Common use of Account Warranties and Covenants Clause in Contracts

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 rendered 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 Account 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 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; 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 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 and the amount of all Accounts set forth on any Collateral report or invoice delivered to Senior Agent are actually owing to Debtor and not contingent. No discounts, credits or allowances will be issued, granted or allowed by Debtor to customers and no returns will be accepted without Senior Agent’s prior written consent; provided, that until Senior Agent notifies Debtor to the contrary, Debtor may presume consent. No payment shall be made on any Account except payment immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will 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 Debtor that may impair the validity or collectibility of an Account (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, 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 Senior 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 and such Account is not evidenced by a judgment, Instrument or chattel paperrendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account other than any credit balances in the ordinary course of businessAccount; 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 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 ); Borrower is the ordinary course lawful owner of business; 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 CreditorsLenders; the Account is free of all security interests, liens and encumbrances other than those in favour favor of Senior Agent, Agent and Permitted Encumbrances on behalf of Agents, Senior itself and Lenders, Subordinated Agent and Subordinated Creditors, and the Account is due and payable in accordance with its terms 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 amount lockboxes established in accordance with subsection 4.25 and (b) use its best efforts to assure prompt payment of --------------- all Accounts set forth on any Collateral report amounts due or invoice delivered to Senior become due under the Accounts. Without Agent's prior written consent, which Borrower may presume until Agent are actually owing notifies Borrower to Debtor and not contingent. No the contrary, no discounts, credits or allowances in excess of $250,000 will be issued, granted or allowed by Debtor Borrower to customers and no returns will be accepted without Senior Agent’s prior written consent; provided, that until Senior Agent notifies Debtor to the contrary, Debtor may presume consentaccepted. No payment shall be made on any Account except payment immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor Borrower will 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 Debtor that may Borrower which has a reasonable likelihood to impair the validity or collectibility of an Account (it is understood and agreed that notification by delivery in excess of the Borrowing Base Certificate (as defined in the Loan Agreement) shall be considered delivery of “prompt” notice)$250,000. 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, Debtor Borrower 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: other than an individual account equal to or less than $250,000 (a) cause all invoices evidencing provided the aggregate amount of such individual 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 paperdoes 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 of Borrower (excluding Accounts of Borrower and US Obligors in an aggregate amount not exceeding US$100,000 or the Equivalent Amount thereof 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 and such Account is not evidenced by a judgment, Instrument or chattel paperrendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account other than any credit balances in the ordinary course of businessAccount; 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 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 ); Borrower is the ordinary course lawful owner of business; 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 CreditorsLenders; the Account is free of all security interests, liens and encumbrances Liens other than those in favour of Senior Agent, on behalf of Agents, Senior itself and Lenders, Subordinated Agent and Subordinated CreditorsUS Facility Agent, on behalf of itself and the US Facility Lenders, and Prior Claims and the Account is due and payable in accordance with its terms 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 amount lockboxes established in accordance with SUBSECTION 4.25 and (b) use its diligent efforts to assure prompt payment of all Accounts set forth on any Collateral report amounts due or invoice delivered to Senior Agent are actually owing to Debtor and not contingentbecome due under the Accounts. No discounts, credits or allowances will be issued, granted or allowed by Debtor Borrower to customers and no returns will be accepted without Senior Agent’s 's prior written consent; providedPROVIDED, that HOWEVER, until Senior Agent notifies Debtor Borrower to the contrary, Debtor Borrower may presume consent. No payment shall be made on any Account except payment Borrower will immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will 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 Debtor Borrower that may impair the validity or collectibility of an Account (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)Account. 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 DefaultDefault and upon notice from Agent to Borrower, Debtor Borrower 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: Loan and Security Agreement (Beacon Roofing Supply Inc)

Account Warranties and Covenants. Except as otherwise disclosed to Senior 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 and such Account is not evidenced by a judgment, Instrument or chattel paperrendered; there are no rights of cancellation, setoffs, offsets or counterclaims, genuine or otherwise, against the Account other than any credit balances in the ordinary course of businessAccount; 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 xxxx and hold transaction; no agreement exists permitting any return, deduction or discount (other than the discount stated on the invoice) and deductions for allowances in accordance with market expansion agreements in ); either GTM or GTG are the ordinary course lawful owner of business; 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 CreditorsLender; the Account is free of all security interests, liens liens, claims and encumbrances other than those in favour favor of Senior Agent, on behalf of Agents, Senior Lenders, Subordinated Agent and Subordinated CreditorsLender, and the Account is due and payable in accordance with its terms and the amount of all Accounts set forth on any Collateral report or invoice delivered to Senior Agent are actually owing to Debtor and not contingentterms. No discounts, credits or allowances will be issued, granted or allowed by Debtor either Borrower to customers account debtors and no returns will be accepted without Senior Agent’s Lender's prior written consent; providedprovided however, that until Senior Agent the earlier of (i) the occurrence of a Default or Event of Default or (ii) such time as Lender notifies Debtor Borrowers to the contrary, Debtor Borrowers may presume consent. No payment shall be made on any Account except payment Borrowers will immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will promptly notify Senior 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 Debtor either or both Borrowers that may impair the validity or collectibility of an Account (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)Account. Senior 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, Debtor shall notneither Borrower may, without the prior consent of Senior 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. 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: Loan and Security Agreement (Greenman Technologies Inc)

