Cash Management Systems. (a) Each Credit Party shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, in any case, so long as any such failure shall not be material in any respect): (A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above); (B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and (C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreement. (b) [Intentionally Omitted]. (c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Account. (d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account. (e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement. (f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment. (g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.
Appears in 1 contract
Samples: Credit Agreement (Talbots Inc)
Cash Management Systems. The Credit Parties will establish and maintain the cash management systems described below (the “Cash Management Systems”):
(a) Each Credit Party shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act establish lock boxes (“Lock Boxes”) and/or at Administrative Agent’s reasonable discretion, lockbox or omission blocked accounts at one or more of any Credit Party or the banks set forth in Disclosure Schedule 6.20 (“Blocked Accounts”), and shall request in writing and otherwise take such reasonable steps to ensure that all Account Debtors forward payment directly to such Lock Boxes, and (ii) resulted from the isolated failure by any employee of any Credit Party deposit or cause to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any timebe deposited promptly, and in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the date of receipt thereof (other than such payments as may be inadvertently misdirected at Borrower’s offices in Boca Raton, FL or mis-deliveredNorth Aurora, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitationIL, all cash, checks, drafts or other similar items of paymentpayment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lock Box) to be deposited into one or more Blocked Accounts in such Credit Party’s name, but under the sole dominion and control of Administrative Agent, and at a Control Account bank identified in Disclosure Schedule 6.20 (each, a “Relationship Bank”). Each Credit Party and each Related Person thereof acknowledges and agrees that all cash, checks or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that constituting proceeds of Collateral are part of the Collateral. All proceeds of the sale or other disposition of any Collateral, shall be deposited electronically, such items may be delivered directly into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes applicable Blocked Accounts, subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreementprovisions of Section 2.8.
(b) [Intentionally Omitted]The Borrower may maintain, in its name, an account (each a “Disbursement Account” and collectively, the “Disbursement Accounts”) at a bank reasonably acceptable to Administrative Agent into which Administrative Agent shall, from time to time, deposit proceeds of Revolving Credit Advances and Swingline Advances made to the Borrower pursuant to Section 2.1 for use by the Borrower solely in accordance with the provisions of Section 6.8.
(c) On or before the Closing Date, each bank where a Disbursement Account is maintained and all Relationship Banks, shall have entered into tri-party blocked account agreements with Administrative Agent, for the benefit of the Lending Parties, and the Credit Parties, as applicable, in form and substance reasonably acceptable to Administrative Agent, which shall become operative on or prior to the Closing Date. Each Control Agreement such blocked account agreement shall provide, among other things, that (i) the depositorybank acknowledges that all items of payment deposited in such account and proceeds thereof deposited in the applicable Blocked Account are subject to a security interest of the Administrative Agent, securities intermediary or commodities intermediary on behalf of the Lending Parties, (ii) that the parties to such blocked account agreement agree that the bank shall comply with the instruction originated by Administrative Agent directing disposition of the funds in the deposit account without further consent of the applicable Credit Party, (iii) the bank executing such agreement has no rights of setoff or recoupment or any other claim against such account, as the case may be, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing)payment, and (iiiv) from and after the Closing DateDate (A) with respect to banks at which a Blocked Account is maintained, except for cash and Cash Equivalents maintained by the Credit Parties pursuant such bank agrees to Section 5.22, forward immediately all amounts received in any Control each Blocked Account shall be swept to the Collection Account and to commence the process of daily sweeps from such Blocked Account into the Collection Account and (B) with respect to banks at which a Disbursement Account is maintained, from and after the receipt of a notice (an “Activation Notice”) from Administrative Agent (which Activation Notice may be given by Administrative Agent at any time at which (1) a Default or another Control Event of Default has occurred and is continuing after its applicable cure period, (2) Administrative Agent reasonably believes based upon information available to it that a Default or an Event of Default is likely to occur; (3) Administrative Agent reasonably believes that an event or circumstance that is likely to have a Material Adverse Effect has occurred, or (4) Administrative Agent reasonably has grounds to question the integrity of the Borrower’s Cash Management Systems or any Credit Party’s compliance with the provisions of this Section 6.20 or any other provisions of the Loan Documents to the extent related to such Cash Management Systems), such bank agrees to forward immediately all amounts in such Disbursement Account which is swept to the Collection Account and to commence the process of daily sweeps from such Disbursement Account into the Collection Account. No Credit Party shall accumulate or maintain cash in Disbursement Accounts or payroll accounts as of any date of determination in excess of (x) the aggregate amount of checks outstanding against such accounts as of that date plus (y) all amounts necessary to meet minimum balance requirements.
(d) So long as no Default has occurred and is continuing, the Borrower may amend Disclosure Schedule 6.20 to add or replace a Relationship Bank, Lock Box or Blocked Account or to replace any Disbursement Account; provided that (i) Administrative Agent shall have consented, such consent not to be unreasonably withheld conditioned or delayed, in writing in advance to the opening of such account or Lock Box with the relevant bank and (ii) prior to the time of the opening of such account or Lock Box, the applicable Credit Party, and such bank shall have executed and delivered to Administrative Agent a tri-party blocked account agreement, in form and substance reasonably satisfactory to Administrative Agent.
(e) The Lock Boxes, Blocked Accounts, and Disbursement Accounts shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts securing payment of the Loans and all other Obligations, and in which each Credit Party thereof shall have granted a Lien to Agent, on behalf of the Lending Parties, pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be deemed received by Administrative Agent in accordance with Section 1.10(a) 2.14 and shall be applied (and allocated) by Administrative Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be2.10. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) . Each Credit Parties may amend Schedule 3.22 to add or replace any deposit account Party shall and shall cause its Affiliates, officers, employees, agents, directors or other account; providedPersons acting for or in concert with such Credit Party (each a “Related Person”) to hold in trust for Administrative Agent, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to for the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time benefit of the opening Lending Parties, all checks, cash and other items of payment received by such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreementany such Related Person.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.
Appears in 1 contract
Samples: Credit Agreement (Medical Staffing Network Holdings Inc)
Cash Management Systems. (a) Each Credit Party shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, ABL Control Agreements providing for “full” cash dominion with respect to each ABL Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practicespractices and proceeds of Term Priority Collateral) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a an ABL Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a an ABL Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a an ABL Control Account or Local Deposit Account is maintained for deposit into such ABL Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a an ABL Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to ABL Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute ABL Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a an ABL Control Account that is subject to a an ABL Control Agreement.
(b) [Intentionally Omitted].
(c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Account.
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.
Appears in 1 contract
Samples: Term Loan Agreement (Talbots Inc)
Cash Management Systems. The Credit Parties will establish and maintain the cash management systems described below (the "Cash Management Systems"):
(a) Each Commencing on or prior to the Closing Date, (i) the Borrowers will, or cause each of their Subsidiaries to, request in writing and otherwise take reasonable steps to ensure that all Account Debtors in respect of Government Accounts forward payment directly to an account of a Credit Party shall enter intodesignated as a Government Receivables Deposit Account on Disclosure Schedule 6.16
(a) (each a "Government Receivables Deposit Account"), (ii) the Credit Parties will, or will cause each of their Subsidiaries to, establish lock boxes ("Lock Boxes") or at Agent's discretion, blocked accounts at one or more of the banks set forth in Disclosure Schedule 6.16(c) ("Blocked Accounts"), and cause each depository, securities intermediary or commodities intermediary shall request in writing and otherwise take such reasonable steps to enter into, Control Agreements providing for “full” cash dominion ensure that all Account Debtors with respect to each Control Account, securities, commodity or similar account Private Accounts forward payment directly to such Lock Boxes and (including, without limitation, any lockbox or similar arrangementsiii) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any timewill deposit and cause their Subsidiaries to deposit or cause to be deposited promptly, and in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the date of receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of paymentpayment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lock Box) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession Blocked Accounts. Until so deposited, all such payments shall be held in trust by each Credit Party and any of an Approved Armored Car Carrier together its Subsidiaries for the Agent and shall not be commingled with any cash pursuant to clause other funds or property of any Credit Party. On or before the Closing Date, Borrower Representative shall have established a concentration account in its name (i)(A)(1the "Concentration Account") above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which at the applicable Account Debtors bank that shall be directed designated as the Concentration Account bank for Borrowers in Disclosure Schedule 6.16(a) (the "Concentration Account Bank") which bank shall be reasonably satisfactory to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control AgreementAgent.
(b) [Intentionally Omitted]Any Borrower may maintain, in its name, an account (each a "Disbursement Account" and collectively, the "Disbursement Accounts") at a bank reasonably acceptable to Agent into which Agent shall, from time to time, deposit proceeds of Revolving Credit Advances and Swingline Advances made to the Borrowers pursuant to Section 2.1 for use by the Borrowers solely in accordance with the provisions of Section 6.8.
(c) On or before the Closing Date (or such later date as Agent shall consent to in writing), each Credit Party shall deliver to Agent (i) for each Government Receivables Deposit Account, a tri-party deposit account agreement between Agent, the bank at which each Government Receivables Deposit Account is maintained and each Credit Party, in form and substance satisfactory to Agent (each a "Government Receivables Deposit Account Agreement"), which Government Receivables Deposit Account Agreement shall become operative on or prior to the Closing Date, and (ii) for the accounts of Credit Parties designated as a Blocked Account on Disclosure Schedule 6.16(c) and for the Concentration Account and any Disbursement Accounts, a tri-party blocked account agreement or lockbox account agreement between Agent, the bank at which such Blocked Accounts or Disbursement Account is maintained and Credit Parties, in form and substance satisfactory to Agent (each a "Blocked Account Agreement"), which Blocked Account Agreement shall become operative on or prior to the Closing Date. Each Control such Blocked Account Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing DateDate (A) with respect to banks at which any Blocked Accounts or Disbursement Account is maintained, except for cash and Cash Equivalents maintained by the Credit Parties pursuant such bank agrees to Section 5.22, forward immediately all amounts received in any Control each Blocked Account shall be swept to the Concentration Account and to commence the process of daily into sweeps from each of the Collection Account or another Control Account which is swept daily Concentration Accounts and Disbursement Accounts into the Collection Account.
(d) By 10:00 a.m. (New York time) on each Business Day, each Credit Party will cause the entire available balance in each Government Receivables Deposit Account to be transferred to the Blocked Accounts. The balance from time to time standing to the credit of the Blocked Accounts shall be distributed as directed by the Credit Parties in accordance with the provisions of the Blocked Account Agreement. Borrowers shall not, and shall not cause or permit any Subsidiary thereof to, accumulate or maintain cash in disbursement accounts or 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.
(e) So long as no Default or Event of Default has occurred and is continuing, Borrowers may amend Disclosure Schedule 6.16(a) and (c) to add or replace a bank, Government Receivables Deposit Account, the Concentration Account, any Blocked Account or any Disbursement Account; provided, that (i) Agent shall have consented in writing in advance to the opening of such account with the relevant bank and (ii) prior to the time of the opening of such account, Borrowers or their Subsidiaries, as applicable, and such bank shall have executed and delivered to Agent a tri-party blocked account agreement, in form and substance satisfactory to Agent in its sole discretion. Borrowers shall close any of its accounts (and establish replacement accounts in accordance with the foregoing sentence) promptly and in any event within 30 days following notice from Agent to Borrower Representative that the creditworthiness of any bank holding an account is no longer acceptable in Agent's reasonable judgment, or as promptly as practicable and in any event within 60 days following notice from Agent to Borrower Representative that the operating performance, funds transfer or availability procedures or performance with respect to accounts or lockboxes of the bank holding such accounts or Agent's liability under any tri-party blocked account agreement with such bank is no longer acceptable in Agent's reasonable judgment.
(f) The Government Receivables Deposit Accounts, the Concentration Account, the Blocked Accounts and the Disbursement Accounts shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts securing payment of the Loans and all other Obligations, and in which Borrowers and each Subsidiary thereof shall have granted a Lien to Agent, on behalf of itself and Lenders, pursuant to the Security Agreement.
(g) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) 2.14 and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be2.10. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(eh) Credit Parties may amend Schedule 3.22 to add or replace any deposit account Borrowers shall and shall cause its Affiliates, officers, employees, agents, directors or other account; provided, that Persons acting for or in concert with Borrowers (each a "Related Person") to (i) Agent shall have consented hold in writing (trust for Agent, for the benefit of itself and Lenders, all checks, cash and other items of payment received by Borrowers or any such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depositoryRelated Person, securities intermediary or commodities intermediary and (ii) with respect to within 1 Business Day after receipt by Borrowers or any additional such Related Person of any checks, cash or replacement Control other items of payment, deposit the same into a Blocked Account or the Concentration Account. Borrowers and each Related Person thereof acknowledges and agrees that all cash, securities account, checks or commodities account, except as Agent may otherwise agree in writing, prior to the time other items of payment constituting proceeds of Collateral are part of the opening Collateral. All proceeds of such account, the applicable Credit Party and the applicable depository, securities intermediary sale or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness other disposition of any bank holding an account is no longer acceptable in Agent’s reasonable judgmentCollateral, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter be deposited directly into a Control Agreement with respect to such Local Blocked Account or the Concentration Account (or if proceeds of Government Accounts into a Government Receivables Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the AgentAccount).
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. The Credit Parties shall (except solely to the extent the failure to do so shall have either at all times (i) not resulted from use commercially reasonable efforts to cause all their Customers on any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures and all Receivables of the Credit Parties not affecting from time to time included in the Borrowing Base to make all payments and remittances with respect to such Receivables into one or more than ten deposit accounts located with a depositary bank in the United States of America (10) Stores or into one or more lockboxes established and maintained by a depositary bank in the United States of America and with respect to which such depositary bank retrieves and process all checks and other evidences of payment so received at any timesuch lockbox and deposits the same into one or more deposit accounts located with it in the United States of America); provided that, in the case of payments or remittances with respect to Receivables owed to any caseDiscretionary Guarantor, a depositary bank located in the country or jurisdiction where such Discretionary Guarantor is organized or operates (or into one or more lockboxes established and maintained by a depositary bank located in the country or jurisdiction where such Discretionary Guarantor is organized or operates and with respect to which such depositary bank retrieves and process all checks and other evidences of payment so long received at such lockbox and deposits the same into one or more deposit accounts located with it in the country or jurisdiction where such Discretionary Guarantor is organized or operates) (such deposit accounts being referred to as any the “Collection Deposit Accounts” and such failure shall not be material in any respect):
lockboxes being referred to as the “Collection Lockboxes”), (Aii) cause (1) all cash payments received by them at proceeds of the Disposition of any Store ABL Priority Collateral (other than xxxxx cash maintained any proceeds of any Disposition of Inventory in Store cash registers the ordinary course of business, which shall be subject to facilitate point of sale transactionsclause (i) above), consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit deposited directly into a Control Collection Deposit Account or Local the Concentration Deposit Account, provided that until such time as such cash (iii) cause each Collection Deposit Account and the Concentration Deposit Account at all times to be solely a collection account, and no Credit Party shall make any disbursements or other direct payments shall therefrom, and (iv) deposit or cause to be delivered into deposited promptly, and in any event no later than the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one three Business Day Days after the date of its receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) payment received by it relating to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, constituting payments or remittances with respect to any Receivables of any Credit Party from time to time included in the case of checks, drafts and other similar items of payment that Borrowing Base into one or more Collection Deposit Accounts or Collection Lockboxes in precisely the form in which they are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together received (but with any cash pursuant endorsements of such Credit Party necessary for deposit or collection), and until they are so deposited to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than hold such payments in connection with delinquent collection efforts, pursuant to which trust for the applicable Account Debtors shall be directed to remit payment directly to benefit of the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control AgreementCollateral Agent.
(b) [Intentionally OmittedReserved].
(c) Each Control Agreement shall provideAny Credit Party may replace any Collection Deposit Account, among other thingsCollection Lockbox or Concentration Deposit Account, or establish any new Collection Deposit Account, Collection Lockbox or Concentration Deposit Account; provided, in each case, that (i) the depositoryeach such replacement or new Collection Deposit Account, securities intermediary Collection Lockbox or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Concentration Deposit Account shall be swept daily into subject to a Control Agreement in favor of the Collection Account or another Control Account which Collateral Agent and shall otherwise meet the requirements of this Section 5.19 (provided that in the case of any newly acquired Credit Party, the requirements of this Section 5.19 shall not apply until the date that is swept daily into 60 days after the Collection Accountdate of the acquisition of such Credit Party).
(d) All amounts deposited in the Collection Administrative Agent Account under Section 5.19(b) shall be deemed received by the Administrative Agent in accordance with Section 1.10(a) 2.16 and shall be applied (and allocated) by the Administrative Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii2.14(b), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Administrative Agent Account. Any amount so received in a currency other than Dollars may be converted to Dollars in accordance with the Administrative Agent’s customary practices.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) The Collateral Agent shall have consented promptly (but in writing (such consent not be unreasonably withheldany event within three Business Days) furnish written notice to each depositary bank of any payment in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time full of the opening of such account, Obligations. Any amount received in the applicable Credit Party and Administrative Agent Account under Section 5.19(b) at any time when all the applicable depository, securities intermediary or commodities intermediary Obligations have been paid in full shall have executed and delivered be remitted to Agent a Control Agreementan operating account designated by the Borrower.
(f) Without the prior written consent of the Administrative Agent, no Credit Parties Party shall close modify or amend the instructions pursuant to any of their respective accounts (the Control Agreements. So long as no notice has been provided under Section 8.1, each Credit Party shall, and establish replacement accounts the Collateral Agent hereby authorizes each Credit Party to, enforce and collect all amounts owing on the Inventory and Receivables, provided that such authorization shall automatically terminate if the Administrative Agent provides a notice under Section 8.1. Each Credit Party acknowledges and agrees that disposition of funds in the Collection Deposit Accounts and the Concentration Deposit Account shall be subject to the Collateral Agent’s control in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgmentSection 5.19(b).
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.
Appears in 1 contract
Samples: Restructuring Support Agreement (QualTek Services Inc.)
Cash Management Systems. (a) Each The Credit Party shall enter intoParties will maintain the cash management systems described below (the “Cash Management Systems”):
(i) (x) the Parent Borrower will, or will cause each of the applicable Subsidiaries to, request in writing and otherwise take reasonable steps to provide that all Account Debtors in respect of Governmental Accounts that constitute Collateral forward payment directly to an account of a Borrower designated as a Government Receivables Deposit Account on Schedule 9.15(a) (each a “Government Receivables Deposit Account”), (y) the Credit Parties will, or will cause each of their Subsidiaries to, maintain lock boxes (“Lock Boxes”) or, at the Administrative Agent’s discretion, blocked accounts (“Blocked Accounts”) listed on Schedule 9.15(c) at one or more banks that are reasonably acceptable to the Collateral Agent, and cause each depository, securities intermediary or commodities intermediary shall request in writing and otherwise take reasonable steps to enter into, Control Agreements providing for “full” cash dominion provide that all Account Debtors with respect to Private Accounts that constitute Collateral forward payments directly to such Lock Boxes or Blocked Accounts and (z) each Control AccountBorrower will deposit and cause its Subsidiaries to deposit or cause to be deposited promptly, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, and in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the date of receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of paymentpayment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lock Box) into the Blocked Accounts. Until so deposited, all such payments shall be held in trust by each Borrower and any of its Subsidiaries for the Administrative Agent and shall not be commingled with any other funds or property of any Borrower. The Parent Borrower shall maintain a concentration account in its name (the “Concentration Account”) (with a bank reasonably acceptable to the Administrative Agent (it being agreed that Xxxxx Fargo Bank, N.A. is acceptable to the Administrative Agent)) that shall be deposited designated as the Concentration Account for the Parent Borrower listed on Schedule 9.15(a).
(ii) The Parent Borrower may maintain, in its name, one or more accounts (any such account, a “Disbursement Account”) at any bank reasonably acceptable to the Administrative Agent into a Control Account or Local Deposit Account within one (1) Business Day after which the receipt thereof Administrative Agent shall, from time to time, deposit proceeds of Loans made to the Parent Borrower pursuant to Section 2.1 for use by the Parent Borrower solely in accordance with the provisions of Section 9.13 (it being understood thatthat the Administrative Agent may also deposit or wire proceeds of Loans into any other account designated by the Parent Borrower at any time other than during the continuance of any Cash Dominion Event). The Parent Borrower may also maintain, in its name, one or more accounts that (x) do not contain any funds that are proceeds of Accounts that otherwise constitute Collateral or (y) include funds that are proceeds of Accounts that otherwise constitute Collateral and that are neither Government Receivables Deposit Accounts nor subject to a Blocked Account Agreement, but solely (in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to this clause (i)(A)(1y) above);
(Bonly) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit extent that any such accounts which do are not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreementblocked account or control agreement with any other party (each a “Non-Controlled Account”).
(biii) [Intentionally Omitted].
Within 60 calendar days after the Closing Date (cor such later date as the Administrative Agent may, in its sole discretion, consent to in writing), each Borrower that owns or originates Government Accounts shall deliver to the Collateral Agent (x) for each Government Receivables Deposit Account established or maintained by such Borrower, a tri-party deposit account agreement between the Collateral Agent, the bank at which such Government Receivables Deposit Account (each a “Government Receivables Bank”) is maintained and such Borrower, in form and substance reasonably satisfactory to the Collateral Agent (each a “Government Receivables Deposit Account Agreement”), and (y) for the accounts of any Borrower designated as a Blocked Account on Schedule 9.15(c) and for the Concentration Account and any Disbursement Accounts, a tri-party blocked account agreement or lockbox account agreement between the Collateral Agent, the bank at which each such Blocked Account, Concentration Account or Disbursement Account is maintained and the relevant Borrowers, in form and substance reasonably satisfactory to the Collateral Agent (each a “Blocked Account Agreement”). Each Control such Blocked Account Agreement with respect to any Blocked Account shall provide, among other things, that from and after the date thereof the bank at which any such Blocked Account is maintained, agrees to forward immediately all amounts in each such account to the Concentration Account. In addition, any such Blocked Account Agreement shall provide, among other things, that (i) upon the depositoryoccurrence and during the continuation of a Cash Dominion Event, securities intermediary the bank at which such Blocked Account, Concentration Account or commodities intermediary executing such agreement has no rights Disbursement Account is maintained shall, upon receipt of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to notice by the administration Collateral Agent of such account and for returned checks or other items Cash Dominion Event, commence the process of payment (except as Agent may otherwise agree in writing), and (ii) daily sweeps from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily such accounts into the Collection Account (it being understood that any such daily sweep in respect of any cash or another Control other amount in a Disbursement Account which shall be subject to the rights of the Borrowers to transfer, apply or otherwise use the proceeds of any Loans hereunder for any purpose in accordance with Section 9.13 by moving any cash or other amount on deposit in any Disbursement Account out of such account for any such purpose); provided that any amounts in the Concentration Accounts reasonably identified (with reasonably detailed written support) to the Administrative Agent as not constituting Collateral will be distributed as directed by the Administrative Agent as requested by the Parent Borrower, including to one or more Non-Controlled Accounts. Notwithstanding anything to the contrary herein or in any other Credit Document, no cash or other amount that is disbursed or otherwise transferred from the Disbursement Account (other than to the extent swept daily back into the Collection Account) shall constitute Collateral.
(div) All amounts deposited By 10:00 a.m. (New York time) on each Business Day, each Borrower will cause the entire available balance in each Government Receivables Deposit Account to be transferred by ACH or book entry transfer to the Collection Concentration Account. The Borrowers will not transfer any funds out of the Government Receivables Deposit Account or any Blocked Account except to the Concentration Account. The balance from time to time standing to the credit of the Blocked Accounts shall be deemed received by Agent distributed as directed in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time provisions of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Blocked Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.Agreements. Prior to
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter intoAnnexed hereto as Schedule 6.15(a) is a schedule of all DDAs, and cause each depositorythat are maintained by the Borrowers, securities intermediary or commodities intermediary to enter intowhich Schedule includes, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar depository (i) the name and address of such depository; (ii) the account (including, without limitation, any lockbox or similar arrangementsnumber(s) maintained by with such Person as of or depository; and (iii) a contact person at such depository.
(b) Within one-hundred twenty (120) days after the Closing Date. Credit Parties shall Date (except solely or such longer period as the Administrative Agent may agree in its sole reasonable discretion), each Borrower will use commercially reasonable efforts to enter into a blocked account agreement (each, a “Blocked Account Agreement”), reasonably satisfactory to the extent Administrative Agent, with respect to the failure DDAs existing as of the Closing Date listed on Schedule 6.15(b) attached hereto (collectively, the “Blocked Accounts”). Each U.S. Loan Party hereby agrees that, once the Blocked Account Agreements are entered into, all cash received by such U.S. Loan Party in any DDA that is not a Blocked Account (other than amounts held in payroll, trust and tax withholding accounts funded in the ordinary course of business and required by Applicable Law) will be promptly transferred into a Blocked Account. After entering into the Blocked Account Agreement, there shall be at all times thereafter at least one Blocked Account.
