Accounts and Account Collections. (a) Borrower shall notify Administrative Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s knowledge, would result in any Account no longer constituting an Eligible Account. Borrower hereby agrees not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Agent’s consent, except in the Ordinary Course of Business. So long as no Event of Default exists or has occurred and is continuing, Borrower may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances. (b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Agent or schedule thereof delivered to Administrative Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms. (c) Administrative Agent shall have the right at any time or times in Administrative Agent’s name or in the name of a nominee of Administrative Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Agent upon request the name and address of each Account Debtor of Borrower or any of its Subsidiaries. (d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i) (A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary to establish and maintain, at its sole expense, blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”), as Administrative Agent may specify, with such banks as are acceptable to Administrative Agent into which Borrower and its Subsidiaries shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) Borrower shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries is maintained, and by each bank where any other Deposit Account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries to execute and deliver, such agreements and documents as Administrative Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of Section 5.17, Borrower shall not establish, and shall cause each of its Subsidiaries not to establish, any Deposit Accounts not existing as of the Closing Date, unless Borrower or its Subsidiaries (as applicable) have complied in full with the provisions of this Section 6.1 with respect to such Deposit Accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations. (e) For purposes of calculating the amount of the Loans available to Borrower, payments made to a Blocked Account will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. (f) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or indemnification of such bank or Person.
Appears in 2 contracts
Samples: Credit Agreement (Collegiate Pacific Inc), Credit Agreement (Sport Supply Group, Inc.)
Accounts and Account Collections. (a) Borrower and each Borrowing Base Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Borrowing Base Guarantor of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Loan Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Loan Party’s knowledge, would result in any Account no longer constituting an Eligible Account. Borrower and each Borrowing Base Guarantor hereby agrees agree not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower and each Borrowing Base Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Collateral Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Collateral Agent and promptly reflected in the reporting of the Borrowing Base, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower or any of its SubsidiariesBorrowing Base Guarantor.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked deposit accounts (in either casecollectively, the “Blocked Accounts”), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower and its Subsidiaries Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral (other than proceeds of a Casualty Event or Asset Sales that do not require a permanent repayment under Loan Documents) in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Loan Parties. Borrower and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of . Except as permitted by Section 5.179.01(e)(iii), Borrower and Guarantors shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Original Closing Date, unless Borrower or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes of calculating the amount of the Loans available to Borrower, payments made to The Borrower and each Guarantor shall maintain a Blocked Account will be applied (conditional upon final collection) cash management system which is acceptable to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in (the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit “Cash Management System”). The Cash Management System shall contain, among other things, the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.following:
(fi) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating With respect to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Borrower and each Guarantor, the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of a notice (on “Activation Notice”) from the Collateral Agent (which Activation Notice (notwithstanding anything to the contrary in any agreement with such applicable bank) may be given, and at the request of the Required Lenders, shall be given, by Collateral Agent at any time following the occurrence and during the continuance of an Event of Default or at any time after daily Excess Availability for ten or more days (whether consecutive or non-consecutive) during any fiscal quarter is less than $50.0 million (and until such time as average daily Excess Availability is in excess of $50.0 million for a period of three (3) consecutive months following such fiscal quarter)), to forward daily all amounts in each Blocked Account to one Blocked Account designated as concentration account in the name of Borrower (the “Concentration Account”) at the bank that shall be designated as the Concentration Account bank for Borrower (the “Concentration Account Bank”), which, on the Original Closing Date, shall be account #0000000000 maintained by PNC Bank, National Association. The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in the Concentration Account to the account designated as collection account (the “Collection Account”) which shall be under the exclusive dominion and control of the Collateral Agent’s payments to or indemnification of such bank or Person.;
Appears in 2 contracts
Samples: Credit Agreement (General Cable Corp /De/), Credit Agreement (General Cable Corp /De/)
Accounts and Account Collections. (a) Borrower shall notify Administrative Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s knowledge, would result in any Account no longer constituting an Eligible Account. Borrower hereby agrees not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Agent’s consent, except in the Ordinary Course of Business. So long as no Event of Default exists or has occurred and is continuing, Borrower may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Agent or schedule thereof delivered to Administrative Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Agent shall have the right at any time or times in Administrative Agent’s name or in the name of a nominee of Administrative Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Agent upon request the name and address of each Account Debtor of Borrower or any of its Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”), as Administrative Agent may specify, with such banks as are acceptable to Administrative Agent into which Borrower and its Subsidiaries shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) Borrower shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries is maintained, and by each bank where any other Deposit Account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries to execute and deliver, such agreements and documents as Administrative Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of Section 5.17, Borrower shall not establish, and shall cause each of its Subsidiaries not to establish, any Deposit Accounts not existing as of the Closing Date, unless Borrower or its Subsidiaries (as applicable) have complied in full with the provisions of this Section 6.1 with respect to such Deposit Accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes of calculating the amount of the Loans available to Borrower, payments made to a Blocked Account will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.
(f) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or indemnification of such bank or Person.
Appears in 2 contracts
Samples: Credit Agreement (Collegiate Pacific Inc), Credit Agreement (Collegiate Pacific Inc)
Accounts and Account Collections. (a) Borrower and each Subsidiary Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Subsidiary Guarantor of any of their its material obligations to any material Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any material Account Debtor, or any material disputes with material Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Loan Party relating to the financial condition of any material Account Debtor and (iii) any event or circumstance which, to any Credit Loan Party’s knowledge, would result in any Account in excess of $250,000 no longer constituting an Eligible Account. Borrower and each Subsidiary Guarantor hereby agrees agree not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to the Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower and each Subsidiary Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative the Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, respects and (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower or any of its SubsidiariesSubsidiary Guarantor.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expenses blocked accounts or lockboxes and related blocked deposit accounts, which, on the Closing Date, shall consist of accounts set forth on Schedule 9.01(d) (in either each case, “Blocked Accounts”), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower and its Subsidiaries Subsidiary Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral (other than proceeds of a Casualty Event or Asset Sales that do not require a repayment under Loan Documents) in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Loan Parties. Borrower and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement (as defined in the Security Agreement) duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements. Except as permitted by Section 9.01(e)(iii), and (C) without limiting the provisions of Section 5.17, no Borrower or Guarantor shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Closing Date, unless Borrower or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes Borrower and each Guarantor shall maintain a cash management system which is acceptable to the Administrative Agent and the Collateral Agent (the “Cash Management System”). The Cash Management System shall contain, among other things, the following:
(i) With respect to the Blocked Accounts of calculating Borrower and such Guarantor as the amount Collateral Agent shall determine in its sole discretion, the applicable bank maintaining such Blocked Accounts shall agree from and after the receipt of a notice (an “Activation Notice”) from the Collateral Agent (which Activation Notice, as well as any similar notice provided pursuant to a Credit Card Receivables Control Agreement, may be given at any time a Cash Dominion Trigger Event shall have occurred and be continuing), pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in each Blocked Account to one Blocked Account designated as concentration account in the name of Borrower (the “Concentration Account”) at the bank that shall be designated as the Concentration Account bank for Borrower (the “Concentration Account Bank”) by notice to the Administrative Agent and the Collateral Agent. The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in the Concentration Account to the account designated as collection account (the “Collection Account”) which shall be under the exclusive dominion and control of the Loans available Collateral Agent;
(ii) With respect to Borrowerthe Blocked Accounts of such Guarantors as the Collateral Agent shall determine in its sole discretion, payments made the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of an Activation Notice from the Collateral Agent (which Activation Notice may be given by Collateral Agent at any time after the occurrence of a Cash Dominion Trigger Event), to a forward all amounts in each Blocked Account will be applied (conditional upon final collection) to the Obligations on applicable Concentration Account and Collection Account and to commence the Business Day process of receipt by Administrative Agent daily sweeps from such Blocked Account into the Concentration Account and Collection Account;
(iii) Any provision of immediately this Section 9.01 to the contrary notwithstanding, (A) Loan Parties may maintain payroll accounts and trust accounts that are not a part of the Cash Management Systems provided that no Loan Party shall accumulate or maintain cash in such accounts as of any date of determination in excess of checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements and (B) Loan Parties may maintain local cash accounts that are not a part of the Cash Management Systems which individually do not at any time contain available funds in the Payment Account provided excess of $10,000 and, together with all other such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time local cash accounts, do not exceed $100,000. In addition, Xxxxxxx & Xxxxxxx Wholesale, Inc. may maintain that certain account at Premier West Bank established prior to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent this Agreement in the Payment Account provided such payments or other funds connection a foreign vendor payment dispute and notice thereof are received holding cash in accordance with Administrative Agent’s usual and customary practices as in effect from time an amount not to time and with sufficient time to credit the Loan Account on such dayexceed $360,000, and if not, then on the next Business Dayplus accrued interest thereon.
(f) The Collateral Agent shall apply all funds received in the Concentration Account on a daily basis to the repayment (by transferring same to the account of or pursuant to direction of Administrative Agent) of (i) first, to reimbursable expenses of Agents then due and payable pursuant to the Loan Documents and Fees due and payable to the Agents and Lenders pursuant to the Loan Documents; (ii) second, to interest then due and payable on all Loans, (iii) third, Overadvances, (iv) fourth, to the principal balance of the Swingline Loan until the same has been repaid in full, (v) fifth, to the outstanding principal balance of Revolving Loans until the same has been paid in full, including accompanying accrued interest and charges under Sections 2.12, 2.13 and 2.15 (Borrower may elect which of any Eurodollar Borrowings is to be prepaid), (vi) sixth, to cash collateralize all LC Exposures plus any accrued and unpaid Fees with respect thereto (to be held and applied in accordance with Section 2.18(i) hereof), and (vii) last, to all other Obligations pro rata in accordance with the amounts that such Lender certifies is outstanding in each case without a reduction in the Commitments; all further funds received in the Collection Account shall, unless an Event of Default has occurred and is continuing, be transferred or applied by the Collateral Agent in accordance with the directions of Borrower or the respective other Loan Party. If an Event of Default has occurred and is continuing, the Collateral Agent shall not transfer or apply any such funds from the Collection Account in accordance with such directions unless the Administrative Agent and the Collateral Agent determine to release such funds to Borrower. Absent any such determination by the Administrative Agent and the Collateral Agent, all such funds in the Collection Account shall be transferred to the Cash Collateral Account to be applied to the Eurodollar Loans on the last day of the relevant Interest Period of such Eurodollar Loan or to the Obligations as they come due (whether at stated maturity, by acceleration or otherwise). If consented to by the Administrative Agent, the Collateral Agent and the Required Lenders, such funds in the Cash Collateral Account may be released to Borrower. So long as no Event of Default shall have occurred and be continuing, the Borrower may direct that prepayments of Revolving Loans required pursuant to this Section 9.01(f) with respect to any Eurodollar Borrowing be deposited into a Breakage Prepayment Account and applied to repay such Eurodollar Borrowing at the end of the applicable Interest Periods related thereto.
(g) Borrower and its directors, employees, agents, Subsidiaries agents and other Affiliates and Subsidiary Guarantors shall, acting as trustee for Administrative Collateral Agent, receive, as the property of Administrative Collateral Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Collateral Agent. In no event shall the same be commingled with Borrower’s own fundsfunds which are not subject to a Lien in favor of the Collateral Agent. Borrower agrees to pay or to reimburse Administrative Collateral Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Collateral Agent’s payments to or indemnification of such bank or Person.