Account Warranties and Covenants. Except as otherwise disclosed to Senior 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 and such Account is not evidenced by a judgment, Instrument or chattel paper; rendered: there are no rights of cancellation. setoffs, offsets or counterclaims, genuine or otherwise, against the Account other than any credit balances in the ordinary course of business; Account: 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 xxxx and bill xxx hold transaction; no agreement exists permitting any return, deduction or discount (other than the discount stated on the invoice) and deductions for allowances in accordance with market expansion agreements in ); Borrower is the ordinary course lawful owner of business; 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 CreditorsLender; the Account is free of all security interests. liens, liens claims and encumbrances other than those in favour favor of Senior Agent, on behalf of Agents, Senior Lenders, Subordinated Agent and Subordinated CreditorsLender, and the Account is due and payable in accordance with its terms 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 amount lockboxes established in accordance with subsection 4.4 and (b) use its best efforts to assure prompt payment of all Accounts set forth on any Collateral report amounts due or invoice delivered to Senior Agent are actually owing to Debtor and not contingentbecome due under the Accounts. No discounts, credits or allowances will be issued, granted or allowed by Debtor Borrower to customers account debtors and no returns will be accepted without Senior Agent’s Lender's prior written consent; provided: PROVIDED HOWEVER, that until Senior Agent the earlier of (i) the occurrence of a Default or Event of Default or (ii) such time as Lender notifies Debtor Borrower to the contrary, Debtor . Borrower may presume consent. No payment shall be made on any Account except payment Borrower will immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will promptly notify Senior 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 Debtor Borrower that may impair the validity or collectibility of an Account (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)Account. Senior 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, Debtor Borrower shall not, without the prior consent of Senior 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. 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: Loan and Security Agreement (Hmi Industries 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 rendered and such Account is not evidenced by a judgment, Instrument or chattel paperrendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account other than any credit balances in the ordinary course of businessAccount; 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 xxxx and bill xxx 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 ); Borrower is the ordinary course lawful owner of business; 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 favour favor 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 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 amount lockboxes established in accordance with subsection 4.26 and (b) use its best efforts to assure prompt payment of all Accounts set forth on any Collateral report amounts due or invoice delivered to Senior Agent are actually owing to Debtor and not contingentbecome due under the Accounts. No discounts, credits or allowances will be issued, granted or allowed by Debtor Borrower to customers and no returns will be accepted without Senior Agent’s 's prior written consent; provided, that until Senior Agent notifies Debtor Borrower to the contrary, Debtor Borrower may presume consent. No payment shall be made on any Account except payment Borrower will immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will promptly notify Senior Agent in the event that a customer alleges any dispute or claim with respect to an Account in an amount in excess of $10,000.00 or of any other circumstances known to Debtor Borrower that may impair the validity or collectibility of such an Account (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)Account. 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, Debtor Borrower 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: Loan and Security Agreement (Rankin Automotive Group Inc)

Account Warranties and Covenants. Except as otherwise disclosed to Senior 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 and such Account is not evidenced by a judgment, Instrument or chattel paperrendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account other than any credit balances in the ordinary course of businessAccount; 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 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 applicable Obligor is the lawful owner of business; 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 CreditorsLenders; the Account is free of all security interests, liens and encumbrances other than those in favour favor of Senior Agent, on behalf of Agents, Senior itself and Lenders, Subordinated Agent and Subordinated Creditors, and the Account is due and payable in accordance with its terms terms. 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 amount lockboxes established in accordance with subsection 4.25 and (b) use its diligent efforts to assure prompt payment of all Accounts set forth on any Collateral report amounts due or invoice delivered to Senior Agent are actually owing to Debtor and not contingentbecome due under the Accounts. No discounts, credits or allowances will be issued, granted or allowed by Debtor any Obligor to customers and no returns will be accepted without Senior Agent’s prior written consent; provided, that however, until Senior Agent notifies Debtor Borrower to the contrary, Debtor Obligors may presume consent. No payment shall be made on any Account except payment Borrower will immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will 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 Debtor any Obligor that may impair the validity or collectibility of an Account (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)Account. 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 DefaultDefault and upon notice from Agent to Borrower, Debtor shall notno Obligor shall, 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: Loan and Security Agreement (Beacon Roofing Supply Inc)