(c) Each Blocked Account Agreement entered into by a Borrower shall permit the Administrative Agent to do so shall have either instruct the depository, after the occurrence and during the continuance of a Cash Dominion Event (and delivery of notice thereof from the Administrative Agent), to transfer on each Business Day of all available cash receipts to the concentration account maintained by the Administrative Agent at CUSA (the “Concentration Account”), from:
(i) not resulted from any act or omission the sale of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts Inventory and other similar items of payment that are deposited electronicallyCollateral (but excluding, such items may be delivered into until the possession of an Approved Armored Car Carrier together with CF Facility is repaid, any cash pursuant to clause (i)(A)(1) aboveCF Priority Collateral);
(Bii) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxesproceeds of collections of Accounts; and
(Ciii) cause each Blocked Account (including all funds cash deposited therein from each DDA). If, at any time during the continuance of a Cash Dominion Event, any cash or Cash Equivalents owned by any U.S. Loan Party (other than (i) xxxxx cash and minimum daily working capital accounts funded in local store deposit the ordinary course of business, the deposits in which shall not aggregate more than $15.0 million (or such greater amounts to which the Administrative Agent may agree), and (ii) payroll, trust and tax withholding accounts which do not constitute Control Accounts (“Local Deposit Accounts”funded in the ordinary course of business and required by Applicable Law) are deposited to be transferred on any account, or held or invested in any manner, otherwise than in a daily basis to a Control Blocked Account that is subject to a Control Agreement.
Blocked Account Agreement (b) [Intentionally Omitted].
(c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account a DDA which is swept daily to a Blocked Account), the Administrative Agent may require the applicable U.S. Loan Party to close such account and have all funds therein transferred to a Blocked Account, and all future deposits made to a Blocked Account which is subject to a Blocked Account Agreement. In addition to the foregoing, during the continuance of a Cash Dominion Event, at the request of the Administrative Agent, the U.S. Loan Parties shall provide the Administrative Agent with an accounting of the contents of the Blocked Accounts, which shall identify, to the reasonable satisfaction of the Administrative Agent, the proceeds from the ABL Priority Collateral which were deposited into a Blocked Account and swept to the Collection Concentration Account.
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) The U.S. Loan Parties may close DDAs or Section 1.10(c)(ii)Blocked Accounts and/or open new DDAs or Blocked Accounts, as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds subject to the Collection Accountexecution and delivery to the Administrative Agent of appropriate Blocked Account Agreements (except with respect to any payroll, trust, and tax withholding accounts or unless expressly waived by the Administrative Agent) consistent with and to the extent required by the provisions of this Section 6.15 and otherwise reasonably satisfactory to the Administrative Agent. The U.S. Loan Parties shall furnish the Administrative Agent with prior written notice of its intention to open or close a Blocked Account and the Administrative Agent shall promptly notify the Parent Borrower as to whether the Administrative Agent shall require a Blocked Account Agreement with the Person with whom such account will be maintained.
(e) Credit The U.S. Loan Parties may amend Schedule 3.22 also maintain one or more disbursement accounts to add or replace any deposit account or other account; provided, that be used by the U.S. Loan Parties for disbursements and payments (i) Agent shall have consented in writing (such consent not be unreasonably withheldincluding payroll) in advance to the opening ordinary course of such account with the relevant depository, securities intermediary business or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreementpermitted hereunder.
(f) Credit Parties The Concentration Account shall close at all times be under the sole dominion and control of the Administrative Agent. Each U.S. Loan Party hereby acknowledges and agrees that (i) such U.S. Loan Party has no right of withdrawal from the Concentration Account, (ii) the funds on deposit in the Concentration Account shall at all times continue to be collateral security for all of the Obligations, and (iii) the funds on deposit in the Concentration Account shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this Section 6.15, during the continuation of a Cash Dominion Event, any U.S. Loan Party receives or otherwise has dominion and control of any such proceeds or collections related to ABL Priority Collateral, such proceeds and collections shall be held in trust by such U.S. Loan Party for the Administrative Agent, shall not be commingled with any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and such U.S. Loan Party’s other funds or deposited in any event within thirty (30) days following notice from Agent that account of such U.S. Loan Party and shall promptly be deposited into the creditworthiness of any bank holding an account is no longer acceptable Concentration Account or dealt with in such other fashion as such U.S. Loan Party may be instructed by the Administrative Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository So long as no Cash Dominion Event has occurred and if such Control Agreement cannot be obtainedis continuing, the Agent U.S. Loan Parties may require direct, and shall have sole control over, the Credit Parties to close such Local Deposit Accounts manner of disposition of funds in the Blocked Accounts.
(h) Any amounts received in the Concentration Account at any time when all of the Obligations then due have been and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory remain fully repaid shall be remitted to the operating account of the U.S. Loan Parties.
(i) The Administrative Agent shall promptly (but in any event within one Business Day) furnish written notice to each Person with whom a Blocked Account is maintained of any termination of a Cash Dominion Event.
(j) The following shall apply to deposits and payments under and pursuant to this Agreement:
(i) Funds shall be deemed to have been deposited to the Concentration Account on the Business Day on which deposited, provided that such deposit is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. New York City time, on that Business Day);
(ii) Funds paid to the Administrative Agent, other than by deposit to the Concentration Account, shall be deemed to have been received on the Business Day when they are good and collected funds, provided that such payment is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. New York City time, on that Business Day);
(iii) If a deposit to the Concentration Account or payment is not available to the Administrative Agent until after 4:00 p.m. on a Business Day, such deposit or payment shall be deemed to have been made at 9:00 a.m. on the then next Business Day;
(iv) If any item deposited to the Concentration Account and credited to the Loan Account is dishonored or returned unpaid for any reason, whether or not such return is rightful or timely, the Administrative Agent shall have the right to reverse such credit and charge the amount of such item to the applicable Loan Account and the Borrowers shall indemnify the Secured Parties against all reasonable out-of-pocket claims and losses resulting from such dishonor or return;
(v) All amounts received under this Section 6.15 shall be applied in the manner set forth in Section 8.03.
Appears in 1 contract
Cash Management Systems. (a) Each The Credit Party shall enter intoParties will maintain the cash management systems described below (the “Cash Management Systems”):
(i) (x) the Parent Borrower will, or will cause each of the applicable Subsidiaries to, request in writing and otherwise take reasonable steps to provide that all Account Debtors in respect of Governmental Accounts that constitute Collateral forward payment directly to an account of a Borrower designated as a Government Receivables Deposit Account on Schedule 9.15(a) (each a “Government Receivables Deposit Account”), (y) the Credit Parties will, or will cause each of their Subsidiaries to, maintain lock boxes (“Lock Boxes”) or, at the Administrative Agent’s discretion, blocked accounts (“Blocked Accounts”) listed on Schedule 9.15(c) at one or more banks that are reasonably acceptable to the Collateral Agent, and cause each depository, securities intermediary or commodities intermediary shall request in writing and otherwise take reasonable steps to enter into, Control Agreements providing for “full” cash dominion provide that all Account Debtors with respect to Private Accounts that constitute Collateral forward payments directly to such Lock Boxes or Blocked Accounts and (z) each Control AccountBorrower will deposit and cause its Subsidiaries to deposit or cause to be deposited promptly, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, and in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the date of receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of paymentpayment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lock Box) into the Blocked Accounts. Until so deposited, all such payments shall be held in trust by each Borrower and any of its Subsidiaries for the Administrative Agent and shall not be commingled with any other funds or property of any Borrower. The Parent Borrower shall maintain a concentration account in its name (the “Concentration Account”) (with a bank reasonably acceptable to the Administrative Agent (it being agreed that Xxxxx Fargo Capital Finance, LLC is acceptable to the Administrative Agent)) that shall be deposited designated as the Concentration Account for the Parent Borrower listed on Schedule 9.15(a).
(ii) The Parent Borrower may maintain, in its name, one or more accounts (any such account, a “Disbursement Account”) at any bank reasonably acceptable to the Administrative Agent into a Control Account or Local Deposit Account within one (1) Business Day after which the receipt thereof Administrative Agent shall, from time to time, deposit proceeds of Loans made to the Parent Borrower pursuant to Section 2.1 for use by the Parent Borrower solely in accordance with the provisions of Section 9.13 (it being understood thatthat the Administrative Agent may also deposit or wire proceeds of Loans into any other account designated by the Parent Borrower at any time other than during the continuance of any Cash Dominion Event). The Parent Borrower may also maintain, in its name, one or more accounts that (x) do not contain any funds that are proceeds of Accounts that otherwise constitute Collateral or (y) include funds that are proceeds of Accounts that otherwise constitute Collateral and that are neither Government Receivables Deposit Accounts nor subject to a Blocked Account Agreement, but solely (in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to this clause (i)(A)(1y) above);
(Bonly) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit extent that any such accounts which do are not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreementblocked account or control agreement with any other party (each a “Non-Controlled Account”).
(biii) [Intentionally Omitted].
Within 60 calendar days after the Closing Date (cor such later date as the Administrative Agent may, in its sole discretion, consent to in writing), each Borrower that owns or originates Government Accounts shall deliver to the Collateral Agent (x) for each Government Receivables Deposit Account established or maintained by such Borrower, a tri-party deposit account agreement between the Collateral Agent, the bank at which such Government Receivables Deposit Account (each a “Government Receivables Bank”) is maintained and such Borrower, in form and substance reasonably satisfactory to the Collateral Agent (each a “Government Receivables Deposit Account Agreement”), and (y) for the accounts of any Borrower designated as a Blocked Account on Schedule 9.15(c) and for the Concentration Account and any Disbursement Accounts, a tri-party blocked account agreement or lockbox account agreement between the Collateral Agent, the bank at which each such Blocked Account, Concentration Account or Disbursement Account is maintained and the relevant Borrowers, in form and substance reasonably satisfactory to the Collateral Agent (each a “Blocked Account Agreement”). Each Control such Blocked Account Agreement with respect to any Blocked Account shall provide, among other things, that from and after the date thereof the bank at which any such Blocked Account is maintained, agrees to forward immediately all amounts in each such account to the Concentration Account. In addition, any such Blocked Account Agreement shall provide, among other things, that (i) upon the depositoryoccurrence and during the continuation of a Cash Dominion Event, securities intermediary the bank at which such Blocked Account, Concentration Account or commodities intermediary executing such agreement has no rights Disbursement Account is maintained shall, upon receipt of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to notice by the administration Collateral Agent of such account and for returned checks or other items Cash Dominion Event, commence the process of payment (except as Agent may otherwise agree in writing), and (ii) daily sweeps from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily such accounts into the Collection Account (it being understood that any such daily sweep in respect of any cash or another Control other amount in a Disbursement Account which shall be subject to the rights of the Borrowers to transfer, apply or otherwise use the proceeds of any Loans hereunder for any purpose in accordance with Section 9.13 by moving any cash or other amount on deposit in any Disbursement Account out of such account for any such purpose); provided that any amounts in the Concentration Accounts reasonably identified (with reasonably detailed written support) to the Administrative Agent as not constituting Collateral will be distributed as directed by the Administrative Agent as requested by the Parent Borrower, including to one or more Non-Controlled Accounts. Notwithstanding anything to the contrary herein or in any other Credit Document, no cash or other amount that is disbursed or otherwise transferred from the Disbursement Account (other than to the extent swept daily back into the Collection Account) shall constitute Collateral.
(div) By 10:00 a.m. (New York time) on each Business Day, each Borrower will cause the entire available balance in each Government Receivables Deposit Account to be transferred by ACH or book entry transfer to the Concentration Account. The Borrowers will not transfer any funds out of the Government Receivables Deposit Account or any Blocked Account except to the Concentration Account. The balance from time to time standing to the credit of the Blocked Accounts shall be distributed as directed in accordance with the provisions of the Blocked Account Agreements. Prior to the occurrence of any first Cash Dominion Event, the balance from time to time standing to the credit of the Concentration Account shall be distributed as directed by the Parent Borrower, including to one or more Non-Controlled Accounts. The Parent Borrower shall not, and shall not cause or permit any Subsidiary thereof to, accumulate or maintain cash (other than cash that is not proceeds of any Collateral) in disbursement accounts or payroll accounts as of any date of determination in excess of checks outstanding against such accounts as of the date and amounts necessary to meet minimum balance, near-term funding requirements or near-term operating requirements. Notwithstanding anything to the contrary, cash held in overnight deposit or investment accounts shall be deemed to be in the Concentration Account overnight.
(v) So long as no Default or Event of Default has occurred and is continuing, the Parent Borrower may amend Schedules 9.15(a) and (c) to add or replace a bank, any Government Receivables Deposit Account, the Concentration Account, any Blocked Account or any Disbursement Account; provided that (x) the Administrative Agent shall have consented in writing in advance to the opening of such new or replacement account with the relevant bank (which consent shall not be unreasonably withheld) and (y) prior to the time of the opening of such account, the applicable Borrower and such bank shall have executed and delivered to the Collateral Agent a tri-party agreement, in form and substance reasonably satisfactory to the Collateral Agent in its sole discretion. Each Borrower shall cease using any account to hold proceeds of Collateral promptly and in any event within 30 days (or such later date as the Administrative Agent may, in its sole reasonable discretion, consent to in writing) following notice from the Administrative Agent to the Parent Borrower that the creditworthiness of the bank holding such account is no longer acceptable in the Administrative Agent’s reasonable credit judgment, or as promptly as practicable and in any event within 60 days (or such later date as the Administrative Agent may, in its sole reasonable discretion, consent to in writing) following notice from the Administrative Agent to the Parent Borrower that the operating performance, funds transfer or availability procedures or performance with respect to accounts or lockboxes of the bank holding such account or Agent’s liability under any tri-party blocked account agreement with such bank is no longer acceptable in the Administrative Agent’s reasonable credit judgment.
(vi) The Government Receivables Deposit Accounts, the Concentration Account, the Blocked Accounts and the Disbursement Accounts (subject to the last two sentences of Section 9.15(a)(iii)) shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts (to the extent constituting proceeds of Accounts otherwise constituting Collateral) securing payment of the Loans and all other Obligations, and in which the applicable Borrower shall have granted a Lien to the Collateral Agent, on behalf of itself and Lenders, pursuant to the Security Agreement. The Borrowers shall use commercially reasonable efforts to ensure that all cash, checks and other similar items of payment in the Government Receivables Deposit Accounts, the Concentration Account and the Blocked Accounts are solely in respect of Accounts that otherwise constitute Collateral; provided that, credit card, debit card and internet xxxx inquiry and payment system (IBIP) payments received in the Concentration Account that do not constitute proceeds of Accounts otherwise constituting Collateral shall be permitted in the Concentration Account so long as the Borrowers use their commercially reasonable efforts to distribute such amounts to a Non-Controlled Account within three (3) Business Days of receipt thereof.
(vii) All amounts deposited in the Collection Account shall be deemed received by the Administrative Agent in accordance with Section 1.10(a) 5 and shall be applied (and allocated) by the Administrative Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be5. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(eviii) Credit Parties may amend Schedule 3.22 to add or replace any deposit account The Borrowers shall and shall cause their respective Affiliates, officers, employees, agents, directors or other account; providedPersons acting for or in concert with a Borrower (each a “Related Person”) to (x) hold in trust for the Administrative Agent, for the benefit of itself and Lenders, all checks, cash and other items of payment received by a Borrower or by a Related Person on behalf of a Borrower in respect of Accounts that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depositoryconstitute Collateral, securities intermediary or commodities intermediary and (iiy) with within 1 Business Day after receipt by a Borrower or by a Related Person on behalf of a Borrower of any checks, cash or other items of payment in respect to any additional of Accounts that constitute Collateral, deposit the same into a Blocked Account or replacement Control the Concentration Account. Each Borrower and each Related Person thereof acknowledges and agrees that all cash, securities account, checks or commodities account, except as Agent may otherwise agree in writing, prior to the time other items of payment constituting proceeds of Collateral are part of the opening Collateral. All proceeds of such account, the applicable Credit Party and the applicable depository, securities intermediary sale or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness other disposition of any bank holding an account is no longer acceptable in Agent’s reasonable judgmentCollateral, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter be deposited directly into a Control Agreement with respect to such Local Blocked Account or the Concentration Account (or if proceeds of Government Accounts, into a Government Receivables Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the AgentAccount).
Appears in 1 contract
Cash Management Systems. On or prior to the Closing Date, Borrowers and the other Credit Parties will establish, and will maintain until the Termination Date, a cash management system (including as to which Deposit Accounts are disbursement accounts) acceptable to Agent in its sole discretion. Without limiting the foregoing:
(a) Each Credit Party shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures Deposit Accounts of the Credit Parties not affecting more than ten (10) Stores at any timein existence as of the Closing Date, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Credit Party shall have executed and delivered to Agent a Blocked Account Debtors shall be directed Agreement with respect to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local such Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreement.;
(b) [Intentionally Omitted].
(c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Date no Credit Parties pursuant to Section 5.22, all amounts received in any Control Account Party shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Account.
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account banks at which they maintain Deposit Accounts, or other account; providedopen any new Deposit Accounts, that unless (ix) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to such change and (y) prior to the opening time of such account change, 9 Senior Credit Agreement (Omni) the applicable Credit Party and bank shall have executed and delivered to Agent a Blocked Account Agreement with respect to all Deposit Accounts at such bank;
(c) (i) with respect to any Deposit Account that is a disbursement account, Agent agrees that the relevant depositoryapplicable Credit Party who holds such Deposit Account may continue to write checks on, securities intermediary and otherwise make withdrawals from, such Deposit Account unless and until an Event of Default occurs, at (or commodities intermediary after) which time Agent may elect, in its sole and absolute discretion, to take control of such Deposit Account and all cash deposited therein, and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such Deposit Account that is not a disbursement account, the applicable Blocked Account Agreement shall provide that Agent at all times controls such Deposit Account and all cash deposited therein (unless otherwise agreed to by Agent in its sole discretion); and
(d) each Borrower shall at all times maintain a designated Deposit Account (each, a “Designated Deposit Account”), which shall not be a disbursement account, into which all proceeds other than proceeds of Working Capital Loan Primary Collateral (or proceeds that constitute Working Capital Loan Primary Collateral) shall, to the extent not paid directly to Agent, be deposited immediately upon receipt by any Credit Party Party, and with respect to which the applicable Borrower and the applicable depository, securities intermediary or commodities intermediary bank shall have executed and delivered to Agent a Control Blocked Account Agreement.
(fe) Credit Parties On the Closing Date, all payments received in respect of Preheat’s accounts receivable shall close be transferred to a new account to be established at Xxxxxxx Bank, National Association. On and after the Closing Date, no further deposits shall be made into any of their respective accounts (and establish replacement accounts the Preheat Existing Accounts, except for the deposit of an amount as may be required to meet Preheat’s payroll requirements, which amount shall be acceptable to Agent in accordance with clause (d) hereof) promptly and in any event within its sole discretion. Within thirty (30) days following notice from the Closing Date, Omni shall have (i) closed all Preheat Existing Accounts and (ii) delivered to Agent that the creditworthiness of all Pledged Account Agreements, Blocked Account Agreements and any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from other documents required by Agent that the operating performance, funds transfer or availability procedures or performance pursuant to this Section 1.8 with respect to accounts of the depositoryPreheat’s Deposit Accounts, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer each in form and substance acceptable to Agent in Agent’s reasonable judgmentits sole discretion.
(gf) Upon Agent’s requestWithin five (5) Business Days following the Closing Date, each Borrower Omni shall use its commercially reasonable efforts to cause each depository with (i) transfer from the Xxxxxxx Xxxxx bank account listed in Disclosure Schedule 3.19 all deposits which it maintains constitute prepayments for services or any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement canother payments which have not be obtained, the Agent may require yet been earned by Omni or any of the Credit Parties to close into a new separate bank account and (ii) notify Agent of the transfer and the relevant information identifying such Local Deposit Accounts and transfer all new account. Thereafter, any future deposits of a similar type shall also be deposited into such new account. All funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory deposited into the new account shall not be commingled with other funds of the Credit Parties and, upon any portion of such deposits becoming earned by any Credit Party, shall be transferred promptly to the Agentappropriate account in compliance with this Section 1.8.
Appears in 1 contract
Cash Management Systems. DMFIRM #406105327 v12 169
(a) Each The Credit Party shall enter intoParties shall, as promptly as practicable after the Closing Date (and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, in any lockbox or similar arrangements) maintained by such Person as of or event within 90 days after the Closing Date. Credit Parties shall (except solely to , or such longer period as the extent the failure to do so shall have either Administrative Agent may agree to) and at all times thereafter, (i) not resulted from use commercially reasonable efforts to cause all their Customers on any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures and all Receivables of the Credit Parties not affecting from time to time included in the Borrowing Base to make all payments and remittances with respect to such Receivables into one or more than ten deposit accounts located with a depositary bank in the United States of America (10) Stores or into one or more lockboxes established and maintained by a depositary bank in the United States of America and with respect to which such depositary bank retrieves and process all checks and other evidences of payment so received at any timesuch lockbox and deposits the same into one or more deposit accounts located with it in the United States of America); provided that, in the case of payments or remittances with respect to Receivables owed to any caseDiscretionary Guarantor, a depositary bank located in the country or jurisdiction where such Discretionary Guarantor is organized or operates (or into one or more lockboxes established and maintained by a depositary bank located in the country or jurisdiction where such Discretionary Guarantor is organized or operates and with respect to which such depositary bank retrieves and process all checks and other evidences of payment so long received at such lockbox and deposits the same into one or more deposit accounts located with it in the country or jurisdiction where such Discretionary Guarantor is organized or operates) (such deposit accounts being referred to as any the “Collection Deposit Accounts” and such failure shall not be material in any respect):
lockboxes being referred to as the “Collection Lockboxes”), (Aii) cause (1) all cash payments received by them at proceeds of the Disposition of any Store ABL Priority Collateral (other than xxxxx cash maintained any proceeds of any Disposition of Inventory in Store cash registers the ordinary course of business, which shall be subject to facilitate point of sale transactionsclause (i) above), consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit deposited directly into a Control Collection Deposit Account or Local the Concentration Deposit Account, provided that until such time as such cash (iii) cause each Collection Deposit Account and the Concentration Deposit Account at all times to be solely a collection account, and no Credit Party shall make any disbursements or other direct payments shall therefrom, and (iv) deposit or cause to be delivered into deposited promptly, and in any event no later than the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one three Business Day Days after the date of its receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) payment received by it relating to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, constituting payments or remittances with respect to any Receivables of any Credit Party from time to time included in the case of checks, drafts and other similar items of payment that Borrowing Base into one or more Collection Deposit Accounts or Collection Lockboxes in precisely the form in which they are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together received (but with any cash pursuant endorsements of such Credit Party necessary for deposit or collection), and until they are so deposited to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than hold such payments in connection with delinquent collection efforts, pursuant to which trust for the applicable Account Debtors shall be directed to remit payment directly to benefit of the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control AgreementCollateral Agent.
(b) [Intentionally Omitted].
The Credit Parties shall use commercially reasonable efforts to ensure that as promptly as practicable after the Closing Date (c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or but in any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and event within 90 days after the Closing Date, except for cash or such longer period as the Administrative Agent may agree to), and Cash Equivalents maintained by shall at all times thereafter ensure that, each depositary bank where a Collection Deposit Account or the Concentration Deposit Account is maintained, and each depositary bank that maintains a Collection Lockbox, shall have entered into a Control Agreement with respect to each such deposit account DMFIRM #406105327 v12 170
(c) Any Credit Parties pursuant to Section 5.22Party may replace any Collection Deposit Account, all amounts received Collection Lockbox or Concentration Deposit Account, or establish any new Collection Deposit Account, Collection Lockbox or Concentration Deposit Account; provided, in any Control each case, that each such replacement or new Collection Deposit Account, Collection Lockbox or Concentration Deposit Account shall be swept daily into subject to a Control Agreement in favor of the Collection Account or another Control Account which Collateral Agent and shall otherwise meet the requirements of this Section 5.17 (provided that in the case of any newly acquired Credit Party, the requirements of this Section 5.17 shall not apply until the date that is swept daily into 60 days after the Collection Accountdate of the acquisition of such Credit Party).
