Accounts Receivable All accounts receivable of the Acquired Companies that are reflected on the Balance Sheet or the Interim Balance Sheet or on the accounting records of the Acquired Companies as of the Closing Date (collectively, the "Accounts Receivable") represent or will represent valid obligations arising from sales actually made or services actually performed in the Ordinary Course of Business. Unless paid prior to the Closing Date, the Accounts Receivable are or will be as of the Closing Date current and collectible net of the respective reserves shown on the Balance Sheet or the Interim Balance Sheet or on the accounting records of the Acquired Companies as of the Closing Date (which reserves are adequate and calculated consistent with past practice and, in the case of the reserve as of the Closing Date, will not represent a greater percentage of the Accounts Receivable as of the Closing Date than the reserve reflected in the Interim Balance Sheet represented of the Accounts Receivable reflected therein and will not represent a material adverse change in the composition of such Accounts Receivable in terms of aging). Subject to such reserves, each of the Accounts Receivable either has been or will be collected in full, without any set-off, within ninety days after the day on which it first becomes due and payable. There is no contest, claim, or right of set-off, other than returns in the Ordinary Course of Business, under any Contract with any obligor of an Accounts Receivable relating to the amount or validity of such Accounts Receivable. Part 3.8 of the Disclosure Letter contains a complete and accurate list of all Accounts Receivable as of the date of the Interim Balance Sheet, which list sets forth the aging of such Accounts Receivable.
Accounts Receivables Each existing Account constitutes, and each hereafter arising Account will, when such Account arises, constitute, the legally valid and binding obligation of the Account Debtor, except where the failure to do so could not reasonably be expected, individually or in the aggregate, to materially adversely affect the value or collectability of the Accounts included in the Collateral, taken as a whole. No Account Debtor has any defense, set-off, claim or counterclaim against any Grantor that can be asserted against the Administrative Agent, whether in any proceeding to enforce the Administrative Agent’s rights in the Accounts included in the Collateral, or otherwise, except for defenses, setoffs, claims or counterclaims that could not reasonably be expected, individually or in the aggregate, to materially adversely affect the value or collectability of the Accounts included in the Collateral, taken as a whole. None of the Grantors’ accounts receivables are, nor will any hereafter arising account receivable be, evidenced by a promissory note or other Instrument (other than a check) that has not been pledged to the Administrative Agent in accordance with the terms hereof.
Accounts Receivable; Accounts Payable (a) All accounts receivable of the Acquired Companies and their Subsidiaries, whether reflected on the Company Balance Sheet or subsequently created, are valid receivables that have arisen from bona fide transactions in the ordinary course of business consistent with past practice. All such accounts receivable are good and collectible (and subject to no setoffs or counterclaims) at the aggregate recorded amounts thereof, net of any applicable reserves for doubtful accounts reflected on the Company Balance Sheet as adjusted for operations and transactions through the Closing Date in accordance with past custom and practice of the Acquired Companies; provided, however, that nothing in the foregoing shall be construed as a guarantee of collectability. Each of the Acquired Companies and their Subsidiaries have good and marketable title to their respective accounts receivable, free and clear of all Liens, except for Permitted Liens. Since the Balance Sheet Date, there have not been any write-offs as uncollectible of any notes or accounts receivable of any of the Acquired Companies or any of their Subsidiaries, except for write-offs as uncollectible of doubtful accounts reflected on the Company Balance Sheet as adjusted for operations and transactions through the Closing Date in accordance with past custom and practice of the Acquired Companies.
(b) All accounts payable and notes payable of the Acquired Companies and their Subsidiaries, whether reflected on the Company Balance Sheet or subsequently created, are valid payables that have arisen from bona fide transactions in the ordinary course of business consistent with past practice. Since the Balance Sheet Date, the Acquired Companies and their Subsidiaries have paid their accounts payable in the ordinary course of their business and in a manner which is consistent with past practices.
Accounts Receivable; Inventory (a) For each Account with respect to which Advances are requested, on the date each Advance is requested and made, such Account shall be an Eligible Account.
(b) All statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing the Eligible Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all respects what they purport to be. All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any Transaction Report. To the best of Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms.
(c) For any item of Inventory consisting of Eligible Inventory in any Transaction Report, such Inventory (i) consists of finished goods, in good, new, and salable condition, which is not perishable, returned (except to the extent of any refurbished Inventory in salable condition), consigned, obsolete, not sellable, damaged, or defective, and is not comprised of demonstrative or custom inventory, works in progress, packaging or shipping materials, or supplies; (ii) meets all applicable governmental standards; (iii) has been manufactured in compliance with the Fair Labor Standards Act; (iv) is not subject to any Liens, except the first priority Liens granted or in favor of Bank under this Agreement or any of the other Loan Documents and the Liens permitted under clause (j) of the definition of Permitted Liens; and (v) is located at the locations identified by Borrower in the Perfection Certificate where it maintains Inventory (or at any location permitted under Section 7.2).