Appears in 1 contract
Accounts and Account Collections. (a) Borrower NewPageCo and each Borrowing Base Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower NewPageCo or any of its Subsidiaries Borrowing Base Guarantor of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s knowledge, would result in any Account no longer constituting an Eligible Account, in each of the foregoing cases to the extent the outstanding amount of the Accounts affected thereby exceeds $1,000,000 in the aggregate. Borrower NewPageCo and each Borrowing Base Guarantor hereby agrees agree not to grant grant, or permit its Subsidiaries to grant, to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s consent, not to be unreasonably withheld or delayed, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower NewPageCo and its Subsidiaries and each Borrowing Base Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Collateral Agent pursuant to the terms of this Agreement or any applicable Security Collateral Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reflected in the reporting of the Borrowing Base or otherwise reported to Administrative Agent the Collateral Agent, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s name or in the name of a nominee of Administrative Collateral Agent, and may communicate directly with any Account Debtor, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower NewPageCo hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower NewPageCo or any of Borrowing Base Guarantor or its Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower NewPageCo shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked deposit accounts (in either each case, “Blocked Accounts”), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower NewPageCo and its Subsidiaries Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) Borrower manner and shall be identified and segregated from all other funds of the Credit Parties. NewPageCo and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower NewPageCo or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower NewPageCo shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements. Except as permitted by Section 9.1(e)(iii), NewPageCo and (C) without limiting the provisions of Section 5.17, Borrower Guarantors shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Closing Date, unless Borrower NewPageCo or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.1 with respect to such Deposit Accountsdeposit accounts. Borrower After the occurrence and during the continuance of a Cash Dominion Trigger Event NewPageCo agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes NewPageCo and each Guarantor shall maintain a cash management system which is acceptable to the Administrative Agent and the Collateral Agent (the “Cash Management System”). The Cash Management System shall contain, among other things, the following:
(i) With respect to the Blocked Accounts of calculating NewPageCo and such Guarantors as the amount of Collateral Agent shall determine in its sole discretion, the Loans available applicable bank maintaining such Blocked Accounts shall agree, pursuant to Borrowerthe applicable Deposit Account Control Agreement, payments made to a forward daily all amounts in each Blocked Account will to one Blocked Account designated as a concentration account in the name of NewPageCo (the “Concentration Account”) at the bank that shall be applied designated as the Concentration Account bank for NewPageCo (conditional upon final collection) to the Obligations “Concentration Account Bank”), which, on the Business Day of receipt Closing Date, shall be account #695210443 maintained by JPMorgan Chase Bank, N.A.; provided, that for the period from the Closing Date until six months after the Closing Date (or such longer period as extended by the Administrative Agent in its reasonable discretion but not to exceed twelve months after the Closing Date), it is agreed that amounts deposited in certain Blocked Accounts maintained by the Acquired Business at Bank of immediately available funds in the Payment Account provided America, N.A. shall be forwarded on a daily basis net of any disbursements made from such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account Blocked Accounts on such day. The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement from and if notafter the receipt of a notice (an “Activation Notice”) from the Collateral Agent (which Activation Notice may only be given after the occurrence and during the continuance of a Cash Dominion Trigger Event), then on to forward daily all amounts in the next Business Day. For Concentration Account to the purposes of calculating interest on account designated as collection account (the Obligations, such payments or other funds received “Collection Account”) which shall be deemed applied under the exclusive dominion and control of the Collateral Agent;
(conditional upon final collectionii) With respect to the Obligations one Blocked Accounts of such Guarantors as the Collateral Agent shall determine in its sole discretion, the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of an Activation Notice from the Collateral Agent (1which Activation Notice may only be given by Collateral Agent at any time after the occurrence and during the continuance of a Cash Dominion Trigger Event), to forward all amounts in each Blocked Account to the applicable Collection Account and to commence the process of daily sweeps from such Blocked Account into the Collection Account;
(iii) Business Day following Any provision of this Section 9.1 to the contrary notwithstanding, (A) Credit Parties may maintain payroll accounts and trust accounts that are not a part of the Cash Management Systems provided that no Credit Party shall accumulate or maintain cash in such accounts as of any date of receipt determination in excess of immediately available funds by Administrative Agent checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements and (B) Credit Parties main maintain local cash accounts that are not a part of the Cash Management Systems which in the Payment Account provided such payments or other aggregate do not at any time contain funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Dayexcess of $5,000,000.
(f) Borrower The Collateral Agent shall apply all funds received in the Collection Account on a daily basis to the repayment (by transferring same to the account of or pursuant to direction of Administrative Agent) of (i) first, fees and reimbursable expenses of Agents then due and payable; (ii) second, to interest then due and payable on all Loans, (iii) third, Overadvances, (iv) fourth, the Swing Line Loans, (v) fifth, Base Rate Loans, (vi) sixth, Eurodollar Rate Loans, together with all accrued and unpaid interest thereon (excluding Eurodollar Rate Loans (A) with respect to which the application of such payment would result in the payment of the principal prior to the last day of the relevant Interest Period and (B) which NewPageCo elects to continue pursuant to Section 2.8(b)), (vii) seventh, other amounts which are due (other than (A) obligations with respect to any purchasing card or similar program owed to any Lender, any Affiliate of any Lender, the Administrative Agent or the Collateral Agent and (B) Banking Services Obligations) and (ix) last, pro rata to Obligations with respect to any purchasing card or similar program owed to any Lender, any Affiliate of any Lender, the Administrative Agent or the Collateral Agent (not to exceed $3,000,000) and Banking Services Obligations, in each case without a reduction in the Revolving Commitments; all further funds received in any of the Collection Account shall, unless an Event of Default has occurred and is continuing, be transferred or applied by the Collateral Agent in accordance with the directions of NewPageCo or the respective other Credit Party. If an Event of Default has occurred and is continuing, the Collateral Agent shall not transfer or apply any such funds from the Collection Account in accordance with such directions unless the Administrative Agent and the Collateral Agent determine to release such funds to NewPageCo. Absent any such determination by the Administrative Agent and the Collateral Agent, all such funds in the Collection Account shall be transferred to a cash collateral account acceptable to the Collateral Agent to be applied to the Eurodollar Rate Loans on the last day of the relevant Interest Period of such Eurodollar Rate Loan or to the Obligations as they come due (whether at stated maturity, by acceleration or otherwise). If consented to by the Administrative Agent, the Collateral Agent and the Requisite Lenders, such funds in such cash collateral account may be released to NewPageCo.
(g) NewPageCo and its directors, employees, agents, Subsidiaries agents and other Affiliates and Borrowing Base Guarantors shall, acting as trustee for Administrative Collateral Agent, receive, as the property of Administrative Collateral Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Collateral Agent. In no event shall the same be commingled with BorrowerNewPageCo’s own funds. Borrower NewPageCo agrees to pay or to reimburse Administrative Collateral Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Collateral Agent’s payments to or indemnification of such bank or Person.
Appears in 1 contract
Samples: Revolving Credit and Guaranty Agreement (NewPage CORP)
Accounts and Account Collections. (a) Borrower Such Credit Party shall notify Administrative Agent promptly of: (i) any material delay in the performance by Borrower such Credit Party or any of its Subsidiaries of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s 's knowledge, would result in any Account no longer constituting an Eligible Account. Borrower Each Credit Party hereby agrees not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, any material credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Agent’s 's consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with past practices. So long as no Event of Default exists or has occurred and is continuing, Borrower any such Credit Party may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Agent or schedule thereof delivered to Administrative Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Agent shall have the right at any time or times times, upon prior notice to the Funds Administrator so long as no Default or Event of Default has occurred and is continuing, in Administrative Agent’s 's name or in the name of a nominee of Administrative Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise; provided, that so long as no Default or Event of Default has occurred and is continuing, Agent shall afford the Funds Administrator the opportunity to participate in any such discussions with Account Debtors. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower each Credit Party hereby agrees to provide Administrative Agent upon request the name and address of each Account Debtor of Borrower any Credit Party or any of its such Credit Party's Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, Each Credit Party (i)
(Aother than Foreign Subsidiaries) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary to establish and maintain, at its sole expense, blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”"BLOCKED ACCOUNTS"), as Administrative Agent may reasonably specify, with such banks as are reasonably acceptable to Administrative Agent into which Borrower such Credit Party and its Subsidiaries shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) Borrower . Each Credit Party shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower such Credit Party or any of its Subsidiaries is maintained, and by each bank where any other Deposit Account is from time to time maintained. Borrower Each Credit Party shall further execute and deliver, and shall cause each of its Subsidiaries to execute and deliver, such agreements and documents as Administrative Agent may reasonably require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without . Without limiting the provisions of Section 5.175.15, Borrower no Credit Party shall not establish, and no Credit Party (other than a Foreign Subsidiary) shall cause each or permit any of its Subsidiaries not to establish, any Deposit Accounts not existing as of the Closing Date, unless Borrower such Credit Party or its Subsidiaries (as applicable) have complied in full with the provisions of this Section 6.1 with respect to such Deposit Accounts. Borrower Each Credit Party agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations.
. The foregoing and anything contained in any Financing Document to the contrary notwithstanding, the Credit Parties shall not be required to deliver any such Deposit Account Control Agreements in respect of (ei) For any "Payroll Account" or "Payroll Tax Account" (in each case, as defined on the Bank Account Schedule to the Information Certificate) each maintained at Wachovia Bank; provided, that, the Credit Parties shall not, and shall not cause or permit any of their respective Subsidiaries to, deposit or maintain funds in such account other than funds deposited therein in the ordinary course of business for purposes of calculating funding current payroll liabilities, (ii) the amount "Benefit Accounts" (as defined on the Bank Account Schedule to the Information Certificate) and the "Pre-Tax Parking Account" (as defined on the Bank Account Schedule to the Information Certificate) maintained at Wachovia Bank, National Association; provided, that, in each case, the Credit Parties shall not, and shall not cause or permit any of their respective Subsidiaries to, deposit or maintain funds in such accounts other than funds deposited therein at the direction of such Credit Party's employees to be held therein for the benefit of the Loans available to Borroweremployees of such Credit Party and the Credit Parties will at no time deposit any of their own assets into such accounts and (iii) any other Restricted Account; provided, payments made to a Blocked Account will be applied (conditional upon final collection) to that the Obligations on the Business Day Credit Parties shall not, and shall not cause or permit any of receipt by Administrative Agent of immediately available their respective Subsidiaries to, deposit or maintain funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or Restricted Accounts other than funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent deposited therein in the Payment ordinary course of business for funding current liabilities. At no time shall any Credit Party or any of its Subsidiaries deposit, or permit or direct any Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.
(f) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts Debtor or any other payment relating Person (other than Agent) to deposit, funds directly into any account maintained by any Credit Party other than the "Depository Accounts," and/or proceeds the "Lockboxes" maintained at Bank of AccountsAmerica, Inventory or other Collateral which come into their possession or under their control N.A. and immediately upon receipt thereofWachovia Bank, shall deposit or cause the same to be deposited National Association (in each case, as defined in the Blocked AccountsInformation Certificate), or remit provided that VTP may continue to accept checks (to the same or cause extent such arrangements have been established prior to the same to be remitted, in kind, to Administrative Agent. In no event shall Closing Date) from sub-tenants under real property leases so long as (i) the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded aggregate amount of all checks received by any bank at which a Blocked Account is established or any other bank or Person involved VTP does not exceed $500,000 in the transfer aggregate per month and (ii) such checks are promptly deposited by VTP into the Depository Account maintained at Bank of funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or indemnification of such bank or Person.America, N.A.
Appears in 1 contract
Accounts and Account Collections. (a) Borrower Such Credit Party shall notify Administrative the Collateral Agent promptly of: (i) any material delay in the performance by Borrower such Credit Party or any of its Subsidiaries of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s knowledge, would result in any Account no longer constituting an Eligible AccountAccount (as such term is defined in the First Lien Credit Agreement). Borrower Each Credit Party hereby agrees not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, any material credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with past practices. So long as no Event of Default exists or has occurred and is continuing, Borrower any such Credit Party may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative the Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative the First Lien Agent or schedule thereof delivered to Administrative the First Lien Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative the First Lien Agent, as contractual representative for the Collateral Agent pursuant to the Second Lien Intercreditor Agreement (or, following the Discharge of all First Lien Debt, to the Collateral Agent), pursuant to the terms of the First Lien Debt Documents or this Agreement Agreement, as applicable, or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent the Agents in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative subject to the terms of the Second Lien Intercreditor Agreement, the Collateral Agent shall have the right at any time or times times, upon prior notice to the Funds Administrator so long as no Default or Event of Default has occurred and is continuing, in Administrative Collateral Agent’s name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise; provided, that so long as no Default or Event of Default has occurred and is continuing, Collateral Agent shall afford the Funds Administrator the opportunity to participate in any such discussions with Account Debtors. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower each Credit Party hereby agrees to provide Administrative the Collateral Agent upon request the name and address of each Account Debtor of Borrower any Credit Party or any of its such Credit Party’s Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary to establish and maintain, at its sole expense, blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”), as Administrative Agent may specify, with such banks as are acceptable to Administrative Agent into which Borrower and its Subsidiaries shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) Borrower shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries is maintained, and by each bank where any other Deposit Account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries to execute and deliver, such agreements and documents as Administrative Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of Section 5.17, Borrower shall not establish, and shall cause each of its Subsidiaries not to establish, any Deposit Accounts not existing as of the Closing Date, unless Borrower or its Subsidiaries (as applicable) have complied in full with the provisions of this Section 6.1 with respect to such Deposit Accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes of calculating the amount of the Loans available to Borrower, payments made to a Blocked Account will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.