(d) All amounts deposited in the Collection Administrative Agent Account under Section 5.17(b) shall be deemed received by the Administrative Agent in accordance with Section 1.10(a) 2.16 and shall be applied (and allocated) by the Administrative Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii2.14(b), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Administrative Agent Account.. Any amount so received in a currency other than Dollars may be converted to Dollars in accordance with the Administrative Agent’s customary practices. DMFIRM #406105327 v12 171
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) The Collateral Agent shall promptly (but in any event within three Business Days) furnish written notice to each depositary bank that shall have consented received an Activation Notice of any payment in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time full of the opening of such account, Obligations. Any amount received in the applicable Credit Party and Administrative Agent Account under Section 5.17(b) at any time when all the applicable depository, securities intermediary or commodities intermediary Obligations have been paid in full shall have executed and delivered be remitted to Agent a Control Agreementan operating account designated by the Borrower.
(f) Without the prior written consent of the Administrative Agent, no Credit Parties Party shall close modify or amend the instructions pursuant to any of their respective accounts (the Control Agreements. So long as no notice has been provided under Section 8.1, each Credit Party shall, and establish replacement accounts the Collateral Agent hereby authorizes each Credit Party to, enforce and collect all amounts owing on the Inventory and Receivables, provided that such authorization shall automatically terminate if the Administrative Agent provides a notice under Section 8.1. Each Credit Party acknowledges and agrees that disposition of funds in the Collection Deposit Accounts and the Concentration Deposit Account shall be subject to the Collateral Agent’s control in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgmentSection 5.17(b).
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.
Appears in 1 contract
Samples: Abl Credit and Guaranty Agreement (QualTek Services Inc.)
Cash Management Systems. (a) Each Credit Party shall enter into, and cause each depository, securities intermediary On or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after before the Closing Date and until the Revolving Credit Termination Date. Credit Parties shall (except solely to the extent the failure to do so shall have either , (i) not resulted from any act establish lock boxes ("Lock Boxes") at one or omission more of any Credit Party or the banks set forth on Schedule 6.13 (each, a "Relationship Bank"), which banks shall be satisfactory to the Administrative Agent, and shall request in writing and otherwise take such reasonable steps to ensure that all account debtors forward payment directly to such Lock Boxes, and (ii) resulted from the isolated failure by any employee of any Credit Party deposit and cause its domestic Subsidiaries to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any timedeposit or cause to be deposited promptly, and in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the date of receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of paymentpayment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lock Box) to be deposited into a Control Account bank accounts in such Borrower's name or Local Deposit Account within one any such Domestic Subsidiary's name (1collectively, the "Borrower Accounts") Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which at the applicable Account Debtors Relationship Bank. On or before the Closing Date, the Borrower Representative shall have established a concentration account in its name (the "Concentration Account") at the bank which shall be directed to remit payment directly designated as the Concentration Account bank on Schedule 6.13 (the "Concentration Account Bank"), which bank shall be satisfactory to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control AgreementAdministrative Agent.
(b) [Intentionally Omitted].
On or before the Closing Date (c) or such later date as Administrative Agent shall consent to in writing), the Concentration Account Bank and each Relationship Bank, shall have entered into a tri-party blocked account agreement with the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, and the applicable Borrower and its Domestic Subsidiaries, in form and substance acceptable to Administrative Agent, which shall become operative on or prior to the Closing Date. Each Control Agreement such blocked account agreement shall provide, among other things, that (i) all items of payment deposited in such account and proceeds thereof deposited in the depositoryConcentration Account are held by such bank as agent or bailee-in- possession for the Administrative Agent, securities intermediary or commodities intermediary on behalf of Lenders, (ii) the bank executing such agreement has no rights of setoff or recoupment or any other claim against such account, as the case may be, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing)payment, and (iiiii) from and after the Closing Date, except for cash (A) with respect to banks at which a Borrower Account is located, such Relationship Bank agrees to forward immediately all amounts in each Borrower Account to the Concentration Account Bank and Cash Equivalents maintained by to commence the Credit Parties pursuant process of daily sweeps from such Borrower Account into the Concentration Account, and (B) the Concentration Account Bank agrees to Section 5.22, immediately forward all amounts received in any Control the Concentration Account shall be swept daily into to the Collection Account or another Control through daily sweeps from such Concentration Account which is swept daily into the Collection Account; provided, however, that if any Relationship Bank has not entered into a tri-party blocked account agreement on or prior to the Closing Date, the Borrowers shall (x) send a direction letter to such Relationship Bank on the Closing Date irrevocably instructing such Relationship Bank that all amounts in such Borrower Account are to be forwarded immediately to the Concentration Account and (y) cause such Relationship Bank to enter into a tri-party blocked account agreement by January 8, 1999. No Borrower shall, or shall cause or permit any Domestic Subsidiary thereof to, accumulate or maintain cash in disbursement or 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.
(c) So long as no Default or Event of Default has occurred and is continuing, the Borrowers may amend Schedule 6.13 to add or replace a Relationship Bank, any Lock Box, Borrower Account, or to replace any Concentration Account or Disbursement Account; provided, however, (i) the Administrative Agent shall have consented in writing in advance to any such replacement and (ii) prior to the time of the opening of a replacement account or Lock Box, the applicable Borrower and the replacement Relationship Bank shall have executed and delivered to the Administrative Agent a tri-party blocked account agreement, in form and substance satisfactory to the Administrative Agent. The Borrowers shall close any of their accounts (and establish replacement accounts in accordance with the foregoing sentence) promptly and in any event within thirty (30) days of notice from the Administrative Agent that the creditworthiness of any bank holding an account is no longer acceptable in the Administrative Agent's reasonable judgment, or as promptly as practicable and in any event within sixty (60) days of notice from the Administrative Agent that the operating performance, funds transfer and/or availability procedures or performance with respect to accounts or lockboxes of the bank holding such accounts or the Administrative Agent's liability under any tri-party blocked account agreement with such bank is no longer acceptable in the Administrative Agent's reasonable judgment.
(d) The Lock Boxes, Borrower Accounts, Disbursement Accounts and the Concentration Accounts shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts securing payment of the Loans and all other Obligations, and in which the Borrower and each Subsidiary shall have granted a Lien to the Administrative Agent, on behalf of the Agents and the Lenders, pursuant to the Collateral Agreement.
(e) All amounts deposited in the Collection Account shall be deemed received by the Administrative Agent in accordance with Section 1.10(a2.16(c) and shall be applied (and allocated) by the Administrative Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii2.18(d), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(ef) Credit Parties The Borrower Representative may amend Schedule 3.22 to add or replace any deposit maintain an account or other account(a "Disbursement Account"; providedcollectively, that (i"Disbursement Accounts") Agent shall have consented in writing (such consent not be unreasonably withheld) in advance at a bank acceptable to the opening Administrative Agent into which the Administrative Agent shall, from time to time, deposit proceeds of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.Revolving Credit
Appears in 1 contract
Cash Management Systems. (a) Each The Credit Party shall enter intoParties will maintain the cash management systems described below (the “Cash Management Systems”):
(i) (x) the Parent Borrower will, or will cause each of the applicable Subsidiaries to, request in writing and otherwise take reasonable steps to provide that all Account Debtors in respect of Governmental Accounts that constitute Collateral forward payment directly to an account of a Borrower designated as a Government Receivables Deposit Account on Schedule 9.15(a) (each a “Government Receivables Deposit Account”), (y) the Credit Parties will, or will cause each of their Subsidiaries to, maintain lock boxes (“Lock Boxes”) or, at the Administrative Agent’s discretion, blocked accounts (“Blocked Accounts”) listed on Schedule 9.15(c) at one or more banks that are reasonably acceptable to the Collateral Agent, and cause each depository, securities intermediary or commodities intermediary shall request in writing and otherwise take reasonable steps to enter into, Control Agreements providing for “full” cash dominion provide that all Account Debtors with respect to Private Accounts that constitute Collateral forward payments directly to such Lock Boxes or Blocked Accounts and (z) each Control AccountBorrower will deposit and cause its Subsidiaries to deposit or cause to be deposited promptly, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, and in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the date of receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of paymentpayment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lock Box) into the Blocked Accounts. Until so deposited, all such payments shall be held in trust by each Borrower and any of its Subsidiaries for the Administrative Agent and shall not be commingled with any other funds or property of any Borrower. The Parent Borrower shall maintain a concentration account in its name (the “Concentration Account”) (with a bank reasonably acceptable to the Administrative Agent (it being agreed that Xxxxx Fargo Bank, N.A. is acceptable to the Administrative Agent)) that shall be deposited designated as the Concentration Account for the Parent Borrower listed on Schedule 9.15(a).
(ii) The Parent Borrower may maintain, in its name, one or more accounts (any such account, a “Disbursement Account”) at any bank reasonably acceptable to the Administrative Agent into a Control Account or Local Deposit Account within one (1) Business Day after which the receipt thereof Administrative Agent shall, from time to time, deposit proceeds of Loans made to the Parent Borrower pursuant to Section 2.1 for use by the Parent Borrower solely in accordance with the provisions of Section 9.13 (it being understood thatthat the Administrative Agent may also deposit or wire proceeds of Loans into any other account designated by the Parent Borrower at any time other than during the continuance of any Cash Dominion Event). The Parent Borrower may also maintain, in its name, one or more accounts that (x) do not contain any funds that are proceeds of Accounts that otherwise constitute Collateral or (y) include funds that are proceeds of Accounts that otherwise constitute Collateral and that are neither Government Receivables Deposit Accounts nor subject to a Blocked Account Agreement, but solely (in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to this clause (i)(A)(1y) above);
(Bonly) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit extent that any such accounts which do are not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreementblocked account or control agreement with any other party (each a “Non-Controlled Account”).
(biii) [Intentionally Omitted].
Within 60 calendar days after the Closing Date (cor such later date as the Administrative Agent may, in its sole discretion, consent to in writing), each Borrower that owns or originates Government Accounts shall deliver to the Collateral Agent (x) for each Government Receivables Deposit Account established or maintained by such Borrower, a tri-party deposit account agreement between the Collateral Agent, the bank at which such Government Receivables Deposit Account (each a “Government Receivables Bank”) is maintained and such Borrower, in form and substance reasonably satisfactory to the Collateral Agent (each a “Government Receivables Deposit Account Agreement”), and (y) for the accounts of any Borrower designated as a Blocked Account on Schedule 9.15(c) and for the Concentration Account and any Disbursement Accounts, a tri-party blocked account agreement or lockbox account agreement between the Collateral Agent, the bank at which each such Blocked Account, Concentration Account or Disbursement Account is maintained and the relevant Borrowers, in form and substance reasonably satisfactory to the Collateral Agent (each a “Blocked Account Agreement”). It being understood that each Borrower delivered each Government Receivable Deposit Account Agreement and each Blocked Account Agreement required by this Section 9.15(a)(iii) within the required time frame. Each Control such Blocked Account Agreement with respect to any Blocked Account shall provide, among other things, that from and after the date thereof the bank at which any such Blocked Account is maintained, agrees to forward immediately all amounts in each such account to the Concentration Account. In addition, any such Blocked Account Agreement shall provide, among other things, that (i) upon the depositoryoccurrence and during the continuation of a Cash Dominion Event, securities intermediary the bank at which such Blocked Account, Concentration Account or commodities intermediary executing such agreement has no rights Disbursement Account is maintained shall, upon receipt of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to notice by the administration Collateral Agent of such account and for returned checks or other items Cash Dominion Event, commence the process of payment (except as Agent may otherwise agree in writing), and (ii) daily sweeps from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily such accounts into the Collection Account (it being understood that any such daily sweep in respect of any cash or another Control other amount in a Disbursement Account which shall be subject to the rights of the Borrowers to transfer, apply or otherwise use the proceeds of any Loans hereunder for any purpose in accordance with Section 9.13 by moving any cash or other amount on deposit in any Disbursement Account out of such account for any such purpose); provided that any amounts in the Concentration Accounts reasonably identified (with reasonably detailed written support) to the Administrative Agent as not constituting Collateral will be distributed as directed by the Administrative Agent as requested by the Parent Borrower, including to one or more Non-Controlled Accounts. Notwithstanding anything to the contrary herein or in any other Credit Document, no cash or other amount that is disbursed or otherwise transferred from the Disbursement Account (other than to the extent swept daily back into the Collection Account) shall constitute Collateral.
(div) By 10:00 a.m. (New York time) on each Business Day, each Borrower will cause the entire available balance in each Government Receivables Deposit Account to be transferred by ACH or book entry transfer to the Concentration Account. The Borrowers will not transfer any funds out of the Government Receivables Deposit Account or any Blocked Account except to the Concentration Account. The balance from time to time standing to the credit of the Blocked Accounts shall be distributed as directed in accordance with the provisions of the Blocked Account Agreements. Prior to the occurrence of any first Cash Dominion Event, the balance from time to time standing to the credit of the Concentration Account shall be distributed as directed by the Parent Borrower, including to one or more Non-Controlled Accounts. The Parent Borrower shall not, and shall not cause or permit any Subsidiary thereof to, accumulate or maintain cash (other than cash that is not proceeds of any Collateral) in disbursement accounts or payroll accounts as of any date of determination in excess of checks outstanding against such accounts as of the date and amounts necessary to meet minimum balance, near-term funding requirements or near-term operating requirements. Notwithstanding anything to the contrary, cash held in overnight deposit or investment accounts shall be deemed to be in the Concentration Account overnight.
(v) So long as no Default or Event of Default has occurred and is continuing, the Parent Borrower may amend Schedules 9.15(a) and (c) to add or replace a bank, any Government Receivables Deposit Account, the Concentration Account, any Blocked Account or any Disbursement Account; provided that (x) the Administrative Agent shall have consented in writing in advance to the opening of such new or replacement account with the relevant bank (which consent shall not be unreasonably withheld) and (y) prior to the time of the opening of such account, the applicable Borrower and such bank shall have executed and delivered to the Collateral Agent a tri-party agreement, in form and substance reasonably satisfactory to the Collateral Agent in its sole discretion. Each Borrower shall cease using any account to hold proceeds of Collateral promptly and in any event within 30 days (or such later date as the Administrative Agent may agree) following notice from the Administrative Agent to the Parent Borrower that the creditworthiness of the bank holding such account is no longer acceptable in the Administrative Agent’s reasonable credit judgment, or as promptly as practicable and in any event within 60 days (or such later date as the Administrative Agent may agree) following notice from the Administrative Agent to the Parent Borrower that the operating performance, funds transfer or availability procedures or performance with respect to accounts or lockboxes of the bank holding such account or Agent’s liability under any tri-party blocked account agreement with such bank is no longer acceptable in the Administrative Agent’s reasonable credit judgment.
(vi) The Government Receivables Deposit Accounts, the Concentration Account, the Blocked Accounts and the Disbursement Accounts (subject to the last two sentences of Section 9.15(a)(iii)) shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts (to the extent constituting proceeds of Accounts otherwise constituting Collateral) securing payment of the Loans and all other Obligations, and in which the applicable Borrower shall have granted a Lien to the Collateral Agent, on behalf of itself and Lenders, pursuant to the Security Agreement. The Borrowers shall use commercially reasonable efforts to ensure that all cash, checks and other similar items of payment in the Government Receivables Deposit Accounts, the Concentration Account and the Blocked Accounts are solely in respect of Accounts that otherwise constitute Collateral; provided that, credit card, debit card and internet xxxx inquiry and payment system (IBIP) payments received in the Concentration Account that do not constitute proceeds of Accounts otherwise constituting Collateral shall be permitted in the Concentration Account so long as the Borrowers use their commercially reasonable efforts to distribute such amounts to a Non-Controlled Account within three (3) Business Days of receipt thereof.
(vii) All amounts deposited in the Collection Account shall be deemed received by the Administrative Agent in accordance with Section 1.10(a) 5 and shall be applied (and allocated) by the Administrative Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be5. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(eviii) Credit Parties may amend Schedule 3.22 to add or replace any deposit account The Borrowers shall and shall cause their respective Affiliates, officers, employees, agents, directors or other account; providedPersons acting for or in concert with a Borrower (each a “Related Person”) to (x) hold in trust for the Administrative Agent, for the benefit of itself and Lenders, all checks, cash and other items of payment received by a Borrower or by a Related Person on behalf of a Borrower in respect of Accounts that constitute Collateral, and (y) within 1 Business Day after receipt by a Borrower or by a Related Person on behalf of a Borrower of any checks, cash or other items of payment in respect of Accounts that constitute Collateral, deposit the same into a Blocked Account or the Concentration Account. Each Borrower and each Related Person thereof acknowledges and agrees that all cash, checks or other items of payment constituting proceeds of Collateral are part of the Collateral. All proceeds of the sale or other disposition of any Collateral, shall be deposited directly into a Blocked Account or the Concentration Account (or if proceeds of Government Accounts, into a Government Receivables Deposit Account).
(i) During the continuance of a Cash Dominion Event, the Borrowers shall provide the Collateral Agent with an accounting of the contents of the Government Receivables Deposit Accounts, the Blocked Accounts and the Concentration Account, which shall have consented in writing (such consent not be unreasonably withheld) in advance identify, to the opening reasonable satisfaction of such account with the relevant depositoryCollateral Agent, securities intermediary or commodities intermediary the proceeds from the Collateral which were deposited into a Blocked Account and swept to the Concentration Account.
(ii) with respect Within 1 Business Day of the occurrence of a Cash Dominion Event, the Borrowers shall deposit into the Collection Account an amount equal to the entire amount of cash constituting Collateral held in any additional Non-Controlled Account.
(c) Upon the occurrence and during the continuance of a Cash Dominion Event following the entry into Government Receivables Deposit Account Agreements and Blocked Account Agreements, the Concentration Account and each Blocked Account shall at all times be under the sole dominion and control of the Collateral Agent. The Borrowers hereby acknowledge and agree that during the continuance of a Cash Dominion Event following the entry into Government Receivables Deposit Account Agreements and Blocked Account Agreements, (i) the Borrowers have no right of withdrawal from the Concentration Account (subject to the proviso to the last sentence of Section 9.15(a)(iii)), (ii) the funds on deposit in the Concentration Account shall at all times be collateral security for all of the Obligations (other than to the extent such funds do not constitute proceeds of Accounts that are otherwise Collateral) and (iii) the funds on deposit in the Concentration Account shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this Section 9.15, any Borrower receives or replacement Control otherwise has dominion and control of any proceeds or collections of Accounts that otherwise constitute Collateral outside of the Government Receivables Deposit Accounts, the Concentration Account, securities accountany Blocked Account and any Disbursement Account, such proceeds and collections shall be held in trust by such Borrower for the Collateral Agent and shall, not later than the Business Day after receipt thereof, be deposited into the Concentration Account or commodities accountdealt with in such other fashion as such Borrower may be instructed by the Collateral Agent.
(d) [Intentionally Omitted].
(i) Within 60 calendar days after the Closing Date (or such later date as the Administrative Agent may, except as Agent may otherwise agree in its sole discretion, consent in writing), prior each Borrower shall deliver to the time of Collateral Agent notifications (each, a “Credit Card Notification”) in form and substance reasonably satisfactory to the opening Collateral Agent which have been executed on behalf of such accountBorrower and addressed to such Borrower’s credit card clearinghouses and processors listed on Schedule 9.15(e). It being understood that each Borrower delivered each Credit Card Notification required by this Section 9.15(e)(i) within the required time frame. Each Credit Card Notification shall provide, among other things, that from and after the applicable date thereof, all amounts owing to a Borrower and constituting proceeds of Collateral shall be forwarded immediately to the Concentration Account.
(ii) Unless consented to in writing by the Collateral Agent, after the delivery of Schedule 9.15(e) the Borrowers shall not enter into any agreements with credit card processors other than the ones expressly contemplated herein unless contemporaneously therewith, a Credit Party and the applicable depositoryCard Notification, securities intermediary or commodities intermediary shall have is executed and delivered to Agent a Control Agreementthe Collateral Agent.
(f) Credit Parties shall close After the occurrence of any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and first Cash Dominion Event on or after the Third Restatement Effective Date, the Borrowers will be prohibited from depositing cash constituting Collateral in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an deposit account is no longer acceptable in Agent’s reasonable judgmentother than Government Receivables Deposit Accounts, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtainedBlocked Accounts, the Agent may require the Credit Parties to close such Local Deposit Concentration Account, Disbursement Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the AgentCollection Account.
Appears in 1 contract
Cash Management Systems. In each case, subject to the DIP Order and the Carve-Out:
(a) Each Credit Party shall enter intoAnnexed hereto as Schedule 6.15(a) is a schedule of all DDAs, and cause each depositorythat are maintained by the Loan Parties, securities intermediary or commodities intermediary to enter intowhich Schedule includes, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either depository (i) not resulted from any act or omission the name and address of any Credit Party or such depository; (ii) resulted from the isolated failure by any employee of any Credit Party to comply account number(s) maintained with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices depository; and (yiii) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than contact person at such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreementdepository.
(b) [Intentionally Omitted]Within ninety (90) days after the Closing Date (or such longer period as the Administrative Agent may agree in its reasonable discretion), each applicable Borrower will enter into a blocked account agreement (each, a “Blocked Account Agreement”), reasonably satisfactory to the Administrative Agent, with respect to the DDAs existing as of the Closing Date listed on Schedule 6.15(b) attached hereto (collectively, the “Blocked Accounts”). Each Borrower hereby agrees that, once the Blocked Account Agreements are entered into, all cash in respect of Collateral received by a Loan Party in any DDA that is not a Blocked Account (other than amounts held in payroll, trust and tax withholding accounts funded in the ordinary course of business and required by Applicable Law) will be promptly transferred into a Blocked Account. After entering into the Blocked Account Agreement, there shall be at all times thereafter at least one Blocked Account.
(c) Each Control Blocked Account Agreement entered into by a Borrower shall provide, among other things, that (i) permit the Administrative Agent to instruct the depository, securities intermediary or commodities intermediary executing such agreement has no rights after the occurrence and during the continuance of setoff or recoupment or any other claim against such account, other than for payment a Cash Dominion Event (and delivery of its service fees and other charges directly related to notice thereof from the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writingAdministrative Agent), and (ii) from and after the Closing Date, except for to transfer on each Business Day of all available cash and Cash Equivalents receipts to a concentration account maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Account.
(d) All amounts deposited in the Collection Account shall be deemed received by name of the Administrative Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(iithe “Concentration Account”), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.from:
Appears in 1 contract
Samples: Superpriority Secured Debtor in Possession Credit Agreement (iHeartMedia, Inc.)
Cash Management Systems. (a) Each The Credit Party shall enter intoParties will maintain the cash management systems described below (the “Cash Management Systems”):
(i) (x) the Parent Borrower will, or will cause each of the applicable Subsidiaries to, request in writing and otherwise take reasonable steps to provide that all Account Debtors in respect of Governmental Accounts that constitute Collateral forward payment directly to an account of a Borrower designated as a Government Receivables Deposit Account on Schedule 9.15(a) (each a “Government Receivables Deposit Account”), (y) the Credit Parties will, or will cause each of their Subsidiaries to, maintain lock boxes (“Lock Boxes”) or, at the Administrative Agent’s discretion, blocked accounts (“Blocked Accounts”) listed on Schedule 9.15(c) at one or more banks that are reasonably acceptable to the Collateral Agent, and cause each depository, securities intermediary or commodities intermediary shall request in writing and otherwise take reasonable steps to enter into, Control Agreements providing for “full” cash dominion provide that all Account Debtors with respect to Private Accounts that constitute Collateral forward payments directly to such Lock Boxes or Blocked Accounts and (z) each Control AccountBorrower will deposit and cause its Subsidiaries to deposit or cause to be deposited promptly, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, and in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the date of receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of paymentpayment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lock Box) into the Blocked Accounts. Until so deposited, all such payments shall be held in trust by each Borrower and any of its Subsidiaries for the Administrative Agent and shall not be commingled with any other funds or property of any Borrower. The Parent Borrower shall maintain a concentration account in its name (the “Concentration Account”) (with a bank reasonably acceptable to the Administrative Agent (it being agreed that Xxxxx Fargo Capital Finance, LLC is acceptable to the Administrative Agent)) that shall be deposited designated as the Concentration Account for the Parent Borrower listed on Schedule 9.15(a).
