Collection of Accounts; Management of Collateral. (a) Within 90 days of the Closing Date (or such later date, subject to Section 6.15), the Loan Parties shall have established and thereafter shall maintain cash management services and Cash Management Accounts of a type and on terms reasonably satisfactory to the Collateral Agent, which Cash Management Accounts are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor of the Collateral Agent and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a “Cash Management Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period”), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the occurrence of a Cash Management Triggering Event, all proceeds in respect of any Collateral, all collections of a nature susceptible to a deposit in a bank account and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party and remittances on credit card sales) into the Cash Management Collections Accounts, and (B) subject to the conditions set forth in a Cash Management Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e) Each Loan Party shall close any of its Cash Management Accounts maintained with a bank or depositary institution promptly and in any event within forty-five days (or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time) of notice from the Collateral Agent that the creditworthiness of such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment, or that the operating performance, funds transfer, or availability procedures or performance of such bank or depositary institution with respect to Cash Management Accounts or the Collateral Agent’s liability under any Cash Management Agreement with such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment. (f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with Section 6.11(b). Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected. (g) The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries. After the occurrence and during the continuance of a Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties’ security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent or its designee shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. (h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties’ attorney-in-fact with power to endorse any Loan Party’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party’s name on any invoice or xxxx of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing. (i) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof. (j) If any Account includes a charge for any tax payable to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties’ account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account. Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law

Appears in 3 contracts

Samples: Abl Credit Agreement (Steinway Musical Instruments Holdings, Inc.), Abl Credit Agreement (Steinway Musical Instruments Holdings, Inc.), Abl Credit Agreement (Steinway Musical Instruments Holdings, Inc.)

Collection of Accounts; Management of Collateral. (a) Within 90 ~~days~~ daysAs of the ~~Closing~~ ClosingSecond Amendment Effective Date (or such later date, subject to Section 6.15), the Loan Parties shall have established and thereafter shall maintain cash management services and Cash Management Accounts of a type and on terms reasonably satisfactory to the Collateral Agent, which Cash Management Accounts are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor of the Collateral Agent and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a “Cash Management Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period”), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the occurrence of a Cash Management Triggering Event, all proceeds in respect of any Collateral, all collections of a nature susceptible to a deposit in a bank account and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party and remittances on credit card sales) into the Cash Management Collections Accounts, and (B) subject to the conditions set forth in a Cash Management Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e) Each Loan Party shall close any of its Cash Management Accounts maintained with a bank or depositary institution promptly and in any event within forty-five days (or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time) of notice from the Collateral Agent that the creditworthiness of such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment, or that the operating performance, funds transfer, or availability procedures or performance of such bank or depositary institution with respect to Cash Management Accounts or the Collateral Agent’s liability under any Cash Management Agreement with such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment. (f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with Section 6.11(b). Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected. (g) The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries. After the occurrence and during the continuance of a Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties’ security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent or its designee shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. (h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties’ attorney-in-fact with power to endorse any Loan Party’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party’s name on any invoice or xxxx of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing. (i) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof. (j) If any Account includes a charge for any tax payable to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties’ account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account. Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law

Appears in 2 contracts

Samples: Abl Credit Agreement (Steinway Musical Instruments Holdings, Inc.), Abl Credit Agreement (Steinway Musical Instruments Holdings, Inc.)

Collection of Accounts; Management of Collateral. (a) Within 90 ~~days~~ daysAs of the ~~Closing~~ ClosingSecond Amendment Effective Date (or such later date, subject to Section 6.15), the Loan Parties shall have established and thereafter shall maintain cash management services and Cash Management Accounts of a type and on terms reasonably satisfactory to the Collateral Agent, which Cash Management Accounts are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor of the Collateral Agent and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a “Cash Management Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period”), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the occurrence of a Cash Management Triggering Event, all proceeds in respect of any Collateral, all collections of a nature susceptible to a deposit in a bank account and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party and remittances on credit card sales) into the Cash Management Collections Accounts, and (B) subject to the conditions set forth in a Cash Management Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e) Each Loan Party shall close any of its Cash Management Accounts maintained with a bank or depositary institution promptly and in any event within forty-five days (or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time) of notice from the Collateral Agent that the creditworthiness of such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment, or that the operating performance, funds transfer, or availability procedures or performance of such bank or depositary institution with respect to Cash Management Accounts or the Collateral Agent’s liability under any Cash Management Agreement with such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment. (f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with Section 6.11(b). Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected. (g) The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries. After the occurrence and during the continuance of a Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties’ security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent or its designee shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. (h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties’ attorney-in-fact with power to endorse any Loan Party’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party’s name on any invoice or ~~xxxx~~ bill of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing. (i) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof. (j) If any Account includes a charge for any tax payable to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties’ account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account. Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law

Appears in 1 contract

Samples: Abl Credit Agreement (Steinway Musical Instruments Holdings, Inc.)