(f) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or indemnification of such bank or Person.
Appears in 1 contract
Samples: Term Loan Credit Agreement (Comsys It Partners Inc)
Accounts and Account Collections. (a) Borrower shall notify Administrative Agent promptly of: (i) any material delay in the performance Upon request by Borrower or any of its Subsidiaries of any of their material obligations to any Account Debtor or the assertion of any material claimsAgent, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s knowledge, would result in any Account no longer constituting after an Eligible Account. Borrower hereby agrees not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Agent’s consent, except in the Ordinary Course of Business. So long as no Event of Default exists or has occurred and is continuing, Borrower may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Agent or schedule thereof delivered to Administrative Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Agent shall have the right at any time or times in Administrative Agent’s name or in the name of a nominee of Administrative Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Agent upon request the name and address of each Account Debtor of Borrower or any of its Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Domestic Subsidiary to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”"BLOCKED ACCOUNTS"), as Administrative Agent may specify, with such banks as are acceptable to Administrative Agent into which each Borrower and its Domestic Subsidiaries shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts (other than Accounts sold by AAR Receivables Corporation II pursuant to the Securitization Documents to the extent such Accounts have not been reconveyed to the applicable Borrower pursuant to Section 3.4 of the Purchase and Sale Agreement) or the Company Note and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner; PROVIDED, (B) HOWEVER, that any payments which constitute proceeds of property not included in the Collateral shall be excluded from the Blocked Accounts and the requirements of this Section. Each Borrower shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of such Borrower or any of its Domestic Subsidiaries is maintained, and by each bank where any other Deposit Account is from time to time maintained. Each Borrower shall further execute and deliver, and shall cause each of its Domestic Subsidiaries to execute and deliver, such agreements and documents as Administrative Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without . Without limiting the provisions of Section 5.175.13, after the occurrence and during the continuance of an Event of Default, no Borrower shall not establish, and each Borrower shall cause each of its Domestic Subsidiaries not to establish, any Deposit Accounts not existing as of the Closing Date, unless such Borrower or its Domestic Subsidiaries (as applicable) have complied in full with the provisions of this Section 6.1 with respect to such Deposit Accounts. Each Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations.
(eb) For purposes of calculating the amount of the Loans available to Borrower, payments made to a Blocked Account will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s 's usual and customary practices as in effect from time to time and with 52 sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s 's usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.
(fc) After an Event of Default has occurred and is continuing, each Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of AccountsAccounts (other than Accounts sold by AAR Receivables Corporation II pursuant to the Securitization Documents), Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with any Borrower’s 's own funds. Each Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Agent’s 's payments to or indemnification of such bank or Person.
(d) No Borrower or other Credit Party shall commingle any proceeds of any of its Accounts with the proceeds of any Account sold to AAR Receivables Corporation II (or any other single purpose Subsidiary formed for the purpose of facilitating a securitization), except temporary commingling as permitted by the Receivables Purchase Agreement, unless any such sold Account is subsequently reconveyed to a Borrower or other Credit Party pursuant to Section 3.4
Appears in 1 contract
Samples: Credit Agreement (Aar Corp)
Accounts and Account Collections. (a) Borrower and each Subsidiary Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Subsidiary Guarantor of any of their its material obligations to any material Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any material Account Debtor, or any material disputes with material Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Loan Party relating to the financial condition of any material Account Debtor and (iii) any event or circumstance which, to any Credit Loan Party’s knowledge, would result in any Account in excess of $250,000 no longer constituting an Eligible Account. Borrower and each Subsidiary Guarantor hereby agrees agree not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to the Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower and each Subsidiary Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative the Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, respects and (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile fax transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower or any of its SubsidiariesSubsidiary Guarantor.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expenses blocked accounts or lockboxes and related blocked deposit accounts, which, on the Closing Date, shall consist of accounts set forth on Schedule 9.01(d) (in either each case, “Blocked Accounts”), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower and its Subsidiaries Subsidiary Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral (other than proceeds of a Casualty Event or Asset Sales that do not require a repayment under Loan Documents) in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Loan Parties. Borrower and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement (as defined in the Security Agreement) duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements. Except as permitted by Section 9.01(e)(iii), and (C) without limiting the provisions of Section 5.17, no Borrower or Guarantor shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Closing Date, unless Borrower or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. Borrower agrees that that, at all times when cash is being swept in accordance with clause (e) below, all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes Borrower and each Guarantor shall maintain a cash management system which is acceptable to the Administrative Agent and the Collateral Agent (the “Cash Management System”). The Cash Management System shall contain, among other things, the following:
(i) With respect to the Blocked Accounts of calculating Borrower and such Guarantor as the amount Collateral Agent shall determine in its sole discretion, the applicable bank maintaining such Blocked Accounts shall agree from and after the receipt of a notice (an “Activation Notice”) from the Collateral Agent (which Activation Notice, as well as any similar notice provided pursuant to a Credit Card Receivables Control Agreement, may be given at any time a Cash Dominion Trigger Event shall have occurred and be continuing), pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in each Blocked Account to one Blocked Account designated as concentration account in the name of Borrower (the “Concentration Account”) at the bank that shall be designated as the Concentration Account bank for Borrower (the “Concentration Account Bank”) by notice to the Administrative Agent and the Collateral Agent. The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in the Concentration Account to the account designated as collection account (the “Collection Account”) which shall be under the exclusive dominion and control of the Loans available Collateral Agent;
(ii) With respect to Borrowerthe Blocked Accounts of such Guarantors as the Collateral Agent shall determine in its sole discretion, payments made the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of an Activation Notice from the Collateral Agent (which Activation Notice may be given by Collateral Agent at any time after the occurrence of a Cash Dominion Trigger Event), to a forward all amounts in each Blocked Account will be applied (conditional upon final collection) to the Obligations on applicable Concentration Account and Collection Account and to commence the Business Day process of receipt by Administrative Agent daily sweeps from such Blocked Account into the Concentration Account and Collection Account;
(iii) Any provision of immediately this Section 9.01 to the contrary notwithstanding, (A) Loan Parties may maintain payroll accounts and trust accounts that are not a part of the Cash Management System; provided that no Loan Party shall accumulate or maintain cash in such accounts as of any date of determination in excess of checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements and (B) Loan Parties may maintain local cash accounts that are not a part of the Cash Management System which individually do not at any time contain available funds in the Payment Account provided excess of $10,000 and, together with all other such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such daylocal cash accounts, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Daydo not exceed $100,000.
(f) The Collateral Agent shall apply all funds received in the Concentration Account on a daily basis to the repayment (by transferring same to the account of or pursuant to direction of Administrative Agent) of (i) first, to reimbursable expenses of Agents then due and payable pursuant to the Loan Documents and Fees due and payable to the Agents and Lenders pursuant to the Loan Documents; (ii) second, to interest then due and payable on all Loans, (iii) third, Overadvances, (iv) fourth, to the principal balance of the Swingline Loan until the same has been repaid in full, (v) fifth, to the outstanding principal balance of Revolving Loans until the same has been paid in full, including accompanying accrued interest and charges under Sections 2.12, 2.13 and 2.15 (Borrower may elect which of any Eurodollar Borrowings is to be prepaid), (vi) sixth, to cash collateralize all LC Exposures plus any accrued and unpaid Fees with respect thereto (to be held and applied in accordance with Section 2.18(i) hereof), and (vii) last, to all other Obligations pro rata in accordance with the amounts that such Lender certifies is outstanding in each case without a reduction in the Commitments; all further funds received in the Collection Account shall, unless an Event of Default has occurred and is continuing, be transferred or applied by the Collateral Agent in accordance with the directions of Borrower or the respective other Loan Party. If an Event of Default has occurred and is continuing, the Collateral Agent shall not transfer or apply any such funds from the Collection Account in accordance with such directions unless the Administrative Agent and the Collateral Agent determine to release such funds to Borrower. Absent any such determination by the Administrative Agent and the Collateral Agent, all such funds in the Collection Account shall be transferred to the Cash Collateral Account to be applied to the Eurodollar Loans on the last day of the relevant Interest Period of such Eurodollar Loan or to the Obligations as they come due (whether at stated maturity, by acceleration or otherwise). If consented to by the Administrative Agent, the Collateral Agent and the Required Lenders, such funds in the Cash Collateral Account may be released to Borrower. So long as no Event of Default shall have occurred and be continuing, the Borrower may direct that prepayments of Revolving Loans required pursuant to this Section 9.01(f) with respect to any Eurodollar Borrowing be deposited into a Breakage Prepayment Account and applied to repay such Eurodollar Borrowing at the end of the applicable Interest Periods related thereto.
(g) Borrower and its directors, employees, agents, Subsidiaries agents and other Affiliates and Subsidiary Guarantors shall, acting as trustee for Administrative Collateral Agent, receive, as the property of Administrative Collateral Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Collateral Agent. In no event shall the same be commingled with Borrower’s own fundsfunds which are not subject to a Lien in favor of the Collateral Agent. Borrower agrees to pay or to reimburse Administrative Collateral Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Collateral Agent’s payments to or indemnification of such bank or Person.