(ii) The Parent Borrower may maintain, in its name, one or more accounts (any such account, a “Disbursement Account”) at any bank reasonably acceptable to the Administrative Agent into a Control Account or Local Deposit Account within one (1) Business Day after which the receipt thereof Administrative Agent shall, from time to time, deposit proceeds of Loans made to the Parent Borrower pursuant to Section 2.1 for use by the Parent Borrower solely in accordance with the provisions of Section 9.13 (it being understood thatthat the Administrative Agent may also deposit or wire proceeds of Loans into any other account designated by the Parent Borrower at any time other than during the continuance of any Cash Dominion Event). The Parent Borrower may also maintain, in its name, one or more accounts that (x) do not contain any funds that are proceeds of Accounts that otherwise constitute Collateral or (y) include funds that are proceeds of Accounts that otherwise constitute Collateral and that are neither Government Receivables Deposit Accounts nor subject to a Blocked Account Agreement, but solely (in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to this clause (i)(A)(1y) above);
(Bonly) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit extent that any such accounts which do are not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreementblocked account or control agreement with any other party (each a “Non-Controlled Account”).
(biii) [Intentionally Omitted].
Within 60 calendar days after the Closing Date (cor such later date as the Administrative Agent may, in its sole discretion, consent to in writing), each Borrower that owns or originates Government Accounts shall deliver to the Collateral Agent (x) for each Government Receivables Deposit Account established or maintained by such Borrower, a tri-party deposit account agreement between the Collateral Agent, the bank at which such Government Receivables Deposit Account (each a “Government Receivables Bank”) is maintained and such Borrower, in form and substance reasonably satisfactory to the Collateral Agent (each a “Government Receivables Deposit Account Agreement”), and (y) for the accounts of any Borrower designated as a Blocked Account on Schedule 9.15(c) and for the Concentration Account and any Disbursement Accounts, a tri-party blocked account agreement or lockbox account agreement between the Collateral Agent, the bank at which each such Blocked Account, Concentration Account or Disbursement Account is maintained and the relevant Borrowers, in form and substance reasonably satisfactory to the Collateral Agent (each a “Blocked Account Agreement”). Each Control such Blocked Account Agreement with respect to any Blocked Account shall provide, among other things, that from and after the date thereof the bank at which any such Blocked Account is maintained, agrees to forward immediately all amounts in each such account to the Concentration Account. In addition, any such Blocked Account Agreement shall provide, among other things, that (i) upon the depositoryoccurrence and during the continuation of a Cash Dominion Event, securities intermediary the bank at which such Blocked Account, Concentration Account or commodities intermediary executing such agreement has no rights Disbursement Account is maintained shall, upon receipt of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to notice by the administration Collateral Agent of such account and for returned checks or other items Cash Dominion Event, commence the process of payment (except as Agent may otherwise agree in writing), and (ii) daily sweeps from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily such accounts into the Collection Account (it being understood that any such daily sweep in respect of any cash or another Control other amount in a Disbursement Account which shall be subject to the rights of the Borrowers to transfer, apply or otherwise use the proceeds of any Loans hereunder for any purpose in accordance with Section 9.13 by moving any cash or other amount on deposit in any Disbursement Account out of such account for any such purpose); provided that any amounts in the Concentration Accounts reasonably identified (with reasonably detailed written support) to the Administrative Agent as not constituting Collateral will be distributed as directed by the Administrative Agent as requested by the Parent Borrower, including to one or more Non-Controlled Accounts. Notwithstanding anything to the contrary herein or in any other Credit Document, no cash or other amount that is disbursed or otherwise transferred from the Disbursement Account (other than to the extent swept daily back into the Collection Account) shall constitute Collateral.
(div) By 10:00 a.m. (New York time) on each Business Day, each Borrower will cause the entire available balance in each Government Receivables Deposit Account to be transferred by ACH or book entry transfer to the Concentration Account. The Borrowers will not transfer any funds out of the Government Receivables Deposit Account or any Blocked Account except to the Concentration Account. The balance from time to time standing to the credit of the Blocked Accounts shall be distributed as directed in accordance with the provisions of the Blocked Account Agreements. Prior to the occurrence of any first Cash Dominion Event, the balance from time to time standing to the credit of the Concentration Account shall be distributed as directed by the Parent Borrower, including to one or more Non-Controlled Accounts. The Parent Borrower shall not, and shall not cause or permit any Subsidiary thereof to, accumulate or maintain cash (other than cash that is not proceeds of any Collateral) in disbursement accounts or payroll accounts as of any date of determination in excess of checks outstanding against such accounts as of the date and amounts necessary to meet minimum balance, near-term funding requirements or near-term operating requirements. Notwithstanding anything to the contrary, cash held in overnight deposit or investment accounts shall be deemed to be in the Concentration Account overnight.
(v) So long as no Default or Event of Default has occurred and is continuing, the Parent Borrower may amend Schedules 9.15(a) and (c) to add or replace a bank, any Government Receivables Deposit Account, the Concentration Account, any Blocked Account or any Disbursement Account; provided that (x) the Administrative Agent shall have consented in writing in advance to the opening of such new or replacement account with the relevant bank (which consent shall not be unreasonably withheld) and (y) prior to the time of the opening of such account, the applicable Borrower and such bank shall have executed and delivered to the Collateral Agent a tri-party agreement, in form and substance reasonably satisfactory to the Collateral Agent in it sole discretion. Each Borrower shall cease using any account to hold proceeds of Collateral promptly and in any event within 30 days (or such later date as the Administrative Agent may, in its sole reasonable discretion, consent to in writing) following notice from the Administrative Agent to the Parent Borrower that the creditworthiness of the bank holding such account is no longer acceptable in the Administrative Agent’s reasonable credit judgment, or as promptly as practicable and in any event within 60 days (or such later date as the Administrative Agent may, in its sole reasonable discretion, consent to in writing) following notice from the Administrative Agent to the Parent Borrower that the operating performance, funds transfer or availability procedures or performance with respect to accounts or lockboxes of the bank holding such account or Agent’s liability under any tri-party blocked account agreement with such bank is no longer acceptable in the Administrative Agent’s reasonable credit judgment.
(vi) The Government Receivables Deposit Accounts, the Concentration Account, the Blocked Accounts and the Disbursement Accounts (subject to the last two sentences of Section 9.15(a)(iii)) shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts (to the extent constituting proceeds of Accounts otherwise constituting Collateral) securing payment of the Loans and all other Obligations, and in which the applicable Borrower shall have granted a Lien to the Collateral Agent, on behalf of itself and Lenders, pursuant to the Security Agreement. The Borrowers shall use commercially reasonable efforts to ensure that all cash, checks and other similar items of payment in the Government Receivables Deposit Accounts, the Concentration Account and the Blocked Accounts are solely in respect of Accounts that otherwise constitute Collateral; provided that, credit card, debit card and internet xxxx inquiry and payment system (IBIP) payments received in the Concentration Account that do not constitute proceeds of Accounts otherwise constituting Collateral shall be permitted in the Concentration Account so long as the Borrowers use their commercially reasonable efforts to distribute such amounts to a Non-Controlled Account within three (3) Business Days of receipt thereof.
(vii) All amounts deposited in the Collection Account shall be deemed received by the Administrative Agent in accordance with Section 1.10(a) 5 and shall be applied (and allocated) by the Administrative Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be5. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(eviii) Credit Parties may amend Schedule 3.22 to add or replace any deposit account The Borrowers shall and shall cause their respective Affiliates, officers, employees, agents, directors or other account; providedPersons acting for or in concert with a Borrower (each a “Related Person”) to (x) hold in trust for the Administrative Agent, for the benefit of itself and Lenders, all checks, cash and other items of payment received by a Borrower or by a Related Person on behalf of a Borrower in respect of Accounts that constitute Collateral, and (y) within 1 Business Day after receipt by a Borrower or by a Related Person on behalf of a Borrower of any checks, cash or other items of payment in respect of Accounts that constitute Collateral, deposit the same into a Blocked Account or the Concentration Account. Each Borrower and each Related Person thereof acknowledges and agrees that all cash, checks or other items of payment constituting proceeds of Collateral are part of the Collateral. All proceeds of the sale or other disposition of any Collateral, shall be deposited directly into a Blocked Account or the Concentration Account (or if proceeds of Government Accounts, into a Government Receivables Deposit Account).
(i) During the continuance of a Cash Dominion Event, the Borrowers shall provide the Collateral Agent with an accounting of the contents of the Government Receivables Deposit Accounts, the Blocked Accounts and the Concentration Account, which shall have consented in writing (such consent not be unreasonably withheld) in advance identify, to the opening reasonable satisfaction of such account with the relevant depositoryCollateral Agent, securities intermediary or commodities intermediary the proceeds from the Collateral which were deposited into a Blocked Account and swept to the Concentration Account.
(ii) with respect Within 1 Business Day of the occurrence of a Cash Dominion Event, the Borrowers shall deposit into the Collection Account an amount equal to the entire amount of cash constituting Collateral held in any additional Non-Controlled Account.
(c) Upon the occurrence and during the continuance of a Cash Dominion Event following the entry into Government Receivables Deposit Account Agreements and Blocked Account Agreements, the Concentration Account and each Blocked Account shall at all times be under the sole dominion and control of the Collateral Agent. The Borrowers hereby acknowledge and agree that during the continuance of a Cash Dominion Event following the entry into Government Receivables Deposit Account Agreements and Blocked Account Agreements, (i) the Borrowers have no right of withdrawal from the Concentration Account (subject to the proviso to the last sentence of Section 9.15(a)(iii)), (ii) the funds on deposit in the Concentration Account shall at all times be collateral security for all of the Obligations (other than to the extent such funds do not constitute proceeds of Accounts that are otherwise Collateral) and (iii) the funds on deposit in the Concentration Account shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this Section 9.15, any Borrower receives or replacement Control otherwise has dominion and control of any proceeds or collections of Accounts that otherwise constitute Collateral outside of the Government Receivables Deposit Accounts, the Concentration Account, securities accountany Blocked Account and any Disbursement Account, such proceeds and collections shall be held in trust by such Borrower for the Collateral Agent and shall, not later than the Business Day after receipt thereof, be deposited into the Concentration Account or commodities accountdealt with in such other fashion as such Borrower may be instructed by the Collateral Agent.
(d) [Intentionally Omitted].
(i) Within 60 calendar days after the Closing Date (or such later date as the Administrative Agent may, except as Agent may otherwise agree in its sole discretion, consent in writing), prior each Borrower shall deliver to the time of Collateral Agent notifications (each, a “Credit Card Notification”) in form and substance reasonably satisfactory to the opening Collateral Agent which have been executed on behalf of such accountBorrower and addressed to such Borrower’s credit card clearinghouses and processors listed on Schedule 9.15(e). Each Credit Card Notification shall provide, among other things, that from and after the applicable date thereof, all amounts owing to a Borrower and constituting proceeds of Collateral shall be forwarded immediately to the Concentration Account.
(ii) Unless consented to in writing by the Collateral Agent, after the delivery of Schedule 9.15(e) the Borrowers shall not enter into any agreements with credit card processors other than the ones expressly contemplated herein unless contemporaneously therewith, a Credit Party and the applicable depositoryCard Notification, securities intermediary or commodities intermediary shall have is executed and delivered to Agent a Control Agreementthe Collateral Agent.
(f) Credit Parties shall close After the occurrence of any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and first Cash Dominion Event, the Borrowers will be prohibited from depositing cash constituting Collateral in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an deposit account is no longer acceptable in Agent’s reasonable judgmentother than Government Receivables Deposit Accounts, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtainedBlocked Accounts, the Agent may require the Credit Parties to close such Local Deposit Concentration Account, Disbursement Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the AgentCollection Account.
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter intoAnnexed hereto as Schedule 6.14(a) is a schedule of all DDAs, and cause each depositorythat are maintained by the Loan Parties, securities intermediary or commodities intermediary to enter intowhich Schedule includes, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar depository (i) the name and address of such depository; (ii) the account (including, without limitation, any lockbox or similar arrangementsnumber(s) maintained by with such Person depository; and (iii) a contact person at such depository.
(b) Within ninety (90) days after the Closing Date (or such longer period as the Administrative Agent may agree in its sole reasonable discretion), each applicable Borrower will enter into a blocked account agreement (each, a “Blocked Account Agreement”), reasonably satisfactory to the Administrative Agent, with respect to the DDAs existing as of or the Closing Date listed on Schedule 6.14(b) attached hereto (collectively, the “Blocked Accounts”). Each Borrower hereby agrees to promptly (and, with respect to account debtors as of the Closing Date, in any event within 90 days after the Closing Date. Credit Parties shall (except solely ) instruct all account debtors that are not currently making payments directly to DDAs listed on Schedule 6.14(a) or otherwise subject to such Blocked Account Agreements to make all future payments in respect of Collateral directly to the extent DDAs subject to such Blocked Account Agreements and that, once the failure Blocked Account Agreements are entered into, all cash in respect of Collateral received by a Loan Party (other than amounts held in payroll, trust and tax withholding accounts funded in the ordinary course of business and required by Applicable Law) will be deposited only into a Blocked Account subject to do so a Blocked Account Agreement and any cash in respect of Collateral that is inadvertently received by a Loan Party (other than amounts held in payroll, trust and tax withholding accounts funded in the ordinary course of business and required by Applicable Law) into an account that is not a Blocked Account will be promptly (and in any event within two Business Days) transferred into a Blocked Account subject to a Blocked Account Agreement. After entering into the Blocked Account Agreements, there shall have either be at all times thereafter at least one Blocked Account.
(c) Each Blocked Account Agreement entered into by the Borrowers shall permit the Administrative Agent to instruct the depository, after the occurrence and during the continuance of a Liquidity Period (and delivery of notice thereof from the Administrative Agent), to transfer on each Business Day of all available cash receipts to the concentration account maintained by the Administrative Agent at Deutsche Bank AG, New York Branch or such other financial institution as may be reasonably acceptable to the Parent Borrower and the Administrative Agent (the “Concentration Account”), from:
(i) not resulted from any act or omission the sale of any Credit Party or Collateral;
(ii) resulted from the isolated failure by any employee all proceeds of any Credit Party to comply with the formal cash management procedures collections of the Credit Parties not affecting more than ten (10) Stores at any time, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxesAccounts; and
(Ciii) cause each Blocked Account (including all funds cash deposited therein from each DDA). If, at any time during the continuance of a Liquidity Period, any cash or Cash Equivalents that are Collateral (or proceeds thereof) owned by any Loan Party (other than any accounts set forth in local store deposit accounts which do not constitute Control Accounts clause (“Local Deposit Accounts”e) below) are deposited to be transferred on any account, or held or invested in any manner, other than in a daily basis to a Control Blocked Account that is subject to a Control Blocked Account Agreement (or a DDA which is swept daily to a Blocked Account), the Administrative Agent may require the applicable Loan Party to close such account and have all funds therein transferred to a Blocked Account, and all future deposits made to a Blocked Account which is subject to a Blocked Account Agreement. If, at any time during the continuance of a Liquidity Period and prior to the expiration of the ninety (90) day period set forth in clause (b) above, the Borrowers have not entered into a Blocked Account Agreement with respect to any Blocked Account, for so long as such Liquidity Period exists the Administrative Agent may require the Borrowers to otherwise transfer to the Concentration Account any amounts that the Administrative Agent would be able to transfer to the Concentration Account were the Blocked Account Agreement in place at such time. In addition to the foregoing, during the continuance of a Liquidity Period, at the request of the Administrative Agent, the Loan Parties shall provide the Administrative Agent with an accounting of the contents of the Blocked Accounts, which shall identify, to the reasonable satisfaction of the Administrative Agent, the proceeds from the Collateral which were deposited into a Blocked Account and swept to the Concentration Account.
(bd) [Intentionally Omitted]The Loan Parties may close DDAs or Blocked Accounts and/or open new DDAs or Blocked Accounts, subject to the execution and delivery to the Administrative Agent of appropriate Blocked Account Agreements (except with respect to any payroll, trust, and tax withholding accounts or unless expressly waived by the Administrative Agent) consistent with and to the extent required by the provisions of this Section 6.14 and otherwise reasonably satisfactory to the Administrative Agent. The Parent Borrower shall furnish the Administrative Agent with prior written notice of its intention to open or close a Blocked Account and the Administrative Agent shall promptly notify the Parent Borrower as to whether the Administrative Agent shall require a Blocked Account Agreement with the Person with whom any such new account will be maintained.
(ce) Each Control Agreement shall provide, among other things, that The Loan Parties may also maintain one or more (i) xxxxx cash and minimum working capital accounts funded in the depositoryordinary course of business, securities intermediary the balances of which shall not at any time aggregate more than $5 million (or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related greater amount to which the administration of such account and for returned checks or other items of payment (except as Administrative Agent may otherwise agree in writingagree), and (ii) from payroll, trust and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Account.
(d) All amounts deposited tax withholding accounts funded in the Collection Account shall be deemed received ordinary course of business and required by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control AgreementApplicable Law.
(f) Credit Parties The Concentration Account shall close at all times be under the sole dominion and control of the Administrative Agent (other than any dominion or control that arises pursuant to such account being held at a financial institution other than the Administrative Agent). Each Loan Party hereby acknowledges and agrees that (i) such Loan Party has no right of withdrawal from the Concentration Account, (ii) the funds on deposit in the Concentration Account shall at all times continue to be collateral security for all of the Obligations, and (iii) the funds on deposit in the Concentration Account shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this Section 6.14, during the continuation of a Liquidity Period, any Loan Party receives or otherwise has dominion and control of any such proceeds or collections related to Collateral, such proceeds and collections shall be held in trust by such Loan Party for the Administrative Agent, shall not be commingled with any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and such Loan Party’s other funds or deposited in any event within thirty (30) days following notice from Agent that account of such Loan Party and shall promptly be deposited into the creditworthiness of any bank holding an account is no longer acceptable Concentration Account or dealt with in such other fashion as such Loan Party may be instructed by the Administrative Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository So long as no Liquidity Period has occurred and if such Control Agreement cannot be obtainedis continuing, the Agent Loan Parties may require direct, and shall have sole control over, the Credit Parties to close such Local Deposit Accounts manner of disposition of funds in the Blocked Accounts.
(h) Any amounts received in the Concentration Account at any time when all of the Obligations then due have been and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory remain fully repaid shall be remitted to the Agentoperating account of the Loan Parties.
(i) The Administrative Agent shall promptly (but in any event within one Business Day) furnish written notice to each Person with whom a Blocked Account is maintained of any termination of a Liquidity Period.
(j) The following shall apply to deposits and payments under and pursuant to this Agreement:
(i) if any item deposited to the Concentration Account and credited to the Loan Account is dishonored or returned unpaid for any reason, whether or not such return is rightful or timely, the Administrative Agent shall have the right to reverse such credit and charge the amount of such item to the applicable Loan Account and the Borrowers shall indemnify the Secured Parties against all reasonable out-of-pocket claims and losses resulting from such dishonor or return; and
(ii) all amounts received under this Section 6.14 shall be applied in the manner set forth in Section 8.03.
Appears in 1 contract
Samples: Credit Agreement (Clear Channel Outdoor Holdings, Inc.)
Cash Management Systems. (a) Each Credit Party shall enter intoThe Borrower shall, and shall cause each depositoryits Subsidiaries to, securities intermediary or commodities intermediary establish and maintain the Cash Management Systems described below: Prior to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, in any case, Date and for so long as any such failure Loan or any other Obligation is outstanding, Borrower shall not deposit and shall cause its Subsidiaries to deposit or cause to be material deposited promptly, and in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the date of receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of paymentpayment relating to or constituting payments made in respect of any and all Collateral into bank accounts in Borrower's name or such Subsidiary's name (collectively, the "Borrower Accounts") at banks set forth on Schedule 3.22. Prior to the Closing Date, Borrower shall have established a concentration account in Borrower's name (the "Concentration Account") at LaSalle National Bank, which shall be deposited into a Control designated as the Concentration Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood thatbank on Schedule 3.22, in accordance with a blocked account agreement in form and substance satisfactory to Agent, in its sole discretion. Prior to the case Closing Date, LaSalle National Bank, as Concentration Account bank, and all of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together banks set forth on Schedule 3.22 with which Borrower or any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (Subsidiary thereof has any relationship other than as the holder of a deposit account, including by way of example any mortgage or other lending relationship (each such bank a "Relationship Bank"), shall have entered into triparty blocked account agreements with Agent, for the benefit of itself and Lenders, and Borrower and/or each such Subsidiary, as applicable, in connection with delinquent collection effortsform and substance acceptable to Agent, pursuant to which the applicable Account Debtors shall be directed to remit payment directly become operative prior to the Credit Parties’ chief executive office) to remit Closing Date at LaSalle National Bank, as the bank where the Concentration Account is maintained, and all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts Relationship Banks at which do not constitute Control Borrower Accounts (“Local Deposit Accounts”) to be transferred are maintained. Borrower shall clearly designate each bank which is a Relationship Bank as such on a daily basis to a Control Account that is subject to a Control Agreement.
(b) [Intentionally Omitted].
(c) Schedule 3.22. Each Control Agreement such blocked account agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Account.
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.that:
Appears in 1 contract
Samples: Loan Agreement (Artra Group Inc)
Cash Management Systems. (a) Each The Credit Party shall enter intoParties will maintain the cash management systems described below (the “Cash Management Systems”):
(i) (x) the Parent Borrower will, or will cause each of the applicable Subsidiaries to, request in writing and otherwise take reasonable steps to provide that all Account Debtors in respect of Governmental Accounts that constitute Collateral forward payment directly to an account of a Borrower designated as a Government Receivables Deposit Account on Schedule 9.15(a) (each a “Government Receivables Deposit Account”), (y) the Credit Parties will, or will cause each of their Subsidiaries to, maintain lock boxes (“Lock Boxes”) or, at the Administrative Agent’s discretion, blocked accounts (“Blocked Accounts”) listed on Schedule 9.15(c) at one or more banks that are reasonably acceptable to the Collateral Agent, and cause each depository, securities intermediary or commodities intermediary shall request in writing and otherwise take reasonable steps to enter into, Control Agreements providing for “full” cash dominion provide that all Account Debtors with respect to Private Accounts that constitute Collateral forward payments directly to such Lock Boxes or Blocked Accounts and (z) each Control AccountBorrower will deposit and cause its Subsidiaries to deposit or cause to be deposited promptly, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, and in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the date of receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of paymentpayment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lock Box) into the Blocked Accounts. Until so deposited, all such payments shall be held in trust by each Borrower and any of its Subsidiaries for the Administrative Agent and shall not be commingled with any other funds or property of any Borrower. The Parent Borrower shall maintain a concentration account in its name (the “Concentration Account”) (with a bank reasonably acceptable to the Administrative Agent (it being agreed that Xxxxx Fargo Bank, N.A. is acceptable to the Administrative Agent)) that shall be deposited designated as the Concentration Account for the Parent Borrower listed on Schedule 9.15(a).
(ii) The Parent Borrower may maintain, in its name, one or more accounts (any such account, a “Disbursement Account”) at any bank reasonably acceptable to the Administrative Agent into a Control Account or Local Deposit Account within one (1) Business Day after which the receipt thereof Administrative Agent shall, from time to time, deposit proceeds of Loans made to the Parent Borrower pursuant to Section 2.1 for use by the Parent Borrower solely in accordance with the provisions of Section 9.13 (it being understood thatthat the Administrative Agent may also deposit or wire proceeds of Loans into any other account designated by the Parent Borrower at any time other than during the continuance of any Cash Dominion Event). The Parent Borrower may also maintain, in its name, one or more accounts that (x) do not contain any funds that are proceeds of Accounts that otherwise constitute Collateral or (y) include funds that are proceeds of Accounts that otherwise constitute Collateral and that are neither Government Receivables Deposit Accounts nor subject to a Blocked Account Agreement, but solely (in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to this clause (i)(A)(1y) above);
(Bonly) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit extent that any such accounts which do are not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreementblocked account or control agreement with any other party (each a “Non-Controlled Account”).
(biii) [Intentionally Omitted].