Collection of Accounts; Management of Collateral. (a) Within ~~90 days of~~ 20 Business Days after the ~~Closing~~ Effective Date (or such later ~~date, subject~~ time as may be agreed to ~~Section 6.15~~by the Administrative Agent), the Domestic Loan Parties shall ~~have established~~ (i) establish and ~~thereafter shall~~ maintain cash management services ~~and Cash Management Accounts~~ of a type and on terms ~~reasonably~~ satisfactory to the ~~Collateral Agent~~Administrative Agent at one or more of the banks set forth on Schedule 8.01 (each, ~~which~~ a "Cash Management Bank"), and shall take such reasonable steps to enforce, collect and receive all amounts owing on the Accounts ~~are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor~~ of the ~~Collateral Agent~~ Domestic Loan Parties or any of their Domestic Subsidiaries, and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a “Cash Management Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period”), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the ~~next~~ first Business Day after the ~~occurrence~~ date of ~~a Cash Management Triggering Event~~receipt thereof, all proceeds in respect of any ~~Collateral, all collections of a nature susceptible to a deposit in a bank account~~ Collateral and all Collections and other amounts received by any Domestic Loan Party (including payments made by the Account Debtors directly to any Domestic Loan ~~Party and remittances on credit card sales~~Party) into ~~the~~ a Cash Management ~~Collections Accounts~~Account or the Administrative Agent's Account; provided, ~~and (B)~~ however, that, subject to the ~~conditions~~ limitations set forth in this Agreement, the Domestic Loan Parties and their Domestic Subsidiaries shall be permitted to maintain and fund (i) Accounts of Domestic Loan Parties and their Domestic Subsidiaries other than Cash Management Accounts in an aggregate amount not in excess of $4,000,000 at any one time and (ii) the Excluded Deposit Accounts (as defined in the Security Agreement). The Administrative Agent shall charge the Loan Account on the last day of each month with one (1) collection day for all such Collections. (b) Within 20 Business Days after the Effective Date (or such later time as may be agreed to by the Administrative Agent), the Domestic Loan Parties shall, with respect to 104 each Cash Management Account, deliver to the Administrative Agent a Cash Management Agreement with respect to such Cash Management Account. Notwithstanding the foregoing, promptly upon the request of the Administrative Agent, each Loan Party shall deliver a Cash Management ~~Account~~Agreement to the Administrative Agent with respect to any Cash Management Account identified by the Administrative Agent. Each Cash Management Agreement shall provide, ~~pursuant~~ among other things, that the Cash Management Bank shall, from and after the receipt of a notice (an "Activation Notice") from the Administrative Agent (which Activation Notice may be given by the Administrative Agent (i) with respect to ~~each applicable Deposit~~ Depository Accounts, at any time in its sole discretion and (ii) with respect to Disbursement Accounts, the Concentration Account ~~Control Agreement or~~ and any Securities ~~Account Control Agreement (or otherwise at~~ Accounts, during the ~~instruction~~ occurrence and continuation of ~~the Collateral Agent~~an Event of Default) to forward all ~~amounts on deposit in~~ cash deposited into the Cash Management Accounts covered thereby by electronic funds transfer (including, but not limited to, ACH transfers) on each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice Administrative Agent's Account. (c) So long as no Default or ~~take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering~~ Event of Default has occurred and is continuing~~. The Collateral Agent further agrees that upon~~ , the ~~termination of~~ Administrative Borrower may amend Schedule 8.01 to add or replace a Cash ~~Dominion Period~~Management Account Bank or Cash Management Account; provided, however, that (i) such prospective Cash Management Bank shall be reasonably satisfactory to the ~~Collateral~~ Administrative Agent and the Administrative Agent shall ~~provide notice~~ have consented in writing in advance to the ~~banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control~~ opening of such Cash ~~Managements Accounts to~~ Management Account with the ~~Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the~~ prospective Cash Management ~~Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans~~ Bank, and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) ~~any securities account~~prior to the time of the opening of such Cash Management Account, ~~unless the Collateral Agent~~ each Domestic Loan Party and such prospective Cash Management Bank shall have ~~received~~ executed and delivered to the Administrative Agent a ~~Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e)~~ Cash Management Agreement. Each Domestic Loan Party shall close any of its Cash Management Accounts ~~maintained~~ (and establish replacement cash management accounts in accordance with ~~a bank or depositary institution~~ the foregoing sentence) promptly and in any event within ~~forty-five~~ 30 days ~~(or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time)~~ of notice from the ~~Collateral~~ Administrative Agent that the creditworthiness of ~~such bank or depositary institution~~ any Cash Management Bank is no longer acceptable in the ~~Collateral~~ Administrative Agent~~’s Credit Judgment~~'s reasonable judgment, or as promptly as practicable and in any event within 60 days of notice from the Administrative Agent that the operating performance, funds transfer, or availability procedures or performance of ~~such bank or depositary institution~~ the Cash Management Bank with respect to Cash Management Accounts or the ~~Collateral~~ Administrative Agent’s 's liability under any Cash Management Agreement with such ~~bank or depositary institution~~ Cash Management Bank is no longer acceptable in the ~~Collateral~~ Administrative Agent~~’s Credit Judgment~~'s reasonable judgment. (fd) The Cash Management Accounts ~~with Cash Management Banks~~ shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the ~~Finance~~ Obligations, and in which the Domestic Loan Parties are hereby deemed to have granted a Lien to the ~~Collateral~~ Administrative Agent for the benefit of the ~~Secured Parties~~Administrative Agent and the Lenders. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received ~~during a Cash Dominion Period~~ directly by any Domestic Loan Party ~~from any of its Account Debtors, as proceeds from Accounts of such Loan Party or~~ as proceeds of any ~~other~~ Collateral shall be held by such Loan Party in trust for the ~~Secured Parties~~ Administrative Agent and ~~if of a nature susceptible to a deposit in a bank account,~~ the Lenders and upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a the Administrative Agent's Account; provided, however, all Net Cash ~~Management Account~~ Proceeds received directly by such Domestic Loan Party pursuant to an event described in ~~accordance with~~ Section ~~6.11(b~~2.05(c)(iii), (iv) or (v) shall be held by such Loan Party in trust for the Administrative Agent and the Lenders and upon receipt be deposited by the Loan Party in original form and no later than the next Business Day after receipt thereof into the Administrative Agent's Account. ~~Each~~ A Domestic Loan Party shall not commingle such collections with such Loan Party's own funds or the funds of any Subsidiary 105 or Affiliate of such Loan Party or with the proceeds of any ~~Property~~ assets not included in the Collateral. No checks, drafts or other ~~instrument~~ instruments received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such checks, drafts or other instruments have actually been collected. (ge) ~~The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries.~~ After the occurrence and during the continuance of ~~a Default or~~ an Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the ~~Secured Parties’~~ Lenders' security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent ~~or its designee~~ shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. The Domestic Loan Parties shall not, without prior written consent of the Collateral Agent, grant any extension of time of payment of any Account, compromise or settle any Account for less than the full amount thereof, release, in whole or in part, any Person or property liable for the payment thereof, or allow any credit or discount whatsoever thereon, except, in the absence of a continuing Event of Default, as permitted by Section 7.02(o). (hf) Each Domestic Loan Party hereby appoints ~~each~~ the Administrative Agent or its designee on behalf of such Administrative Agent as the Domestic Loan Parties’ ' attorney-in-fact with power exercisable only during the continuance of an Event of Default to endorse any Domestic Loan Party’s 's name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Domestic Loan Party’s 's name on any invoice or ~~xxxx~~ bill of lading relating to any of the Accounts, drafts against Accxxxx Debtors with respect to Accounts, assignments and verifications of Accounts and notices to Account Debtors with respect to Accounts, ~~assignments~~ to send verification of Accounts, ~~verification~~ and to notify the Postal Service authorities to change the address for delivery of ~~Accounts of~~ mail addressed to any ~~Account Debtor with an outstanding balance of Accounts owing to the~~ Domestic Loan ~~Parties in excess of $1,000,000 and notices~~ Party to such ~~Account Debtors with respect~~ address as the Administrative Agent may designate and to ~~Accounts~~do all other acts and things necessary to carry out this Agreement. All acts of said attorney or designee are hereby ratified and approved, and ~~such~~ said attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until all of the ~~date on which all Finance~~ Loans Letter of Credit Obligations (other than Letter of Credit Obligations that are ~~paid~~ cash collateralized pursuant to the terms of this Agreement) and other Obligations under the Loan Documents are Paid in ~~full~~ Full and all of the Loan Documents are terminated~~. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing~~. (ig) Nothing herein contained shall be construed to constitute ~~any~~ the Administrative Agent as agent of any Loan Party for any purpose whatsoever, and the ~~Agents~~ Administrative Agent shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court 106 of competent jurisdiction). The ~~Agents~~ Administrative Agent shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The ~~Agents~~Administrative Agent, by anything herein or in any assignment or otherwise, do does not assume any of the obligations under any contract or agreement assigned to ~~any~~ the Administrative Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof. (jh) If any Account includes a charge for any tax payable to any Governmental Authority, ~~each~~ the Administrative Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties’ ' account and to charge the Loan Parties therefor. (i) No Loan Party shall, or shall cause or permit any Subsidiary thereof to, accumulate or maintain cash in Disbursement 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. ~~The Loan Parties shall notify~~ To the ~~Agents if~~ extent cash has accumulated in D-M-E Company's account no. 1XXXX01 at Comerica Bank as of any ~~Account includes any taxes due~~ date of determination in excess of checks outstanding against such account as of that date and amounts necessary to ~~any~~ meet minimum balance requirements, D-M-E Company shall, within one (1) Business Day, transfer such ~~Governmental Authority and, in the absence~~ excess cash out of such ~~notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account.~~ account. (j) Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the ~~Agents~~ Administrative Agent and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law.