Appears in 1 contract
Accounts and Account Collections. (a) Borrower and each Borrowing Base Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Borrowing Base Guarantor of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Loan Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Loan Party’s knowledge, would result in any Account no longer constituting an Eligible Account. Borrower and each Borrowing Base Guarantor hereby agrees agree not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower and each Borrowing Base Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Collateral Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Collateral Agent and promptly reflected in the reporting of the Borrowing Base, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower or any of its SubsidiariesBorrowing Base Guarantor.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked deposit accounts (in either casecollectively, the “Blocked Accounts”), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower and its Subsidiaries Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral (other than proceeds of a Casualty Event or Asset Sales that do not require a permanent repayment under Loan Documents) in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Loan Parties. Borrower and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of . Except as permitted by Section 5.179.01(e)(iii), Borrower and Guarantors shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Original Closing Date, unless Borrower or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes of calculating the amount of the Loans available to Borrower, payments made to The Borrower and each Guarantor shall maintain a Blocked Account will be applied (conditional upon final collection) cash management system which is acceptable to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in (the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit “Cash Management System”). The Cash Management System shall contain, among other things, the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.following:
(fi) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating With respect to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Borrower and each Guarantor, the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of a notice (on “Activation Notice”) from the Collateral Agent (which Activation Notice (notwithstanding anything to the contrary in any agreement with such applicable bank) may be given, and at the request of the Required Lenders, shall be given, by Collateral Agent at any time following the occurrence and during the continuance of an Event of Default or at any time after daily Excess Availability for ten or more days (whether consecutive or non-consecutive) during any fiscal quarter is less than $50.0 million (and until such time as average daily Excess Availability is in excess of $50.0 million for a period of three (3) consecutive months following such fiscal quarter)), to forward daily all amounts in each Blocked Account to one Blocked Account designated as concentration account in the name of Borrower (the “Concentration Account”) at the bank that shall be designated as the Concentration Account bank for Borrower (the “Concentration Account Bank”), which, on the Original Closing Date, shall be account #4000000000 maintained by PNC Bank, National Association. The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in the Concentration Account to the account designated as collection account (the “Collection Account”) which shall be under the exclusive dominion and control of the Collateral Agent’s payments to or indemnification of such bank or Person.;
Appears in 1 contract
Accounts and Account Collections. (a) Borrower and each Subsidiary Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Subsidiary Guarantor of any of their its material obligations to any material Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any material Account Debtor, or any material disputes with material Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Loan Party relating to the financial condition of any material Account Debtor and (iii) any event or circumstance which, to any Credit Loan Party’s knowledge, would result in any Account in excess of $250,000 no longer constituting an Eligible Account. Borrower and each Subsidiary Guarantor hereby agrees agree not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to the Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower and each Subsidiary Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative the Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, respects and (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower or any of its SubsidiariesSubsidiary Guarantor.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expenses blocked accounts or lockboxes and related blocked deposit accounts, which, on the Closing Date, shall consist of accounts set forth on Schedule 9.01(d) (in either each case, “Blocked Accounts”), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower and its Subsidiaries Subsidiary Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral (other than proceeds of a Casualty Event or Asset Sales that do not require a repayment under Loan Documents) in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Loan Parties. Borrower and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement (as defined in the Security Agreement) duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements. Except as permitted by Section 9.01(e)(iii), and (C) without limiting the provisions of Section 5.17, no Borrower or Guarantor shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Closing Date, unless Borrower or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes Borrower and each Guarantor shall maintain a cash management system which is acceptable to the Administrative Agent and the Collateral Agent (the “Cash Management System”). The Cash Management System shall contain, among other things, the following:
(i) With respect to the Blocked Accounts of calculating Borrower and such Guarantor as the amount Collateral Agent shall determine in its sole discretion, the applicable bank maintaining such Blocked Accounts shall agree from and after the receipt of a notice (an “Activation Notice”) from the Collateral Agent (which Activation Notice, as well as any similar notice provided pursuant to a Credit Card Receivables Control Agreement, may be given at any time a Cash Dominion Trigger Event shall have occurred and be continuing), pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in each Blocked Account to one Blocked Account designated as concentration account in the name of Borrower (the “Concentration Account”) at the bank that shall be designated as the Concentration Account bank for Borrower (the “Concentration Account Bank”) by notice to the Administrative Agent and the Collateral Agent. The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in the Concentration Account to the account designated as collection account (the “Collection Account”) which shall be under the exclusive dominion and control of the Loans available Collateral Agent;
(ii) With respect to Borrowerthe Blocked Accounts of such Guarantors as the Collateral Agent shall determine in its sole discretion, payments made the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of an Activation Notice from the Collateral Agent (which Activation Notice may be given by Collateral Agent at any time after the occurrence of a Cash Dominion Trigger Event), to a forward all amounts in each Blocked Account will be applied (conditional upon final collection) to the Obligations on applicable Concentration Account and Collection Account and to commence the Business Day process of receipt by Administrative Agent daily sweeps from such Blocked Account into the Concentration Account and Collection Account;
(iii) Any provision of immediately this Section 9.01 to the contrary notwithstanding, (A) Loan Parties may maintain payroll accounts and trust accounts that are not a part of the Cash Management Systems provided that no Loan Party shall accumulate or maintain cash in such accounts as of any date of determination in excess of checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements and (B) Loan Parties may maintain local cash accounts that are not a part of the Cash Management Systems which individually do not at any time contain available funds in the Payment Account provided excess of $10,000 and, together with all other such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time local cash accounts, do not exceed $100,000. In addition, Xxxxxxx & Xxxxxxx Wholesale, Inc. may maintain that certain account at US Bank established prior to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent this Agreement in the Payment Account provided such payments or other funds connection a foreign vendor payment dispute and notice thereof are received holding cash in accordance with Administrative Agent’s usual and customary practices as in effect from time an amount not to time and with sufficient time to credit the Loan Account on such dayexceed $360,000, and if not, then on the next Business Dayplus accrued interest thereon.
(f) The Collateral Agent shall apply all funds received in the Concentration Account on a daily basis to the repayment (by transferring same to the account of or pursuant to direction of Administrative Agent) of (i) first, to reimbursable expenses of Agents then due and payable pursuant to the Loan Documents and Fees due and payable to the Agents and Lenders pursuant to the Loan Documents; (ii) second, to interest then due and payable on all Loans, (iii) third, Overadvances, (iv) fourth, to the principal balance of the Swingline Loan until the same has been repaid in full, (v) fifth, to the outstanding principal balance of Revolving Loans until the same has been paid in full, including accompanying accrued interest and charges under Sections 2.12, 2.13 and 2.15 (Borrower may elect which of any Eurodollar Borrowings is to be prepaid), (vi) sixth, to cash collateralize all LC Exposures plus any accrued and unpaid Fees with respect thereto (to be held and applied in accordance with Section 2.18(i) hereof), and (vii) last, to all other Obligations pro rata in accordance with the amounts that such Lender certifies is outstanding in each case without a reduction in the Commitments; all further funds received in the Collection Account shall, unless an Event of Default has occurred and is continuing, be transferred or applied by the Collateral Agent in accordance with the directions of Borrower or the respective other Loan Party. If an Event of Default has occurred and is continuing, the Collateral Agent shall not transfer or apply any such funds from the Collection Account in accordance with such directions unless the Administrative Agent and the Collateral Agent determine to release such funds to Borrower. Absent any such determination by the Administrative Agent and the Collateral Agent, all such funds in the Collection Account shall be transferred to the Cash Collateral Account to be applied to the Eurodollar Loans on the last day of the relevant Interest Period of such Eurodollar Loan or to the Obligations as they come due (whether at stated maturity, by acceleration or otherwise). If consented to by the Administrative Agent, the Collateral Agent and the Required Lenders, such funds in the Cash Collateral Account may be released to Borrower. So long as no Event of Default shall have occurred and be continuing, the Borrower may direct that prepayments of Revolving Loans required pursuant to this Section 9.01(f) with respect to any Eurodollar Borrowing be deposited into a Breakage Prepayment Account and applied to repay such Eurodollar Borrowing at the end of the applicable Interest Periods related thereto.
(g) Borrower and its directors, employees, agents, Subsidiaries agents and other Affiliates and Subsidiary Guarantors shall, acting as trustee for Administrative Collateral Agent, receive, as the property of Administrative Collateral Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Collateral Agent. In no event shall the same be commingled with Borrower’s own fundsfunds which are not subject to a Lien in favor of the Collateral Agent. Borrower agrees to pay or to reimburse Administrative Collateral Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Collateral Agent’s payments to or indemnification of such bank or Person.
Appears in 1 contract
Accounts and Account Collections. (a) Each Borrower shall notify Administrative the Collateral Agent promptly of: (i) any material delay in the performance by any Borrower or any of its Subsidiaries of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Loan Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to the knowledge of a Responsible Officer of any Credit Loan Party’s knowledge, would result in any Account no longer constituting an Eligible Account. Each Borrower hereby agrees not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative the Collateral Agent’s consentconsent (such consent not to be unreasonably withheld, conditioned or delayed), except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to the Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower any Company may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative the Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative the Collateral Agent or schedule thereof delivered to Administrative the Collateral Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative the Collateral Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative the Collateral Agent and promptly reflected in the reporting of the Borrowing Base, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative The Collateral Agent shall have the right at any time or times times, in Administrative the Collateral Agent’s name or in the name of a nominee of Administrative the Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, each Borrower hereby agrees to provide Administrative the Collateral Agent upon request the name and address of each Account Debtor of Borrower or any of its SubsidiariesBorrower.
(d) Upon request by The Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower and certain other Loan Parties shall each establish and maintain, at its sole expense, and shall cause each Subsidiary to establish and maintain, at its their sole expense, blocked accounts or lockboxes and related blocked deposit accounts, which, on the Restatement Date, shall consist of the accounts set forth on Schedule 9.01(d) (in either each case, the “Blocked Accounts”), as the Administrative Agent may specify, with such banks as are reasonably acceptable to the Administrative Agent into which the Administrative Borrower and its Subsidiaries the other Loan Parties shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Loan Parties. The Administrative Borrower and the other Loan Parties shall deliver, or cause to be delivered, to the Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of the Administrative Borrower or any of its Subsidiaries other Loan Party is maintained, and subject to Section 9.01(e)(iii), by each bank where any other Deposit Account deposit account is from time to time maintained. The Administrative Borrower and each other Loan Party shall further execute and deliver, and shall cause each of its Subsidiaries to execute and deliver, deliver such agreements and documents as the Administrative Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements. Except as permitted by Section 9.01(e)(iii), and (C) without limiting neither the provisions of Section 5.17, Administrative Borrower nor any other Loan Party shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Closing Restatement Date, unless the Administrative Borrower or its Subsidiaries such Loan Party (as applicable) have has complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. The Administrative Borrower and each other Loan Party agrees that all payments made to such Blocked Accounts or other funds received and collected by the Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to the Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of the Administrative Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes The Administrative Borrower and each other Loan Party shall maintain a cash management system which is acceptable to the Administrative Agent in its Reasonable Credit Judgment (the “Cash Management System”). The Cash Management System shall contain, among other things, the following:
(i) With respect to the Blocked Accounts of calculating the Administrative Borrower and the other Loan Parties, the applicable bank maintaining such Blocked Accounts shall agree, pursuant to the applicable Deposit Account Control Agreement, from and after the receipt of a notice (an “Activation Notice”) from the Administrative Agent (which Activation Notice may be given by Administrative Agent at any time Excess Availability is less than an amount equal to the greater of (x) 15.0% of the aggregate amount of the Loans available Revolving Commitments or (y) $30,000,000, or an Event of Default shall exist), to Borrower, payments made to a forward daily all amounts in each Blocked Account will to one Blocked Account designated as the concentration account in the name of the Administrative Borrower (the “Concentration Account”) at the bank that shall be applied designated as the Concentration Account bank for the Loan Parties (conditional upon final collection) the “Concentration Account Bank”), which, on the Restatement Date, shall be account 201366827 maintained by SunTrust Bank, Richmond, Virginia. The Concentration Account Bank shall agree, pursuant to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds applicable Deposit Account Control Agreement, to forward daily all amounts in the Payment Concentration Account provided such payments to the account designated as the collection account (the “Collection Account”) which shall be under the exclusive dominion and notice thereof are received in accordance with control of the Administrative Agent’s usual and customary practices as in effect from time ;
(ii) [Intentionally Omitted];
(iii) Any provision of this Section 9.01 to time and with sufficient time to credit the contrary notwithstanding, (A) the Loan Account on Parties may maintain payroll accounts and trust accounts that are not a part of the Cash Management System provided that no Loan Party shall accumulate or maintain cash in such dayaccounts as of any date of determination in excess of checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements and (B) the Loan Parties may maintain payroll deposit accounts, trust deposit accounts, withholding tax, employee benefit and other fiduciary deposit accounts and local cash deposit accounts, and if not, then on other accounts the next Business Day. For thirty day average daily balance of which accounts does not exceed $1.0 million in the purposes aggregate as of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the any date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Daydetermination.
(f) The Administrative Agent shall apply all funds received in the Collection Account on a daily basis to the repayment of (i) first, Fees and reimbursable expenses of the Agents then due and payable, (ii) second, interest then due and payable on all Loans, (iii) third, Overadvances, (iv) fourth, the Swingline Loans, (v) fifth, ABR Revolving Loans and to cash collateralize all outstanding Letters of Credit pro rata, (vi) sixth, Eurodollar Revolving Loans, together with all accrued and unpaid interest thereon (excluding Eurodollar Revolving Loans (A) with respect to which the application of such payment would result in the payment of the principal prior to the last day of the relevant Interest Period and (B) which the Administrative Borrower elects to continue pursuant to Section 2.08(b)), and (vii) last, other amounts which are due, in each case without a reduction in the Commitments; all further funds received in the Collection Account shall, unless an Event of Default has occurred and is continuing, be transferred or applied by the Administrative Agent in accordance with the directions of the Administrative Borrower or the respective Loan Party. If an Event of Default has occurred and is continuing, the Administrative Agent shall not transfer or apply any such funds from the Collection Account in accordance with such directions from the Administrative Borrower or such respective Loan Party unless the Administrative Agent shall have determined to release such funds to the Administrative Borrower and the Loan Parties. Absent any such determination by the Administrative Agent, all such funds in the Collection Account shall be transferred to the Specified Borrowing Base Account to be applied to the Eurodollar Revolving Loans on the last day of the relevant Interest Period of such Eurodollar Revolving Loan or to the Obligations as they come due (whether at stated maturity, by acceleration or otherwise). If consented to by the Administrative Agent, the Collateral Agent and the Required Lenders, such funds in the Specified Borrowing Base Account may be released to the Borrowers.
(g) Each Borrower and its directors, employees, agents, Subsidiaries agents and other Affiliates shall, acting as trustee for the Administrative Agent, receive, as the property of the Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to the Administrative Agent. In no event shall the same be commingled with any Borrower’s own funds. Each Borrower agrees to pay or to reimburse the Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of the Administrative Agent’s payments to or indemnification of such bank or Person.