Account Warranties and Covenants. Except as otherwise disclosed to Senior 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 and such Account is not evidenced by a judgment, Instrument or chattel paperrendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account other than any credit balances in the ordinary course of businessAccount; 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 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 applicable Obligor is the lawful owner of business; 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 CreditorsLenders; the Account is free of all security interests, liens and encumbrances other than those in favour favor of Senior Agent, on behalf of Agents, Senior itself and Lenders, Subordinated Agent and Subordinated Creditors, and the Account is due and payable in accordance with its terms terms. 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 amount lockboxes established in accordance with SUBSECTION 4.25 and (b) use its diligent efforts to assure prompt payment of all Accounts set forth on any Collateral report amounts due or invoice delivered to Senior Agent are actually owing to Debtor and not contingentbecome due under the Accounts. No discounts, credits or allowances will be issued, granted or allowed by Debtor any Obligor to customers and no returns will be accepted without Senior Agent’s 's prior written consent; providedPROVIDED, that HOWEVER, until Senior Agent notifies Debtor Borrower to the contrary, Debtor Obligors may presume consent. No payment shall be made on any Account except payment Borrower will immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will 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 Debtor any Obligor that may impair the validity or collectibility of an Account (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)Account. 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 DefaultDefault and upon notice from Agent to Borrower, Debtor shall notno Obligor shall, 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: Loan and Security Agreement (Beacon Roofing Supply Inc)

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Account Warranties and Covenants. Except as otherwise disclosed to Senior 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 and such Account is not evidenced by a judgment, Instrument or chattel paperrendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account other than any credit balances in the ordinary course of businessAccount; 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 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 ); Borrower is the ordinary course lawful owner of business; 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 CreditorsLenders; the Account is free of all security interests, liens and encumbrances other than those in favour favor of Senior Agent, Agent and Permitted Encumbrances on behalf of Agents, Senior itself and Lenders, Subordinated Agent and Subordinated Creditors, and the Account is due and payable in accordance with its terms 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 amount lockboxes established in accordance with subsection 4.25 and (b) use its best efforts to assure prompt payment of all Accounts set forth on any Collateral report amounts due or invoice delivered to Senior become due under the Accounts. Without Agent's prior written consent, which Borrower may presume until Agent are actually owing notifies Borrower to Debtor and not contingent. No the contrary, no discounts, credits or allowances in excess of $250,000 will be issued, granted or allowed by Debtor Borrower to customers and no returns will be accepted without Senior Agent’s prior written consent; provided, that until Senior Agent notifies Debtor to the contrary, Debtor may presume consentaccepted. No payment shall be made on any Account except payment immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor Borrower will 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 Debtor that may Borrower which has a reasonable likelihood to impair the validity or collectibility of an Account (it is understood and agreed that notification by delivery in excess of the Borrowing Base Certificate (as defined in the Loan Agreement) shall be considered delivery of “prompt” notice)$250,000. 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, Debtor Borrower 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: other than an individual account equal to or less than $250,000 (a) cause all invoices evidencing provided the aggregate amount of such individual 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 paperdoes not exceed $1,000,000).

Appears in 1 contract

Samples: Loan and Security Agreement (Banctec Inc)

