Common use of Charge-Off Policy Clause in Contracts

Charge-Off Policy. Borrower shall maintain, all in a manner satisfactory to Agent, a policy for charging off the unpaid balance of any Contract upon the occurrence of any default under the terms thereof. Without limiting the generality of the foregoing, Borrower’s policy shall provide, as a minimum, that on the last business day of each month, the Borrower shall charge off (i) the unpaid balance of any Contract with respect to which any payment due thereunder is 120 days or more past due as determined on a contractual basis and (ii) the unpaid balance of any Contract with respect to which the Contract Debtor is the subject of a bankruptcy or insolvency proceeding. In addition, the policy shall provide that Borrower shall immediately charge off all Contracts with a deficiency balance and shall charge off all of the value of any Vehicles which have been repossessed for more than 120 days. Borrower shall properly account for all charge offs in the calculation of all financial covenant requirements in this Agreement. To the extent that the amount of the then outstanding Charge Off Shortfall is deducted (i) from Borrower’s Adjusted Net Earnings from Operations for purposes of the calculation of the Interest Coverage Ratio as set forth in Section 9.18 and (ii) from Borrower’s Adjusted Tangible Net Worth for purposes of the calculation of the Borrowing Base Ratio as set forth in Section 9.21, such Charge Off Shortfall shall be deemed not to be a default under this Section 9.31, provided, however, that Agent at any time may give Borrower 60 days’ prior written notice that failure to make or maintain the amount of charge offs as required by the first three sentences of this Section 9.31 may thereafter be deemed a default under this Section 9.31 (whether or not any such deductions are made).

Appears in 2 contracts

Samples: Loan and Security Agreement (Nicholas Financial Inc), Loan and Security Agreement (Nicholas Financial Inc)

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Charge-Off Policy. Borrower shall maintain, all in a manner satisfactory to Agent, a policy for charging off the unpaid balance of any Contract upon the occurrence of any default under the terms thereof. Without limiting the generality of the foregoing, Borrower’s policy shall provide, as a minimum, that on the last business day of each month, the Borrower shall charge off (i) the unpaid balance of any Contract with respect to which any payment due thereunder is (x) prior to September 1, 2016, 120 days or more past due and (y) thereafter, 180 days or more past due, in each case, as determined on a contractual basis and (ii) the unpaid balance of any Contract with respect to which the Contract Debtor is the subject of a bankruptcy or insolvency proceedingbasis. In addition, the policy shall provide that Borrower shall immediately charge off all Contracts with a deficiency balance and shall charge off all of the value of any Vehicles which have been repossessed for more than 120 days. Borrower shall properly account for all charge offs in the calculation of all financial covenant requirements in this Agreement. To the extent that the amount of the then outstanding Charge Off Shortfall is deducted (i) from Borrower’s Adjusted Net Earnings from Operations for purposes of the calculation of the Interest Coverage Ratio as set forth in Section 9.18 and (ii) from Borrower’s Adjusted Tangible Net Worth for purposes of the calculation of the Borrowing Base Ratio as set forth in Section 9.21, such Charge Off Shortfall shall be deemed not to be a default under this Section 9.31, provided, however, that Agent at any time may give Borrower 60 days’ prior written notice that failure to make or maintain the amount of charge offs as required by the first three sentences of this Section 9.31 may thereafter be deemed a default under this Section 9.31 (whether or not any such deductions are made).

Appears in 2 contracts

Samples: Loan Agreement (Nicholas Financial Inc), Loan Agreement (Nicholas Financial Inc)

Charge-Off Policy. Borrower shall maintain, all in a manner satisfactory to Agent, a policy for charging off the unpaid balance of any Contract upon the occurrence of any default under the terms thereof. Without limiting the generality of the foregoing, Borrower’s policy shall provide, as a minimum, that on the last business day of each month, the Borrower shall charge off (i) the unpaid balance of any Contract with respect to which any payment due thereunder is 120 days or more past due as determined on a contractual basis and (ii) the unpaid balance of any Contract with respect to which the Contract Debtor is the subject of a bankruptcy or insolvency proceedingbasis. In addition, the policy shall provide that Borrower shall immediately charge off all Contracts with a deficiency balance and shall charge off all of the value of any Vehicles which have been repossessed for more than 120 days. Borrower shall properly account for all charge offs in the calculation of all financial covenant requirements in this Agreement. To the extent that the amount of the then outstanding Charge Off Shortfall is deducted (i) from Borrower’s Adjusted Net Earnings from Operations for purposes of the calculation of the Interest Coverage Ratio as set forth in Section 9.18 and (ii) from Borrower’s Adjusted Tangible Net Worth for purposes of the calculation of the Borrowing Base Ratio as set forth in Section 9.21, such Charge Off Shortfall shall be deemed not to be a default under this Section 9.31, provided, however, that Agent at any time may give Borrower 60 days’ prior written notice that failure to make or maintain the amount of charge offs as required by the first three sentences of this Section 9.31 may thereafter be deemed a default under this Section 9.31 (whether or not any such deductions are made).

Appears in 1 contract

Samples: Loan Agreement (Nicholas Financial Inc)

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Charge-Off Policy. Borrower shall maintain, all in a manner satisfactory to Agent, a policy for charging off the unpaid balance of any Contract upon the occurrence of any default under the terms thereof. Without limiting the generality of the foregoing, Borrower’s policy shall provide, as a minimum, that on the last business day of each month, the Borrower shall charge off (i) the unpaid balance of any Contract with respect to which any payment due thereunder is (x) prior to September 1, 2016, 120 days or more past due and (y) thereafter, 180 days or more past due, in each case, as determined on a contractual basis and (ii) the unpaid balance of any Contract with respect to which the Contract Debtor is the subject of a bankruptcy or insolvency proceedingbasis. In addition, the policy shall provide that Borrower shall immediately charge off all Contracts with a deficiency balance and shall charge off all of the value of any Vehicles which have been repossessed for more than 120 days. Borrower shall properly account for all charge offs in the calculation of all financial covenant requirements in this Agreement. To the extent that the amount of the then outstanding Charge Off Shortfall is deducted deducted (i) from Borrower’s Adjusted Net Earnings from Operations for purposes of the calculation of the Interest Coverage Ratio as set forth in Section 9.18 and (ii) from Borrower’s Adjusted Tangible Net Worth for purposes of the calculation of the Borrowing Base Ratio as set forth in Section 9.21, such Charge Off Shortfall shall be deemed not to be a default under this Section 9.31, provided, however, that Agent at any time may give Borrower 60 days’ prior written notice that failure to make or maintain the amount of charge offs as required by the first three sentences of this Section 9.31 may thereafter be deemed a default under this Section 9.31 (whether or not any such deductions are made).

Appears in 1 contract

Samples: Loan Agreement (Nicholas Financial Inc)

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