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

Collection of Receivables; Management of Collateral. (a) The Borrowers will, at their own cost and expense, (i) arrange for remittances on Receivables of each of the Receivables Grantors to be made directly to lockboxes designated by the Agent or in such other manner as the Agent may direct, and (ii) promptly deposit, or cause to be deposited, all payments received by the Receivables Grantors on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated by the Agent in precisely the form received (but with any endorsements of the Receivables Grantors necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors for and as the Lenders' property and shall not be commingled with the Receivables Grantors' other funds. All remittances and payments that are deposited in accordance with the foregoing will, after two Business Days (or three Business Days in the case of deposits that are made after 1:00 p.m. (New York time)), be applied by the Agent to reduce the outstanding balance of the Revolving Credit Loans, subject to final collection in cash of the item deposited. Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent's security interest to any and all Customers or any third party holding or otherwise concerned with any of the Collateral, and thereafter the Agent shall have the sole right to collect the Receivables and/or take possession of the Collateral and the books and records relating thereto. The Receivables Grantors shall not, without the Agent's prior written consent, grant any extension of the time of payment of any Receivable, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its business.

Collection of Receivables; Management of Collateral. (a) The Upon the occurrence and during the continuance of any Default or any Event of Default, or if Availability shall at any time be less than $3,000,000, and if the Agent in its sole discretion so requests, the Borrowers will, at their own cost and expense, (i) arrange for remittances on Receivables of each of the Receivables Grantors to be made directly to lockboxes designated by the Agent or in such other manner as the Agent may direct, and (ii) promptly deposit, or cause to be deposited, all payments received by the Receivables Grantors Borrowers on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated by the Agent in precisely the form received (but with any endorsements of the Receivables Grantors Borrowers necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors Borrowers for and as the Lenders' property and shall not be commingled with the Receivables GrantorsBorrowers' other funds. All remittances and payments that are deposited in accordance with the foregoing will, after two one Business Days Day (or three two Business Days in the case of deposits that are made after 1:00 p.m. (2:00 p.m., New York time)), be applied by the Agent to reduce the outstanding balance of the Revolving Credit Loans, subject to final collection in cash of the item deposited. Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent's security interest to any and all Customers or any third party holding or otherwise concerned with any of the Collateral, and thereafter the Agent shall have the sole right to collect the Receivables and/or take possession of the Collateral and the books and records relating thereto. The Receivables Grantors Borrowers shall not, without the Agent's prior written consent, grant any extension of the time of payment of any Receivable, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its businessas permitted by Section 10.03 hereof.

Collection of Receivables; Management of Collateral. (a) The Borrowers Borrower will, at their its own cost and expense, (i) arrange for remittances on Receivables of each of the Receivables Grantors Borrower to be made directly to lockboxes designated by the Agent or in such other manner as the Agent may direct, and (ii) promptly deposit, or cause to be deposited, all payments received by the Receivables Grantors Borrower on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated by the Agent in precisely the form received (but with any endorsements of the Receivables Grantors Borrower necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors Borrower for and as the Lenders' property and shall not be commingled with the Receivables Grantors' Borrower's other funds. All Upon the occurrence and during the continuance of any Default or Event of Default, all remittances and payments that are deposited in 86 92 accordance with the foregoing will, after two Business Days (or three Business Days in the case of deposits that are made after 1:00 p.m. (New York time)), will be applied by the Agent to reduce the outstanding balance (or if such balance is reduced to zero, to be held by the Agent as cash collateral, subject to withdrawal by the Borrower) of the Revolving Credit Loans, subject to final collection in cash of the item depositeddeposited and subject to the assessment of a two-day collection charge. Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent's security interest to any and all Customers or any third party holding or otherwise concerned with any of the Collateral, and thereafter the Agent shall have the sole right to collect the Receivables and/or take possession of the Collateral and the books and records relating thereto. The Receivables Grantors Borrower shall not, without the Agent's prior written consent, grant any extension of the time of payment of any Receivable, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its business.