Appears in 1 contract

Samples: Financing Agreement (Milacron Inc)

Collection of Accounts; Management of Collateral. (a) ~~Within 90 days~~ As of the ~~Closing~~ SecondThird Amendment Effective Date (or such later date, subject to Section 6.15), the Loan Parties shall have established and thereafter shall maintain cash management services and Cash Management Accounts of a type and on terms reasonably satisfactory to the Collateral Agent, which Cash Management Accounts are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor of the Collateral Agent and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a “Cash Management Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period”), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the occurrence of a Cash Management Triggering Event, all proceeds in respect of any Collateral, all collections of a nature susceptible to a deposit in a bank account and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party and remittances on credit card sales) into the Cash Management Collections Accounts, and (B) subject to the conditions set forth in a Cash Management Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e) Each Loan Party shall close any of its Cash Management Accounts maintained with a bank or depositary institution promptly and in any event within forty-five days (or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time) of notice from the Collateral Agent that the creditworthiness of such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment, or that the operating performance, funds transfer, or availability procedures or performance of such bank or depositary institution with respect to Cash Management Accounts or the Collateral Agent’s liability under any Cash Management Agreement with such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment. (f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with Section 6.11(b). Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected. (g) The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries. After the occurrence and during the continuance of a Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties’ security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent or its designee shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. (h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties’ attorney-in-fact with power to endorse any Loan Party’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party’s name on any invoice or ~~xxxx~~ bill of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing. (i) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof. (j) If any Account includes a charge for any tax payable to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties’ account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account. Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law

Appears in 1 contract

Samples: Abl Credit Agreement (Steinway Musical Instruments Holdings, Inc.)

Collection of Accounts; Management of Collateral. (a) ~~Within 90 days of the Closing Date (or such later date, subject to Section 6.15), the~~ The Loan Parties shall ~~have established~~ (i) establish and ~~thereafter shall~~ maintain cash management services ~~and Cash Management Accounts~~ of a type and on terms ~~reasonably~~ satisfactory to Administrative Agent at one or more of the ~~Collateral Agent, which~~ banks set forth on Schedule 8.01 (each a "Cash Management Bank"), and shall take such reasonable steps to enforce, collect and receive all amounts owing on the Accounts ~~are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor~~ of the ~~Collateral Agent~~ Borrower or any of its Subsidiaries, and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a “Cash Management Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period”), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the ~~next~~ first Business Day after the ~~occurrence~~ date of ~~a Cash Management Triggering Event~~receipt thereof, all proceeds in respect of any ~~Collateral, all collections of a nature susceptible to a deposit in a bank account~~ Collateral and all Collections and other amounts received by any Loan Party (including payments made by the Account Debtors directly to any Loan Party) into a Cash Management Account or the Concentration Account. (b) On the Effective Date, the Loan Parties shall, with respect to each Cash Management Account, deliver to Administrative Agent either (i) a Cash Management Agreement with respect to such Cash Management Account or (ii) evidence that the Loan Parties have provided to each Cash Management Bank at which such Cash Management Account is located notice in writing of Administrative Agent's security interest in such Cash Management Account and irrevocable directions, in form and substance satisfactory to Administrative Agent, to send by electronic funds transfer (including, but not limited to, ACH transfers) on each Business Day to the Concentration Account all funds on deposit in such Cash Management Account and that each such Cash Management Bank has agreed to do so. Notwithstanding the foregoing, promptly upon the request of Administrative Agent, each Loan Party ~~and remittances on credit card sales)~~ shall deliver a Cash Management Agreement to Administrative Agent with respect to any Cash Management Account identified by Administrative Agent. Each Cash Management Agreement shall provide, among other things, that all cash deposited into the Cash Management ~~Collections Accounts~~Accounts covered thereby shall be sent by electronic funds transfer (including, but not limited to, ACH transfers) on each Business Day to the Concentration Account. (c) Upon the terms and ~~(B)~~ subject to the conditions set forth in ~~a Cash Management~~ the Concentration Account Agreement with respect to ~~a Cash Management~~ the Concentration Account, ~~pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent)~~ all amounts ~~on deposit~~ received in the ~~Cash Management Accounts~~ Concentration Account shall be wired each Business Day to into the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice Administrative Agent's Account. (d) So long as no Default or ~~take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering~~ Event of Default has occurred and is continuing~~. The Collateral Agent further agrees that upon~~ , the ~~termination of~~ Borrower may amend Schedule 8.01 to add or replace a Cash ~~Dominion Period~~Management Bank or Cash Management Account; provided, ~~the Collateral~~ however, that (i) such prospective Cash Management Bank shall be reasonably satisfactory to Administrative Agent and Administrative Agent shall ~~provide notice~~ have consented in writing in advance to the ~~banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control~~ opening of such Cash ~~Managements Accounts to~~ Management Account with the ~~Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the~~ prospective Cash Management ~~Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans~~ Bank, and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) ~~any securities account~~prior to the time of the opening of such Cash Management Account, ~~unless the Collateral Agent~~ each Loan Party and such prospective Cash Management Bank shall have ~~received~~ executed and delivered to Administrative Agent a ~~Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e)~~ Cash Management Agreement. Each Loan Party shall close any of its Cash Management Accounts ~~maintained~~ (and establish replacement cash management accounts in accordance with ~~a bank or depositary institution~~ the foregoing sentence) promptly and in any event within ~~forty-five~~ thirty (30) days ~~(or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time)~~ of notice from ~~the Collateral~~ Administrative Agent that the creditworthiness of ~~such bank or depositary institution~~ any Cash Management Bank is no longer acceptable in ~~the Collateral~~ Administrative Agent~~’s Credit Judgment~~'s reasonable judgment, or as promptly as practicable and in any event within sixty (60) days of notice from Administrative Agent that the operating performance, funds transfer, or availability procedures or performance of ~~such bank or depositary institution~~ the Cash Management Bank with respect to Cash Management Accounts or ~~the Collateral~~ Administrative Agent’s 's liability under any Cash Management Agreement with such ~~bank or depositary institution~~ Cash Management Bank is no longer acceptable in ~~the Collateral~~ Administrative Agent~~’s Credit Judgment~~'s reasonable judgment. (fe) The Cash Management Accounts ~~with Cash Management Banks~~ shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the ~~Finance~~ Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to ~~the Collateral~~ Administrative Agent for the benefit of the ~~Secured Parties~~Lenders. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received ~~during a Cash Dominion Period~~ directly by any Loan Party ~~from any of its Account Debtors, as proceeds from Accounts of such Loan Party or~~ as proceeds of any ~~other~~ Collateral shall be held by such Loan Party in trust for the ~~Secured Parties~~ Agents and ~~if of a nature susceptible to a deposit in a bank account,~~ the Lenders and upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a the Concentration Account; provided, however, all Net Cash ~~Management Account~~ Proceeds received directly by such Loan Party pursuant to an event described in ~~accordance with~~ Section ~~6.11(b)~~2.05(c)(ii) shall be held by such Loan Party in trust for the Agents and the Lenders and upon receipt be deposited by the Loan Party in original form and no later than the next Business Day after receipt thereof into the Administrative Agent's Account. ~~Each~~ A Loan Party shall not commingle such collections with such Loan Party's own funds or the funds of any Subsidiary or Affiliate of such Loan Party or with the proceeds of any ~~Property~~ assets not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected. The Administrative Agent shall charge the Loan Account on the last day of each month with one (1) collection day for all such collections. (gf) ~~The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries.~~ After the occurrence and during the continuance of ~~a Default or~~ an Event of Default, ~~the Collateral~~ any Agent may send a notice of assignment and/or notice of the ~~Secured Parties’~~ Lenders' security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent ~~or its designee~~ shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. The Loan Parties shall not, without prior written consent of the Collateral Agent, grant any extension of time of payment of any Account, compromise or settle any Account for less than the full amount thereof, release, in whole or in part, any Person or property liable for the payment thereof, or allow any credit or discount whatsoever thereon, except, in the absence of a continuing Event of Default, as permitted by Section 7.02(o). (hg) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties’ ' attorney-in-fact with power exercisable during the continuance of an Event of Default to endorse any Loan Party’s 's name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party’s 's name on any invoice or xxxx of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments ~~of Accounts, verification~~ and verifications of Accounts ~~of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000~~ and notices to ~~such~~ Account Debtors with respect to Accounts, to send verification of Accounts, and to notify the Postal Service authorities to change the address for delivery of mail addressed to any Loan Party to such address as such Agent may designate and to do all other acts and things reasonably necessary to carry out this Agreement. All acts of said attorney or designee are hereby ratified and approved, and ~~such~~ said attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until all of the ~~date on which all Finance~~ Loans, Reimbursement Obligations, Letter of Credit Obligations and other Obligations under the Loan Documents are paid in full and all of the Loan Documents are terminated~~. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing~~. (ih) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof. (ji) If any Account includes a charge for any tax payable to any Governmental Authority, ~~each~~ Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties’ ' account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account. . (j) Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law.