Collection of Accounts Receivable From and after the Closing, Seller shall pursuant to the Management Contract (subject to that certain Termination Agreement dated as of even date herewith pursuant to which such foregoing Management Contract is being terminated) and Buyer and Seller shall use their commercially reasonable efforts to cause IPS, pursuant to the IPS Contract (subject to that certain Termination Agreement dated as of November 30, 2014 pursuant to which the foregoing IPS Contract is being terminated), to xxxx for services provided by Seller to GAA prior to the Closing Date and to collect, in the ordinary course, the Accounts Receivable of Seller (determined pursuant to the Management Contract) attributable solely to services provided by Seller to GAA, pursuant to the Management Contract, prior to the Closing Date (collectively, the “Pre-Closing Seller Accounts Receivable”). Buyer shall have no obligation to file collection actions or lawsuits with respect to any such Pre-Closing Seller Accounts Receivable attributable to services provided by Seller to GAA prior to the Closing Date (or with respect to any “Pre-Closing Accounts Receivable” being accounts receivable attributable to services provided by GAA prior to the Closing Date); nor shall Buyer have any liability to Seller or Seller Owner for any failure by IPS to timely xxxx for services provided by GAA prior to the Closing Date or to collect any such Pre-Closing Accounts Receivable attributable to services provided by GAA prior to the Closing Date. This Section shall not apply with respect to any billing for services provided by Buyer on or after the Closing Date or any accounts receivable attributable to services provided by Buyer on or after the Closing Date (“Post-Closing GAA Accounts Receivable”).
5.8.1 Buyer shall pay to Seller, solely from Pre-Closing Accounts Receivable collections, by the tenth (10th) day of each calendar month, with respect to the immediately preceding calendar month (which calendar month begins after the Closing Date), an amount equal to the positive difference (if any) between (a) the aggregate of the Pre-Closing GAA Accounts Receivable collected under the Management Contract (subject to such applicable Termination Agreement) during such immediately preceding calendar month (net of the billing and collection expense equal to six percent (6%) of Buyer’s net revenues attributable to such Pre-Closing Accounts Receivable in accordance with the IPS Contract, subject to such applicable Termination Agreement, minus (b) the sum of (i) all of the amounts, if any, paid by GAA or Buyer on or after the Closing attributable to GAA’s obligations with respect to trade and accounts payable and other operating expenses incurred or accrued for all periods on or prior to the Closing Date (including compensation payable to physicians and CRNAs employed or engaged by GAA and all billing and collection and management fees payable to Seller), plus (ii) Buyer’s operating expenses after the Closing Date (including, without limitation, the cost of CRNAs, physician labor, anesthesia drugs and supplies, any billing and collection expense and management fee (without double counting of such amounts deducted in subsection (a)), insurance, bank fees, Taxes and other expenses required by GAA to provide anesthesia services pursuant to the PSA Contracts) for the applicable calendar months (such amounts in subsection (b)(ii), collectively, the “Advanced Expenses”). Notwithstanding the foregoing, the reduction described in subsection (b)(ii) shall not apply after the first two calendar months after the Closing Date and nothing in subsection (b)(ii) shall be construed to mean that such expenses are the responsibility of Buyer nor affect any indemnification rights Buyer may have under Section 6. An example of the intended application of this Section 5.8.1 in conjunction with the application of Section 5.9 of the Other Acquisition Agreement, relating to the collection of GAA’s Pre-Closing Accounts Receivable) is set forth in the Accounts Receivable Worksheet attached hereto as Exhibit F. For avoidance of doubt, in no event will GAA or Buyer owe any amounts to Seller under this Section 5.8 (or the Seller under the Other Acquisition Agreement pursuant to Section 5.9 thereof) other than from collections of any Accounts Receivable attributable to services provided by GAA before the Closing Date.