Collection of Receivables; Management of Collateral. (a) The Borrowers Each Borrower will, at their its own cost and expense, (i) arrange for remittances on Receivables of each of the Receivables Grantors to be made directly to lockboxes designated reasonably approved by the Agent or in such other manner as the Agent may directAgent, and (ii) promptly deposit, or cause to be deposited, deposit all payments received by the Receivables Grantors such Borrower on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated by the Agent in precisely the form received (but with any endorsements of the Receivables Grantors such Borrower necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors such Borrower for and as the Lenders' property and shall not be commingled with the Receivables Grantors' such Borrower's other funds. All remittances and payments that are deposited in accordance with the foregoing will, after two Business Days (or three Business Days in the case of deposits that are made after 1:00 p.m. (New York time)), will be applied by the Agent to immediately reduce the outstanding balance of the Revolving Credit Loans, subject to final collection in cash of the item depositeddeposited and subject to the assessment of a two day collection charge. Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent's security interest to any and all Customers or any third party holding or otherwise concerned with any of the Collateral, and thereafter the Agent shall have the sole right to collect the Receivables and/or take possession of the Collateral and the books and records relating thereto. The Receivables Grantors shall notNo Borrower shall, without the Agent's prior written consent, grant any extension of the time of payment of any Receivable, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its businessas permitted by Section 10.03 hereof.

Collection of Receivables; Management of Collateral. (a) The Borrowers At the request of the Agent, upon the occurrence and continuance of an Event of Default, the Borrower will, at their its own cost and expense, (i) arrange for remittances on Receivables of each of the Receivables Grantors to be made directly to lockboxes designated by the Agent or in such other manner as the Agent may direct, and (ii) promptly deposit, or cause to be deposited, deposit all payments received by the Receivables Grantors Borrower on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated by the Agent in precisely the form received (but with any endorsements of the Receivables Grantors Borrower necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors Borrower for and as the Lenders' property and shall not be commingled with the Receivables Grantors' Borrower's other funds. All remittances and payments that are deposited in accordance with the foregoing will, after two Business Days (or three Business Days in the case of deposits that are made after 1:00 p.m. (New York time)), be applied by the Agent to reduce the outstanding balance of the Revolving Credit Loans, subject to final collection in cash of the item deposited. Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent's security interest to any and all Customers or any third party holding or otherwise concerned with any of the 76 83 Collateral, and thereafter the Agent shall have the sole right to collect the Receivables and/or take possession of the Collateral and the books and records relating thereto. The Receivables Grantors Borrower shall not, without the Agent's prior written consent, grant any extension of the time of payment of any Receivable, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its businessas permitted by Sec tion 10.03 hereof.

Collection of Receivables; Management of Collateral. (a) The Borrowers Borrower will, at their its own cost and expense, (i) arrange for remittances on Receivables of each and all other cash receipts of the Receivables Grantors Borrower and its subsidiaries from any source including, without limitation, payments from retail stores, licensees, the Factor and trade debtors to be made directly to lockboxes designated by the Agent or in such other manner as the Agent may direct, and (ii) promptly deposit, or cause to be deposited, all payments received by the Receivables Grantors Borrower and its subsidiaries on account of ReceivablesReceivables and all other cash receipts described in clause (i) above, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated by the Agent in precisely the form received (but with any endorsements of the Receivables Grantors Borrower necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors Borrower for and as the Lenders' property and shall not be commingled with the Receivables Grantors' Borrower's other funds. All remittances Each Business Day, provided (i) that Availability is greater than zero dollars and payments that are deposited (ii) the aggregate amount of all funds being held in such designated accounts in accordance with the foregoing willis less than $500,000, after two Business Days (or three Business Days in the case of deposits that are made after 1:00 p.m. (New York time))Agent may transfer all such funds to the Borrower's general operating account; otherwise, all such funds not so transferred will be applied by the Agent to reduce the outstanding balance (or if such balance is reduced to zero, to be held by the Agent as cash collateral) of the Revolving Credit Loans, Loans subject to final collection in cash of the item depositeddeposited and subject to the assessment of a two-day collection charge. In the event that Availability is less than zero dollars, as determined by the Agent in its sole discretion, any or all funds on deposit in the Borrower's general operating account may be applied by the Agent to reduce the outstanding balance (or if such balance is reduced to zero, to be held by the Agent as cash collateral) of the Revolving Credit Loans. The Agent, in its sole discretion, shall have the right to modify any provision of this Section 10.01(a), including, without limitation, applying all funds being held in the designated accounts to satisfy the Obligations. Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent's security interest to any and all Customers or any third party holding or otherwise concerned with any of the Collateral, and thereafter the Agent shall have the sole right to collect the Receivables and/or take possession of the Collateral and the books and records relating thereto. The Receivables Grantors Borrower shall not, without the Agent's prior written consent, grant any extension of the time of payment of any Receivable, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its business.