Within 60 calendar days after the Closing Date (cor such later date as the Administrative Agent may, in its sole discretion, consent to in writing), each Borrower that owns or originates Government Accounts shall deliver to the Collateral Agent (x) for each Government Receivables Deposit Account established or maintained by such Borrower, a tri-party deposit account agreement between the Collateral Agent, the bank at which such Government Receivables Deposit Account (each a “Government Receivables Bank”) is maintained and such Borrower, in form and substance reasonably satisfactory to the Collateral Agent (each a “Government Receivables Deposit Account Agreement”), and (y) for the accounts of any Borrower designated as a Blocked Account on Schedule 9.15(c) and for the Concentration Account and any Disbursement Accounts, a tri-party blocked account agreement or lockbox account agreement between the Collateral Agent, the bank at which each such Blocked Account, Concentration Account or Disbursement Account is maintained and the relevant Borrowers, in form and substance reasonably satisfactory to the Collateral Agent (each a “Blocked Account Agreement”). It being understood that each Borrower delivered each Government Receivable Deposit Account Agreement and each Blocked Account Agreement required by this Section 9.15(a)(iii) within the required time frame. Each Control such Blocked Account Agreement with respect to any Blocked Account shall provide, among other things, that from and after the date thereof the bank at which any such Blocked Account is maintained, agrees to forward immediately all amounts in each such account to the Concentration Account. In addition, any such Blocked Account Agreement shall provide, among other things, that (i) upon the depositoryoccurrence and during the continuation of a Cash Dominion Event, securities intermediary the bank at which such Blocked Account, Concentration Account or commodities intermediary executing such agreement has no rights Disbursement Account is maintained shall, upon receipt of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to notice by the administration Collateral Agent of such account and for returned checks or other items Cash Dominion Event, commence the process of payment (except as Agent may otherwise agree in writing), and (ii) daily sweeps from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily such accounts into the Collection Account (it being understood that any such daily sweep in respect of any cash or another Control other amount in a Disbursement Account which shall be subject to the rights of the Borrowers to transfer, apply or otherwise use the proceeds of any Loans hereunder for any purpose in accordance with Section 9.13 by moving any cash or other amount on deposit in any Disbursement Account out of such account for any such purpose); provided that any amounts in the Concentration Accounts reasonably identified (with reasonably detailed written support) to the Administrative Agent as not constituting Collateral will be distributed as directed by the Administrative Agent as requested by the Parent Borrower, including to one or more Non-Controlled Accounts. Notwithstanding anything to the contrary herein or in any other Credit Document, no cash or other amount that is disbursed or otherwise transferred from the Disbursement Account (other than to the extent swept daily back into the Collection Account) shall constitute Collateral.
(div) By 10:00 a.m. (New York time) on each Business Day, each Borrower will cause the entire available balance in each Government Receivables Deposit Account to be transferred by ACH or book entry transfer to the Concentration Account. The Borrowers will not transfer any funds out of the Government Receivables Deposit Account or any Blocked Account except to the Concentration Account. The balance from time to time standing to the credit of the Blocked Accounts shall be distributed as directed in accordance with the provisions of the Blocked Account Agreements. Prior to the occurrence of any first Cash Dominion Event, the balance from time to time standing to the credit of the Concentration Account shall be distributed as directed by the Parent Borrower, including to one or more Non-Controlled Accounts. The Parent Borrower shall not, and shall not cause or permit any Subsidiary thereof to, accumulate or maintain cash (other than cash that is not proceeds of any Collateral) in disbursement accounts or payroll accounts as of any date of determination in excess of checks outstanding against such accounts as of the date and amounts necessary to meet minimum balance, near-term funding requirements or near-term operating requirements. Notwithstanding anything to the contrary, cash held in overnight deposit or investment accounts shall be deemed to be in the Concentration Account overnight.
(v) So long as no Default or Event of Default has occurred and is continuing, the Parent Borrower may amend Schedules 9.15(a) and (c) to add or replace a bank, any Government Receivables Deposit Account, the Concentration Account, any Blocked Account or any Disbursement Account; provided that (x) the Administrative Agent shall have consented in writing in advance to the opening of such new or replacement account with the relevant bank (which consent shall not be unreasonably withheld) and (y) prior to the time of the opening of such account, the applicable Borrower and such bank shall have executed and delivered to the Collateral Agent a tri-party agreement, in form and substance reasonably satisfactory to the Collateral Agent in its sole discretion. Each Borrower shall cease using any account to hold proceeds of Collateral promptly and in any event within 30 days (or such later date as the Administrative Agent may agree) following notice from the Administrative Agent to the Parent Borrower that the creditworthiness of the bank holding such account is no longer acceptable in the Administrative Agent’s reasonable credit judgment, or as promptly as practicable and in any event within 60 days (or such later date as the Administrative Agent may agree) following notice from the Administrative Agent to the Parent Borrower that the operating performance, funds transfer or availability procedures or performance with respect to accounts or lockboxes of the bank holding such account or Agent’s liability under any tri-party blocked account agreement with such bank is no longer acceptable in the Administrative Agent’s reasonable credit judgment.
(vi) The Government Receivables Deposit Accounts, the Concentration Account, the Blocked Accounts and the Disbursement Accounts (subject to the last two sentences of Section 9.15(a)(iii)) shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts (to the extent constituting proceeds of Accounts otherwise constituting Collateral) securing payment of the Loans and all other Obligations, and in which the applicable Borrower shall have granted a Lien to the Collateral Agent, on behalf of itself and Lenders, pursuant to the Security Agreement. The Borrowers shall use commercially reasonable efforts to ensure that all cash, checks and other similar items of payment in the Government Receivables Deposit Accounts, the Concentration Account and the Blocked Accounts are solely in respect of Accounts that otherwise constitute Collateral; provided that, credit card, debit card and internet bill inquiry and payment system (IBIP) payments received in the Concentration Account that do not constitute proceeds of Accounts otherwise constituting Collateral shall be permitted in the Concentration Account so long as the Borrowers use their commercially reasonable efforts to distribute such amounts to a Non-Controlled Account within three (3) Business Days of receipt thereof.
(vii) All amounts deposited in the Collection Account shall be deemed received by the Administrative Agent in accordance with Section 1.10(a) 5 and shall be applied (and allocated) by the Administrative Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be5. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(eviii) Credit Parties may amend Schedule 3.22 to add or replace any deposit account The Borrowers shall and shall cause their respective Affiliates, officers, employees, agents, directors or other account; providedPersons acting for or in concert with a Borrower (each a “Related Person”) to (x) hold in trust for the Administrative Agent, for the benefit of itself and Lenders, all checks, cash and other items of payment received by a Borrower or by a Related Person on behalf of a Borrower in respect of Accounts that constitute Collateral, and (y) within 1 Business Day after receipt by a Borrower or by a Related Person on behalf of a Borrower of any checks, cash or other items of payment in respect of Accounts that constitute Collateral, deposit the same into a Blocked Account or the Concentration Account. Each Borrower and each Related Person thereof acknowledges and agrees that all cash, checks or other items of payment constituting proceeds of Collateral are part of the Collateral. All proceeds of the sale or other disposition of any Collateral, shall be deposited directly into a Blocked Account or the Concentration Account (or if proceeds of Government Accounts, into a Government Receivables Deposit Account).
(i) During the continuance of a Cash Dominion Event, the Borrowers shall provide the Collateral Agent with an accounting of the contents of the Government Receivables Deposit Accounts, the Blocked Accounts and the Concentration Account, which shall have consented in writing (such consent not be unreasonably withheld) in advance identify, to the opening reasonable satisfaction of such account with the relevant depositoryCollateral Agent, securities intermediary or commodities intermediary the proceeds from the Collateral which were deposited into a Blocked Account and swept to the Concentration Account.
(ii) with respect Within 1 Business Day of the occurrence of a Cash Dominion Event, the Borrowers shall deposit into the Collection Account an amount equal to the entire amount of cash constituting Collateral held in any additional Non-Controlled Account.
(c) Upon the occurrence and during the continuance of a Cash Dominion Event following the entry into Government Receivables Deposit Account Agreements and Blocked Account Agreements, the Concentration Account and each Blocked Account shall at all times be under the sole dominion and control of the Collateral Agent. The Borrowers hereby acknowledge and agree that during the continuance of a Cash Dominion Event following the entry into Government Receivables Deposit Account Agreements and Blocked Account Agreements, (i) the Borrowers have no right of withdrawal from the Concentration Account (subject to the proviso to the last sentence of Section 9.15(a)(iii)), (ii) the funds on deposit in the Concentration Account shall at all times be collateral security for all of the Obligations (other than to the extent such funds do not constitute proceeds of Accounts that are otherwise Collateral) and (iii) the funds on deposit in the Concentration Account shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this Section 9.15, any Borrower receives or replacement Control otherwise has dominion and control of any proceeds or collections of Accounts that otherwise constitute Collateral outside of the Government Receivables Deposit Accounts, the Concentration Account, securities accountany Blocked Account and any Disbursement Account, such proceeds and collections shall be held in trust by such Borrower for the Collateral Agent and shall, not later than the Business Day after receipt thereof, be deposited into the Concentration Account or commodities accountdealt with in such other fashion as such Borrower may be instructed by the Collateral Agent.
(d) [Intentionally Omitted].
(i) Within 60 calendar days after the Closing Date (or such later date as the Administrative Agent may, except as Agent may otherwise agree in its sole discretion, consent in writing), prior each Borrower shall deliver to the time of Collateral Agent notifications (each, a “Credit Card Notification”) in form and substance reasonably satisfactory to the opening Collateral Agent which have been executed on behalf of such accountBorrower and addressed to such Borrower’s credit card clearinghouses and processors listed on Schedule 9.15(e). It being understood that each Borrower delivered each Credit Card Notification required by this Section 9.15(e)(i) within the required time frame. Each Credit Card Notification shall provide, among other things, that from and after the applicable date thereof, all amounts owing to a Borrower and constituting proceeds of Collateral shall be forwarded immediately to the Concentration Account.
(ii) Unless consented to in writing by the Collateral Agent, after the delivery of Schedule 9.15(e) the Borrowers shall not enter into any agreements with credit card processors other than the ones expressly contemplated herein unless contemporaneously therewith, a Credit Party and the applicable depositoryCard Notification, securities intermediary or commodities intermediary shall have is executed and delivered to Agent a Control Agreementthe Collateral Agent.
(f) Credit Parties shall close After the occurrence of any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and first Cash Dominion Event on or after the Amendment No. 1 Effective Date, the Borrowers will be prohibited from depositing cash constituting Collateral in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an deposit account is no longer acceptable in Agent’s reasonable judgmentother than Government Receivables Deposit Accounts, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtainedBlocked Accounts, the Agent may require the Credit Parties to close such Local Deposit Concentration Account, Disbursement Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the AgentCollection Account.
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either At all times: (i) not resulted from any act or omission Borrowers shall maintain a blocked account at the Agent for the collection of any Credit Party or all remittances and payments on Borrowers' Accounts and other Collateral, pursuant to an agreement the terms and conditions of which are satisfactory to Agent in all respects (the "Blocked Account Agreement") and (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores each Borrower shall maintain their deposit accounts at any timeAgent or, in any casethe alternative, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received at another financial institution which has agreed to accept drafts drawn on it by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent Agent under a written depository transfer agreement with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit AccountAgent, and (2) all other payments received at any Store (including, without limitation, to block such Borrower's account and waive its own rights as against such account. Each Borrower will hold in trust for Agent all checks, drafts or drafts, cash and other similar items remittances that are proceeds of payment) Collateral and shall immediately upon receipt deliver such remittances to the blocked account maintained at the Agent for application to the Obligations. The order and method of application shall be deposited into a Control Account or Local Deposit Account within one (1) Business Day after in Agent's sole discretion and proceeds which in Agent's discretion are not so applied shall be credited to the receipt thereof (it being understood thatrespective Borrower's deposit account with Agent or, in the case of checksalternative, at another financial institution which has agreed to accept drafts drawn on it by Agent under a written depository transfer agreement with Agent, and other similar items of payment that are deposited electronically, to block such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements Borrower's account and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreementwaive its own rights as against such account.
(b) [Intentionally Omitted]For purposes of calculating interest on the Obligations, such payments or other funds received by the Agent will be applied to the Obligations as of the Business Day that is two (2) Business Days after the date of receipt by the Agent in the blocked account. For purposes of calculating the amount of the Revolving Loans available to Borrowers such payments will be applied to the Obligations on the Business Day of receipt by Agent in the blocked account, if such payments are received within sufficient time (in accordance with Agent's usual and customary practices as in effect from time to time) to credit the respective Borrower's loan accounts on such day, and if not, then on the next Business Day. In the event there are not sufficient funds in the respective Borrower's operating account when debited and/or charged under this paragraph, under the Blocked Account Agreement, or otherwise, the Borrowers agree to immediately pay such amounts to the Agent in immediately available funds.
(c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related Only to the administration of such account and for returned checks or other items of payment extent not inconsistent with the paragraphs (except as Agent may otherwise agree in writing), a) and (iib) from and after above, the Closing Date, except for Borrowers shall continue to use the cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received management systems currently in any Control Account shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Account.
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account place with the relevant depository, securities intermediary or commodities intermediary and Agent (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement`Cash Management Systems').
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent."
Appears in 1 contract
Cash Management Systems. Within 45 days after the Closing Date (or such later date as may be agreed by the Co-Collateral Agents), each of the Loan Parties shall establish and maintain until the Maturity Date, the cash management systems described in this Section 2.16 (the “Cash Management Systems”).
(a) Each Credit Party shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or Within 45 days after the Closing Date. Credit Parties Date (or such later date as may be agreed by the Co-Collateral Agents), each Loan Party shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act establish blocked accounts (“Blocked Accounts”) at one or omission more of any Credit Party or the banks set forth in Schedule 2.16(a)(A) and (ii) resulted from the isolated failure by any employee of any Credit Party subject to comply with the formal cash management procedures of the Credit Parties not affecting more than ten subsection (10h) Stores at any timebelow, deposit or cause to be deposited promptly, and in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the date of receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of paymentpayment relating to or constituting payments made in respect of any and all ABL Collateral into one or more Blocked Accounts in such Loan Party’s name and at a bank identified in Schedule 2.16(a)(A) to be deposited into (each, a Control Account or Local Deposit Account within one (1) Business Day “Relationship Bank”). Within 45 days after the receipt thereof Closing Date (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, or such items later date as may be delivered into agreed by the possession of an Approved Armored Car Carrier together with any cash pursuant to clause Co-Collateral Agents), each Loan Party shall have established a concentration account in its name (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements each a “Concentration Account” and direct all Account Debtors (other than in connection with delinquent collection effortscollectively, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Concentration Accounts”) at the bank or banks that shall be designated as the Concentration Account bank for each such Loan Party in Schedule 2.16(a)(B) (each a “Concentration Account Bank” and collectively, the “Concentration Account Banks”), which banks shall be reasonably satisfactory to be transferred on a daily basis to a Control Account that is subject to a Control AgreementCollateral Agent.
(b) [Intentionally Omitted]Each Loan Party may maintain, in its name, an account (each a “Disbursement Account” and collectively, the “Disbursement Accounts”) at a bank reasonably acceptable to Collateral Agent into which Collateral Agent shall, from time to time, deposit proceeds of the Loans made to such Loan Party pursuant to Sections 2.02, 2.02A, 2.04 and 2.05 for use by such Loan Party solely in accordance with the provisions of Section 7.10.
(c) Each As promptly as practicable, and in any event within 45 days after the Closing Date (or such later date as may be agreed by the Co-Collateral Agents), each Concentration Account Bank, each bank where a Disbursement Account is maintained and all other Relationship Banks, shall have entered into Deposit Account Control Agreements with Collateral Agent, for the benefit of itself and Lenders, and the applicable Loan Party, in form and substance reasonably acceptable to Collateral Agent. Unless otherwise agreed by the Co-Collateral Agents, each such Deposit Account Control Agreement shall provide, among other things, that (i) all items of payment deposited in such account and proceeds thereof deposited in the depositoryapplicable Concentration Account are held by such bank as agent or bailee-in-possession for Collateral Agent, securities intermediary or commodities intermediary on behalf of itself and Lenders, (ii) the bank executing such agreement Deposit Account Control Agreement has no rights of setoff or recoupment or any other claim against such account, as the case may be, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing)payment, and (iiiii) (A) with respect to banks at which a Blocked Account is maintained, such bank agrees to forward, so long as a Default, an Event of Default or an Excess Availability Triggering Event has occurred and is continuing, immediately all amounts in each Blocked Account to such Loan Party’s Concentration Account Bank and to commence the process of daily sweeps from such Blocked Account into the applicable Concentration Account and after the Closing Date(B) with respect to each Concentration Account Bank, except for cash such bank agrees to immediately forward, so long as a Default, an Event of Default or an Excess Availability Triggering Event has occurred and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22is continuing, all amounts received in any Control the applicable Concentration Account shall be swept daily into to the Collection Account or another Control through daily sweeps from such Concentration Account which is swept daily into the Collection Account. It is understood and agreed that the Excess Availability Triggering Event shall be deemed to have occurred and be continuing on the Closing Date. No Loan Party shall accumulate or maintain cash in Disbursement Accounts or payroll accounts as of any date of determination in excess of checks or other items of payment outstanding against such accounts as of that date and amounts necessary to meet minimum balance requirements, unless otherwise agreed by the Co-Collateral Agents in their reasonable discretion.
(d) So long as no Default or Event of Default has occurred and is continuing, Loan Parties may amend Schedule 2.16(a)(A) to add or replace a Relationship Bank or Blocked Account or to replace any Concentration Account or any Disbursement Account; provided, that (i) Collateral Agent shall have consented in writing (such consent not to be unreasonably withheld or delayed) in advance to the opening of such account with the relevant bank and (ii) subject to subsection (h) below, prior to the time of the opening of such account, the applicable Loan Party and such bank shall have executed and delivered to Collateral Agent a Deposit Account Control Agreement, in form and substance reasonably satisfactory to Collateral Agent. Loan Parties shall close any of their accounts (and establish replacement accounts in accordance with the foregoing sentence) promptly and in any event within 30 days following notice from Collateral Agent that the creditworthiness of any bank holding an account is no longer acceptable in Collateral Agent’s reasonable judgment, or as promptly as practicable and in any event within sixty (60) days following notice from Collateral Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the bank holding such accounts or Collateral Agent’s liability under any Deposit Account Control Agreement with such bank is no longer acceptable in Collateral Agent’s reasonable judgment.
(e) The Blocked Accounts, Disbursement Accounts and the Concentration Accounts shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts securing payment of the Loans and all other Obligations, and, subject to subsection (h) below, in which each Loan Party shall have granted a Lien to Collateral Agent, on behalf of itself and Lenders, pursuant to the ABL Guarantee and Collateral Agreement.
(f) All amounts deposited in the Collection Account shall be deemed received by Collateral Agent in accordance with Section 1.10(a2.13(a) and shall be applied (and allocated) by Collateral Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii2.13(g), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(eg) Credit Parties may amend Schedule 3.22 Each Loan Party shall and shall cause each of its Affiliates to add (i) hold in trust for Collateral Agent, for the benefit of itself and Lenders, all checks, cash and other items of payment representing proceeds of any ABL Collateral received by such Loan Party or replace any such Affiliate, and (ii) within one (1) Business Day after receipt by such Loan Party or any such Affiliate of any such checks, cash or other items of payment, deposit the same into a Blocked Account of such Loan Party. Each Loan Party on behalf of itself and each Affiliate thereof acknowledges and agrees that all cash, checks or other items of payment constituting proceeds of ABL Collateral are part of the ABL Collateral. All proceeds of the sale or other disposition of any ABL Collateral, shall be deposited directly into the applicable Blocked Accounts.
(h) Notwithstanding anything herein to the contrary, no deposit account established or maintained by any Loan Party (i) solely as a disbursement account for payroll; (ii) the average daily balance in which does not exceed at any time $1,000,000 in the case of any one such account, or, in aggregate, $5,000,000, in the case of all such accounts; (iii) into which funds are deposited pursuant to ERISA or any Plan or any other similar trust account; (iv) holding solely the proceeds of any Non-ABL Collateral; or (v) such other accounts (including, without limitation, local deposit accounts) as reasonably determined by Collateral Agent in its discretion, shall be required to be subject to a Deposit Account Control Agreement; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Accountsuch local deposit account described in clause (v), securities such Loan Party shall, within two (2) Business Days of the deposit of any funds into such local deposit account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts deposit such funds in excess of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter minimum balance requirements into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the AgentConcentration Account.
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Accountof its deposit, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) accounts maintained by such Person (other than (i) any payroll accounts into which there is deposited no funds other than those intended solely to cover wages for employees of the Credit Parties so long as such payroll account is a zero balance account, (ii) any accounts constituting employee withholding and trust accounts and containing only funds deducted from pay otherwise due to employees for services rendered to be applied toward the tax obligations of such employees, (iii) to the extent not maintained at Bank of America, xxxxx cash accounts with a balance of less than $50,000 individually and $500,000 in the aggregate for all such accounts and (iv) any Segregated Governmental Account) as of or after the Closing Date. .
(b) In addition, in order to segregate and to facilitate perfection of the Agent’s security interest in funds received from Governmental Payors making payments under Medicare or Medicaid, if any, the Credit Parties agree that the Credit Parties shall (except solely to the extent the failure to do so shall have either (ia) not resulted segregate collections made from any act Governmental Payors making payments under Medicare or omission of any Credit Party or (ii) resulted Medicaid, from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures collections made from all other Account Debtors and customers of the applicable Credit Parties not affecting more than ten (10) Stores at any timeParties, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, by (i) notifying all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors payors (other than in connection with delinquent collection efforts, pursuant Governmental Payors making payments under Medicare or Medicaid) then instructed to which the applicable Account Debtors shall be directed make payments to remit payment directly to the such Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis make payments to a Control Account that is deposit account subject to a Control Agreement.
(b) [Intentionally Omitted].
(c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Datenotifying all Governmental Payors making payments under Medicare or Medicaid to make payments to a Segregated Governmental Account, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Account.
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (iib) enter into, and cause each applicable depository to enter into, a “sweep” agreement (a “Sweep Agreement”) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writingeach Segregated Governmental Account (and, prior to the time such segregation of collections from Governmental Payors, with respect to each deposit account receiving payments from Governmental Payors made under Medicare or Medicaid) pursuant to which such depository will agree to sweep amounts deposited therein on daily basis to a deposit account of the opening Credit Parties subject to a Control Agreement in favor of the Agent as and when funds clear and become available in accordance with such accountdepository’s customary procedures, each with such financial institution and each in form and substance reasonably acceptable to the Agent. No Credit Party may change any sweep instruction set forth in such Sweep Agreement without the prior written consent of the Agent; provided that so long as prior written notice is provided to the Agent, each Credit Party shall be entitled as necessary to be in compliance with Health Care Laws to unilaterally waive, revoke, terminate or amend any sweep instructions or Sweep Agreement; provided, further, that upon any such waiver, revocation, termination or amendment, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts cooperate with Agent to promptly reinstate, in accordance with clause (d) hereof) promptly Health Care Laws, such sweep instructions or Sweep Agreements, as applicable, and shall take all actions reasonably required for such reinstatement. To the extent any Person, whether a Governmental Payor or otherwise, remits payments to an incorrect deposit account or otherwise makes payments not in any event within thirty (30) days following notice from Agent that accordance with the creditworthiness provisions of any bank holding this Section 4.11 or an account is no longer acceptable in Agentapplicable Credit Party’s reasonable judgmentpayment direction, or as promptly as practicable such Credit Party shall contact such Person and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository redirect payment from such Person in accordance with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository the terms hereof. The Agent agrees and if such Control Agreement cannot be obtained, the Agent may require the confirms that Credit Parties to close such Local Deposit Accounts will have sole dominion and transfer “control” (within the meaning of Section 9-104 of the UCC and the common law) over each Segregated Governmental Account and all funds therein and the Agent disclaims any right of any nature whatsoever to a Control control or otherwise direct or make any claim against the funds held in any Segregated Governmental Account subject from time to a Control Agreement at a financial institution reasonably satisfactory to the Agenttime.
Appears in 1 contract
Samples: Credit Agreement (Metropolitan Health Networks Inc)
Cash Management Systems. (a) Each Credit Party Within thirty (30) days following execution of this Agreement, the Borrower shall enter intouse its reasonable best efforts to establish and, and cause each depositoryonce established, securities intermediary or commodities intermediary shall continue to enter intomaintain, Control Agreements providing for at its expense, blocked accounts at the banks identified at level A on Schedule “fullI” cash dominion with respect to each Control Account, securities, commodity or similar account hereto as determined by the Lender (“Blocked Accounts”) into which the Borrower shall promptly deposit all funds received from all sources other than Excluded Cash but including, without limitation, all account receivable payments, cash sales receipts, credit card payments, any lockbox and all refunds received from any source whatsoever and any proceeds of any advances or similar arrangements) maintained other loans made to them and shall direct their account debtors that remit payments by such Person electronic funds transfers to directly remit all payments into the Blocked Accounts. For greater certainty, the Borrower’s agreement to use its reasonable best efforts to establish the Blocked Accounts shall not require the Borrower to change any of its banking relationships if a bank refuses to establish the Blocked Accounts contemplated hereby. Until the Blocked Accounts are established as aforesaid, or if the Borrower, following the use of its reasonable best efforts to do so, is unsuccessful in establishing some or after all of the Closing Date. Credit Parties shall (except solely Blocked Accounts contemplated hereby then, with respect to those banks where it is unable to do so, the Borrower shall, on a daily basis, wire transfer to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures Initial Blocked Account all monies in all of the Credit Parties not affecting more than ten (10) Stores at any time, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (Borrower’s deposit accounts other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store Excluded Cash (including, without limitation, all checks, drafts or other similar items of paymentthe accounts shown on Schedule “I” hereto) and which monies shall thereafter be transferred to the Lender by way of cash sweeps of the Blocked Accounts by the Blocked Account Banks pursuant to the Blocked Account Agreements to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after held by the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any Lender as cash collateral pursuant to clause (i)(A)(1the agreement contemplated in Paragraph 13(e) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control of this Agreement.