(h) At any time after the delivery of an Activation Notice as described in Section 9.01(e)(i) and once the Administrative Agent shall have received evidence satisfactory to it that Average Excess Availability for each of the two (2) 30 day periods ending on or about the date of determination is greater than an amount equal to the greater of (x) 15.0% of the aggregate amount of the Revolving Commitments or (y) $30,000,000, and provided that no other Default or Event of Default shall then exist, the Administrative Agent shall promptly send a notice to each applicable bank that received an Activation Notice to the effect that the required daily sweeps shall be stopped and the Administrative Borrower or the applicable Loan Party may have access to the applicable accounts in accordance with the applicable Deposit Account Control Agreement until another Activation Notice is received by such banks.
Appears in 1 contract
Samples: Credit Agreement (Massey Energy Co)
Accounts and Account Collections. (a) Borrower Such Credit Party shall notify Administrative Agent promptly of: (i) any material delay in the performance by Borrower such Credit Party or any of its Subsidiaries of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s knowledge, would result in any Account no longer constituting an Eligible Account. Borrower Each Credit Party hereby agrees not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, any material credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Agent’s consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with past practices. So long as no Event of Default exists or has occurred and is continuing, Borrower any such Credit Party may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Agent or schedule thereof delivered to Administrative Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Agent shall have the right at any time or times times, upon prior notice to the Funds Administrator so long as no Default or Event of Default has occurred and is continuing, in Administrative Agent’s name or in the name of a nominee of Administrative Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise; provided, that so long as no Default or Event of Default has occurred and is continuing, Agent shall afford the Funds Administrator the opportunity to participate in any such discussions with Account Debtors. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower each Credit Party hereby agrees to provide Administrative Agent upon request the name and address of each Account Debtor of Borrower any Credit Party or any of its such Credit Party’s Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, Each Credit Party (i)
(Aother than Foreign Subsidiaries) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary to establish and maintain, at its sole expense, blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”), as Administrative Agent may reasonably specify, with such banks as are reasonably acceptable to Administrative Agent into which Borrower such Credit Party and its Subsidiaries shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) Borrower . Each Credit Party shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower such Credit Party or any of its Subsidiaries is maintained, and by each bank where any other Deposit Account is from time to time maintained. Borrower Each Credit Party shall further execute and deliver, and shall cause each of its Subsidiaries to execute and deliver, such agreements and documents as Administrative Agent may reasonably require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without . Without limiting the provisions of Section 5.175.15, Borrower no Credit Party shall not establish, and no Credit Party (other than a Foreign Subsidiary) shall cause each or permit any of its Subsidiaries not to establish, any Deposit Accounts not existing as of the Closing Date, unless Borrower such Credit Party or its Subsidiaries (as applicable) have complied in full with the provisions of this Section 6.1 with respect to such Deposit Accounts. Borrower Each Credit Party agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations. The foregoing and anything contained in any Financing Document to the contrary notwithstanding, the Credit Parties shall not be required to deliver any such Deposit Account Control Agreements in respect of (i) any “Payroll Account” or “Payroll Tax Account” (in each case, as defined on the Bank Account Schedule to the Information Certificate) each maintained at Wachovia Bank, National Association; provided, that, the Credit Parties shall not, and shall not cause or permit any of their respective Subsidiaries to, deposit or maintain funds in such account other than funds deposited therein in the ordinary course of business for purposes of funding current payroll liabilities, (ii) the “Benefit Accounts” (as defined on the Bank Account Schedule to the Information Certificate) and the “Pre-Tax Parking Account” (as defined on the Bank Account Schedule to the Information Certificate) maintained at Wachovia Bank, National Association; provided, that, in each case, the Credit Parties shall not, and shall not cause or permit any of their respective Subsidiaries to, deposit or maintain funds in such accounts other than funds deposited therein at the direction of such Credit Party’s employees to be held therein for the benefit of the employees of such Credit Party and the Credit Parties will at no time deposit any of their own assets into such accounts and (iii) any other Restricted Account; provided, that the Credit Parties shall not, and shall not cause or permit any of their respective Subsidiaries to, deposit or maintain funds in such Restricted Accounts other than funds deposited therein in the ordinary course of business for funding current liabilities. At no time shall any Credit Party or any of its Subsidiaries deposit, or permit or direct any Account Debtor or any other Person (other than Agent) to deposit, funds directly into any account maintained by any Credit Party other than the “Depository Accounts,” and/or the “Lockboxes” maintained at Wachovia Bank, National Association (in each case, as defined in the Information Certificate).
(e) For purposes of calculating the amount of the Loans available to Borrowerthe Borrowers, payments made to a Blocked Account will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.
(f) Borrower The Credit Parties and its their respective directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s the Credit Parties’ own funds. Borrower Each Credit Party agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or indemnification of such bank or Person.
Appears in 1 contract
Accounts and Account Collections. (a) Borrower and each Borrowing Base Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Borrowing Base Guarantor of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Loan Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Loan Party’s knowledge, would result in any Account no longer constituting an Eligible Account. Borrower and each Borrowing Base Guarantor hereby agrees agree not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower and each Borrowing Base Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Collateral Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Collateral Agent and promptly reflected in the reporting of the Borrowing Base, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower or any of its SubsidiariesBorrowing Base Guarantor.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked deposit accounts (in either casecollectively, the “Blocked Accounts”), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower and its Subsidiaries Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral (other than proceeds of a Casualty Event or Asset Sales that do not require a permanent repayment under Loan Documents) in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Loan Parties. Borrower and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of . Except as permitted by Section 5.179.01(e)(iii), Borrower and Guarantors shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Original Closing Date, unless Borrower or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes of calculating the amount of the Loans available to Borrower, payments made to The Borrower and each Guarantor shall maintain a Blocked Account will be applied (conditional upon final collection) cash management system which is acceptable to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in (the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit “Cash Management System”). The Cash Management System shall contain, among other things, the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.following:
(fi) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating With respect to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Borrower and each Guarantor, the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of a notice (on “Activation Notice”) from the Collateral Agent (which Activation Notice (notwithstanding anything to the contrary in any agreement with such applicable bank) may be given, and at the request of the Required Lenders, shall be given, by Collateral Agent at any time following the occurrence and during the continuance of an Event of Default or at any time after daily Excess Availability for ten or more days (whether consecutive or non-consecutive) during any fiscal quarter is less than $50.0 million (and until such time as average daily Excess Availability is in excess of $50.0 million for a period of three (3) consecutive months following such fiscal quarter)), to forward daily all amounts in each Blocked Account to one Blocked Account designated as concentration account in the name of Borrower (the “Concentration Account”) at the bank that shall be designated as the Concentration Account bank for Borrower (the “Concentration Account Bank”), which, on the Original Closing Date, shall be account #4000000000 maintained by PNC Bank, National Association. The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in the Concentration Account to the account designated as collection account (the “Collection Account”) which shall be under the exclusive dominion and control of the Collateral Agent’s payments to or indemnification of such bank or Person.;
Appears in 1 contract
Accounts and Account Collections. (a) Borrower and each Borrowing Base Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Borrowing Base Guarantor of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Loan Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Loan Party’s knowledge, would result in any Account no longer constituting an Eligible Account. Borrower and each Borrowing Base Guarantor hereby agrees agree not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower and each Borrowing Base Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Collateral Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Collateral Agent and promptly reflected in the reporting of the Borrowing Base, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower or any of its SubsidiariesBorrowing Base Guarantor.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked deposit accounts (in either casecollectively, the “Blocked Accounts”), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower and its Subsidiaries Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral (other than proceeds of a Casualty Event or Asset Sales that do not require a permanent repayment under Loan Documents) in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Loan Parties. Borrower and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of . Except as permitted by Section 5.179.01(e)(iii), Borrower and Guarantors shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Original Closing Date, unless Borrower or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes The Borrower and each Guarantor shall maintain a cash management system which is acceptable to the Administrative Agent and the Collateral Agent (the “Cash Management System”). The Cash Management System shall contain, among other things, the following:
(i) With respect to the Blocked Accounts of calculating Borrower and such Guarantors as the amount Collateral Agent shall determine in its sole discretion, the applicable bank maintaining such Blocked Accounts shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in each Blocked Account to one Blocked Account designated as concentration account in the name of Borrower (the “Concentration Account”) at the bank that shall be designated as the Concentration Account bank for Borrower (the “Concentration Account Bank”), which, on the Original Closing Date, shall be account #4000000000 maintained by PNC Bank, National Association. The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in the Concentration Account to the account designated as collection account (the “Collection Account”) which shall be under the exclusive dominion and control of the Loans available Collateral Agent;
(ii) With respect to Borrowerthe Blocked Accounts of such Guarantors as the Collateral Agent shall determine in its sole discretion, payments made the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of a notice (an “Activation Notice”) from the Collateral Agent (which Activation Notice may be given by Collateral Agent at any time in its discretion), to a forward all amounts in each Blocked Account will be applied (conditional upon final collection) to the Obligations on applicable Collection Account and to commence the Business Day process of receipt by daily sweeps from such Blocked Account into the Collection Account;
(iii) Borrower may maintain, in its name, an account or accounts at a bank reasonably acceptable to Administrative Agent, into which Administrative Agent of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect shall, from time to time, deposit proceeds of Revolving Loans and Swingline Loans made to Borrower hereunder and which bank shall agree, pursuant to Deposit Account Control Agreement relative to such disbursement account, from and after the receipt of a notice from the Collateral Agent (which notice may be given by Collateral Agent at any time an Event of Default occurs and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collectionis continuing) to forward all amounts in each Blocked Account to the Obligations one applicable Collection Account. Any provision of this Section 9.01 to the contrary notwithstanding, (1A) Business Day following Loan Parties may maintain payroll accounts and trust accounts that are not a part of the Cash Management Systems provided that no Loan Party shall accumulate or maintain cash in such accounts and the disbursement account(s) described in the preceding sentence as of any date of receipt determination in excess of immediately available checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements and (B) Loan Parties may maintain local cash accounts that are not a part of the Cash Management Systems which individually do not at any time contain funds by Administrative Agent in the Payment Account provided excess of $100,000 and, together with all other such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such daylocal cash accounts, and if not, then on the next Business Daydo not exceed $1.0 million.
(f) The Administrative Agent shall apply all funds received in the Collection Account on a daily basis to the repayment (by transferring same to the account of or pursuant to direction of Administrative Agent) of (i) first, Fees and reimbursable expenses of the Administrative Agent and the Collateral Agent then due and payable; (ii) second, to interest then due and payable on all Loans, (iii) third, Overadvances, (iv) fourth, the Swingline Loans, (v) fifth, ABR Revolving Loans, (vi) sixth, Eurodollar Revolving Loans, together with all accrued and unpaid interest thereon (excluding Eurodollar Revolving Loans (A) with respect to which the application of such payment would result in the payment of the principal prior to the last day of the relevant Interest Period and (B) which Borrower elects to continue pursuant to Section 2.08(b)), and (vii) last, other amounts which are due, in each case without a reduction in the Commitments; all further funds received in any of the Collection Account shall, unless an Event of Default has occurred and is continuing, be transferred or applied by the Collateral Agent in accordance with the directions of Borrower or the respective other Loan Party. If an Event of Default has occurred and is continuing, the Administrative Agent shall not transfer or apply any such funds from the Collection Account in accordance with such directions unless the Administrative Agent and the Collateral Agent determine to release such funds to Borrower. Absent any such determination by the Administrative Agent and the Collateral Agent, all such funds in the Collection Account shall be transferred to the Cash Collateral Account to be applied to the Eurodollar Revolving Loans on the last day of the relevant Interest Period of such Eurodollar Revolving Loan or to the Obligations as they come due (whether at stated maturity, by acceleration or otherwise). If consented to by the Administrative Agent, the Collateral Agent and the Required Lenders, such funds in the Cash Collateral Account may be released to Borrower.
(g) Borrower and its directors, employees, agents, Subsidiaries agents and other Affiliates and Borrowing Base Guarantors shall, acting as trustee for Administrative Collateral Agent, receive, as the property of Administrative Collateral Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Collateral Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Collateral Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Collateral Agent’s payments to or indemnification of such bank or Person.