Collection of Receivables; Management of Collateral. (a) The Borrowers At the request of the Agent upon the occurrence and continuance of an Event of Default, the Borrower will, at their its own cost and expense, (i) arrange for remittances on Receivables of each of the Receivables Grantors to be made directly to lockboxes designated by the Agent or in such other manner as the Agent may direct, and (ii) promptly deposit, or cause to be deposited, deposit all payments received by the Receivables Grantors Borrower on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated by the Agent in precisely the form received (but with any endorsements of the Receivables Grantors Borrower necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors Borrower for and as the Lenders' property and shall not be commingled with the Receivables Grantors' Borrower's other funds. All remittances and payments that are deposited in accordance with the foregoing will, after two Business Days (or three Business Days in the case of deposits that are made after 1:00 p.m. (New York time)), be applied by the Agent to reduce the outstanding balance of the Revolving Credit Loans, subject to final collection in cash of the item deposited. Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent's security interest to any and all Customers or any third party holding or otherwise concerned with any of the Collateral, and thereafter the Agent shall have the sole right to collect the Receivables and/or take possession of the Collateral and the books and records relating thereto. The Receivables Grantors Upon the occurrence and continuance of an Event of Default, the Borrower shall not, without the Agent's prior written consent, grant any extension of the time of payment of any Receivable, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its businessthereon.

Collection of Receivables; Management of Collateral. (a) The Borrowers On or prior to the Compliance Date, the Company will, at their its own cost and expense, (i) arrange for remittances on Receivables of each of the Receivables Grantors to be made directly to lockboxes designated a post office box under the Lender's sole dominion and control established by the Agent or in such other manner as Company (the Agent may direct"Lockbox"), and (ii) promptly deposit, or cause to be deposited, deposit all payments received by the Receivables Grantors Company on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated into a blocked account under the Lender's sole dominion and control established by the Agent Company at the Lender (the "Blocked Account"), in precisely the form received (but with any endorsements of the Receivables Grantors Company necessary for deposit or collection), subject to withdrawal by the Agent Lender only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors Company for and as the Lenders' Lender's property and shall not be commingled with the Receivables Grantors' Company's other funds. All remittances and payments that are deposited in accordance with the foregoing will, after two Business Days (or three Business Days in the case of deposits that are made after 1:00 p.m. (New York time)), Blocked Account will be applied by the Agent Lender to reduce the outstanding balance Aggregate Outstandings of the Revolving Credit LoansLoans owing to the Lender and for cash requirements of the Company, subject to final collection in cash of the item depositeddeposited and subject to the assessment of a one day collection charge. The Lender may charge the Company's account for the amount of any item of payment which is returned to Lender unpaid or otherwise dishonored. The Lender shall not be required to deposit any check which bears the legend "Payment in Full" or words of similar import, unless the Company shall have previously informed the Lender to accept such check. Upon the occurrence and continuance of an Event of DefaultDefault following the Compliance Date, the Agent Lender may send a notice of assignment and/or notice of the Agent's security interest in favor of the Lender to any and all Customers or any third party holding or otherwise concerned with any of the Collateralcollateral, and thereafter the Agent Lender shall have the sole right to collect the Receivables and/or take possession of the Collateral collateral and the books and records relating thereto. The Receivables Grantors Company shall not, without the AgentLender's prior written consent, grant any extension of the time of payment of any ReceivableAccount, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its businessas permitted by Section 10.03 hereof.

Collection of Receivables; Management of Collateral. (a) The At the request of the Agent, the Borrowers will, at their own cost and expense, (i) arrange for remittances on Receivables of each of the Receivables Grantors to be made directly to lockboxes designated by the Agent or in such other manner as the Agent may direct, and (ii) promptly deposit, or cause to be deposited, deposit all payments received by the Receivables Grantors Borrowers on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated by the Agent in precisely the form received (but with any endorsements of the Receivables Grantors Borrowers necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors Borrowers for and as the Lenders' property and shall not be commingled with the Receivables GrantorsBorrowers' other funds. All remittances and payments that are deposited in accordance with the foregoing will, after two Business Days (or three Business Days in the case of deposits that are made after 1:00 p.m. (New York time)), will be applied by the Agent on the day received to reduce the outstanding balance of the Revolving Credit Loans, subject to final collection in cash of the item deposited, but for purposes of the calculation of interest and fees on the Revolving Credit Loans, such remittances and payments shall be deemed to be applied to the Revolving Credit Loans after one and one-half Business Days. Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent's security interest to any and all Customers or any third party holding or otherwise concerned with any of the Collateral, and thereafter the Agent shall have the sole right to collect the Receivables and/or take possession of the Collateral and the books and records relating thereto. The Receivables Grantors Borrowers shall not, without the Agent's prior written consent, except in the ordinary course of business and in compliance with its past practices, grant any extension of the time of payment of any Receivable, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its businessas permitted by Section 10.03 hereof.