(b) [Intentionally Omitted]The Blocked Account Banks and the Borrower shall enter into agreements (“Blocked Account Agreements”), in form and substance satisfactory to the Lender providing that the Blocked Account Banks have no Lien upon, or right to setoff against, the Blocked Accounts, the items received for deposit therein, or the funds from time to time on deposit therein and that the Blocked Account Banks will wire, or otherwise transfer, in immediately available funds, on a daily basis, all funds received or deposited into the Blocked Accounts to the Lender’s account, as the Lender may from time to time designate for such purpose, to be held by the Lender as cash collateral pursuant to the agreement contemplated in Paragraph 13(e) of this Agreement.
(c) Each Control Agreement Within thirty (30) days following execution of this Agreement, the Borrower shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related take all steps necessary to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, cause all amounts received in any Control Account shall be swept daily monies currently deposited into the Collection Account or another Control Account which is swept daily account identified on Schedule “I” hereto as the “credit and debit cards” account to be instead deposited into one of the Blocked Accounts (or, in the interim, into the Collection Initial Blocked Account).
(d) All amounts deposited Any monies, cheques, notes, drafts or any other payment which come into the possession or under the control of the Borrower or, in the Collection Account case of any related person, comes into its possession or under its control and is rightfully that of the Borrower, shall, immediately upon receipt thereof where received by the Borrower or upon the Borrower becoming aware of the receipt thereof where received by a related person, be deposited by the Borrower, or shall be deemed received caused by Agent the Borrower to be deposited, in accordance with Section 1.10(a) the Blocked Accounts and shall be applied dealt with as contemplated in Paragraph 15(b) of this Agreement. In no event shall the same be commingled with any of the Borrower’s own funds. The Borrower agrees to reimburse the Lender on demand for any amounts owed or paid to the Blocked Account Banks regarding the Blocked Accounts or any other bank or person involved in the transfer of funds to or from such Blocked Accounts arising out of the Lender’s payments to or indemnification of such bank or person.
(e) The Lender shall, on each Business Day in respect of amounts received from the Borrower’s Blocked Accounts on the previous Business Day and allocatedheld by the Lender as cash collateral as aforesaid, provided that no Default or Event of Default has occurred and subject to Paragraph 15(g) by Agent in accordance with Section 1.10(c)(iof this Agreement, transfer such amounts to the Borrower’s Disbursement Account.
(f) The Borrower shall make all of its payments and disbursements only from its Disbursement Account or Section 1.10(c)(ii)from its Payroll Account.
(g) Upon receipt of the Monthly Borrowing Base Report or Other Borrowing Base Report, as the case may be. In no event , the Lender shall any calculate the then Facility A Loan Availability as contemplated in Paragraph 5 of this Agreement and shall calculate the amount, if any, by which the amount be so applied unless of the Loan then outstanding (including principal, accrued and until such amount shall have been credited in immediately available funds unpaid interest, unpaid fees and expenses and all other amounts owing by the Borrower to the Collection Account.
(eLender under this Agreement but excluding any principal amount then outstanding but not yet payable in respect of the Facility B Loan) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing exceeds the then Facility A Loan Availability (such consent not be unreasonably withheld) in advance excess, if any, being the “Availability Deficiency”). The Lender shall further calculate the amount, if any, by which the Availability Deficiency exceeds the amount of cash then held by the Lender as cash collateral pursuant to the opening agreement contemplated in Paragraph 13(e) of this Agreement (such account with excess, if any, being the relevant depository“Cash Collateral Deficiency”). The Lender shall, securities intermediary or commodities intermediary and (ii) with respect in addition to any cash collateral then held by it, retain amounts received from the Borrower’s Blocked Accounts as additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree cash collateral until it has retained amounts which in writing, prior to the time aggregate equal the Cash Collateral Deficiency and only thereafter shall the provisions of the opening Paragraph 15(e) of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreementthis Agreement apply.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party The Borrower shall enter intoestablish and maintain the Accounts each of which shall be subject to an Account Control Agreement, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after into which the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures proceeds of the Credit Parties not affecting more than ten (10) Stores at any time, in any case, so long as any such failure shall not Term Loans will be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store paid in accordance with past practices and Section 2.2(a). The Borrower (yor the Servicer on its behalf) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after may only withdraw funds from the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited Accounts for use in accordance with this Section upon the correction of Agreement. If any such error) or (III) Account ceases to be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit an Eligible Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreement.
(b) [Intentionally Omitted].
(c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Account.
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days of obtaining Knowledge thereof, the Borrower shall establish, or cause to be established, a new Account of the applicable type.
(b) In accordance with Section 2.2(a) of the Servicing Agreement, the Borrower acknowledges and confirms that it has established and will maintain a Payment Controlled Account pursuant to an Account Control Agreement, into which Collections shall have been or shall be deposited, except for any Other Revenue which may be deposited in the DNC Bank Account and netted against the Weekly Servicing Fee and amounts in accordance with Section 7.14.
(c) Amounts on deposit in the Payment Controlled Account may be withdrawn by the Borrower to be applied pursuant to Section 2.7 in accordance with the applicable Transfer Report. Any Accrued Monthly Interest Amount or Accrued Preferred Distribution that is retained in the Payment Controlled Account pursuant to Section 2.7(iv) shall be held in the Payment Controlled Account until the immediately following notice Monthly Transfer Date.
(d) [RESERVED].
(e) The Account Bank shall, from time to time and in accordance with the direction of the Manager, without regard to the limitations described under Section 2.3, make withdrawals from the Payment Controlled Account (i) to pay to the Persons entitled thereto any amounts deposited in error, (ii) to pay to the Administrative Agent that and the creditworthiness of any bank holding an account is Account Bank the Administrative Agent Fee and the Account Bank Fee and accrued and unpaid expenses and indemnities payable to the Administrative Agent and the Account Bank, as applicable, and (iii) to clear and terminate the Payment Controlled Account on the date the Term Loans are no longer acceptable outstanding and this Agreement has been terminated.
(f) If, notwithstanding the provisions of this Section 6.12, the Borrower or the Manager receives any Collections, the Borrower or the Manager shall deposit such amounts in Agent’s reasonable judgment, the Payment Controlled Account or as promptly as practicable and in any event a Controlled Account within one-hundred and twenty five (1205) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts Business Days of the depository, securities intermediary or commodities intermediary holding identification of such accounts or Agent’s liability under any Control Agreement amounts in accordance with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgmentthe Servicing Standard.
(g) Upon Agent’s request[Reserved]
(h) On the Closing Date, each in addition to the proceeds of the Term Loans pursuant to Section 2.2(a), the Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit deposit into the Retention Controlled Account to promptly enter into the entire amounts of the Borrower’s existing cash balances as of 9:00 A.M. (New York City time) on the Closing Date.
(i) Sums on deposit in the Accounts, shall be invested in Permitted Investments and such Permitted Investments shall be held in a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Permitted Investment Account subject to an Account Control Agreement. Each of the Permitted Investments may be purchased by the Borrower. Except during the continuance of an Event of Default, the Borrower shall have the right to direct each Account Bank in writing, which may be standing instructions, to invest sums on deposit in the Accounts in Permitted Investments; provided, however, in no event shall the Borrower direct any Account Bank to make a Control Agreement at a financial institution reasonably satisfactory Permitted Investment if the maturity or liquidation date of that Permitted Investment is later than the Business Day prior to the Agentdate on which the invested sums are required for payment of an obligation for which the Account was created. After an Event of Default of which the Administrative Agent shall have received written notice thereof and during the continuance thereof, sums on deposit in the Accounts shall remain uninvested, unless otherwise directed in writing by the Requisite Lenders. The Borrower shall direct each Account Bank to apply any interest or income earned from Permitted Investments to the Payment Controlled Account in accordance with the priorities set forth in Section 2.7 hereof with any such interest or income available on any Monthly Transfer Date or Weekly Transfer Date being deemed to be attributable to the immediately preceding Collection Period for such purposes. The Borrower shall be responsible for payment of any federal, state, local or non-U.S. income or other Tax applicable to income earned from Permitted Investments. The Accounts shall be assigned the federal tax identification number of the Borrower. The Borrower agrees that it shall not modify, amend or terminate the Permitted Investments Direction Letter without the prior written consent of the Requisite Lenders, except that the Borrower may make modifications that allow for a selection among Permitted Investments.
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter intoAnnexed hereto as Schedule 9.16 is a schedule of all DDAs that are maintained by the Borrowers and the U.S. Subsidiary Guarantors that are Material Subsidiaries as of the Closing Date, and cause each depositorywhich Schedule includes, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either depository (i) not resulted from any act or omission the name and address of any Credit Party or such depository; (ii) resulted from the isolated failure by any employee of any Credit Party to comply account number(s) maintained with the formal cash management procedures of the Credit Parties not affecting more than ten such depository; (10iii) Stores a contact person at any time, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices depository and (yiv) thereafter, shall not identifying whether such DDA must be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Blocked Account Agreement.
(b) [Intentionally Omitted]Within 120 days after the Closing Date, or such longer period as the Administrative Agent may agree in its reasonable discretion, each Borrower and each U.S. Subsidiary Guarantor will use commercially reasonable efforts to enter into a springing blocked account agreement (each, a “Blocked Account Agreement,” which, for the avoidance of doubt, may be included in any Foreign Security Document), reasonably satisfactory to the Administrative Agent, with respect to the DDAs (other than Excluded Accounts) (such DDAs subject to Blocked Account Agreements, collectively, the “Blocked Accounts”). If such Blocked Account Agreements are not obtained within 120 days after the Closing Date (or such later date as the Administrative Agent shall reasonably agree), each Borrower and each U.S. Subsidiary Guarantor shall, within 60 days thereof (or such later date as the Administrative Agent may reasonably agree) to move its applicable DDAs to the Administrative Agent or another financial institution that will provide such Blocked Account Agreements. Each Borrower hereby agrees that, once the Blocked Account Agreements are entered into, all cash received by such Borrower or any U.S. Subsidiary Guarantor in any DDA that is not a Blocked Account (other than amounts held in Excluded Accounts and, solely in respect of Excluded Accounts identified in clause (ii) of the definition thereof, required by Applicable Law) will be promptly transferred into a Blocked Account (other than, during a Cash Dominion Period, a Blocked Account that is a cash pooling account). After entering into the Blocked Account Agreement, there shall be at all times thereafter at least one Blocked Account that is not a cash pooling account. To the extent that any DDA is used for both collection and for other purposes (including payments and disbursements or cash pooling functions), then within ninety (90) days after the Closing Date (or such longer period as the Administrative Agent may agree in its reasonable discretion) the Borrowers shall either (i) terminate such other functions (other than collections) of each such account or (ii) transition the collection function of such account to another account that is subject to a Blocked Account Agreement and dedicated solely to collections.
(c) Each Control Blocked Account Agreement shall providepermit the Administrative Agent to instruct the depository, among (x) after the occurrence and during the continuance of a Specified Event of Default, in the case of a Blocked Account that is a cash pooling account of a Foreign Borrower or (y) during a Cash Dominion Period, in the case of all other thingsBlocked Accounts (and delivery of notice thereof from the Administrative Agent), to transfer on each Business Day all available cash receipts to a concentration account maintained by the Administrative Agent at Citibank, N.A. (each, a “Concentration Account”), from:
(i) the sale of Inventory and other Collateral (other than Term Priority Collateral);
(ii) all proceeds of collections of Accounts; and
(iii) each Blocked Account (including all cash deposited therein from each DDA) (other than, except during a continuing Specified Event of Default, a cash pooling account). If, at any time during the Cash Dominion Period, any cash or Cash Equivalents owned by any Borrower or any U.S. Subsidiary Guarantor (other than amounts held in Excluded Accounts and, solely in respect of Excluded Accounts identified in clause (ii) of the definition thereof, required by Applicable Law) are deposited to any account, or held or invested in any manner, other than in a Blocked Account (other than a Blocked Account that is a cash pooling account) that is subject to a Blocked Account Agreement (or a DDA which is swept daily to a Blocked Account (other than a Blocked Account that is a cash pooling account)), the Administrative Agent may require the applicable Person to close such account and have all funds therein transferred to a Blocked Account (other than a cash pooling account), and all future deposits made to a Blocked Account (other than a Blocked Account that is a cash pooling account) which is subject to a Blocked Account Agreement; provided that, to the extent that cash or Cash Equivalents are deposited in any Blocked Account that is a cash pooling account during a Cash Dominion Period, the Borrowers shall transfer such cash and Cash Equivalents to a Blocked Account that is not a cash pooling account, but, unless a Specified Event of Default has occurred and is continuing, the Administrative Agent may not require that (i) the depository, securities intermediary any such cash pooling account be closed or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for any cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received on deposit in any Control such cash pooling account prior to the commencement of a Cash Dominion Period be transferred to a Blocked Account that is not a cash pooling account. In addition to the foregoing, during the Cash Dominion Period, at the request of the Administrative Agent, the Borrowers shall be provide the Administrative Agent with an accounting of the contents of the Blocked Accounts, which shall identify, to the reasonable satisfaction of the Administrative Agent, the proceeds from the Collateral which were deposited into a Blocked Account and swept daily into the Collection Account or another Control Account which is swept daily into the Collection to a Concentration Account.
(d) All amounts deposited in The Borrowers and the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) U.S. Subsidiary Guarantors may close DDAs or Section 1.10(c)(ii)Blocked Accounts and/or open new DDAs or Blocked Accounts, as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds subject to the Collection Accountexecution and delivery to the Administrative Agent of appropriate Blocked Account Agreements (except with respect to any Excluded Accounts) consistent with and to the extent required by the provisions of this Section 9.16 and otherwise reasonably satisfactory to the Administrative Agent. Each such Person shall furnish the Administrative Agent with prior written notice of its intention to open or close a Blocked Account and the Administrative Agent shall promptly notify the Parent Borrower as to whether the Administrative Agent shall require a Blocked Account Agreement with the Person with whom such account will be maintained.
(e) Credit Parties The Borrowers and the U.S. Subsidiary Guarantors may amend Schedule 3.22 also maintain one or more zero balance disbursement accounts to add or replace any deposit account or other account; provided, that be used by such Persons for disbursements and payments (i) Agent shall have consented in writing (such consent not be unreasonably withheldincluding payroll) in advance to the opening ordinary course of such account with the relevant depository, securities intermediary business or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreementpermitted hereunder.
(f) Each Concentration Account shall at all times be under the sole dominion and control of the Administrative Agent. Each Credit Parties Party hereby acknowledges and agrees that (i) such Credit Party has no right of withdrawal from any Concentration Account, (ii) the funds on deposit in each Concentration Account shall close at all times continue to be collateral security for all of the Obligations pursuant to the Security Documents, and (iii) the funds on deposit in each Concentration Account shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this Section 9.16, during a Cash Dominion Period, any Credit Party receives or otherwise has dominion and control of any such proceeds or collections related to Collateral (other than Term Priority Collateral), such proceeds and collections shall be held in trust by such Person for the Administrative Agent, shall not be commingled with any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and such Person’s other funds or deposited in any event within thirty (30) days following notice from Agent that account of such Person and shall promptly be deposited into a Concentration Account or dealt with in such other fashion as such Person may be instructed by the creditworthiness of any bank holding an account is no longer acceptable in Administrative Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtainedSo long as no Cash Dominion Period is in existence, the Borrowers and the U.S. Subsidiary Guarantors may direct, and shall have sole control over, the manner of disposition of funds in the Blocked Accounts (other than Blocked Accounts that are cash pooling accounts, for which the Borrowers and the U.S. Subsidiary Guarantors may direct, and shall have sole control over, the manner of disposition of funds so long as no Specified Event of Default has occurred and is continuing).
(h) Any amounts received in any Concentration Account at any time shall be remitted to the operating account of the applicable Borrowers after the application of such amounts pursuant to Section 5.2(b).
(i) The Administrative Agent may require shall promptly (but in any event within one Business Day) furnish written notice to each Person with whom a Blocked Account is maintained, upon any termination of a Cash Dominion Period or a Specified Event of Default, as applicable, in each case for which the Credit Parties Administrative Agent has delivered a notice pursuant to close Section 9.16(c), of the termination of such Local Deposit Accounts notice.
(j) The following shall apply to deposits and transfer all funds therein payments under and pursuant to this Agreement:
(i) Funds shall be deemed to have been deposited to the applicable Concentration Account on the Business Day on which deposited, provided that such deposit is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. New York City time, on that Business Day);
(ii) Funds paid to the Administrative Agent, other than by deposit to a Control Account subject Concentration Account, shall be deemed to have been received on the Business Day when they are good and collected funds, provided that such payment is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. New York City time, on that Business Day);
(iii) If a deposit to a Control Agreement at a financial institution reasonably satisfactory Concentration Account or payment is not available to the AgentAdministrative Agent until after 4:00 p.m. on a Business Day, such deposit or payment shall be deemed to have been made at 9:00 a.m. on the then next Business Day; and
(iv) If any item deposited to any Concentration Account and applied in accordance with Section 5.2(b) is dishonored or returned unpaid for any reason, whether or not such return is rightful or timely, the Administrative Agent shall have the right to reverse such application and the Borrowers shall indemnify the Secured Parties against all reasonable out-of-pocket claims and losses resulting from such dishonor or return.
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter intoAnnexed hereto as Schedule 6.15(a) is a schedule of all DDAs that are maintained by the Borrowers as of the Closing Date, and cause each depositorywhich Schedule includes, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either depository (i) not resulted from any act or omission the name and address of any Credit Party or such depository; (ii) resulted from the isolated failure by any employee of any Credit Party to comply account number(s) maintained with the formal cash management procedures of the Credit Parties not affecting more than ten such depository; (10iii) Stores a contact person at any time, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices depository and (yiv) thereafter, shall not identifying whether such DDA must be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Blocked Account Agreement.
(b) [Intentionally Omitted]Each Borrower (in the case of the Canadian Borrower, within ninety (90) days of the Closing Date, or such longer period as the Administrative Agent may agree in its reasonable discretion) will enter into a springing blocked account agreement (each, a “Blocked Account Agreement,” which, for the avoidance of doubt, may be included in any Foreign Security Agreement), reasonably satisfactory to the Administrative Agent, with respect to the DDAs (other than Excluded Accounts) (such DDAs subject to Blocked Account Agreements, collectively, the “Blocked Accounts”). Each Borrower hereby agrees that, once the Blocked Account Agreements are entered into, all cash received by such Borrower in any DDA that is not a Blocked Account (other than amounts held in Excluded Accounts and, solely in respect of Excluded Accounts identified in clause (ii) of the definition thereof, required by applicable Law) will be promptly transferred into a Blocked Account (other than, during a Cash Dominion Event, a Blocked Account that is a cash pooling account). After entering into the Blocked Account Agreement, there shall be at all times thereafter at least one Blocked Account that is not a cash pooling account. To the extent that any DDA is used for both collection and for other purposes (including payments and disbursements or cash pooling functions), then within ninety (90) days after the Closing Date (or such longer period as the Administrative Agent may agree in its sole reasonable discretion) the Borrowers shall either (i) terminate such other functions (other than collections) of each such account or (ii) transition the collection function of such account to another account that is subject to a Blocked Account Agreement and dedicated solely to collections.
(c) Each Control Blocked Account Agreement entered into by a Borrower shall providepermit the Administrative Agent to instruct the depository, among after the occurrence and during the continuance of (x) a Specified Event of Default, in the case of a Blocked Account that is a cash pooling account or (y) a Cash Dominion Event, in the case of all other thingsBlocked Accounts (and delivery of notice thereof from the Administrative Agent), that to transfer on each Business Day all available cash receipts to a concentration account maintained by the Administrative Agent at Citibank (each, a “Concentration Account”), from: (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights sale of setoff or recoupment or any other claim against such account, other than for payment of its service fees Inventory and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and Collateral; (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Account.proceeds of collections of Accounts; and
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) The Borrowers may close DDAs or Section 1.10(c)(ii)Blocked Accounts and/or open new DDAs or Blocked Accounts, as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds subject to the Collection Accountexecution and delivery to the Administrative Agent of appropriate Blocked Account Agreements (except with respect to any Excluded Accounts) consistent with and to the extent required by the provisions of this Section 6.15 and otherwise reasonably satisfactory to the Administrative Agent. Each Borrower shall furnish the Administrative Agent with prior written notice of its intention to open or close a Blocked Account and the Administrative Agent shall promptly notify the Administrative Borrower as to whether the Administrative Agent shall require a Blocked Account Agreement with the Person with whom such account will be maintained.
(e) Credit Parties The Borrowers may amend Schedule 3.22 also maintain one or more zero balance disbursement accounts to add or replace any deposit account or other account; provided, that be used by the Borrowers for disbursements and payments (i) Agent shall have consented in writing (such consent not be unreasonably withheldincluding payroll) in advance to the opening ordinary course of such account with the relevant depository, securities intermediary business or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreementpermitted hereunder.
(f) Credit Parties Each Concentration Account shall close any of their respective accounts (at all times be under the sole dominion and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts control of the depositoryAdministrative Agent. Each Foreign Loan Party hereby acknowledges and agrees that (i) such Foreign Loan Party has no right of withdrawal from any Concentration Account, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository(ii) the funds on deposit in each Concentration Account shall at all times continue to be collateral security for all of the Obligations pursuant to the Collateral Documents, securities intermediary or commodities intermediary is no longer acceptable and (iii) the funds on deposit in Agent’s reasonable judgmenteach Concentration Account shall be applied as provided in this Agreement.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository So long as no Cash Dominion Event has occurred and if such Control Agreement cannot be obtainedis continuing, the Borrowers may direct, and shall have sole control over, the manner of disposition of funds in the Blocked Accounts (other than Blocked Accounts that are cash pooling accounts, for which the Borrowers may direct, and shall have sole control over, the manner of disposition of funds so long as no Specified Event of Default has occurred and is continuing).
(h) Any amounts received in any Concentration Account at any time shall be remitted to the operating account of the applicable Borrower (i) as provided in Section 2.05(b)(iii) or (ii) otherwise when all of the Obligations then due have been and remain fully repaid.
(i) The Administrative Agent may require shall promptly (but in any event within one Business Day) furnish written notice to each Person with whom a Blocked Account is maintained, upon any termination of a Cash Dominion Event or a Specified Event of Default, as applicable, in each case for which the Credit Parties Administrative Agent has delivered a notice pursuant to close Section 6.15(c), of the termination of such Local Deposit Accounts notice.
(j) The following shall apply to deposits and transfer all funds therein payments under and pursuant to this Agreement: (i) Funds shall be deemed to have been deposited to the applicable Concentration Account on the Business Day on which deposited, provided that such deposit is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. New York City time, on that Business Day); (ii) Funds paid to the Administrative Agent, other than by deposit to a Control Account subject Concentration Account, shall be deemed to have been received on the Business Day when they are good and collected funds, provided that such payment is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. New York City time, on that Business Day); (iii) If a deposit to a Control Agreement at a financial institution reasonably satisfactory Concentration Account or payment is not available to the Agent.Administrative Agent until after 4:00 p.m. on a Business Day, such deposit or payment shall be deemed to have been made at 9:00 a.m. on the then next Business Day; (iv) If any item deposited to any Concentration Account and credited to the Loan Account is dishonored or returned unpaid for any reason, whether or not such return is rightful or timely, the Administrative Agent shall have the right to reverse such credit and charge the amount of such item to the applicable Loan Account and the
Appears in 1 contract
Samples: Credit Agreement (Avaya Inc)
Cash Management Systems. (a) Each Credit Party Borrower shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from establish and maintain cash management services of a type and on terms satisfactory to Lender at one or more of the banks set forth on Schedule 2.6 (each a “Cash Management Bank”), and shall request in writing and otherwise take such reasonable steps to ensure that all amounts owed to Borrower by any act or omission Person is directly deposited to one of any Credit Party or the cash management accounts at such Cash Management Banks, and (ii) resulted from the isolated failure by any employee of any Credit Party deposit or cause to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any timebe deposited promptly, and in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other event no later than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one first Business Day after the date of receipt thereof, be maintained all Collections into one of the DDAs set forth on Schedule 2.6 (a “Cash Management Account”) at one of the Cash Management Banks or the Collection Account. If, notwithstanding the provisions of this Section 2.6, Borrower receives or otherwise has dominion over or control of any Collections, Borrower shall hold such Collections in a safe located at a Store in accordance with past practices trust for Lender and (y) thereafter, shall not be used to service commingle such Collections with any xxxxx cash Person’s other funds or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than deposit such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited Collections in accordance with this Section upon the correction any account of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control AgreementPerson except as instructed by Lender.