(h) With respect to the accounts #4005296996 and #4005297008 maintained at PNC Bank, National Association, Loan Parties represent and warrant that no more than $2,500 in the aggregate is on deposit therein and covenant and agree that no Loan Party shall deposit or suffer to be deposited therein any funds, and Loan Parties shall terminate such accounts no later than December 24, 2003, on or before which date Borrower agrees to deliver to the Administrative Agent evidence of such termination.
Appears in 1 contract
Accounts and Account Collections. (a) Borrower and each Borrowing Base Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Borrowing Base Guarantor of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Loan Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Loan Party’s 's knowledge, would result in any Account no longer constituting an Eligible Account. Borrower and each Borrowing Base Guarantor hereby agrees agree not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s 's consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower and each Borrowing Base Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Collateral Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Collateral Agent and promptly reflected in the reporting of the Borrowing Base, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s 's name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower or any of its SubsidiariesBorrowing Base Guarantor.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked deposit accounts (in either casecollectively, “Blocked Accounts”the "BLOCKED ACCOUNTS"), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower and its Subsidiaries Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral (other than proceeds of a Casualty Event or Asset Sales that do not require a permanent repayment under Loan Documents) in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Loan Parties. Borrower and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of . Except as permitted by Section 5.179.01(e)(iii), Borrower and Guarantors shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Closing Date, unless Borrower or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes The Borrower and each Guarantor shall maintain a cash management system which is acceptable to the Administrative Agent and the Collateral Agent (the "CASH MANAGEMENT SYSTEM"). The Cash Management System shall contain, among other things, the following:
(i) With respect to the Blocked Accounts of calculating Borrower and such Guarantors as the amount Collateral Agent shall determine in its sole discretion, the applicable bank maintaining such Blocked Accounts shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in each Blocked Account to one Blocked Account designated as concentration account in the name of Borrower (the "CONCENTRATION ACCOUNT") at the bank that shall be designated as the Concentration Account bank for Borrower (the "CONCENTRATION ACCOUNT BANK"), which, on the Closing Date, shall be account #0000000000 maintained by PNC Bank, National Association. The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in the Concentration Account to the account designated as collection account (the "COLLECTION ACCOUNT") which shall be under the exclusive dominion and control of the Loans available Collateral Agent;
(ii) With respect to Borrowerthe Blocked Accounts of such Guarantors as the Collateral Agent shall determine in its sole discretion, payments made the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of a notice (an "ACTIVATION NOTICE") from the Collateral Agent (which Activation Notice may be given by Collateral Agent at any time in its discretion), to a forward all amounts in each Blocked Account will be applied (conditional upon final collection) to the Obligations on applicable Collection Account and to commence the Business Day process of receipt by daily sweeps from such Blocked Account into the Collection Account;
(iii) Borrower may maintain, in its name, an account or accounts at a bank reasonably acceptable to Administrative Agent, into which Administrative Agent of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect shall, from time to time, deposit proceeds of Revolving Loans and Swingline Loans made to Borrower hereunder and which bank shall agree, pursuant to Deposit Account Control Agreement relative to such disbursement account, from and after the receipt of a notice from the Collateral Agent (which notice may be given by Collateral Agent at any time an Event of Default occurs and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collectionis continuing) to forward all amounts in each Blocked Account to the Obligations one applicable Collection Account. Any provision of this Section 9.01 to the contrary notwithstanding, (1A) Business Day following Loan Parties may maintain payroll accounts and trust accounts that are not a part of the Cash Management Systems provided that no Loan Party shall accumulate or maintain cash in such accounts and the disbursement account(s) described in the preceding sentence as of any date of receipt determination in excess of immediately available checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements and (B) Loan Parties may maintain local cash accounts that are not a part of the Cash Management Systems which individually do not at any time contain funds by Administrative Agent in the Payment Account provided excess of $100,000 and, together with all other such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such daylocal cash accounts, and if not, then on the next Business Daydo not exceed $1.0 million.
(f) The Administrative Agent shall apply all funds received in the Collection Account on a daily basis to the repayment (by transferring same to the account of or pursuant to direction of Administrative Agent) of (i) first, Fees and reimbursable expenses of the Administrative Agent and the Collateral Agent then due and payable; (ii) second, to interest then due and payable on all Loans, (iii) third, Overadvances, (iv) fourth, the Swingline Loans, (v) fifth, ABR Revolving Loans, (vi) sixth, Eurodollar Revolving Loans, together with all accrued and unpaid interest thereon (excluding Eurodollar Revolving Loans (A) with respect to which the application of such payment would result in the payment of the principal prior to the last day of the relevant Interest Period and (B) which Borrower elects to continue pursuant to Section 2.08(b)), and (vii) last, other amounts which are due, in each case without a reduction in the Commitments; all further funds received in any of the Collection Account shall, unless an Event of Default has occurred and is continuing, be transferred or applied by the Collateral Agent in accordance with the directions of Borrower or the respective other Loan Party. If an Event of Default has occurred and is continuing, the Administrative Agent shall not transfer or apply any such funds from the Collection Account in accordance with such directions unless the Administrative Agent and the Collateral Agent determine to release such funds to Borrower. Absent any such determination by the Administrative Agent and the Collateral Agent, all such funds in the Collection Account shall be transferred to the Cash Collateral Account to be applied to the Eurodollar Revolving Loans on the last day of the relevant Interest Period of such Eurodollar Revolving Loan or to the Obligations as they come due (whether at stated maturity, by acceleration or otherwise). If consented to by the Administrative Agent, the Collateral Agent and the Required Lenders, such funds in the Cash Collateral Account may be released to Borrower.
(g) Borrower and its directors, employees, agents, Subsidiaries agents and other Affiliates and Borrowing Base Guarantors shall, acting as trustee for Administrative Collateral Agent, receive, as the property of Administrative Collateral Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Collateral Agent. In no event shall the same be commingled with Borrower’s 's own funds. Borrower agrees to pay or to reimburse Administrative Collateral Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Collateral Agent’s 's payments to or indemnification of such bank or Person.
(h) With respect to the accounts #4005296996 and #4005297008 maintained at PNC Bank, National Association, Loan Parties represent and warrant that no more than $2,500 in the aggregate is on deposit therein and covenant and agree that no Loan Party shall deposit or suffer to be deposited therein any funds, and Loan Parties shall terminate such accounts no later than December 24, 2003, on or before which date Borrower agrees to deliver to the Administrative Agent evidence of such termination.
Appears in 1 contract
Accounts and Account Collections. (a) Borrower shall notify Administrative Agent promptly of: (i) any material delay in the performance by Borrower Borrower, any other Secured Credit Party or any of its Subsidiaries a Managed Practice of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor or Managed Practice and (iii) any event or circumstance which, to any Credit Party’s 's knowledge, would result in any Account no longer constituting an Eligible Account. Borrower hereby agrees not to grant to any Account Debtor, and to cause each of its Restricted Subsidiaries not to grant to any Account Debtor, any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Agent’s 's consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Secured Credit Party or Managed Practice or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Agent or schedule thereof delivered to Administrative Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, recoupments, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported permitted pursuant to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulationsregulations where the violation could reasonably be expected to have a Material Adverse Effect, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its termsterms except as limited by general principles of equity and debtor relief laws.
(c) Administrative Agent shall have the right at any time or times times, in Administrative Agent’s 's name or in the name of a nominee of Administrative Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Agent upon request the name and address of each Account Debtor of Borrower or any of its Subsidiarieseach Secured Credit Party.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Secured Credit Party and Managed Practice to establish and maintain, at its sole expense, blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”"BLOCKED ACCOUNTS"), as Administrative Agent may specify, with such banks as are reasonably acceptable to Administrative Agent into which Borrower and its Subsidiaries the Secured Credit Parties shall promptly deposit and direct their respective Account Debtors deposit, or cause to directly remit be deposited, all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner. In addition, Borrower or the Secured Credit Parties shall direct or cause Managed Practices to direct their Account Debtors to directly remit to a Group Account that is subject to a Deposit Account Agreement all payments on Accounts and all payments constituting proceeds or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner. Borrower agrees that it shall be liable for any fees and charges in effect from time to time and charged by the applicable bank in respect of Blocked Accounts, and that Agent and Lenders shall have no liability therefor. Borrower further acknowledges and agrees that, to the extent such fees and charges are not paid by Borrower directly but are satisfied using collections in a Blocked Account, such fees and charges shall be deemed to be advances made by Agent and Lenders in respect of the Revolving Loan facility hereunder and, to the extent that the payment of such fees or charges by Borrower as provided herein causes the Revolving Loan Outstandings to exceed the Revolving Loan Limit, Borrower agrees to immediately (Bupon notice) repay to Agent the amount of such overadvance. Borrower agrees to indemnify and hold Agent and Lenders harmless from any and all liabilities, claims, losses and demands whatsoever, including reasonable attorneys' fees and expenses, arising from or relating to actions of Agent or the Blocked Account bank pursuant to this Section 6.1 or any Deposit Account Control Agreement or Deposit Account Agreement. Borrower shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Secured Credit Party is maintained, and by each bank where any other Deposit Account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries the Secured Credit Parties and Managed Practices, to execute and deliver, such agreements and documents as Administrative Agent may reasonably require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements or Deposit Account Agreements, and (C) without . Without limiting the provisions of Section 5.175.12, Borrower shall not establish, and shall cause each of its Subsidiaries the Secured Credit Parties and Managed Practices, not to establish, any Group Accounts or Deposit Accounts not existing as of the Closing Date, unless Borrower or its Subsidiaries such Secured Credit Party (as applicable) have complied in full with the provisions of this Section 6.1 with respect to such Group Accounts or Deposit Accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any LenderLender after occurrence and during the continuance of an Event of Default, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall shall, if controlled by a Deposit Account Control Agreement, constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes . Borrower shall, and shall cause each Secured Credit Party to, at all times diligently pursue and prosecute the collection of calculating the amount Accounts and payment of the Loans available to Borrower, payments made to a Blocked Account will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in the Payment Account provided such payments and notice proceeds thereof are received in accordance with Administrative Agent’s usual the terms of this Agreement and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.
(f) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or indemnification of such bank or Person.Financing 42
Appears in 1 contract
Samples: Credit Agreement (Radiologix Inc)
Accounts and Account Collections. (a) Borrower and each Borrowing Base Guarantor shall notify Administrative Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Borrowing Base Guarantor of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s knowledge, would result in any Account no longer constituting an Eligible Account, in each of the foregoing cases to the extent the outstanding amount of the Accounts affected thereby exceeds $500,000 in the aggregate. Borrower and each Borrowing Base Guarantor hereby agrees agree not to grant grant, or permit its Restricted Subsidiaries to grant, to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Agent’s consent, not to be unreasonably withheld or delayed, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to Administrative Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower and its Restricted Subsidiaries and each Borrowing Base Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Agent or schedule thereof delivered to Administrative Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Collateral Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reflected in the reporting of the Borrowing Base or otherwise reported to Administrative Agent Agent, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Agent shall have the right at any time or times times, in Administrative Agent’s name or in the name of a nominee of Administrative Agent, and may communicate directly with any Account Debtor, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Agent upon request the name and address of each Account Debtor of Borrower or any of Borrowing Base Guarantor or its Restricted Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked deposit accounts (in either each case, “Blocked Accounts”), as Administrative Agent may specify, with Xxxxx Fargo Bank (so long as Xxxxx Fargo Bank or an Affiliate thereof is a Lender hereunder) or such other banks as are acceptable to Administrative Agent into which Borrower and its Subsidiaries Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Credit Parties. Borrower and Guarantors shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of . Except as permitted by Section 5.179.01(e)(iii), Borrower and Guarantors shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Closing Date, unless Borrower or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. After the occurrence and during the continuance of a Cash Dominion Trigger Event, Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes of calculating Borrower and each Guarantor shall maintain a cash management system which is acceptable to Administrative Agent (the amount “Cash Management System”), it being understood and agreed that the existing cash management system maintained at Xxxxx Fargo Bank as of the date hereof, including the ACH Letter Agreement, is acceptable to Administrative Agent. The Cash Management System shall contain, among other things, the following:
(i) With respect to the Blocked Accounts of Borrower and such Guarantors as Administrative Agent shall determine in its sole discretion, the applicable bank maintaining such Blocked Accounts shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in each Blocked Account to one Blocked Account designated as a concentration account in the name of Borrower (the “Concentration Account”) at the bank that shall be designated as the Concentration Account bank for Borrower (the “Concentration Account Bank”). The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement from and after the receipt of a notice (an “Activation Notice”) from Administrative Agent (which Activation Notice may only be given after the occurrence and during the continuance of a Cash Dominion Trigger Event), and for the duration of the Dominion Period to forward daily all amounts in the Concentration Account to the account designated as collection account (the “Collection Account”) which shall be under the exclusive dominion and control of Administrative Agent.