5.8.2 Beginning on March 10, 2015, Buyer shall begin to repay to Seller the Advanced Expenses (such payments to be made by the tenth (10th) day of each calendar month, with respect to the immediately preceding calendar month). The first payment hereunder will be due by March 10, 2015 and the tenth (10th) day of each calendar month thereafter until the Advanced Expenses are repaid to Seller in full; provided, however, all accrued and unpaid Advanced Expenses shall be immediately due and payable in full on or before June 10, 2015. The amount payable each month by Buyer with respect to the Advanced Expenses will equal the product of (a) twenty-five percent (25%) multiplied by (b) the positive difference, if any, between (i) the aggregate of the Post-Closing Accounts Receivable payable to Buyer during such immediately preceding calendar month (net of the billing and collection expense equal to six percent (6%) of GAA’s net revenues and management fee equal to four percent (4%) of the Buyer’s net revenues attributable to such Post-Closing Accounts Receivable, in each case attributable to such Post-Closing Accounts Receivable under the IPS Billing and Management Agreement as defined in the Other Acquisition Agreement), minus (b) all of the amounts paid by Buyer on or after the Closing attributable to Buyer’s obligations with respect to trade and accounts payable and all other operating expenses (of a nature described above in Section 5.8.1) incurred or accrued for all periods on or after the Closing Date, and other liabilities arising from Seller’s conduct of business for all periods on or before the Closing Date.
5.8.3 Each monthly payment shall include a breakdown showing, in reasonable detail, the determination of the amount payable such month by the Buyer to the Seller.
Accounts Receivable and Accounts Payable (a) The Seller agrees that it will utilize normal collection efforts consistent with past business practices of the Seller in collecting the outstanding accounts receivable of the Seller generated by the Purchased Assets as of the Effective Date. The Seller shall not undertake any formal collection action (whether legal action, referral to a collection agency or otherwise) with respect to any such Account Receivable without first consulting with the Buyer. The Seller agrees to pay, in a manner consistent with past business practice of the Seller, the outstanding accounts payable of the Seller as of the Effective Date. The Buyer shall not, and shall not permit its employees, officers, directors, independent contractors or agents to, directly or indirectly, encourage any customer of Seller not to make payment on any accounts receivable of Seller or commit any action which could reasonably lead or cause any customer not to make such a payment and the Buyer shall otherwise cooperate with Seller and its designees (and cause its personnel and accountants to cooperate) in Seller’s collection efforts.
(b) Both parties agree, as expeditiously as possible, to notify the Customers set forth on Exhibit 2.25, of the sale of the Purchased Assets, and to instruct such Customers that any monies due on invoices for service periods prior to the Effective Date shall be paid to Seller/Capital via the Capital lockbox mechanism, and all monies due on invoices for service periods subsequent to the Effective Date shall be paid to Buyer. The parties agree that in the event payments are received by either of the parties on accounts receivable from customers who are customers of both of the Buyer and Seller, and in the event that the customer has not provided instructions on the face of the remittance or any accompanying documentation or correspondence, the party receiving such payment shall contact the Customer to ascertain how the payment is to be applied. In the event such inquiry is unsuccessful, then such payments shall be applied first to the oldest outstanding invoice(s). In the event that either party receives proceeds of accounts receivable which belong to the other party, such party will immediately remit such proceeds, in kind, to the other party; provided, however, that, in the case of monies being received by Buyer and due to Seller, such proceeds shall be remitted to the Capital lockbox.
Notes and Accounts Receivable All notes and accounts receivable of the Company, all of which are reflected properly on the books and records of the Company, are valid receivables subject to no setoffs, defenses or counterclaims, are current and, to the Company's Knowledge, collectible subject in each case only to the reserve for bad debts set forth on the face of the Most Recent Balance Sheet as adjusted for operations and transactions through the Closing Date in accordance with the past custom and practice of the Company.
Eligible Accounts All of the Accounts owned by any Borrower and reflected in the most recent Borrowing Base Certificate delivered by such Borrower to Agent shall be “Eligible Accounts” for purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies. In addition, Agent reserves the right, at any time and from time to time after the Closing Date, to adjust any of the criteria set forth below, to establish new criteria and to adjust advance rates with respect to Eligible Accounts, in its reasonable credit judgment exercised in good faith; provided, that (i) any increase of any advance rate above its Original Advance Rate is subject to the approval of all Lenders and (ii) any adjustment by Agent to any criterion set forth below that results in such criterion being less restrictive than as in effect on the Closing Date shall be subject to approval of Requisite Lenders. Eligible Accounts shall not include any Account of any Borrower:
(a) which does not arise from the sale of goods or the performance of services by such Borrower in the ordinary course of its business;
(b) upon which (i) such Borrower’s right to receive payment is contingent upon the fulfillment of any condition by such Borrower or (ii) such Borrower is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;
(c) to the extent that any defense, counterclaim, setoff or dispute is asserted as to such Account;
(d) if the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to such Borrower’s completion of further performance under such contract;