Appears in 1 contract

Samples: Financing Agreement (Eagle Family Foods Inc)

Collection of Accounts; Management of Collateral. ~~(a) Within 90 days of~~ On or prior to the ~~Closing Date (or such later date, subject to Section 6.15)~~Final Facility Effective Date, the Loan Parties shall ~~have established~~ (i) establish and ~~thereafter shall~~ maintain cash management services ~~and Cash Management Accounts~~ of a type and on terms ~~reasonably~~ satisfactory to the Collateral Agent, which Cash Management Accounts are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor of the Collateral Agent and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a “Cash Management Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period”), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the occurrence of a Cash Management Triggering Event, all proceeds in respect of any Collateral, all collections of a nature susceptible to a deposit in a bank account and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party and remittances on credit card sales) into the Cash Management Collections Accounts, and (B) subject to the conditions set forth in a Cash Management Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e) Each Loan Party shall close any of its Cash Management Accounts maintained with a bank or depositary institution promptly and in any event within forty-five days (or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time) of notice from the Collateral Agent that the creditworthiness of such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment, or that the operating performance, funds transfer, or availability procedures or performance of such bank or depositary institution with respect to Cash Management Accounts or the Collateral Agent’s liability under any Cash Management Agreement with such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment. (f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with Section 6.11(b). Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent ~~unless~~ at one or more of the banks set forth on Schedule 9.01 (each a "Cash Management Bank"), and ~~until such instruments have actually been collected. (g) The Loan Parties~~ shall take ~~all~~ such reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Domestic Subsidiaries. After the occurrence and during the continuance of a Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties’ security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and ~~thereafter the Collateral Agent~~ (ii) deposit or ~~its designee shall have the sole right~~ cause to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. (h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties’ attorney-in-fact with power to endorse any Loan Party’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party’s name on any invoice or xxxx of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approvedbe deposited promptly, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing. (i) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event ~~whatsoever~~no later than the first Business Day after the date of receipt thereof, ~~have any liability for any error or omission or delay~~ all proceeds in respect of any ~~kind occurring in the settlement, collection or payment of any of the Accounts or any instrument~~ Collateral and all Collections and other amounts received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party ~~of any of~~ (including payments made by the ~~terms and conditions thereof. (j) If any~~ Account ~~includes a charge for any tax payable~~ Debtors directly to any ~~Governmental Authority, each Agent is hereby authorized~~ Loan Party) into a Cash Management Account (~~but in no event obligated~~other than an operating/check disbursement account) ~~in its discretion to pay~~ or the ~~amount thereof~~ Concentration Accounts. On or prior to the ~~proper taxing authority for the Loan Parties’ account and to charge~~ Final Facility Effective Date, the Loan Parties ~~therefor~~shall deliver to the Administrative Agent (x) a Cash Management Agreement with respect to each Cash Management Account and (y) a Concentration Account Agreement with respect to each Concentration Account. ~~The Loan Parties~~ Each Cash Management Bank shall ~~notify~~ have irrevocable directions to send all funds on deposit in the ~~Agents if any~~ applicable Cash Management Accounts (other than operating/check disbursement accounts) by electronic funds transfer (including, but not limited to, ACH transfers) on each Business Day to the applicable Concentration Account ~~includes any taxes due to any~~ at such ~~Governmental Authority and~~Cash Management Bank, or, in the ~~absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason~~ case of the ~~sale and delivery creating such~~ accounts at Bank of America, N.A., directly to the Solutia Business Concentration Account~~. Notwithstanding any other terms set forth in~~ , it being understood that the ~~Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations~~ operating/check disbursement accounts of the Loan Parties ~~set forth herein~~identified on Schedule 9.01 shall be subject to a Cash Management Agreement, ~~are cumulative of~~but shall not be subject to such irrevocable directions until the Administrative Agent shall have provided notice to such Cash Management Bank as described in the Cash Management Agreements. Notwithstanding the foregoing, ~~may be exercised singly or concurrently with~~promptly upon the request of Administrative Agent, ~~and are not exclusive of,~~ each Loan Party shall deliver a Cash Management Agreement to the Administrative Agent with respect to any ~~other rights, remedies or obligations set forth in any other Loan Document or as provided~~ Cash Management Account identified by ~~law~~the Administrative Agent.