(ii) With respect to the Blocked Accounts of such Guarantors as Administrative Agent shall determine in its sole discretion, the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of an Activation Notice from Administrative Agent (which Activation Notice may only be given by Administrative Agent at any time after the occurrence and during the continuance of a Cash Dominion Trigger Event), to forward all amounts in each Blocked Account to the applicable Collection Account and to commence the process of daily sweeps from such Blocked Account into the Collection Account.
(iii) Any provision of this Section 9.01 to the contrary notwithstanding, (A) Credit Parties may maintain payroll accounts and trust accounts that are not a part of the Cash Management Systems; provided, that, no Credit Party shall accumulate or maintain cash in such payroll accounts as of any date of determination in excess of checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements, (B) Credit Parties may maintain local cash accounts that are not a part of the Cash Management Systems which in the aggregate do not at any time contain funds in excess of $1,000,000, (C) Credit Parties may maintain the Carve Out Account and (D) so long as any Prepetition First Lien Notes or Prepetition Junior Lien Notes remain outstanding, the Credit Parties may maintain the Junior Lien Collateral Proceeds Account.
(f) During any Dominion Period, all funds in the Collection Account will be applied, first, to pay fees and reimbursable expenses of the Monitoring Agents then due and payable, second, to repay Protective Advances outstanding at such time until paid in full, and third, to repay any Revolving Loans available (including Swing Line Loans) outstanding at such time. In addition, during any Dominion Period, (x) to Borrowerthe extent there is a Borrowing Base Shortfall, payments made all funds in the Collection Account will be applied, first, to repay any Protective Advances outstanding at such time until paid in full, second, to repay any Revolving Loans (including Swing Line Loans) outstanding at such time until paid in full, and third, to cash collateralize outstanding Letters of Credit in an amount necessary to maintain compliance with the Borrowing Base until cash collateralized in full, (y) to the extent that there is a Blocked Collateral Amount Shortfall, all funds in the Collection Account will be applied, first, to repay any Protective Advances outstanding at such time until paid in full, second, to repay any Revolving Loans (including Swing Line Loans) outstanding at such time until paid in full, third, to cash collateralize outstanding Letters of Credit until cash collateralized in full, and fourth, to repay Term Loans outstanding at such time and/or deposit funds as cash collateral in the Collateral Amount Account, in an aggregate amount necessary to maintain compliance with the Collateral Amount until paid (or cash collateralized) in full and (z) if an Event of Default has occurred and is continuing, all funds in the Collection Account and the Collateral Amount Account will be applied (conditional upon final collectionnot less than five days’ notice), first, to repay any Protective Advances outstanding at such time until paid in full, second, to repay any Revolving Loans (including Swing Line Loans) outstanding at such time until paid in full, third, to cash collateralize Letters of Credit until cash collateralized in full, and fourth, to repay Term Loans outstanding at such time until paid in full. To the Obligations on extent a mandatory prepayment of the Business Day Term Loans is required due to a Collateral Amount Shortfall and so long as no Event of receipt by Administrative Agent of immediately available funds Default has occurred and is continuing, such amount may (i) be applied to prepay the Term Loans or (ii) be deposited as cash collateral in the Payment Collateral Amount Account provided such payments at the option of Borrower. To the extent that no Protective Advances or Revolving Loans (including Swing Line Loans) are outstanding, so long as no Event of Default has occurred and notice thereof are received is continuing and there is no Borrowing Base Shortfall or Collateral Amount Shortfall, amounts in accordance with Administrative Agent’s usual the Concentration Account and customary practices as in effect from time to time and with sufficient time to credit the Loan Collection Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) made available to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business DayBorrower during any Dominion Period.
(fg) Borrower and its directors, employees, agents, Subsidiaries agents and other Affiliates and Borrowing Base Guarantors shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or indemnification of such bank or Person.
Appears in 1 contract
Accounts and Account Collections. (a) Borrower NewPageCo and each Borrowing Base Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower NewPageCo or any of its Subsidiaries Borrowing Base Guarantor of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s knowledge, would result in any Account no longer constituting an Eligible Account, in each of the foregoing cases to the extent the outstanding amount of the Accounts affected thereby exceeds $500,000 in the aggregate. Borrower NewPageCo and each Borrowing Base Guarantor hereby agrees agree not to grant grant, or permit its Subsidiaries to grant, to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s consent, not to be unreasonably withheld or delayed, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower NewPageCo and its Subsidiaries and each Borrowing Base Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Collateral Agent pursuant to the terms of this Agreement or any applicable Security Collateral Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reflected in the reporting of the Borrowing Base or otherwise reported to Administrative Agent the Collateral Agent, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s name or in the name of a nominee of Administrative Collateral Agent, and may communicate directly with any Account Debtor, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower NewPageCo hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower NewPageCo or any of Borrowing Base Guarantor or its Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower NewPageCo shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked deposit accounts (in either each case, “Blocked Accounts”), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower NewPageCo and its Subsidiaries Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) Borrower manner and shall be identified and segregated from all other funds of the Credit Parties. NewPageCo and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower NewPageCo or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower NewPageCo shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements. Except as permitted by Section 9.1(e)(iii), NewPageCo and (C) without limiting the provisions of Section 5.17, Borrower Guarantors shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Closing Date, unless Borrower NewPageCo or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.1 with respect to such Deposit Accountsdeposit accounts. Borrower After the occurrence and during the continuance of a Cash Dominion Trigger Event NewPageCo agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes NewPageCo and each Guarantor shall maintain a cash management system which is acceptable to the Administrative Agent and the Collateral Agent (the “Cash Management System”). The Cash Management System shall contain, among other things, the following:
(i) With respect to the Blocked Accounts of calculating NewPageCo and such Guarantors as the amount Collateral Agent shall determine in its sole discretion, the applicable bank maintaining such Blocked Accounts shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in each Blocked Account to one Blocked Accounts designated as concentration account in the name of NewPageCo (the “Concentration Account”) at the bank that shall be designated as the Concentration Account bank for NewPageCo (the “Concentration Account Bank”), which, on the Closing Date, shall be account #695210443 maintained by JPMorgan Chase Bank, N.
A. The Concentration Account Bank shall agree, pursuant to the applicable Deposit Account Control Agreement from and after the receipt of a notice (an “Activation Notice”) from the Collateral Agent (which Activation Notice may only be given after the occurrence and during the continuance of a Cash Dominion Trigger Event), to forward daily all amounts in the Concentration Account to the account designated as collection account (the “Collection Account”) which shall be under the exclusive dominion and control of the Loans available Collateral Agent;
(ii) With respect to Borrowerthe Blocked Accounts of such Guarantors as the Collateral Agent shall determine in its sole discretion, payments made the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of an Activation Notice from the Collateral Agent (which Activation Notice may be given by Collateral Agent at any time after the occurrence and during the continuance of a Cash Dominion Trigger Event), to a forward all amounts in each Blocked Account will be applied (conditional upon final collection) to the Obligations on applicable Collection Account and to commence the Business Day process of receipt by Administrative Agent daily sweeps from such Blocked Account into the Collection Account;
(iii) Any provision of immediately available this Section 9.1 to the contrary notwithstanding, (A) Credit Parties may maintain payroll accounts and trust accounts that are not a part of the Cash Management Systems provided that no Credit Party shall accumulate or maintain cash in such accounts as of any date of determination in excess of checks outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements and (B) Credit Parties main maintain local cash accounts that are not a part of the Cash Management Systems which in the aggregate do not at any time contain funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes excess of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day$2,500,000.
(f) Borrower The Collateral Agent shall apply all funds received in the Collection Account on a daily basis to the repayment (by transferring same to the account of or pursuant to direction of Administrative Agent) of (i) first, fees and reimbursable expenses of Agents then due and payable; (ii) second, to interest then due and payable on all Loans, (iii) third, Overadvances, (iv) fourth, the Swing Line Loans, (v) fifth, Base Rate Loans, (vi) sixth, Eurodollar Rate Loans, together with all accrued and unpaid interest thereon (excluding Eurodollar Rate Loans (A) with respect to which the application of such payment would result in the payment of the principal prior to the last day of the relevant Interest Period and (B) which NewPageCo elects to continue pursuant to Section 2.8(b)), (vii) seventh, other amounts which are due (other than (A) obligations with respect to any purchasing card or similar program owed to any Lender, any Affiliate of any Lender, the Administrative Agent or the Collateral Agent and (B) Banking Services Obligations) and (ix) last, pro rata to Obligations with respect to any purchasing card or similar program owed to any Lender, any Affiliate of any Lender, the Administrative Agent or the Collateral Agent (not to exceed $1,500,000) and Banking Services Obligations, in each case without a reduction in the Revolving Commitments; all further funds received in any of the Collection Account shall, unless an Event of Default has occurred and is continuing, be transferred or applied by the Collateral Agent in accordance with the directions of NewPageCo or the respective other Credit Party. If an Event of Default has occurred and is continuing, the Collateral Agent shall not transfer or apply any such funds from the Collection Account in accordance with such directions unless the Administrative Agent and the Collateral Agent determine to release such funds to NewPageCo. Absent any such determination by the Administrative Agent and the Collateral Agent, all such funds in the Collection Account shall be transferred to the Cash Collateral Account to be applied to the Eurodollar Rate Loans on the last day of the relevant Interest Period of such Eurodollar Rate Loan or to the Obligations as they come due (whether at stated maturity, by acceleration or otherwise). If consented to by the Administrative Agent, the Collateral Agent and the Requisite Lenders, such funds in the Cash Collateral Account may be released to NewPageCo.
(g) NewPageCo and its directors, employees, agents, Subsidiaries agents and other Affiliates and Borrowing Base Guarantors shall, acting as trustee for Administrative Collateral Agent, receive, as the property of Administrative Collateral Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Collateral Agent. In no event shall the same be commingled with BorrowerNewPageCo’s own funds. Borrower NewPageCo agrees to pay or to reimburse Administrative Collateral Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Collateral Agent’s payments to or indemnification of such bank or Person.