Account Warranties and Covenants. Except as otherwise disclosed With respect to Senior Agent the Accounts of the Borrowers scheduled, listed or referred to from time to time on any Aging Reports or Financial Statement, each Borrower warrants and represents to the Lenders that: (a) such Accounts are genuine, are in writingall respects what they purport to be, 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 and such Account is are not evidenced by a judgment; (b) such Accounts are assignable and a security interest may be granted therein and such Accounts are subject to the first and prior perfected Lien and security interest of the Lenders; (c) such Accounts represent undisputed, Instrument bona fide transactions completed in material compliance with the terms and provisions of the documents related thereto as delivered to the Lenders if so requested; (d) the Equipment or chattel paperInventory sold or leased, or the services rendered, which resulted in the creation of such Accounts have been delivered or rendered to the applicable Account Debtor; (e) the amounts shown on the Borrowers' books and records and all invoices and statements delivered to the Lenders, when and if so requested, with respect to such Accounts are actually and absolutely owing to the applicable Borrower and are not in any way contingent; (f) no payments have been made upon such Accounts; (g) there are no setoffsset-offs, offsets counterclaims or counterclaimsdisputes existing or, genuine to Borrowers' knowledge, asserted with respect to such Accounts and the Borrowers have not made any agreement with any applicable Account Debtor for any deduction or otherwisediscount from any such Account, against except discounts allowed by the Account other than any credit balances Borrowers in the ordinary course of businesstheir business for prompt payment; (h) to 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 knowledge of the Loan Agreement) Borrowers, there are no facts, events or a consignment, sale or return or a xxxx and hold transaction; no agreement exists permitting occurrences which in 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; 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 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 and the amount of all Accounts set forth on any Collateral report or invoice delivered to Senior Agent are actually owing to Debtor and not contingent. No discounts, credits or allowances will be issued, granted or allowed by Debtor to customers and no returns will be accepted without Senior Agent’s prior written consent; provided, that until Senior Agent notifies Debtor to the contrary, Debtor may presume consent. No payment shall be made on any Account except payment immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will 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 Debtor that may way impair the validity or collectibility the enforceability of an Account (it is understood such Accounts or tend to reduce the amounts payable under such Accounts as shown on the books and agreed that notification by delivery records of the Borrowing Base Certificate Borrowers and the invoices and statements delivered to the Lenders, when and if so requested, with respect thereto; (as defined in i) to the Loan Agreement) shall be considered delivery best knowledge of “prompt” notice). Senior Agent shall the Borrowers without independent inquiry, all of the applicable Account Debtors with respect to such Accounts have the rightcapacity to contract and are solvent; (j) such Accounts and the Equipment, at or Inventory sold or leased or the services rendered giving rise to said Accounts are not subject to any time or times hereafterlien, to verify the validitysecurity interest, amount claim, charge or any other matter relating to an Accountencumbrance, by mail, telephone or in person. After except for the occurrence first and prior perfected security interest of a Default or an Event the Lenders and except those of Default, Debtor shall not, without holders of 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: Permitted Liens; and (ak) 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 knowledge of Accounts and Payments. Debtor shall establish lockboxes and blocked accounts (collectivelythe Borrowers, “Blocked Accounts”) in Debtor’s name with such banks (“Collecting Banks”) as there are reasonably acceptable to Senior Agent (subject to irrevocable instructions acceptable to Senior Agent as hereinafter set forth) to no proceedings or actions 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 are threatened 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 pending 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 the applicable Account Debtors which might result in concert with any material adverse change in such Account 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's financial condition.

Appears in 1 contract

Samples: Loan and Security Agreement (Westell Technologies Inc)

Account Warranties and Covenants. Except as otherwise disclosed to Senior Agent in writing, as to each Account of Borrower (excluding Accounts of Borrower and US Obligors in an aggregate amount not exceeding US$200,000 or the Equivalent Amount thereof 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 and such Account is not evidenced by a judgment, Instrument or chattel paperrendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account other than any credit balances in the ordinary course of businessAccount; 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 xxxx bxxx 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 ); Borrower is the ordinary course lawful owner of business; 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 CreditorsLenders; the Account is free of all security interests, liens and encumbrances Liens other than those in favour of Senior Agent, on behalf of Agents, Senior itself and Lenders, Subordinated Agent and Subordinated CreditorsUS Facility Agent, on behalf of itself and the US Facility Lenders, and Prior Claims and the Account is due and payable in accordance with its terms 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 amount lockboxes established in accordance with subsection 4.25 and (b) use its diligent efforts to assure prompt payment of all Accounts set forth on any Collateral report amounts due or invoice delivered to Senior Agent are actually owing to Debtor and not contingentbecome due under the Accounts. No discounts, credits or allowances will be issued, granted or allowed by Debtor Borrower to customers and no returns will be accepted without Senior Agent’s prior written consent; provided, that however, until Senior Agent notifies Debtor Borrower to the contrary, Debtor Borrower may presume consent. No payment shall be made on any Account except payment Borrower will immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will 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 Debtor Borrower that may impair the validity or collectibility of an Account (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)Account. 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 DefaultDefault and upon notice from Agent to Borrower, Debtor Borrower 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: Loan and Security Agreement (Beacon Roofing Supply Inc)

