount or any other matter relating to an Account, by mail, telephone or in person. After the occurrence of a Default or an Event of Default, Borrower shall not, without the prior consent of AgentLender, adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any customer account debtor or obligor thereof, or allow any credit or discount thereon.

Appears in 1 contract

Samples: Loan and Security Agreement (Hmi Industries Inc)

Account Warranties and Covenants. Except as otherwise disclosed to Agent in writing, as As to each Account that, at the time of its creation, the Account is a valid, bona fide account, representing an undisputed indebtedness incurred by the named account debtor for goods actually sold and delivered or for services completely rendered; there are no rights of cancellation, setoffs, offsets or counterclaims, genuine or otherwise, against the Account; the Account does not represent a sale to an Affiliate or a consignment, sale or return or a bill xxx xxxx and hold transaction; no agreement exists permitting any return, deduction or discount (other than the discount stated on the invoice); Borrower is either GTM or GTG are the lawful owner of the Account and has the right to assign the same to Agent, for the benefit of LendersLender; the Account is free of all security interests, liens liens, claims and encumbrances other than those in favor of Agent, on behalf of LendersLender, and the Account is due and payable in accordance with its terms. Borrower shall, at its own expense: (a) cause all invoices evidencing Accounts and all copies thereof to bear a notice that such invoices are payable to the lockboxes established in accordance with subsection 4.26 and (b) use its best efforts to assure prompt payment of all amounts due or to become due under the Accounts. No credits or allowances will be issued, granted or allowed by either Borrower to customers account debtors and no returns will be accepted without AgentLender's prior written consent; providedprovided however, that until Agent the earlier of (i) the occurrence of a Default or Event of Default or (ii) such time as Lender notifies Borrower Borrowers to the contrary, Borrower Borrowers may presume consent. Borrower Borrowers will immediately notify Agent Lender in the event that a customer an account debtor alleges any dispute or claim with respect to an Account or of any other circumstances known to Borrower either or both Borrowers that may impair the validity or collectibility of an Account. Agent Lender shall have the right, at any time or times hereafter, to verify the validity, amount or any other matter relating to an Account, by mail, telephone or in person. After the occurrence of a Default or an Event of Default, neither Borrower shall notmay, without the prior consent of AgentLender, adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any customer account debtor or obligor thereof, or allow any credit or discount thereon.

Appears in 1 contract

Samples: Loan and Security Agreement (Greenman Technologies Inc)

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