Collection of Receivables; Management of Collateral. (a) The At the request of the Agent, the Borrowers will, at their own cost and expense, (i) arrange for remittances on Receivables of each of the Receivables Grantors to be made directly to lockboxes designated by the Agent or in such other manner as the Agent may directdirect (including triparty agreements satisfactory to the Agent), and (ii) promptly deposit, or cause to be deposited, all payments received by the Receivables Grantors Borrowers on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated by the Agent in precisely the form received (but with any endorsements of the Receivables Grantors Borrowers necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors Borrowers for and as the Lenders' property and shall not be commingled with the Receivables GrantorsBorrowers' other funds. All If at any time (i) until the completion of a Public Offering Total Availability shall be less than $5,000,000, (ii) after the completion of such Public Offering Total Availability shall be less than $5,000,000 or (iii) a Default or Event of Default shall have occurred and be continuing, all remittances and payments that are deposited in accordance with the foregoing will, after two Business Days (or three Business Days in the case of deposits that are made after 1:00 p.m. (New York time)), will be applied by the Agent to reduce the outstanding balance (or if such balance is reduced to zero, to be held by the Agent as cash collateral), of the Revolving Credit Loans, subject to final collection in cash of the item depositeddeposited and, if such lockboxes are maintained with the Agent, subject to the assessment of a two-day collection charge. Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent's security interest to any and all Customers or any third party holding or otherwise concerned with any of the Collateral, and thereafter the Agent shall have the sole right to collect the Receivables and/or take possession of the Collateral and the books and records relating thereto. The Receivables Grantors Borrowers shall not, without the Agent's prior written consent, grant any extension of the time of payment of any Receivable, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its business.

Collection of Receivables; Management of Collateral. (a) The Borrowers will, at their own cost and expense, (i) at the request of the Agent upon the occurrence and continuance of an Event of Default, arrange for remittances on Receivables of each of the Receivables Grantors to be made directly to lockboxes designated by the Agent or in such other manner as the Agent may direct, and (ii) promptly deposit, (or cause to be deposited, within 90 days following a Permitted Acquisition) deposit all payments received by the Receivables Grantors Borrowers on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more accounts designated by the Agent in precisely the form received (but with any endorsements of the Receivables Grantors Borrowers necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by the Receivables Grantors Borrowers for and as the Lenders' property and shall not be commingled with the Receivables GrantorsBorrowers' other funds. All remittances and payments that are deposited in accordance with the foregoing will, after two Business Days (or three Business Days in the case of deposits that are made after 1:00 p.m. (New York time)), will be immediately applied by the Agent to reduce the outstanding balance of the Revolving Credit Loans, subject to the continued accrual of interest on such remittances and payments for two (2) Business Days (or three (3) Business Days in the case of remittances and payments received after 12:00 noon (New York time)) and in any event subject to final collection in cash of the item deposited. So long as the procedures set forth in the preceding paragraph remain in effect, the arrangements between the Agent and the Lenders with respect to making of Revolving Credit Loans shall be handled on the following basis: On a weekly basis the Agent will provide each Lender with a statement showing for the period since the last statement the aggregate principal amount of new Revolving Credit Loans made to the Borrowers, the amount of remittances and payments actually collected and applied by the Agent to reduce the outstanding principal balance of the Revolving Credit Loans during such period and the outstanding principal balance of the Revolving Credit Loans at the end of such period. If a Lender's pro rata share (based on such Lender's Revolving Credit Commitment) of Revolving Credit Loans made during such period exceeds such Lender's pro rata share of remittances and payments applied to reduce the Revolving Credit Loans during such period, the difference will be paid in same day funds by such Lender to the Agent, and if such Lender's pro rata share of remittances and payments applied to reduce the Revolving Credit Loans during such period exceeds such Lender's pro rata share of Revolving Credit Loans made during such period, the difference will be paid in same day funds by the Agent to such Lender. Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent's security interest to any and all Customers or any third party holding or otherwise concerned with any of the Collateral, and thereafter the Agent shall have the sole right to collect the Receivables and/or take possession of the Collateral and the books and records relating theretothereto and to exercise all rights included in the Collateral. All amounts collected on Receivables when received by the Agent shall be credited to the Borrowers' account, after adding two Business Days for collection, clearance and transfer of remittances, conditional upon final payment to the Agent. Upon the occurrence and during the continuance of an Event of Default, all amounts collected on Receivables may be applied to reduce the Loans in the Agent's sole discretion. The Receivables Grantors Borrowers shall not, without the Agent's prior written consent, grant any extension of the time of payment of any Receivable, compromise or settle any Receivable 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, prior to the occurrence and continuance of an Event of Default, in the ordinary course of its businessas permitted by Section 10.03 hereof.