Account Warranties and Covenants. Except With respect to the Accounts -------------------------------- scheduled, listed or referred to from time to time on any Financial Statement, Borrower warrants and represents to Lenders that as otherwise disclosed of the date of such Financial Statement: (a) such Accounts are genuine, are in all respects what they purport to Senior Agent in writingbe, 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 and such Account is are not evidenced by a judgment; (b) subject to Permitted Liens, Instrument such Accounts are assignable and a security interest may be granted therein and such Accounts are subject to the first and prior perfected Lien and security interest of Lenders; (c) such Accounts represent bona fide transactions not subject to material disputes and completed in material compliance with the terms and provisions of the documents related thereto as delivered to Lenders if so requested; (d) the Equipment or chattel paperInventory sold or leased, or the services rendered, which resulted in the creation of such Accounts have been delivered or rendered to the applicable Account Debtor; (e) with the exception of disputes of a nonmaterial nature, the amounts shown on the books and records and all invoices and statements delivered to Lenders, when and if so requested, with respect to such Accounts are actually and absolutely owing and are not contingent; (f) subject to progress xxxxxxxx in the ordinary course of business, no payments have been made upon such Accounts; (g) other than set-offs, counterclaims or disputes of a non-material nature, there are no setoffsset-offs, offsets counterclaims or counterclaimsdisputes existing or, genuine to Borrower's knowledge, asserted with respect to such Accounts and there is not any agreement with any applicable Account Debtor for any deduction or otherwisediscount from any such Account, against the Account other than any credit balances except discounts allowed 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 Agreementh) or a consignment, sale or return or a 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; 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 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 and the amount of all Accounts set forth on any Collateral report or invoice delivered to Senior Agent are actually owing to Debtor and not contingent. No discounts, credits or allowances will be issued, granted or allowed by Debtor to customers and no returns will be accepted without Senior Agent’s prior written consent; provided, that until Senior Agent notifies Debtor to the contraryknowledge of Borrower, Debtor may presume consent. No payment shall be made on there are no facts, events or occurrences which in any Account except payment immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will 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 Debtor that may way impair the validity or collectibility the enforceability of an Account such Accounts or tend to reduce the amounts payable under such Accounts as shown on Borrower's Books or the books and records of its Subsidiaries and the invoices and statements delivered to Lenders, when and if so requested, with respect thereto; (it is understood and agreed that notification by delivery i) to the best knowledge of Borrower without independent inquiry, all of the Borrowing Base Certificate applicable Account Debtors with respect to such Accounts have the capacity to contract and are solvent; (as defined j) such Accounts and the Equipment, or Inventory sold or leased or the services rendered giving rise to said Accounts are not subject to any lien, security interest, claim, charge or any other encumbrance, except for the first and prior perfected security interest of Lenders and except those of holders of the Permitted Liens; and (k) to the knowledge of Borrower, there are no proceedings or actions which are threatened or pending against any of the applicable Account Debtors which might result in the Loan Agreement) shall be considered delivery of “prompt” notice)any Material Adverse Effect in such Account Debtor's financial condition. Senior Agent shall have the right, at any time or all times hereafter, to verify the validity, amount or any other matter relating to an Account, by mail, telephone or in person. After after the occurrence of a Default or an Event of Default, 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 DefaultDefault and otherwise upon three (3) Business Day's prior notice to Borrower on a reasonable basis, Debtor shall so notify account debtorsduring Borrower's usual business hours, parties to such contracts inspect and obligors in respect of instruments examine and chattel paperto check the Collateral as to quality, quantity, value, and condition.

Appears in 1 contract

Samples: Loan and Security Agreement (Material Sciences Corp)

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 rendered and such Account is not evidenced by a judgment, Instrument or chattel paperrendered; there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account other than any credit balances in the ordinary course of businessAccount; 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 xxxx and bill xxx 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 ); Borrower is the ordinary course lawful owner of business; 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 favour favor 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 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 amount lockboxes established in accordance with subsection 4.26 and (b) use its best efforts to assure prompt payment of all Accounts set forth on any Collateral report amounts due or invoice delivered to Senior Agent are actually owing to Debtor and not contingentbecome due under the Accounts. No discounts, credits or allowances will be issued, granted or allowed by Debtor Borrower to customers and no returns will be accepted without Senior Agent’s 's prior written consent; provided, that until Senior Agent notifies Debtor Borrower to the contrary, Debtor Borrower may presume consent. No payment shall be made on any Account except payment Borrower will immediately delivered to the applicable Blocked Account or to Senior Agent. Debtor will 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 Debtor Borrower that may impair the validity or collectibility of an Account (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)Account. 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, Debtor Borrower 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: Loan and Security Agreement (Skechers Usa Inc)

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