Appears in 1 contract

Samples: Financing Agreement (Solutia Inc)

Collection of Accounts; Management of Collateral. (a) ~~Within 90 days of the Closing Date (or such later date, subject to Section 6.15), the~~ The Loan Parties shall ~~have established~~ (i) establish and ~~thereafter shall~~ maintain cash management services ~~and Cash Management Accounts~~ of a type and on terms reasonably satisfactory to ~~the Collateral Agent, which Cash Management Accounts are in each case subject to a Deposit Account Control Agreement~~ Administrative Agent at one or ~~Securities Account Control Agreement (i) in favor~~ more of the ~~Collateral Agent and (ii) which provides that all amounts~~ banks or institutions set forth on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days Schedule 8.01 (each a “Cash Management ~~Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period~~Bank”), ~~then (A) the Loan Parties shall deposit or cause to be deposited promptly,~~ and in any event no later than the next Business Day after the occurrence of a Cash Management Triggering Event, all proceeds in respect of any Collateral, all collections of a nature susceptible to a deposit in a bank account and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party and remittances on credit card sales) into the Cash Management Collections Accounts, and (B) subject to the conditions set forth in a Cash Management Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e) Each Loan Party shall close any of its Cash Management Accounts maintained with a bank or depositary institution promptly and in any event within forty-five days (or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time) of notice from the Collateral Agent that the creditworthiness of such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment, or that the operating performance, funds transfer, or availability procedures or performance of such bank or depositary institution with respect to Cash Management Accounts or the Collateral Agent’s liability under any Cash Management Agreement with such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment. (f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with Section 6.11(b). Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected. (g) The Loan Parties shall take ~~all~~ such reasonable steps to enforce, collect and receive all amounts owing on the Accounts of ~~the~~ Loan Parties or any of their Subsidiaries, and (ii) deposit or cause to be deposited promptly after the date of receipt thereof, all proceeds in respect of any Collateral and all Collections and other amounts received by any Loan Party (including payments made by the Account Debtors directly to any Loan Party) into a Cash Management Account. (b) Each Loan Party shall deliver a Cash Management Agreement to Administrative Agent with respect to each Cash Management Account. ~~After~~ Each Cash Management Agreement shall provide, among other things, that after the occurrence and during the continuance of a an Event of Default and subject to the conditions set forth in the Cash Management Agreement, the Administrative Agent shall have the right to instruct the Cash Management Bank to remit all amounts received in any Cash Management Account covered by the Cash Management Agreement, by wire each Business Day, to the Administrative Agent’s Account. (c) So long as no Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties’ security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent or its designee shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. (h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties’ attorney-in-fact with power to endorse any Loan Party’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party’s name on any invoice or xxxx of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event Default has occurred and is continuing~~. (i) Nothing herein contained shall be construed~~ , the Administrative Borrower may amend Schedule 8.01 to ~~constitute any Agent as agent~~ add or replace a Cash Management Bank or Cash Management Account; provided, however, that prior to the time of ~~any~~ the opening of such Cash Management Account, each Loan Party ~~for~~ and such prospective Cash Management Bank shall have executed and delivered to Administrative Agent a Cash Management Agreement. During the continuance of an Event of Default, each Loan Party shall close any ~~purpose whatsoever,~~ of its Cash Management Accounts (and establish replacement cash management accounts in accordance with the ~~Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located~~ foregoing sentence) promptly and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event ~~whatsoever, have any liability for any error or omission or delay~~ within thirty (30) days of notice from Administrative Agent that the creditworthiness of any ~~kind occurring~~ Cash Management Bank is no longer acceptable in Administrative Agent’s reasonable judgment, or as promptly as practicable and in any event within sixty (60) days of notice from Administrative Agent that the ~~settlement~~operating performance, ~~collection~~ funds transfer, or ~~payment of any~~ availability procedures or performance of the Cash Management Bank with respect to Cash Management Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations Administrative Agent’s liability under any ~~contract or agreement assigned to any Agent and shall not be responsible~~ Cash Management Agreement with such Cash Management Bank is no longer acceptable in ~~any way for the performance by any Loan Party of any of the terms and conditions thereof~~Administrative Agent’s reasonable judgment. (j) If any Account includes a charge for any tax payable to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties’ account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account. Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law

Appears in 1 contract

Samples: Financing Agreement (Omega Protein Corp)

Collection of Accounts; Management of Collateral. (a) ~~Within 90 days of the Closing Date (or such later date, subject to Section 6.15), the~~ Loan Parties shall ~~have established~~ (i) establish and ~~thereafter shall~~ maintain cash management services ~~and Cash Management Accounts~~ of a type and on terms ~~reasonably~~ satisfactory to Agent at one or more of the ~~Collateral Agent, which~~ banks set forth on Schedule 7.01 (each a "Cash Management Bank"), and shall take such reasonable steps to enforce, collect and receive all amounts owing on the Accounts ~~are in each case subject to a Deposit Account Control Agreement~~ of Parent or ~~Securities Account Control Agreement (i) in favor~~ any of ~~the Collateral Agent~~ its Subsidiaries, and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a “Cash Management Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period”), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the third Business Day after the date of receipt thereof prior to November 30, 2006 and no later than the next Business Day after the ~~occurrence~~ date of ~~a Cash Management Triggering Event~~the receipt thereof at all times on and after November 30, 2006, all proceeds in respect of any ~~Collateral, all collections of a nature susceptible to a deposit in a bank account~~ Collateral and all Collections and other amounts received by any Loan Party other than assets and/or funds of any Subsidiary that do not constitute Loan Parties (including payments made by the Account Debtors directly to any Loan ~~Party and remittances on credit card sales~~Party) into a Cash Management Account or the Concentration Account. To the extent that any funds in the Concentration Account, any Cash Management Account or the investment account in which Qualified Cash is maintained are transferred to an Operating Account prior to a Cash Dominion Event and Agent sending a Notice of Exclusive Control with respect thereto, such funds that are so transferred shall not thereafter be required to be transferred back to a Cash Management Account or the Concentration Account. (b) As soon as possible, but in any event on or before November 20, 2006, Loan Parties shall, with respect to each Cash Management Account, the Concentration Account and the Operating Accounts and investment account in which any Qualified Cash is held, deliver to Agent a Control Agreement, EXCEPT that Loan Parties shall not be required to deliver a Control Agreement (i) for any Cash Management Account that is not at Bank of America, provided, that, any such account is closed on or before December 31, 2006 and any funds at any time received therein are transferred to a Cash Management Account at Bank of America or the Concentration Account as provided below, (ii) deposit accounts specifically and exclusively used for petty cash so long as the aggregate balance of the funds on deposit xx xxl of such petty cash deposit accounts shall not exceed $250,000 at any time anx xx Default or Event of Default shall exist or have occurred and be continuing, and (iii) deposit accounts specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of a Loan Party's employees. Prior to November 30, 2006, each Loan Party shall cause to be transferred all funds deposited or credited to each Cash Management Account by manual transfer on a weekly basis to the Concentration Account and on and after November 30, 2006, each Loan Party shall cause to be transferred all funds deposited or credited to each Cash Management Account by manual transfer every other Business Day to the Concentration Account at which such account is maintained, provided, that, Loan Parties shall cause such transfers from the Cash Management ~~Collections Accounts~~Accounts to be done automatically as soon as reasonably practicable. Each Control Agreement shall provide, among other things that each Cash Management Bank or Concentration Account Bank irrevocably agrees that it will comply at any time with the instructions originated by Agent to such Cash Management Bank or Concentration Account Bank directing the disposition of cash, securities, payments and all other items from time to time credited to such account, without the further consent of such Loan Party, provided that Agent 115 will not give a Notice of Exclusive Control to such Cash Management Banks or Concentration Account Bank unless a Cash Dominion Event has occurred. (c) So long as no Default or Event of Default has occurred and is continuing, Administrative Borrower may amend Schedule 7.01 to add or replace a Cash Management Bank, Cash Management Account, Operating Account or bank or depository institution at which an Operating Account is maintained; provided, however, that (i) such prospective Cash Management Bank or bank or depository institution at which such Operating Account is maintained shall be satisfactory to Agent and Agent shall have consented in writing in advance to the opening of such Cash Management Account with the prospective Cash Management Bank or such Operating Account with the prospective bank or depository institution at which such Operating Account is to be maintained, and (ii) prior to the time of the opening of such Cash Management Account or Operating Account (other than (A) deposit accounts specifically and exclusively used for petty cash so long as the aggregate balance of the funds on deposit xx xxl of such petty cash deposit accounts shall not exceed $250,000 at any time anx xx Default or Event of Default shall exist or have occurred and be continuing, and (B) ~~subject~~ deposit accounts specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the ~~conditions set forth in~~ benefit of a Loan Party's employees), each Loan Party and such prospective Cash Management ~~Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit~~ Bank or prospective bank or depository institution at which such Operating Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties is maintained shall have ~~full dominion~~ executed and ~~control over the Cash Management Accounts, and the Collateral~~ delivered to Agent ~~agrees not to deliver~~ a ~~control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing~~Control Agreement. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e) Each Loan Party shall close any of its Cash Management Accounts ~~maintained~~ (and establish replacement cash management accounts in accordance with ~~a bank or depositary institution~~ the foregoing sentence) promptly and in any event within ~~forty-five~~ thirty (30) days ~~(or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time)~~ of notice from ~~the Collateral~~ Agent that the creditworthiness of ~~such bank or depositary institution~~ any Cash Management Bank is no longer acceptable in ~~the Collateral~~ Agent~~’s Credit Judgment~~'s reasonable judgment, or as promptly as practicable and in any event within sixty (60) days of notice from Agent that the operating performance, funds transfer, or availability procedures or performance of ~~such bank or depositary institution~~ the Cash Management Bank with respect to Cash Management Accounts or ~~the Collateral~~ Agent’s 's liability under any ~~Cash Management~~ Control Agreement with such ~~bank or depositary institution~~ Cash Management Bank is no longer acceptable in ~~the Collateral~~ Agent~~’s Credit Judgment~~'s reasonable judgment. (f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with Section 6.11(b). Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected. (g) The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries. After the occurrence and during the continuance of a Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties’ security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent or its designee shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. (h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties’ attorney-in-fact with power to endorse any Loan Party’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party’s name on any invoice or xxxx of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing. (i) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof. (j) If any Account includes a charge for any tax payable to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties’ account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account. Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law