(b) [Intentionally Omitted].
(c) Borrower shall establish and maintain Cash Management Agreements with Lender and each Cash Management Bank set forth on Schedule 2.7 and Xxxxx Fargo in respect to the Collection Account and Disbursement Account and, upon the request of Lender at any time, at any other DDA . Each such Cash Management Agreement shall be a Control Agreement shall and provide, among other things, that (i) upon notice from Lender, the depositoryCash Management Bank will comply with instructions of Lender directing the disposition of funds in the Cash Management Account without further consent by Borrower, securities intermediary or commodities intermediary executing such agreement (ii) the Cash Management Bank has no rights of setoff or recoupment or any other claim against such accountthe applicable Cash Management Account, other than for payment of its service fees and other charges directly related to the administration of such account Cash Management Account and for returned checks or other items of payment (except as Agent may otherwise agree in writing)payment, and (iiiii) from and after except as otherwise permitted under Section 2.6(e), the Closing Date, except for cash and Cash Equivalents maintained Management Bank immediately will forward by the Credit Parties pursuant to Section 5.22, daily sweep all amounts received in any Control the applicable Cash Management Account shall be swept daily into to the Collection Account and (iv) Borrower shall have no (A) access to such Cash Management Account(s) or another the contents thereof and (B) right to direct the distribution of any funds from such Cash Management Account(s).
(c) Borrower has or shall establish and maintain a Cash Management Agreement with Xxxxx Fargo and each Cash Management Bank that maintains a Collection Account (which agreement shall govern such Collection Account). Such Cash Management Agreement(s) shall each be a Control Agreement and provide, among other things, that (i) upon notice from Lender, such Cash Management Bank will comply with instructions of Lender directing the disposition of funds in such Collection Account which is swept without further consent by Borrower, (ii) such Cash Management Bank has no rights of setoff or recoupment or any other claim against such Collection Account, other than for payment of its service fees and other charges directly related to the administration of such Collection Account and for returned checks or other items of payment, (iii) the Cash Management Bank immediately will forward by daily into sweep all amounts in such Collection Account to the Lender’s Account and (iv) Borrower shall have no (A) access to such Collection Account or the contents thereof and (B) right to direct the distribution of any funds from such Collection Account.
(d) All Promptly at the request of the Lender, Borrower shall deliver to the Lender notification, executed by Borrower, to each depository institution at which such Borrower maintains any DDA (other than DDA’s established for xxxxx cash), in form and substance satisfactory to the Lender in its sole discretion, of the Lender’s Liens in such DDA and, shall instruct such depository institution, upon direction of the Lender, to remit all amounts deposited from time to time in the DDA to the Lender’s Account or as otherwise directed from time to time by the Lender. Except as otherwise may be provided with respect to Blocked Accounts pursuant to Section 2.6(e), Borrower shall not establish any DDA hereafter unless, contemporaneous with such establishment, Borrower notifies Lender and, if requested by Lender, delivers to such depository institution the notification described herein and together with a Cash Management Agreement. Borrower shall not change such direction or designation without the prior written consent of Lender. If no Event of Default has occurred and is continuing, the Lender shall not direct any such depository institution referred to in this Section 2.6(d) to remit amounts to the Lender without taking into consideration other expenditures to be made from such accounts provided that the provisions of this sentence shall not apply to Cash Management Accounts, Blocked Accounts, or the Collection Account(s). Notwithstanding the foregoing, Borrower shall not be required to provide a cash management agreement or other control agreement with respect to any DDA in which a balance of $2,500 or less is maintained at all times (provided that the aggregate amount of such balances in all accounts does not exceed $20,000 and the full balance in such account is swept into the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(iiat least twice per week), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(e) Notwithstanding anything herein to the contrary, for each Liquidation Sale, prior to Lender’s making the Revolving Credit Parties may amend Schedule 3.22 Advance or incurring the Letter of Credit Obligations with respect to add or replace any deposit account or other account; providedsuch Liquidation Sale, that (i) Agent shall have consented unless such requirement is waived in writing by Lender, Borrower shall establish a blocked account in Borrower’s name (the “Blocked Account”) at a bank acceptable to Lender, for the deposit of all Collections and other amounts that Borrower is entitled to receive and use with respect to such consent not Liquidation Sale, and Borrower shall deposit or cause to be unreasonably withheld) in advance deposited to the opening Blocked Account such amounts at least two times per week, or more frequently as Borrower may determine is appropriate. In the event that Borrower has not established a Blocked Account prior to the date on which Lender is otherwise willing to make an Revolving Credit Advance or incur the Letter of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) Credit Obligations with respect to any additional or replacement Control AccountLiquidation Sale, securities accountBorrower shall cause, in a manner satisfactory to Lender in its sole discretion, all Collections and other amounts which Borrower is entitled to receive and use with respect to such Liquidation Sale at the Collection Account at least two times per week, or commodities account, except more frequently as Agent Borrower may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreementdetermine is appropriate.
(f) Prior to Lender’s making the Revolving Credit Parties shall close any Advance or incurring the Letter of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance Credit Obligations with respect to accounts of each Liquidation Sale, the depository, securities intermediary or commodities intermediary holding bank at which the Blocked Account for such accounts or Agent’s liability under any Liquidation Sale has been established shall have entered into a Control Agreement with Lender and Borrower, in form and substance acceptable to Lender, which shall immediately become operative at the bank at which the Blocked Account is maintained. Such Control Agreement shall provide, among other things, that such depositorybank executing such agreement has no rights of setoff or recoupment or any other claim against such Blocked Account, securities intermediary or commodities intermediary other than for payment of its service fees and other charges directly related to the administration of such account, and the bank at which the Blocked Account is located agrees to forward immediately all amounts in the Blocked Account to the Collection Account and to commence the process of daily sweeps from the Blocked Account into the Collection Account. Although, as a result of the collection of payments in the Collection Account, a credit balance may exist in favor of Borrower, under no longer acceptable circumstance shall such credit balance accrue interest in Agent’s reasonable judgmentfavor of Borrower.
(g) Upon Agent’s requestFor each Liquidation Sale, each Borrower shall establish, in its name, a separate account (each a “Disbursement Account”) at a bank acceptable to Lender (the “Disbursement Account Bank”) into which Lender shall deposit proceeds of the Revolving Credit Advances with respect to such Liquidation Sale, except for those proceeds as to which Lender and Borrower have agreed upon an alternative method of funding, for use its commercially reasonable efforts by Borrower solely in accordance with the provisions of Section 2.2. Prior to cause each depository with Lender’s making such Revolving Credit Advance, the bank at which it maintains any Local Deposit the Disbursement Account to promptly enter for such Liquidation Sale has been established shall have entered into a Control Agreement with Lender and Borrower, in form and substance acceptable to Lender, which shall immediately become operative at the bank at which the Blocked Account is maintained. Such Control Agreement shall provide, among other things, that such bank executing such agreement has no rights of setoff or recoupment or any other claim against such Blocked Account, other than for payment of its service fees and other charges directly related to the administration of such account.
(h) The Cash Management Accounts, Collection Accounts, Blocked Account and the Disbursement Account for each Liquidation Sale shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts securing payment of the Liquidation Loans and all other Obligations, and in which Borrower shall be deemed to have granted a Lien to Lender pursuant to the Collateral Documents. Unless Lender otherwise agrees, Borrower shall maintain the Blocked Account and the Disbursement Account with respect to each Liquidation Sale so long as there is any reasonable expectation that any additional Collections will be received or Revolving Credit Advances made with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the AgentLiquidation Sale.
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter intoAs of the date hereof, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either (i) not resulted from any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal Borrower’s cash management procedures of the Credit Parties not affecting more than ten accounts (10“Cash Management Accounts”) Stores at any time, in any case, so long and structure is as any such failure shall not be material in any respect):set forth on Schedule 19(a) hereto.
(Ab) Borrower shall continue to direct its Account Debtors and financial service providers that remit payments by electronic funds transfers to remit all such payments into the Cash Management Accounts consistent with past practice and will not change such instructions without Lender’s prior written consent.
(c) Each business day, Borrower will cause (1) all cash payments received by them at any Store funds (other than xxxxx cash maintained in Store cash registers to facilitate point proceeds of sale transactions, consistent with past practicesLoans) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) received from all other payments received at any Store (sources including, without limitation, all checksaccount receivable payments, drafts or other similar items of payment) cash sales receipts, credit card payments, and any and all refunds received from any source whatsoever to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after of the receipt thereof (it being understood that, Cash Management Accounts consistent with past practice and concentrated in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control Agreement.
(b) [Intentionally Omitted].
(c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account which is swept daily into the Collection Blocked Account.
(d) All amounts deposited On or before February 28, 2015, Borrower shall deliver to Lender an executed deposit account control agreement substantially similar to Xxxxx Fargo’s standard form with respect to the Blocked Account. The deposit account control agreement will provide that Borrower shall not have access to or use of the funds on deposit in the Collection Blocked Account shall and that amounts on deposit in such account will be deemed received by Agent swept each business day to an account in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Accountname of Lender.
(e) Credit Parties may amend Schedule 3.22 On or before February 28, 2015, Borrower shall deliver to add or replace any Lender an executed deposit account or other account; providedcontrol agreement, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance substantially similar to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) Xxxxx Fargo’s standard form with respect to any additional all Borrower accounts at Xxxxx Fargo which receive deposits from Account Debtors and other third parties other than the Blocked Account. Also on or replacement Control Accountbefore February 28, securities account2015, or commodities accountBorrower shall deliver to Lender an executed deposit control agreement, except as Agent may otherwise agree in writing, prior substantially similar to the time financial institutions standard form for other accounts that receive funds from third parties, including U.S. Bank. Such deposit account control agreements will permit Borrower to cause amounts on deposit in such account to be swept each business day to the Blocked Account until Lender notifies Xxxxx Fargo that an Event of the opening Default has occurred under this Agreement and instructs Xxxxx Fargo and U.S. Bank to dispose of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreementfunds differently.
(f) Credit Parties On or before after February 28, 2015, Borrower shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding deliver to Lender an executed deposit account is no longer acceptable in Agentcontrol agreement substantially similar to Xxxxx Fargo’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance standard form with respect to the Disbursement Account and all other Xxxxx Fargo accounts that Borrower maintains for the purpose of the depository, securities intermediary or commodities intermediary holding making payments. The deposit account control agreement will provide that amounts on deposit in such accounts or Agent’s liability may be disbursed at the control of Borrower until Lender notifies Xxxxx Fargo that an Event of Default has occurred under any Control this Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgmentand instructs Xxxxx Fargo differently.
(g) Upon Agent’s request, each Notwithstanding the foregoing (i) Borrower may for its convenience may maintain accounts at financial institutions without a deposit account control agreement and without complying with Paragraph 19(c) so long as the amount on deposit in such account does not exceed $10,000 at any time; and (ii) Borrower may maintain a balance within US Bank Account Number [*] sufficient to satisfy its obligations under its airline clearing house agreement.
(h) Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains not maintain any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtainedaccounts other than the Blocked Account, the Agent Disbursement Account, the Cash Management Accounts and, upon written notice to Lender, such other accounts as Borrower may require deem necessary or convenient, which accounts shall be governed by a deposit account control agreement as Lender may require.
(i) Borrower shall transfer funds from the Credit Parties Disbursement Account into another Cash Management Account solely to close make payments necessary for the purpose such Local Deposit Accounts and transfer all funds therein to a Control Cash Management Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agentwas established.
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter intoAnnexed hereto as Schedule 6.15(a) is a schedule of all DDAs, and cause each depositorythat are maintained by the U.S. Borrowers, securities intermediary or commodities intermediary to enter intowhich Schedule includes, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar depository (i) the name and address of such depository; (ii) the account (including, without limitation, any lockbox or similar arrangementsnumber(s) maintained by with such Person as of or depository; and (iii) a contact person at such depository.
(b) Within ninety (90) days after the Closing Date. Credit Parties Date (or such longer period as the Administrative Agent may agree in its sole reasonable discretion), each U.S. Borrower shall enter into a blocked account agreement (except solely each, a “Blocked Account Agreement”), reasonably satisfactory to the extent Administrative Agent, with respect to the failure to do so shall have either DDAs existing as of the Closing Date listed on Schedule 6.15(b) attached hereto (collectively, the “Blocked Accounts”). Each U.S. Borrower hereby agrees that, once the initial Blocked Account Agreements are entered into, all cash received by such U.S. Borrower in any DDA that is not a Blocked Account (other than (i) xxxxx cash accounts funded in the ordinary course of business, the deposits in which shall not resulted from aggregate more than $250,000 or exceed $50,000, in each case, or the equivalent thereof, with respect to any act one account (or omission of any Credit Party or in each case, such greater amounts to which the Administrative Agent may agree), and (ii) resulted payroll, trust and tax withholding accounts funded in the ordinary course of business and required by applicable Law) will be promptly transferred into a Blocked Account. After entering into the initial Blocked Account Agreement, there shall be at all times thereafter at least one Blocked Account in the U.S.
(c) Each Blocked Account Agreement entered into by a U.S. Borrower shall permit the Administrative Agent to instruct the depository, after the occurrence and during the continuance of a Cash Dominion Event (and receipt by the U.S. Borrower of notice thereof from the isolated failure Administrative Agent), to transfer on each Business Day of all available cash receipts to the concentration account maintained by any employee the Administrative Agent at Bank of any Credit Party to comply America (the “U.S. Concentration Account,” and together with the formal cash management procedures of account established pursuant to Section 4.03(d), the Credit Parties not affecting more than ten (10) Stores at any time“Concentration Accounts”), in any case, so long as any such failure shall not be material in any respect):from:
(Ai) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point the sale of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts Inventory and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above)Collateral;
(Bii) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxesproceeds of collections of Accounts; and
(Ciii) cause each Blocked Account (including all funds cash deposited therein from each DDA). If, at any time during the continuance of a Cash Dominion Event, any cash or Cash Equivalents owned by any U.S. Borrower (other than (i) xxxxx cash accounts funded in local store deposit the ordinary course of business, the deposits in which shall not aggregate more than $250,000 or exceed $50,000 in each case, or the equivalent thereof with respect to any one account (or in each case, such greater amounts to which the Administrative Agent may agree), and (ii) payroll, trust and tax withholding accounts which do not constitute Control Accounts (“Local Deposit Accounts”funded in the ordinary course of business and required by Applicable Law) are deposited to be transferred on any account, or held or invested in any manner, otherwise than in a daily basis to a Control Blocked Account that is subject to a Control Agreement.
Blocked Account Agreement (b) [Intentionally Omitted].
(c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account a DDA which is swept daily to a Blocked Account), the Administrative Agent may require the applicable U.S. Borrower to close such account and have all funds therein transferred to a Blocked Account, and all future deposits made to a Blocked Account which is subject to a Blocked Account Agreement. In addition to the foregoing, during the continuance of a Cash Dominion Event, at the request of the Administrative Agent, each of the U.S. Borrowers shall provide the Administrative Agent with an accounting of the contents of the Blocked Accounts, which shall identify, to the reasonable satisfaction of the Administrative Agent, the proceeds from the Collateral which were deposited into a Blocked Account and swept to the Collection U.S. Concentration Account.
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) The U.S. Borrowers may close DDAs or Section 1.10(c)(ii)Blocked Accounts and/or open new DDAs or Blocked Accounts, as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds subject to the Collection Accountexecution and delivery to the Administrative Agent of appropriate Blocked Account Agreements (except with respect to any payroll, trust, and tax withholding accounts or unless expressly waived by the Administrative Agent) consistent with and to the extent required by the provisions of this Section 6.15 and otherwise reasonably satisfactory to the Administrative Agent. The U.S. Borrowers shall furnish the Administrative Agent with prior written notice of its intention to open or close a Blocked Account and the Administrative Agent shall promptly notify the Parent Borrower as to whether the Administrative Agent shall require a Blocked Account Agreement with the Person with whom such account will be maintained.
(e) Credit Parties The U.S. Borrowers may amend Schedule 3.22 also maintain one or more disbursement accounts that are not Blocked Accounts to add or replace any deposit account or other account; provided, that be used by the U.S. Borrowers for disbursements and payments (i) Agent shall have consented in writing (such consent not be unreasonably withheldincluding payroll) in advance to the opening ordinary course of such account with the relevant depository, securities intermediary business or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreementpermitted hereunder.
(f) Credit Parties So long as no Cash Dominion Event has occurred and is continuing, the U.S. Borrowers may direct, and shall close any have sole control over, the manner of their respective accounts (and establish replacement accounts disposition of funds in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgmentBlocked Accounts.
(g) Upon Each Dutch Borrower hereby agrees, after the occurrence and during the continuance of (i) a Cash Dominion Event (and delivery of notice thereof from the Administrative Agent’s request), no less than once per calendar month, to transfer to the Dutch Concentration Account an amount equal to the Dollar Equivalent of the value of all Inventory released, sold or transferred from such Dutch Borrower during such period or (ii) any Event of Default (and delivery of notice thereof from the Administrative Agent), on each Business Day, to transfer to the Dutch Concentration Account an amount equal to the Dollar Equivalent of the value of all Inventory released, sold or transferred from such Dutch Borrower on such Business Day. In addition, during the continuance of a Cash Dominion Event or any Event of Default, as applicable, at the request of the Administrative Agent, each of the Dutch Borrowers shall provide the Administrative Agent with an accounting of the Dutch Concentration Account which shall identify, to the reasonable satisfaction of the Administrative Agent, the released Inventory in respect of which proceeds were deposited into the Dutch Concentration Account.
(h) The Concentration Accounts shall at all times be under the sole dominion and control of the Administrative Agent. Each Borrower hereby acknowledges and agrees that (i) such Borrower has no right of withdrawal from the Concentration Accounts, (ii) the funds on deposit in the Concentration Accounts shall use its commercially reasonable efforts at all times continue to cause each depository be collateral security for all of the Obligations under the applicable Subfacilities, and (iii) the funds on deposit in the Concentration Accounts shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this Section 6.15, during the continuation of a Cash Dominion Event, any Borrower receives or otherwise has dominion and control of any such proceeds or collections, such proceeds and collections shall be held in trust by such Borrower for the Administrative Agent, shall not be commingled with which it maintains any Local Deposit Account to of such Borrower’s other funds or deposited in any account of such Borrower and shall promptly enter be deposited into a Control Agreement the Concentration Accounts or dealt with in such other fashion as such Borrower may be instructed by the Administrative Agent.
(i) Any amounts received in the Concentration Accounts at any time when all of the Obligations then due with respect to such Local Deposit Concentration Accounts have been and remain fully repaid shall be remitted to the operating account of the applicable Borrowers maintained with the Administrative Agent.
(j) The Administrative Agent shall promptly (but in any event within one Business Day) furnish written notice to each Person with whom a Blocked Account is maintained of any termination of a Cash Dominion Event.
(k) The following shall apply to deposits and payments under and pursuant to this Agreement:
(i) Funds shall be deemed to have been deposited to the Concentration Accounts on the Business Day on which deposited, provided that such deposit is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. on that Business Day);
(ii) Funds paid to the Administrative Agent, other than by deposit to a Concentration Account, shall be deemed to have been received on the Business Day when they are good and collected funds, provided that such payment is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. on that Business Day);
(iii) If a deposit to a Concentration Account or payment is not available to the Administrative Agent until after 4:00 p.m. on a Business Day, such deposit or payment shall be deemed to have been made at 9:00 a.m. on the then next Business Day;
(iv) If any item deposited to a Concentration Account and credited to the Loan Account is dishonored or returned unpaid for any reason, whether or not such depository and if such Control Agreement cannot be obtainedreturn is rightful or timely, the Administrative Agent may require shall have the Credit Parties right to close reverse such Local Deposit Accounts credit and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory charge the amount of such item to the Agentapplicable Loan Account and the applicable Borrowers shall indemnify the Secured Parties against all reasonable out-of-pocket claims and losses resulting from such dishonor or return;
(v) All amounts received under this Section 6.15 shall be applied in the manner set forth in Section 8.03.
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter intoAnnexed hereto as Schedule 6.15(a) is a schedule of all DDAs, and cause each depositorythat are maintained by the Loan Parties, securities intermediary or commodities intermediary to enter intowhich Schedule includes, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. Credit Parties shall (except solely to the extent the failure to do so shall have either depository (i) not resulted from any act or omission the name and address of any Credit Party or such depository; (ii) resulted from the isolated failure by any employee of any Credit Party account number(s) maintained with such depository; and (iii) a contact person at such depository.
(b) Within ninety (90) days after the Original Closing Date (or such longer period as the Administrative Agent may agree in its sole reasonable discretion), each applicable Borrower will enter into a blocked account agreement (each, a “Blocked Account Agreement”), reasonably satisfactory to comply the Administrative Agent, with respect to the formal cash management procedures DDAs existing as of the Credit Parties not affecting more than ten Original Closing Date listed on Schedule 6.15(b) attached hereto (10) Stores at any timecollectively, the “Blocked Accounts”). Each Borrower hereby agrees that, once the Blocked Account Agreements are entered into, all cash in respect of Collateral received by a Loan Party in any case, so long as any such failure shall DDA that is not be material in any respect):
(A) cause (1) all cash payments received by them at any Store a Blocked Account (other than xxxxx cash maintained amounts held in Store cash registers to facilitate point payroll, trust and tax withholding accounts funded in the ordinary course of sale transactions, consistent with past practicesbusiness and required by Applicable Law) to either (I) will be delivered, no less frequently than one (1) time each calendar week, promptly transferred into a Blocked Account. After entering into the possession of an Approved Armored Car Carrier for deposit into a Control Blocked Account or Local Deposit AccountAgreement, provided that until such time as such cash payments there shall be delivered at all times thereafter at least one Blocked Account.
(c) Each Blocked Account Agreement entered into by a Borrower shall permit the possession Administrative Agent to instruct the depository, after the occurrence and during the continuance of an Approved Armored Car Carriera Cash Dominion Event (and delivery of notice thereof from the Administrative Agent), such cash payments shall (x) within one to transfer on each Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx of all available cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly receipts to the bank concentration account maintained by the Administrative Agent at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Citibank, N.A. (the “Concentration Account”), and from:
(2i) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items the sale of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above)Collateral;
(Bii) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxesproceeds of collections of Accounts; and
(Ciii) cause each Blocked Account (including all funds cash deposited therein from each DDA). If, at any time during the continuance of a Cash Dominion Event, any cash or Cash Equivalents that are Collateral (or proceeds thereof) owned by any Loan Party (other than (i) xxxxx cash and minimum daily working capital accounts funded in local store deposit the ordinary course of business, the deposits in which shall not at any time aggregate more than $20.0 million (or such greater amounts to which the Administrative Agent may agree), and (ii) payroll, trust and tax withholding accounts which do not constitute Control Accounts (“Local Deposit Accounts”funded in the ordinary course of business and required by Applicable Law) are deposited to be transferred on any account, or held or invested in any manner, otherwise than in a daily basis to a Control Blocked Account that is subject to a Control Agreement.
Blocked Account Agreement (b) [Intentionally Omitted].
(c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account a DDA which is swept daily to a Blocked Account), the Administrative Agent may require the applicable Loan Party to close such account and have all funds therein transferred to a Blocked Account, and all future deposits made to a Blocked Account which is subject to a Blocked Account Agreement. In addition to the foregoing, during the continuance of a Cash Dominion Event, at the request of the Administrative Agent, the Loan Parties shall provide the Administrative Agent with an accounting of the contents of the Blocked Accounts, which shall identify, to the reasonable satisfaction of the Administrative Agent, the proceeds from the Collateral which were deposited into a Blocked Account and swept to the Collection Concentration Account.