Appears in 1 contract
Samples: Revolving Credit and Guaranty Agreement (NewPage CORP)
Accounts and Account Collections. (a) Borrower and each Borrowing Base Guarantor shall notify Administrative Collateral Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Borrowing Base Guarantor of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Loan Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Loan Party’s 's knowledge, would result in any Account no longer constituting an Eligible Account. Borrower and each Borrowing Base Guarantor hereby agrees agree not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, Debtor any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s 's consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies previously disclosed in writing to Collateral Agent. So long as no Event of Default exists or has occurred and is continuing, Borrower and each Borrowing Base Guarantor may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Loan Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Collateral Agent or schedule thereof delivered to Administrative Collateral Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Collateral Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Collateral Agent and promptly reflected in the reporting of the Borrowing Base, in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.. 133
(c) Administrative Collateral Agent shall have the right at any time or times times, in Administrative Collateral Agent’s 's name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower hereby agrees to provide Administrative Collateral Agent upon request the name and address of each Account Debtor of Borrower or any of its SubsidiariesBorrowing Base Guarantor.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary Guarantor to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked deposit accounts (in either casecollectively, “Blocked Accounts”the "BLOCKED ACCOUNTS"), as Administrative Collateral Agent may specify, with such banks as are acceptable to Administrative Collateral Agent into which Borrower and its Subsidiaries Guarantors shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral (other than proceeds of a Casualty Event or Asset Sales that do not require a permanent repayment under Loan Documents) in the identical form in which such payments are made, whether by cash, check or other manner, (B) manner and shall be identified and segregated from all other funds of the Loan Parties. Borrower and Guarantors shall deliver, or cause to be delivered, to Administrative Collateral Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries Guarantor is maintained, and by each bank where any other Deposit Account deposit account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries Guarantor to execute and deliver, such agreements and documents as Administrative Collateral Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of . Except as permitted by Section 5.179.01(e)(iii), Borrower and Guarantors shall not establish, and shall cause each of its Subsidiaries not to establish, establish any Deposit Accounts not existing as of deposit accounts after the Original Closing Date, unless Borrower or its Subsidiaries Guarantor (as applicable) have complied in full with the provisions of this Section 6.1 9.01 with respect to such Deposit Accountsdeposit accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Collateral Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Collateral Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes of calculating the amount of the Loans available to Borrower, payments made to The Borrower and each Guarantor shall maintain a Blocked Account will be applied (conditional upon final collection) cash management system which is acceptable to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in (the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit "CASH MANAGEMENT SYSTEM"). The Cash Management System shall contain, among other things, the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.following:
(fi) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating With respect to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Borrower and each Guarantor, the applicable bank maintaining such Blocked Accounts shall agree, from and after the receipt of a notice (on "ACTIVATION NOTICE") from the Collateral Agent (which Activation Notice (notwithstanding anything to the contrary in any agreement with such applicable bank) may be given, and at the request of the Required Lenders, shall be given, by Collateral Agent at any time following the occurrence and during the continuance of an Event of Default or at any time after daily Excess Availability for ten or more days (whether consecutive or non-consecutive) during any fiscal quarter is less than $50.0 million (and until such time as average daily Excess Availability is in excess of $50.0 million for a period of three (3) consecutive months following such fiscal quarter)), to forward daily all amounts in each Blocked Account to one Blocked Account designated as concentration account in the name of Borrower (the "CONCENTRATION 134 ACCOUNT") at the bank that shall be designated as the Concentration Account bank for Borrower (the "CONCENTRATION ACCOUNT BANK"), which, on the Original Closing Date, shall be account #4005296793 maintained by PNC Bank, National Association. The Concentxxxxxx Xxxount Bank shall agree, pursuant to the applicable Deposit Account Control Agreement, to forward daily all amounts in the Concentration Account to the account designated as collection account (the "COLLECTION ACCOUNT") which shall be under the exclusive dominion and control of the Collateral Agent’s payments to or indemnification of such bank or Person.;
Appears in 1 contract
Accounts and Account Collections. (a) Each Borrower shall notify Administrative Agent promptly of: (i) any material delay in the performance by such Borrower or any of its Subsidiaries of any of their material obligations to any Account Debtor in excess of $50,000 or the assertion of any material claims, offsets, defenses or counterclaims by any such Account DebtorDebtor in excess of $50,000, or any material disputes with any such Account DebtorsDebtors regarding amounts in excess of $50,000, or any settlement, adjustment or compromise thereofcompromise, in each case of any Account in an amount in excess of $50,000, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor that has outstanding Accounts in excess of $50,000 and (iii) any event or circumstance which, to any Credit Party’s 's knowledge, would result in any Account in excess of $50,000 no longer constituting an Eligible Account. Each Borrower hereby agrees not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, any credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Agent’s 's consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with past practices and policies. So long as no Event of Default exists or has occurred and is continuing, each Borrower may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative Agent or schedule thereof delivered to Administrative Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Agent shall have the right at any time or times in Administrative Agent’s name or times, in the name of a nominee of Administrative Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, each Borrower hereby agrees to provide Administrative Agent upon request the name and address of each Account Debtor of such Borrower or any of its Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Each Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary to establish and maintain, at its sole expense, expense blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”"BLOCKED ACCOUNTS"), as Administrative Agent may specify, with such banks as are reasonably acceptable to Administrative Agent into which such Borrower and its Subsidiaries shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) . Each Borrower shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of the applicable Borrower or any of its Subsidiaries is maintained, and by each bank where any other Deposit Account is from time to time maintained. Each Borrower shall further execute and deliver, and shall cause each of its Subsidiaries to execute and deliver, such agreements and documents as Administrative Agent may reasonably require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without . Without limiting the provisions of Section 5.175.14, no Borrower shall not establish, and or shall cause each permit any of its Subsidiaries not to establish, any Deposit Accounts not existing as of the Closing Date, unless such Borrower or its Subsidiaries (as applicable) have has complied in full with the provisions of this Section 6.1 with respect to such Deposit Accounts. As of the Closing Date, each of Carlton and Prefco has established a Blocked Account arrangement with XX Xxxxxx Xxxxx Bank. Each of Carlton and Prefco hereby agrees that on or before January 31, 2003, it shall terminate its Blocked Account arrangement with XX Xxxxxx Xxxxx Bank and replace it with a Blocked Account arrangement with another bank reasonably acceptable to Agent, pursuant to agreements and documents reasonably acceptable to Agent. Each Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes of calculating the amount of the Loans available to BorrowerBorrowers, payments made to a Blocked Account will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s 's usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s 's usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.
(f) Each Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with any Borrower’s 's own funds. Each Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Agent’s 's payments to or indemnification of such bank or Person.
Appears in 1 contract
Accounts and Account Collections. (a) Borrower Such Credit Party shall notify Administrative the Collateral Agent promptly of: (i) any material delay in the performance by Borrower such Credit Party or any of its Subsidiaries of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s 's knowledge, would result in any Account no longer constituting an Eligible AccountAccount (as such term is defined in the First Lien Credit Agreement). Borrower Each Credit Party hereby agrees not to grant to any Account Debtor, and to cause each of its Subsidiaries not to grant to any Account Debtor, any material credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Collateral Agent’s 's consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with past practices. So long as no Event of Default exists or has occurred and is continuing, Borrower any such Credit Party may settle, adjust or compromise, and may permit each of its Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative the Collateral Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative the First Lien Agent or schedule thereof delivered to Administrative the First Lien Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative the First Lien Agent, as contractual representative for the Collateral Agent pursuant to the Second Lien Intercreditor Agreement (or, following the Discharge of all First Lien Debt, to the Collateral Agent), pursuant to the terms of the First Lien Debt Documents or this Agreement Agreement, as applicable, or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent the Agents in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative subject to the terms of the Second Lien Intercreditor Agreement, the Collateral Agent shall have the right at any time or times times, upon prior notice to the Funds Administrator so long as no Default or Event of Default has occurred and is continuing, in Administrative Collateral Agent’s 's name or in the name of a nominee of Administrative Collateral Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise; provided, that so long as no Default or Event of Default has occurred and is continuing, Collateral Agent shall afford the Funds Administrator the opportunity to participate in any such discussions with Account Debtors. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower each Credit Party hereby agrees to provide Administrative the Collateral Agent upon request the name and address of each Account Debtor of Borrower any Credit Party or any of its such Credit Party's Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary to establish and maintain, at its sole expense, blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”), as Administrative Agent may specify, with such banks as are acceptable to Administrative Agent into which Borrower and its Subsidiaries shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) Borrower shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of Borrower or any of its Subsidiaries is maintained, and by each bank where any other Deposit Account is from time to time maintained. Borrower shall further execute and deliver, and shall cause each of its Subsidiaries to execute and deliver, such agreements and documents as Administrative Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without limiting the provisions of Section 5.17, Borrower shall not establish, and shall cause each of its Subsidiaries not to establish, any Deposit Accounts not existing as of the Closing Date, unless Borrower or its Subsidiaries (as applicable) have complied in full with the provisions of this Section 6.1 with respect to such Deposit Accounts. Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes of calculating the amount of the Loans available to Borrower, payments made to a Blocked Account will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.
(f) Borrower and its directors, employees, agents, Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s own funds. Borrower agrees to pay or to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or indemnification of such bank or Person.
Appears in 1 contract
Samples: Term Loan Credit Agreement (Comsys It Partners Inc)
Accounts and Account Collections. (a) Borrower Borrowers shall notify Administrative Agent promptly of: (i) any material delay in the performance by Borrower or any of its Subsidiaries Credit Party of any of their material obligations to any Account Debtor or the assertion of any material claims, offsets, defenses or counterclaims by any Account Debtor, or any material disputes with Account Debtors, or any material settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Credit Party relating to the financial condition of any Account Debtor and (iii) any event or circumstance which, to any Credit Party’s knowledge, would result in any Account or Unbilled Account no longer constituting an Eligible Account or Eligible Unbilled Account, respectively. Borrower Borrowers hereby agrees agree not to grant to any Account Debtor, and to cause each not permit any of its Domestic Subsidiaries not to grant to any Account Debtor, any material credit, discount, allowance or extension, or to enter into any agreement for any of the foregoing, without Administrative Agent’s consent, except in the Ordinary Course ordinary course of Businessbusiness in accordance with practices and policies. So long as no Event of Default exists or has occurred and is continuing, Borrower Borrowers may settle, adjust or compromise, and may permit each of its Domestic Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim or dispute with any Account Debtor. At any time that an Event of Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account Debtors of any Credit Party or grant any credits, discounts or allowances.
(b) With respect to each Account and, with respect to items (iii) and (iv) below, each Unbilled Account: (i) the amounts shown on any invoice delivered to Administrative Agent or schedule thereof delivered to Administrative Agent shall be true and complete in all material respects, (ii) no payments shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the terms of this Agreement or any applicable Security Document (to the extent so required), (iii) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Administrative Agent in accordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicable laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.
(c) Administrative Agent shall have the right at any time or times times, in Administrative Agent’s name or in the name of a nominee of Administrative Agent, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the exercise of the right described in the immediately preceding sentence, Borrower Borrowers hereby agrees agree to provide Administrative Agent upon request the name and address of each Account Debtor of Borrower Borrowers or any of its Domestic Subsidiaries.
(d) Upon request by Administrative Agent, as contemplated by Section 4.12 of the Borrower Security Agreement, (i)
(A) Each Borrower shall establish and maintain, at its sole expense, and shall cause each Subsidiary of its Domestic Subsidiaries to establish and maintain, at its sole expense, blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”), as Administrative Agent may specify, with such banks as are acceptable to Administrative Agent into which such Borrower and its Domestic Subsidiaries shall promptly deposit and direct their respective Account Debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner, (B) . Each Borrower shall deliver, or cause to be delivered, to Administrative Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account for the benefit of such Borrower or any of its Domestic Subsidiaries is maintained, and by each bank where any other Deposit Account (excluding payroll accounts or disbursement accounts related to the Borrowers’ consumer fulfillment business) is from time to time maintained. Each Borrower shall further execute and deliver, and shall cause each of its Domestic Subsidiaries to execute and deliver, such agreements and documents as Administrative Agent may require in connection with such Blocked Accounts, Deposit Accounts and such Deposit Account Control Agreements, and (C) without . Without limiting the provisions of Section 5.175.14, Borrower Borrowers shall not establishestablish or permit to be established, and shall cause each of its Subsidiaries not to establish, any Deposit Accounts not existing as of the Closing Date, unless Borrower Borrowers or its their Domestic Subsidiaries (as applicable) have complied in full with the provisions of this Section 6.1 with respect to such Deposit Accounts. Borrower agrees Borrowers agree that all payments made to such Blocked Accounts or other funds received and collected by Administrative Agent or any Lender, whether in respect of the Accounts, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Administrative Agent and Lenders in respect of the Obligations and therefore shall constitute the property of Administrative Agent and Lenders to the extent of the then outstanding Obligations.
(e) For purposes of calculating the amount of the Loans available to BorrowerBorrowers, payments made to a Blocked Account will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Administrative Agent of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day. For the purposes of calculating interest on the Obligations, such payments or other funds received shall be deemed applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Administrative Agent in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Administrative Agent’s usual and customary practices as in effect from time to time and with sufficient time to credit the Loan Account on such day, and if not, then on the next Business Day.
(f) Each Borrower and its directors, employees, agents, Domestic Subsidiaries and other Affiliates shall, acting as trustee for Administrative Agent, receive, as the property of Administrative Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts, Inventory or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent. In no event shall the same be commingled with Borrower’s Borrowers’ own funds. Borrower agrees to pay or Borrowers agree to reimburse Administrative Agent on demand for any amounts owed or paid to or demanded by any bank at which a Blocked Account is established or any other bank or Person involved in the transfer of funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or indemnification of such bank or Person.
Appears in 1 contract
Samples: Credit Agreement (Ahl Services Inc)