Appears in 1 contract

Samples: Loan Agreement (Aerobic Creations, Inc.)

Collection of Accounts; Management of Collateral. (a) Within 90 days of the Closing Date (or such later date, subject to Section 6.15), the Loan Parties shall have established and thereafter shall maintain cash management services and Cash Management Accounts of a type and on terms reasonably satisfactory to the Collateral Agent, which Cash Management Accounts are in each case subject to a Deposit Account Control Agreement or Securities Account Control Agreement (i) in favor of the Collateral Agent and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a “Cash Management Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period”), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the occurrence of a Cash Management Triggering Event, all proceeds in respect of any Collateral, all collections of a nature susceptible to a deposit in a bank account and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party and remittances on credit card sales) into the Cash Management Collections Accounts, and (B) subject to the conditions set forth in a Cash Management Agreement with respect to a Cash Management Account, pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at the instruction of the Collateral Agent) all amounts on deposit in the Cash Management Accounts each Business Day to the Cash Management Collections Accounts. At all times prior to and after a Cash Dominion Period, the Loan Parties shall have full dominion and control over the Cash Management Accounts, and the Collateral Agent agrees not to deliver a control notice or take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering Event has occurred and is continuing. The Collateral Agent further agrees that upon the termination of a Cash Dominion Period, the Collateral Agent shall provide notice to the banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control of such Cash Managements Accounts to the Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the Cash Management Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) any securities account, unless the Collateral Agent shall have received a Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e) Each Loan Party shall close any of its Cash Management Accounts maintained with a bank or depositary institution promptly and in any event within forty-five days (or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time) of notice from the Collateral Agent that the creditworthiness of such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment, or that the operating performance, funds transfer, or availability procedures or performance of such bank or depositary institution with respect to Cash Management Accounts or the Collateral Agent’s liability under any Cash Management Agreement with such bank or depositary institution is no longer acceptable in the Collateral Agent’s Credit Judgment. (f) The Cash Management Accounts with Cash Management Banks shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the Finance Obligations, and in which the Loan Parties are hereby deemed to have granted a Lien to the Collateral Agent for the benefit of the Secured Parties. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received during a Cash Dominion Period directly by any Loan Party from any of its Account Debtors, as proceeds from Accounts of such Loan Party or as proceeds of any other Collateral shall be held by such Loan Party in trust for the Secured Parties and if of a nature susceptible to a deposit in a bank account, upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a Cash Management Account in accordance with Section 6.11(b). Each Loan Party shall not commingle such collections with the proceeds of any Property not included in the Collateral. No checks, drafts or other instrument received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such instruments have actually been collected. (g) The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries. After the occurrence and during the continuance of a Default or Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the Secured Parties’ security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent or its designee shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. (h) Each Loan Party hereby appoints each Agent or its designee on behalf of such Agent as the Loan Parties’ attorney-in-fact with power to endorse any Loan Party’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Loan Party’s name on any invoice or ~~xxxx~~ bill of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments of Accounts, verification of Accounts of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000 and notices to such Account Debtors with respect to Accounts. All acts of said attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until the date on which all Finance Obligations are paid in full and all of the Loan Documents are terminated. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing. (i) Nothing herein contained shall be construed to constitute any Agent as agent of any Loan Party for any purpose whatsoever, and the Agents shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The Agents, by anything herein or in any assignment or otherwise, do not assume any of the obligations under any contract or agreement assigned to any Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof. (j) If any Account includes a charge for any tax payable to any Governmental Authority, each Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties’ account and to charge the Loan Parties therefor. The Loan Parties shall notify the Agents if any Account includes any taxes due to any such Governmental Authority and, in the absence of such notice, the Agents shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account. Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the Agents and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law

Appears in 1 contract

Samples: Abl Credit Agreement (Steinway Musical Instruments Holdings, Inc.)