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) The Loan Parties may close DDAs or Section 1.10(c)(ii)Blocked Accounts and/or open new DDAs or Blocked Accounts, as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds subject to the Collection Account.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance execution and delivery to the opening Administrative Agent of such account with the relevant depository, securities intermediary or commodities intermediary and appropriate Blocked Account Agreements (ii) except with respect to any additional payroll, trust, and tax withholding accounts or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior unless expressly waived by the Administrative Agent) consistent with and to the time extent required by the provisions of the opening of such account, the applicable Credit Party this Section 6.15 and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution otherwise reasonably satisfactory to the Administrative Agent. The Parent Borrower shall furnish the Administrative Agent with prior written notice of its intention to open or close a Blocked Account and the Administrative Agent shall promptly notify the Parent Borrower as to whether the Administrative Agent shall require a Blocked Account Agreement with the Person with whom any such new account will be maintained.
Appears in 1 contract
Samples: Credit Agreement (Clear Channel Communications Inc)
Cash Management Systems. (a) Each Annexed hereto as Schedule 6.15(a) to the Original Credit Party shall enter intoAgreement is a schedule of all DDAs, and cause each depositorythat are maintained by the Borrowers, securities intermediary or commodities intermediary to enter intowhich Schedule includes, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar depository (i) the name and address of such depository; (ii) the account (including, without limitation, any lockbox or similar arrangementsnumber(s) maintained by with such Person as of or depository; and (iii) a contact person at such depository.
(b) Within one-hundred twenty (120) days after the Closing Date. Credit Parties shall Date (except solely or such longer period as the Administrative Agent may agree in its sole reasonable discretion), each Borrower will use commercially reasonable efforts to enter into a blocked account agreement (each, a “Blocked Account Agreement”), reasonably satisfactory to the extent Administrative Agent, with respect to the failure DDAs existing as of the Closing Date listed on Schedule 6.15(b) attached to do so the Original Credit Agreement (collectively, the “Blocked Accounts”). Each U.S. Loan Party hereby agrees that, once the Blocked Account Agreements are entered into, all cash received by such U.S. Loan Party in any DDA that is not a Blocked Account (other than amounts held in payroll, trust and tax withholding accounts funded in the ordinary course of business and required by Applicable Law) will be promptly transferred into a Blocked Account. After entering into the Blocked Account Agreement, there shall have either be at all times thereafter at least one Blocked Account.
(c) Each Blocked Account Agreement entered into by a Borrower shall permit the Administrative Agent to instruct the depository, after the occurrence and during the continuance of a Cash Dominion Event (and delivery of notice thereof from the Administrative Agent), to transfer on each Business Day of all available cash receipts to the concentration account maintained by the Administrative Agent at CUSA (the “Concentration Account”), from:
(i) not resulted from any act or omission the sale of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures of the Credit Parties not affecting more than ten (10) Stores at any time, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts Inventory and other similar items of payment that are deposited electronicallyCollateral (but excluding, such items may be delivered into until the possession of an Approved Armored Car Carrier together with CF Facility is repaid, any cash pursuant to clause (i)(A)(1) aboveCF Priority Collateral);
(Bii) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxesproceeds of collections of Accounts; and
(Ciii) cause each Blocked Account (including all funds cash deposited therein from each DDA). If, at any time during the continuance of a Cash Dominion Event, any cash or Cash Equivalents owned by any U.S. Loan Party (other than (i) xxxxx cash and minimum daily working capital accounts funded in local store deposit the ordinary course of business, the deposits in which shall not aggregate more than $15.0 million (or such greater amounts to which the Administrative Agent may agree), and (ii) payroll, trust and tax withholding accounts which do not constitute Control Accounts (“Local Deposit Accounts”funded in the ordinary course of business and required by Applicable Law) are deposited to be transferred on any account, or held or invested in any manner, otherwise than in a daily basis to a Control Blocked Account that is subject to a Control Agreement.
Blocked Account Agreement (b) [Intentionally Omitted].
(c) Each Control Agreement shall provide, among other things, that (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Account shall be swept daily into the Collection Account or another Control Account a DDA which is swept daily to a Blocked Account), the Administrative Agent may require the applicable U.S. Loan Party to close such account and have all funds therein transferred to a Blocked Account, and all future deposits made to a Blocked Account which is subject to a Blocked Account Agreement. In addition to the foregoing, during the continuance of a Cash Dominion Event, at the request of the Administrative Agent, the U.S. Loan Parties shall provide the Administrative Agent with an accounting of the contents of the Blocked Accounts, which shall identify, to the reasonable satisfaction of the Administrative Agent, the proceeds from the ABL Priority Collateral which were deposited into a Blocked Account and swept to the Collection Concentration Account.
(d) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with Section 1.10(a) and shall be applied (and allocated) by Agent in accordance with Section 1.10(c)(i) The U.S. Loan Parties may close DDAs or Section 1.10(c)(ii)Blocked Accounts and/or open new DDAs or Blocked Accounts, as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds subject to the Collection Accountexecution and delivery to the Administrative Agent of appropriate Blocked Account Agreements (except with respect to any payroll, trust, and tax withholding accounts or unless expressly waived by the Administrative Agent) consistent with and to the extent required by the provisions of this Section 6.15 and otherwise reasonably satisfactory to the Administrative Agent. The U.S. Loan Parties shall furnish the Administrative Agent with prior written notice of its intention to open or close a Blocked Account and the Administrative Agent shall promptly notify the Parent Borrower as to whether the Administrative Agent shall require a Blocked Account Agreement with the Person with whom such account will be maintained.
(e) Credit The U.S. Loan Parties may amend Schedule 3.22 also maintain one or more disbursement accounts to add or replace any deposit account or other account; provided, that be used by the U.S. Loan Parties for disbursements and payments (i) Agent shall have consented in writing (such consent not be unreasonably withheldincluding payroll) in advance to the opening ordinary course of such account with the relevant depository, securities intermediary business or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreementpermitted hereunder.
(f) Credit Parties The Concentration Account shall close at all times be under the sole dominion and control of the Administrative Agent. Each U.S. Loan Party hereby acknowledges and agrees that (i) such U.S. Loan Party has no right of withdrawal from the Concentration Account, (ii) the funds on deposit in the Concentration Account shall at all times continue to be collateral security for all of the Obligations, and (iii) the funds on deposit in the Concentration Account shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this Section 6.15, during the continuation of a Cash Dominion Event, any U.S. Loan Party receives or otherwise has dominion and control of any such proceeds or collections related to ABL Priority Collateral, such proceeds and collections shall be held in trust by such U.S. Loan Party for the Administrative Agent, shall not be commingled with any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and such U.S. Loan Party’s other funds or deposited in any event within thirty (30) days following notice from Agent that account of such U.S. Loan Party and shall promptly be deposited into the creditworthiness of any bank holding an account is no longer acceptable Concentration Account or dealt with in such other fashion as such U.S. Loan Party may be instructed by the Administrative Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository So long as no Cash Dominion Event has occurred and if such Control Agreement cannot be obtainedis continuing, the Agent U.S. Loan Parties may require direct, and shall have sole control over, the Credit Parties to close such Local Deposit Accounts manner of disposition of funds in the Blocked Accounts.
(h) Any amounts received in the Concentration Account at any time when all of the Obligations then due have been and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory remain fully repaid shall be remitted to the operating account of the U.S. Loan Parties.
(i) The Administrative Agent shall promptly (but in any event within one Business Day) furnish written notice to each Person with whom a Blocked Account is maintained of any termination of a Cash Dominion Event.
(j) The following shall apply to deposits and payments under and pursuant to this Agreement:
(i) Funds shall be deemed to have been deposited to the Concentration Account on the Business Day on which deposited, provided that such deposit is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. New York City time, on that Business Day);
(ii) Funds paid to the Administrative Agent, other than by deposit to the Concentration Account, shall be deemed to have been received on the Business Day when they are good and collected funds, provided that such payment is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. New York City time, on that Business Day);
(iii) If a deposit to the Concentration Account or payment is not available to the Administrative Agent until after 4:00 p.m. on a Business Day, such deposit or payment shall be deemed to have been made at 9:00 a.m. on the then next Business Day;
(iv) If any item deposited to the Concentration Account and credited to the Loan Account is dishonored or returned unpaid for any reason, whether or not such return is rightful or timely, the Administrative Agent shall have the right to reverse such credit and charge the amount of such item to the applicable Loan Account and the Borrowers shall indemnify the Secured Parties against all reasonable out-of-pocket claims and losses resulting from such dishonor or return;
(v) All amounts received under this Section 6.15 shall be applied in the manner set forth in Section 8.03.
Appears in 1 contract
Samples: Credit Agreement (Avaya Inc)
Cash Management Systems. (a) Each Credit Party shall enter intoAnnexed hereto as Schedule 6.15(a) is a schedule of all DDAs, and cause each depositorythat are maintained by the Loan Parties, securities intermediary or commodities intermediary to enter intowhich Schedule includes, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar depository (i) the name and address of such depository; (ii) the account (including, without limitation, any lockbox or similar arrangementsnumber(s) maintained by with such Person as of or depository; and (iii) a contact person at such depository.
(b) Within thirty (30) days after the Closing Date. Credit Parties shall Date (except solely or such longer period as the Administrative Agent may agree in its reasonable discretion), each applicable Borrower will enter into a blocked account agreement (each, a “Blocked Account Agreement”), reasonably satisfactory to the extent Administrative Agent, with respect to the failure DDAs existing as of the Closing Date listed on Schedule 6.15(b) attached hereto (collectively, the “Blocked Accounts”). Each Borrower hereby agrees that, once the Blocked Account Agreements are entered into, all cash in respect of Collateral received by a Loan Party in any DDA that is not a Blocked Account (other than amounts held in payroll, trust and tax withholding accounts funded in the ordinary course of business and required by Applicable Law) will be promptly transferred into a Blocked Account. After entering into the Blocked Account Agreement, there shall be at all times thereafter at least one Blocked Account.
(c) Each Blocked Account Agreement entered into by a Borrower shall permit the Administrative Agent to do so shall have either instruct the depository, after the occurrence and during the continuance of a Cash Dominion Event (and delivery of notice thereof from the Administrative Agent), to transfer on each Business Day of all available cash receipts to a concentration account maintained in the name of the Administrative Agent (the “Concentration Account”), from:
(i) not resulted from any act or omission the sale of any Credit Party or Collateral;
(ii) resulted from the isolated failure by any employee all proceeds of any Credit Party to comply with the formal cash management procedures collections of the Credit Parties not affecting more than ten (10) Stores at any time, in any case, so long as any such failure shall not be material in any respect):
(A) cause (1) all cash payments received by them at any Store (other than xxxxx cash maintained in Store cash registers to facilitate point of sale transactions, consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit into a Control Account or Local Deposit Account, provided that until such time as such cash payments shall be delivered into the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one Business Day after the receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafter, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, in the case of checks, drafts and other similar items of payment that are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together with any cash pursuant to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than in connection with delinquent collection efforts, pursuant to which the applicable Account Debtors shall be directed to remit payment directly to the Credit Parties’ chief executive office) to remit all payments directly to those lockboxesAccounts; and
(Ciii) cause each Blocked Account (including all funds cash deposited therein from each DDA). If, at any time during the continuance of a Cash Dominion Event, any cash or Cash Equivalents that are Collateral (or proceeds thereof) owned by any Loan Party (other than (i) xxxxx cash and minimum daily working capital accounts funded in local store deposit the ordinary course of business, the deposits in which shall not at any time aggregate more than $20.0 million (or such greater amounts to which the Administrative Agent may agree), and (ii) payroll, trust and tax withholding accounts which do not constitute Control Accounts (“Local Deposit Accounts”funded in the ordinary course of business and required by Applicable Law) are deposited to be transferred on any account, or held or invested in any manner, otherwise than in a daily basis to a Control Blocked Account that is subject to a Control Blocked Account Agreement (or a DDA which is swept daily to a Blocked Account), the Administrative Agent may require the applicable Loan Party to close such account and have all funds therein transferred to a Blocked Account, and all future deposits made to a Blocked Account which is subject to a Blocked Account Agreement. In addition to the foregoing, during the continuance of a Cash Dominion Event, at the request of the Administrative Agent, the Loan Parties shall provide the Administrative Agent with an accounting of the contents of the Blocked Accounts, which shall identify, to the reasonable satisfaction of the Administrative Agent, the proceeds from the Collateral which were deposited into a Blocked Account and swept to the Concentration Account.
(bd) [Intentionally Omitted]The Loan Parties may close DDAs or Blocked Accounts and/or open new DDAs or Blocked Accounts, subject to the execution and delivery to the Administrative Agent of appropriate Blocked Account Agreements (except with respect to any payroll, trust, and tax withholding accounts or unless expressly waived by the Administrative Agent) consistent with and to the extent required by the provisions of this Section 6.15 and otherwise reasonably satisfactory to the Administrative Agent. The Parent Borrower shall furnish the Administrative Agent with prior written notice of its intention to open or close a Blocked Account and the Administrative Agent shall promptly notify the Parent Borrower as to whether the Administrative Agent shall require a Blocked Account Agreement with the Person with whom any such new account will be maintained.
(ce) The Loan Parties may also maintain one or more disbursement accounts to be used by the Loan Parties for disbursements and payments (including payroll) in the ordinary course of business or as otherwise permitted hereunder.
(f) The Concentration Account shall at all times be under the sole dominion and control of the Administrative Agent. Each Control Agreement Loan Party hereby acknowledges and agrees that (i) such Loan Party has no right of withdrawal from the Concentration Account, (ii) the funds on deposit in the Concentration Account shall at all times continue to be collateral security for all of the Obligations, and (iii) the funds on deposit in the Concentration Account shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this Section 6.15, during the continuation of a Cash Dominion Event, any Loan Party receives or otherwise has dominion and control of any such proceeds or collections related to Collateral, such proceeds and collections shall be held in trust by such Loan Party for the Administrative Agent, shall not be commingled with any of such Loan Party’s other funds or deposited in any account of such Loan Party and shall promptly be deposited into the Concentration Account or dealt with in such other fashion as such Loan Party may be instructed by the Administrative Agent.
(g) So long as no Cash Dominion Event has occurred and is continuing, the Loan Parties may direct, and shall have sole control over, the manner of disposition of funds in the Blocked Accounts.
(h) Any amounts received in the Concentration Account at any time when all of the Obligations then due have been and remain fully repaid shall be remitted to the operating account of the Loan Parties.
(i) The Administrative Agent shall promptly (but in any event within one Business Day) furnish written notice to each Person with whom a Blocked Account is maintained of any termination of a Cash Dominion Event.
(j) Within sixty (60) days after the Closing Date (or such longer period as the Administrative Agent may agree in its reasonable discretion), each Loan Party shall deliver to the Administrative Agent notifications (each, a “Credit Card Notification”) in form and substance reasonably satisfactory to the Administrative Agent which have been executed on behalf of such Loan Party and addressed to such Loan Party’s credit card clearinghouses and processors. Each Credit Card Notification shall provide, among other things, that during the continuance of a Cash Dominion Event (i) the depository, securities intermediary or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after receipt of notice thereof from the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22Administrative Agent), all amounts received in any Control Account owing to a Loan Party and constituting proceeds of Collateral shall be swept daily into forwarded immediately to the Collection Account or another Control Account which is swept daily into the Collection Concentration Account.
(dk) The following shall apply to deposits and payments under and pursuant to this Agreement:
(i) Funds shall be deemed to have been deposited to the Concentration Account on the Business Day on which deposited, provided that such deposit is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. New York City time, on that Business Day);
(ii) Funds paid to the Administrative Agent, other than by deposit to the Concentration Account, shall be deemed to have been received on the Business Day when they are good and collected funds, provided that such payment is available to the Administrative Agent by 4:00 p.m. on that Business Day (except that if the Obligations are being paid in full, by 2:00 p.m. New York City time, on that Business Day);
(iii) If a deposit to the Concentration Account or payment is not available to the Administrative Agent until after 4:00 p.m. on a Business Day, such deposit or payment shall be deemed to have been made at 9:00 a.m. on the then next Business Day;
(iv) If any item deposited to the Concentration Account and credited to the Loan Account is dishonored or returned unpaid for any reason, whether or not such return is rightful or timely, the Administrative Agent shall have the right to reverse such credit and charge the amount of such item to the applicable Loan Account and the Borrowers shall indemnify the Secured Parties against all reasonable out-of-pocket claims and losses resulting from such dishonor or return;
(v) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance with under this Section 1.10(a) and 6.15 shall be applied (and allocated) by Agent in accordance with the manner set forth in Section 1.10(c)(i) or Section 1.10(c)(ii), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account8.03.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) Agent shall have consented in writing (such consent not be unreasonably withheld) in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time of the opening of such account, the applicable Credit Party and the applicable depository, securities intermediary or commodities intermediary shall have executed and delivered to Agent a Control Agreement.
(f) Credit Parties shall close any of their respective accounts (and establish replacement accounts in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgment.
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.
Appears in 1 contract
Cash Management Systems. (a) Each Credit Party shall enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements providing for “full” cash dominion with respect to each Control Account, securities, commodity or similar account (including, without limitation, any lockbox or similar arrangements) maintained by such Person as of or after the Closing Date. The Credit Parties shall (except solely to the extent the failure to do so shall have either at all times (i) not resulted from use commercially reasonable efforts to cause all their Customers on any act or omission of any Credit Party or (ii) resulted from the isolated failure by any employee of any Credit Party to comply with the formal cash management procedures and all Receivables of the Credit Parties not affecting from time to time included in the Borrowing Base to make all payments and remittances with respect to such Receivables into one or more than ten deposit accounts located with a depositary bank in the United States of America (10) Stores or into one or more lockboxes established and maintained by a depositary bank in the United States of America and with respect to which such depositary bank retrieves and process all checks and other evidences of payment so received at any timesuch lockbox and deposits the same into one or more deposit accounts located with it in the United States of America); provided that, in the case of payments or remittances with respect to Receivables owed to any caseDiscretionary Guarantor, a depositary bank located in the country or jurisdiction where such Discretionary Guarantor is organized or operates (or into one or more lockboxes established and maintained by a depositary bank located in the country or jurisdiction where such Discretionary Guarantor is organized or operates and with respect to which such depositary bank retrieves and process all checks and other evidences of payment so long received at such lockbox and deposits the same into one or more deposit accounts located with it in the country or jurisdiction where such Discretionary Guarantor is organized or operates) (such deposit accounts being referred to as any the “Collection Deposit Accounts” and such failure shall not be material in any respect):
lockboxes being referred to as the “Collection Lockboxes”), (Aii) cause (1) all cash payments received by them at proceeds of the Disposition of any Store ABL Priority Collateral (other than xxxxx cash maintained any proceeds of any Disposition of Inventory in Store cash registers the ordinary course of business, which shall be subject to facilitate point of sale transactionsclause (i) above), consistent with past practices) to either (I) be delivered, no less frequently than one (1) time each calendar week, into the possession of an Approved Armored Car Carrier for deposit deposited directly into a Control Collection Deposit Account or Local the Concentration Deposit Account, provided that until such time as such cash (iii) cause each Collection Deposit Account and the Concentration Deposit Account at all times to be solely a collection account, and no Credit Party shall make any disbursements or other direct payments shall therefrom, and (iv) deposit or cause to be delivered into deposited promptly, and in any event no later than the possession of an Approved Armored Car Carrier, such cash payments shall (x) within one three Business Day Days after the date of its receipt thereof, be maintained in a safe located at a Store in accordance with past practices and (y) thereafterall cash, shall not be used to service any xxxxx cash or Store expense reimbursement needs, (II) be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (other than such payments as may be inadvertently misdirected or mis-delivered, which payments shall be promptly deposited in accordance with this Section upon the correction of any such error) or (III) be mailed, no less frequently than two (2) times each calendar week, directly to the bank at which a Control Account or Local Deposit Account is maintained for deposit into such Control Account or Local Deposit Account, and (2) all other payments received at any Store (including, without limitation, all checks, drafts or other similar items of payment) payment received by it relating to be deposited into a Control Account or Local Deposit Account within one (1) Business Day after the receipt thereof (it being understood that, constituting payments or remittances with respect to any Receivables of any Credit Party from time to time included in the case of checks, drafts and other similar items of payment that Borrowing Base into one or more Collection Deposit Accounts or Collection Lockboxes in precisely the form in which they are deposited electronically, such items may be delivered into the possession of an Approved Armored Car Carrier together received (but with any cash pursuant 124 endorsements of such Credit Party necessary for deposit or collection), and until they are so deposited to clause (i)(A)(1) above);
(B) establish lockboxes subject to Control Agreements and direct all Account Debtors (other than hold such payments in connection with delinquent collection efforts, pursuant to which trust for the applicable Account Debtors shall be directed to remit payment directly to benefit of the Credit Parties’ chief executive office) to remit all payments directly to those lockboxes; and
(C) cause all funds in local store deposit accounts which do not constitute Control Accounts (“Local Deposit Accounts”) to be transferred on a daily basis to a Control Account that is subject to a Control AgreementCollateral Agent.
(b) [Intentionally OmittedReserved].
(c) Each Control Agreement shall provideAny Credit Party may replace any Collection Deposit Account, among other thingsCollection Lockbox or Concentration Deposit Account, or establish any new Collection Deposit Account, Collection Lockbox or Concentration Deposit Account; provided, in each case, that (i) the depositoryeach such replacement or new Collection Deposit Account, securities intermediary Collection Lockbox or commodities intermediary executing such agreement has no rights of setoff or recoupment or any other claim against such account, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment (except as Agent may otherwise agree in writing), and (ii) from and after the Closing Date, except for cash and Cash Equivalents maintained by the Credit Parties pursuant to Section 5.22, all amounts received in any Control Concentration Deposit Account shall be swept daily into subject to a Control Agreement in favor of the Collection Account or another Control Account which Collateral Agent and shall otherwise meet the requirements of this Section 5.19 (provided that in the case of any newly acquired Credit Party, the requirements of this Section 5.19 shall not apply until the date that is swept daily into 60 days after the Collection Accountdate of the acquisition of such Credit Party).
(d) All amounts deposited in the Collection Administrative Agent Account under Section 5.19(b) shall be deemed received by the Administrative Agent in accordance with Section 1.10(a) 2.16 and shall be applied (and allocated) by the Administrative Agent in accordance with Section 1.10(c)(i) or Section 1.10(c)(ii2.14(b), as the case may be. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Administrative Agent Account. Any amount so received in a currency other than Dollars may be converted to Dollars in accordance with the Administrative Agent’s customary practices.
(e) Credit Parties may amend Schedule 3.22 to add or replace any deposit account or other account; provided, that (i) The Collateral Agent shall have consented promptly (but in writing (such consent not be unreasonably withheldany event within three Business Days) furnish written notice to each depositary bank of any payment in advance to the opening of such account with the relevant depository, securities intermediary or commodities intermediary and (ii) with respect to any additional or replacement Control Account, securities account, or commodities account, except as Agent may otherwise agree in writing, prior to the time full of the opening of such account, Obligations. Any amount received in the applicable Credit Party and Administrative Agent Account under Section 5.19(b) at any time when all the applicable depository, securities intermediary or commodities intermediary Obligations have been paid in full shall have executed and delivered be remitted to Agent a Control Agreementan operating account designated by the Borrower.
(f) Without the prior written consent of the Administrative Agent, no Credit Parties Party shall close modify or amend the instructions pursuant to any of their respective accounts (the Control Agreements. So long as no notice has been provided under Section 8.1, each Credit Party shall, and establish replacement accounts the Collateral Agent hereby authorizes each Credit Party to, enforce and collect all amounts owing on the Inventory and Receivables, provided that such authorization shall automatically terminate if the Administrative Agent provides a notice under Section 8.1. Each Credit Party acknowledges and agrees that disposition of funds in the Collection Deposit Accounts and the Concentration Deposit Account shall be subject to the Collateral Agent’s control in accordance with clause (d) hereof) promptly and in any event within thirty (30) days following notice from Agent that the creditworthiness of any bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within one-hundred and twenty (120) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the depository, securities intermediary or commodities intermediary holding such accounts or Agent’s liability under any Control Agreement with such depository, securities intermediary or commodities intermediary is no longer acceptable in Agent’s reasonable judgmentSection 5.19(b).
(g) Upon Agent’s request, each Borrower shall use its commercially reasonable efforts to cause each depository with which it maintains any Local Deposit Account to promptly enter into a Control Agreement with respect to such Local Deposit Accounts maintained at such depository and if such Control Agreement cannot be obtained, the Agent may require the Credit Parties to close such Local Deposit Accounts and transfer all funds therein to a Control Account subject to a Control Agreement at a financial institution reasonably satisfactory to the Agent.
Appears in 1 contract
Samples: Debtor in Possession Abl Credit and Guaranty Agreement (QualTek Services Inc.)