(e) that is not a true and correct statement of bona fide indebtedness incurred in the amount of the Account for merchandise sold to or services rendered and accepted by the applicable Account Debtor;
(f) with respect to which an invoice, that is not unacceptable to Agent (in its reasonable judgment) in form and substance, has not been sent to the applicable Account Debtor;
(g) (i) that is not owned by such Borrower or (ii) to the extent it is subject to any right, claim, security interest or other interest of any other Person, other than Liens in favor of Agent, on behalf of itself and Lenders, and Trustee, on behalf of the holders of Senior Notes;
(h) that arises from a sale to any director, officer, other employee or Affiliate of any Credit Party, or to any entity that has any common officer or director with any Credit Party; provided, however, that a sale to any Person that is an Affiliate or such an entity shall not be excluded under this paragraph (h) if such Person is an Affiliate or such an entity solely because it is controlled by BRS or a fund managed by BRS;
(i) that is the obligation of an Account Debtor that is the United States or Canadian government or a political subdivision thereof, or any state, county, province or municipality or department, agency or instrumentality thereof unless Agent, in its sole discretion, has agreed to the contrary in writing and such Borrower, if necessary or desirable, has complied with the Federal Assignment of Claims Act of 1940, any Canadian equivalent thereof, or any applicable state, county or municipal law restricting assignment thereof, with respect to such obligation; provided, so long as no Default or Event of Default shall have occurred and be continuing, Accounts described in this Section 1.6(i) and identified to the Agent pursuant to Section 5.10 shall be deemed Eligible Accounts to the extent such Accounts in the aggregate outstanding at any time do not exceed $1,500,000 and otherwise meet the eligibility criteria set forth in this Section 1.6;
(j) that is the obligation of an Account Debtor located in a foreign country other than Canada (excluding the provinces of Newfoundland, the Northwest Territories and the Territory of Nunavit), unless payment thereof is assured by a letter of credit assigned and delivered to Agent, reasonably satisfactory to Agent as to form, amount and issuer;
(k) to the extent such Borrower or any Subsidiary thereof is liable for goods sold or services rendered by the applicable Account Debtor to such Borrower or any Subsidiary thereof but only to the extent of the potential offset;
(l) that arises with respect to goods that are delivered on a xxxx-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional;
(m) that is in default; provided, that, without limiting the generality of the foregoing, an Account shall be deemed in default upon the occurrence of any of the following:
(i) the Account is not paid within the earlier of: sixty (60) days following its due date or ninety (90) days following its original invoice date;
(ii) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or
(iii) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(n) that is the obligation of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in paragraph (m) of this Section 1.6;
(o) as to which Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien;
(p) as to which any of the representations or warranties in the Loan Documents are untrue;
(q) to the extent such Account is evidenced by a judgment;
(r) to the extent such Account exceeds any credit limit established by Agent, in its reasonable credit judgment;
(s) that is payable in any currency other than Dollars; or
(t) that is otherwise unacceptable to Agent in its reasonable credit judgment.
Accounts Receivable and Payable (a) The accounts receivable shown on the Company Balance Sheet arose in the ordinary course of business, consistent with past practices, represented bona fide claims against debtors for sales and other charges, and have been collected or are collectible in the book amounts thereof. Allowances for doubtful accounts and warranty returns have been prepared in accordance with GAAP consistently applied and in accordance with the Company’s and its Subsidiaries’ past practices and are sufficient to provide for any losses which may be sustained on realization of the receivables. The accounts receivable of the Company and its Subsidiaries arising after the Balance Sheet Date and before the Closing Date arose or shall arise in the ordinary course of business, consistent with past practices, represented or shall represent bona fide claims against debtors for sales and other charges, and have been collected or are collectible in the book amounts thereof. None of the accounts receivable of the Company and its Subsidiaries is subject to any claim of offset, recoupment, setoff or counter-claim, and the Company has no knowledge of any specific facts or circumstances (whether asserted or unasserted) that could give rise to any such claim. None of the accounts receivable of the Company and its Subsidiaries is contingent upon the performance by the Company or any Subsidiary of any obligation or Contract and no agreement for deduction or discount has been made with respect to any of such accounts receivable. The Company has provided to Acquiror or its counsel an accurate aging of the Company’s and its Subsidiaries’ accounts receivable in the aggregate and by customer, which indicates the amounts of allowances for doubtful accounts, warranty returns, accounts receivable of the Company and its Subsidiaries which are subject to asserted warranty claims by customers and reasonably detailed information regarding asserted warranty claims made within the last year, including the type and amounts of such claims.
(b) All accounts payable and notes payable of the Company and its Subsidiaries arose in the ordinary course of business, consistent with past practices in bona fide arms’ length transactions and no such account payable or note payable is delinquent by more than sixty (60) days in its payment. Since December 31, 2013, the Company has paid its accounts payable in the ordinary course of its business and in a manner which is consistent with its past practices.
Eligible Receivables Each Receivable included as an Eligible Receivable in the calculation of the Net Receivables Pool Balance as of any date is an Eligible Receivable as of such date.