Collection of Accounts; Management of Collateral. (a) ~~Within 90~~ In accordance with Section 7.01(r), within 120 days of after the ~~Closing~~ Effective Date (or such later ~~date, subject~~ time as may be agreed to ~~Section 6.15~~by the Administrative Agent), (the "Cash Management Date") the Domestic Loan Parties shall ~~have established~~ (i) establish and ~~thereafter shall~~ maintain cash management services ~~and Cash Management Accounts~~ of a type and on terms reasonably satisfactory to the ~~Collateral~~ Administrative Agent at the Administrative Agent, ~~which~~ an Affiliate thereof, any Lender or any bank providing cash management services to the Loan Parties on the Effective Date (each, a "Cash Management Bank"), and shall take such reasonable steps to enforce, collect, receive and cause all amounts owing on the Accounts ~~are in each case subject~~ of the Domestic Loan Parties or any of their Domestic Subsidiaries to be remitted directly to a ~~Deposit~~ Cash Management Account ~~Control Agreement~~ (other than any payroll, operating, checking or ~~Securities Account Control Agreement (i~~disbursement account) ~~in favor of~~ or the ~~Collateral Agent~~ Administrative Agent's Account, and (ii) which provides that all amounts on deposit in each such Cash Management Account be automatically transferred each Business Day during a Cash Dominion Period (as defined below) to at least one Cash Management Account (as designated by the Collateral Agent) at the Administrative Agent or a Cash Management Bank designated by the Collateral Agent, to be used as a collections account (such account, together with any other collections accounts (including any “lockbox accounts”) established by the Loan Parties with the Administrative Agent or Cash Management Bank so designated, the “Cash Management Collections Accounts”). (b) If (i) a Default or Event of Default has occurred and is continuing or (ii) Availability is less than 17.5% of the Revolving Facility Commitment for five consecutive Business Days (each a “Cash Management Triggering Event”) and until such Cash Management Triggering Event no longer exists for a 30 consecutive calendar day period (such period, a “Cash Dominion Period”), then (A) the Loan Parties shall deposit or cause to be deposited promptly, and in any event no later than the ~~next~~ first Business Day after the ~~occurrence~~ date of ~~a Cash Management Triggering Event~~receipt thereof, all proceeds in respect of any ~~Collateral, all collections of a nature susceptible to a deposit in a bank account~~ Collateral and all Collections and other amounts received by any Domestic Loan Party (including payments made by the Account Debtors directly to any Domestic Loan ~~Party and remittances on credit card sales~~Party) into a Cash Management Account or the Administrative Agent's Account; provided, however, that, (A) at all times prior to the Cash Management ~~Collections Accounts~~Date, the Domestic Loan Parties shall cause the amounts referred to in the foregoing clauses (i) and (ii) to be remitted or deposited to one or more of the accounts listed on Schedule 6.01(u) which shall be subject to a Control Agreement in favor of the Administrative Agent as of the Effective Date and (B) subject to the ~~conditions~~ limitations set forth in this Agreement, the Domestic Loan Parties and their Domestic Subsidiaries shall be permitted to maintain and fund (i) deposit accounts of Domestic Loan Parties and their Domestic Subsidiaries other than Cash Management Accounts in an aggregate amount not in excess of $4,000,000 at any one time and (ii) the Excluded Deposit Accounts (as defined in the Security Agreement). (b) Prior to the Cash Management Date (or such later time as may be agreed to by the Administrative Agent), the Domestic Loan Parties shall, with respect to each Cash Management Account, deliver to the Administrative Agent a Cash Management Agreement with respect to such Cash Management Account. Notwithstanding the foregoing, promptly upon the request of the Administrative Agent, each Loan Party shall deliver a Cash Management ~~Account~~Agreement to the Administrative Agent with respect to any Cash Management Account identified by the Administrative Agent. Each Cash Management Agreement shall provide, ~~pursuant to each applicable Deposit Account Control Agreement or Securities Account Control Agreement (or otherwise at~~ among other things, that the ~~instruction of~~ Cash Management Bank shall, from and after the ~~Collateral Agent)~~ Effective Date forward all ~~amounts on deposit in~~ cash deposited into the Cash Management Accounts covered thereby by electronic funds transfer (including, but not limited to, ACH transfers) on each Business Day to the ~~Cash Management Collections Accounts. At all times prior~~ Administrative Agent's Account; provided, however any such agreement covering any Disbursement Account shall provide that such amounts shall only be transferred to ~~and after a Cash Dominion Period,~~ the ~~Loan Parties shall have full dominion and control over~~ Administrative Agent's account following the Cash Management ~~Accounts,~~ Bank's receipt of a notice (an "Activation Notice") from the Administrative Agent which may only be given during the occurrence and ~~the Collateral Agent agrees not to deliver a control notice~~ continuance of an Event of Default. (c) So long as no Default or ~~take any other action to control the Cash Managements Accounts unless and until a Cash Management Triggering~~ Event of Default has occurred and is continuing~~. The Collateral Agent further agrees that upon~~ , the ~~termination of~~ Administrative Borrower may amend Schedule 8.01 to add or replace a Cash ~~Dominion Period~~Management Account Bank or Cash Management Account; provided, however, that (i) such prospective Cash Management Bank shall be reasonably satisfactory to the ~~Collateral~~ Administrative Agent and the Administrative Agent shall ~~provide notice~~ have consented in writing in advance to the ~~banks with Cash Management Accounts and take all other commercially reasonable actions necessary to revert control~~ opening of such Cash ~~Managements Accounts to~~ Management Account with the ~~Loan Parties. (c) Except as otherwise provided for in Section 8.03, all amounts received or deposited into the~~ prospective Cash Management ~~Collections Accounts during a Cash Dominion Period (whether under this Section 6.11 or otherwise) shall be applied to the payment of the outstanding principal balance of the Loans~~ Bank, and the L/C Obligations (or, to the extent such L/C Obligations are contingent, to provide Cash Collateral in respect of such L/C Obligations). (d) The Loan Parties shall not maintain cash, Cash Equivalents or other amounts in either (i) any Deposit Account, unless the Collateral Agent shall have received a Deposit Account Control Agreement in respect of such Deposit Account (other than Excluded Accounts) or (ii) ~~any securities account~~prior to the time of the opening of such Cash Management Account, ~~unless the Collateral Agent~~ each Domestic Loan Party and such prospective Cash Management Bank shall have ~~received~~ executed and delivered to the Administrative Agent a ~~Securities Account Control Agreement in respect of such securities account (other than Excluded Accounts). (e)~~ Cash Management Agreement. Each Domestic Loan Party shall close any of its Cash Management Accounts ~~maintained~~ (and establish replacement cash management accounts in accordance with ~~a bank or depositary institution~~ the foregoing sentence) promptly and in any event within ~~forty-five~~ 30 days ~~(or such longer period as the Collateral Agent is willing, in its sole discretion, to accommodate from time to time)~~ of notice from the ~~Collateral~~ Administrative Agent that the creditworthiness of ~~such bank or depositary institution~~ any Cash Management Bank is no longer acceptable in the ~~Collateral~~ Administrative Agent~~’s Credit Judgment~~'s reasonable judgment, or as promptly as practicable and in any event within 60 days of notice from the Administrative Agent that the operating performance, funds transfer, or availability procedures or performance of ~~such bank or depositary institution~~ the Cash Management Bank with respect to Cash Management Accounts or the ~~Collateral~~ Administrative Agent’s 's liability under any Cash Management Agreement with such ~~bank or depositary institution~~ Cash Management Bank is no longer acceptable in the ~~Collateral~~ Administrative Agent~~’s Credit Judgment~~'s reasonable judgment. (fd) The Cash Management Accounts ~~with Cash Management Banks~~ shall be cash collateral accounts, with all cash, checks and similar items of payment in such accounts securing payment of the ~~Finance~~ Obligations, and in which the Domestic Loan Parties are hereby deemed to have granted a Lien to the ~~Collateral~~ Administrative Agent for the benefit of the ~~Secured Parties~~Administrative Agent and the Lenders. All checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness received ~~during a Cash Dominion Period~~ directly by any Domestic Loan Party ~~from any of its Account Debtors, as proceeds from Accounts of such Loan Party or~~ as proceeds of any ~~other~~ Collateral shall be held by such Loan Party in trust for the ~~Secured Parties~~ Administrative Agent and ~~if of a nature susceptible to a deposit in a bank account,~~ the Lenders and upon receipt be deposited by such Loan Party in original form and no later than the next Business Day after receipt thereof into a the Administrative Agent's Account; provided, however, all Net Cash ~~Management Account~~ Proceeds received directly by such Domestic Loan Party pursuant to an event described in ~~accordance with~~ Section ~~6.11(b~~2.05(c)(iii), (iv) or (v) shall be held by such Loan Party in trust for the Administrative Agent and the Lenders and upon receipt be deposited by the Loan Party in original form and no later than the next Business Day after receipt thereof into the Administrative Agent's Account. ~~Each~~ A Domestic Loan Party shall not commingle such collections with such Loan Party's own funds or the funds of any Subsidiary or Affiliate of such Loan Party or with the proceeds of any ~~Property~~ assets not included in the Collateral. No checks, drafts or other ~~instrument~~ instruments received by the Administrative Agent shall constitute final payment to the Administrative Agent unless and until such checks, drafts or other instruments have actually been collected. (ge) ~~The Loan Parties shall take all reasonable steps to enforce, collect and receive all amounts owing on the Accounts of the Loan Parties or any of their Subsidiaries.~~ After the occurrence and during the continuance of ~~a Default or~~ an Event of Default, the Collateral Agent may send a notice of assignment and/or notice of the ~~Secured Parties’~~ Lenders' security interest to any and all Account Debtors or third parties holding or otherwise concerned with any of the Collateral, and thereafter the Collateral Agent ~~or its designee~~ shall have the sole right to collect the Accounts and/or take possession of the Collateral and the books and records relating thereto. The Domestic Loan Parties shall not, without prior written consent of the Collateral Agent, grant any extension of time of payment of any Account, compromise or settle any Account for less than the full amount thereof, release, in whole or in part, any Person or property liable for the payment thereof, or allow any credit or discount whatsoever thereon, except, in the absence of a continuing Event of Default, as permitted by Section 7.02(o). (hf) Each Domestic Loan Party hereby appoints ~~each~~ the Administrative Agent or its designee on behalf of such Administrative Agent as the Domestic Loan Parties’ ' attorney-in-fact with power exercisable only during the continuance of an Event of Default to endorse any Domestic Loan Party’s 's name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Accounts, to sign any Domestic Loan Party’s 's name on any invoice or xxxx of lading relating to any of the Accounts, drafts against Account Debtors with respect to Accounts, assignments ~~of Accounts, verification~~ and verifications of Accounts ~~of any Account Debtor with an outstanding balance of Accounts owing to the Loan Parties in excess of $1,000,000~~ and notices to ~~such~~ Account Debtors with respect to Accounts, to send verification of Accounts, and to notify the Postal Service authorities to change the address for delivery of mail addressed to any Domestic Loan Party to such address as the Administrative Agent may designate and to do all other acts and things necessary to carry out this Agreement. All acts of said attorney or designee are hereby ratified and approved, and ~~such~~ said attorney or designee shall not be liable for any acts of omission or commission (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction), or for any error of judgment or mistake of fact or law; this power being coupled with an interest is irrevocable until all of the ~~date on which all Finance~~ Loans, LC Exposure (other than LC Exposure that is cash collateralized pursuant to the terms of this Agreement) and other Obligations under the Loan Documents are ~~paid~~ Paid in ~~full~~ Full and all of the Loan Documents are terminated~~. Each Agent agrees not to deliver any such notice or take any such actions unless and until a Cash Management Triggering Event has occurred and is continuing~~. (ig) Nothing herein contained shall be construed to constitute ~~any~~ the Administrative Agent as agent of any Loan Party for any purpose whatsoever, and the ~~Agents~~ Administrative Agent shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof (other than from acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The ~~Agents~~ Administrative Agent shall not, under any circumstance or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof or for any damage resulting therefrom (other than acts of omission or commission constituting gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction). The ~~Agents~~Administrative Agent, by anything herein or in any assignment or otherwise, do does not assume any of the obligations under any contract or agreement assigned to ~~any~~ the Administrative Agent and shall not be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof. (jh) If any Account includes a charge for any tax payable to any Governmental Authority, ~~each~~ the Administrative Agent is hereby authorized (but in no event obligated) in its discretion to pay the amount thereof to the proper taxing authority for the Loan Parties’ ' account and to charge the Loan Parties therefor. The ~~Loan Parties~~ Borrowers shall notify the ~~Agents~~ Administrative Agent if any Account includes ~~any~~ taxes due to ~~any~~ such Governmental Authority and, in the absence of such notice, the ~~Agents~~ Administrative Agent shall have the right to retain the full proceeds of such Account and shall not be liable for any taxes that may be due by reason of the sale and delivery creating such Account. (i) No Loan Party shall, or shall cause or permit any Subsidiary thereof to, accumulate or maintain cash in Disbursement 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. To the extent cash has accumulated in D-M-E Company's account no. 1XXXX01 at Comerica Bank as of any date of determination in excess of checks outstanding against such account as of that date and amounts necessary to meet minimum balance requirements, D-M-E Company shall, within one (1) Business Day, transfer such excess cash out of such account and into an account subject to a Control Agreement in favor of the Administrative Agent. (j) Notwithstanding any other terms set forth in the Loan Documents, the rights and remedies of the ~~Agents~~ Administrative Agent and the Lenders herein provided, and the obligations of the Loan Parties set forth herein, are cumulative of, may be exercised singly or concurrently with, and are not exclusive of, any other rights, remedies or obligations set forth in any other Loan Document or as provided by law. (k) Notwithstanding any other terms set forth herein or in any other Loan Document, the Administrative Agent shall have the right at any time to require the Canadian Borrowing Base Guarantors to provide Control Agreements and/or Cash Management Agreements with respect to any account into which the proceeds of Accounts of the Canadian Borrowing Base Guarantors are deposited and, each Canadian Borrowing Base Guarantor will so provide such agreements within 120 days after receiving any such request. Without limiting the provisions of this Section 8.01, the parties agree that the provisions of this Section 8.01 shall apply to the Canadian Borrowing Base Guarantors to the same extent as the Domestic Loan Parties at any time when such Control Agreements and/or Cash Management Agreements are in effect.

Appears in 1 contract

Samples: Financing Agreement (Milacron Inc)

Common use of Collection of Accounts; Management of Collateral Clause in Contracts