Covenants Concerning the Collateral. During the Term, Borrower covenants that it shall: (a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations; (b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets to anyone other than Lender and except for Permitted Liens; (c) place notations upon Borrower's books of account and any financial statement prepared by Borrower to disclose Lender's security interest in the Collateral; (d) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property; (e) not extend the payment terms of any Receivable without prompt notice thereof to Lender; (f) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens); (g) defend the Collateral against the claims and demands of all parties; and (h) cause, at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment and Lender shall have the right in its sole discretion based on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability.
Appears in 1 contract
Covenants Concerning the Collateral. During the Term, Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the sale of Spare Parts Inventory, (iii) the disposition or transfer of obsolete and worn-out Equipment in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair -fair market value of not more than $10,000 and 200,000 and, if in excess of said amount, only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the ObligationsObligations and (iv) disposition of General Intangibles in the ordinary course of business;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets to anyone other than Lender except as set forth on Schedule l(B) attached hereto and except for Permitted Liensmade a part hereof;
(c) place notations upon Borrower's books of account account: and any financial statement prepared by Borrower to disclose Lender's security interest in the Collateral;
(d) defend the Collateral against the claims and demands of all parties;
(e) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved, ordinary-wear and tear excepted. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(ef) not extend the payment terms of any Receivable without prompt notice thereof to Lender;
(fg) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first first. security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all partiesCollateral; and
(h) cause, Borrower shall promptly provide Lender with duplicate originals of all credits which Borrower issues to its Customers and immediately notify Lender of any merchandise returns or Disputes. Borrower shall settle all Disputes at least annually, an appraisal to be performed by an appraiser satisfactory no cost or expense to Lender. Should Lender so elect, during the continuation of its Equipment and any Event of Default, Lender shall have the right may at any time in its sole discretion based (i) withdraw Borrower's authority to issue credits to its Customers without Lender's prior written consent; (ii) litigate Disputes or settle them directly with Customers on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is terms acceptable to Lender Lender; or (iii) direct Borrower to set aside and identify as Lender's property any returned or repossessed merchandise or other goods which by sale resulted in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver Receivables theretofore assigned to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability."Retained Goods"
Appears in 1 contract
Samples: Accounts Receivable Management and Security Agreement (World Airways Inc /De/)
Covenants Concerning the Collateral. During the Termterm hereof, Borrower covenants we covenant that it we shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of businessevent any amounts due and owing from any Customer to us on any Eligible Receivable shall become subject to any Customer Dispute, or to any other adjustment otherwise permitted to be made in accordance with the terms and (ii) the disposition or transfer provisions hereof in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 and only prior to the extent occurrence of an Default hereunder, we agree that (x) we shall, at the proceeds time of the submission of the next Borrowing Base Certificate required to be delivered to you immediately following the date on which we learn thereof, provide you with notice thereof. We further agree that we shall also notify you promptly of all returns and credits in respect of any such disposition are used to acquire replacement Equipment Receivables included within a Borrowing Base Certificate, which is subject to Lender's first priority security interest or (y) notice shall specify the proceeds of which are remitted to Lender in reduction of the ObligationsReceivables affected.;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets to anyone other than Lender and except for Permitted Liens;
(c) place notations upon Borrower's our books of account and any financial statement prepared by Borrower us to disclose Lender's your security interest in the Collateral;
(c) defend the Collateral against the claims and demands of all parties;
(d) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower We shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(e) not extend the payment terms of any Receivable without prompt notice thereof to Lenderyou;
(f) perform all other steps requested by Lender reasonable and necessary to create and maintain in Lender's your favor a valid perfected first security interest in all Collateral (except for Permitted Liens);Collateral; and
(g) defend the Collateral against the claims and demands we shall promptly provide you with duplicate originals of all partiescredits which we issue to our Customers and immediately notify you of any merchandise returns or Customer Disputes. We shall settle all Customer Disputes at no cost or expense to you. Should you so elect, upon the occurrence and continuance of any Default, you may at any time in your discretion (i) withdraw our authority to issue credits to our Customers without your prior written consent; and
(hii) cause, at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment and Lender shall have the right in its sole discretion based litigate Customer Disputes or settle them directly with Customers on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is terms acceptable to Lender you; or (iii) direct us to set aside and identify as your property any returned or repossessed merchandise or other goods which by sale resulted in its sole discretion Receivables theretofore assigned to you. All such goods (and on which Lender has a first perfected the proceeds thereof) shall be (A) held by us in trust for you as your property, (B) subject to your security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver to Lender within sixty interest hereunder and (60C) days disposed of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may only in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availabilityaccordance with your express written instructions.
Appears in 1 contract
Samples: Factoring Agreement (Eccs Inc)
Covenants Concerning the Collateral. During the Term, Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer of obsolete and worn-out Equipment in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 and only to the extent that (x) provided the proceeds of any such disposition dispositions which exceed $250,000 in the aggregate during any fiscal year (x) are used or committed to be used to acquire replacement Equipment which is subject to LenderAgent's first priority security interest (subject to Permitted Liens as described in clause (vi) of the definition thereof) and which has a fair market value not less than the Equipment which was disposed or transferred or (y) to the extent not so used or committed to be used, the proceeds of which are remitted to Lender Agent in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets to anyone other than Lender Agent except (i) Permitted Liens and except for Permitted Liens;(ii) as set forth on Schedule 1(A) attached hereto and made a part hereof.
(c) place notations upon Borrower's books of account and any quarterly or annual financial statement prepared by Borrower to disclose LenderAgent's security interest in the Collateral;
(d) defend the Collateral against the claims and demands of all parties.
(e) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(ef) not extend the payment terms of any Receivable without prompt notice thereof to LenderAgent;
(fg) perform all other steps requested by Lender to create and maintain in LenderAgent's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all partiesCollateral; and
(h) cause, at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment and Lender shall have the right in its sole discretion based on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver promptly upon request provide Agent with duplicate originals of all credits which Borrower issues to Lender within sixty (60) days its Customers and immediately notify Agent of any merchandise returns or Disputes. Borrower shall settle all Disputes at no cost or expense to Lenders. Should Agent so elect, upon the Closing Dateoccurrence of any Event of Default, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender Agent may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability.any time in
Appears in 1 contract
Samples: Accounts Receivable Management and Security Agreement (TMP Worldwide Inc)
Covenants Concerning the Collateral. During the Term, Borrower ----------------------------------- covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 250,000 and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets to anyone other than Lender and except for Permitted Liens;
(c) place notations upon Borrower's books of account and any financial statement prepared by Borrower to disclose Lender's security interest in the Collateral;
(d) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(e) not extend the payment terms of any Receivable without prompt notice thereof to Lender;
(f) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);; and
(g) defend the Collateral against the claims and demands of all parties; and
(h) cause, at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment and Lender shall have the right in its sole discretion based on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability.
Appears in 1 contract
Covenants Concerning the Collateral. During the Term, Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer of obsolete and wornout Equipment in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than One Hundred Thousand Dollars ($10,000 and 100,000)and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets to anyone other than Lender except as set forth on Schedule 1(A) attached hereto and except for Permitted Liensmade a part hereof;
(c) place notations upon Borrower's books of account and any financial statement prepared by Borrower to disclose Lender's security interest in the Collateral;any
(d) defend the Collateral against the claims and demands of all parties and the Borrower shall defend and protect its title to, its possession of and the Lender's lien in the Collateral against all claims, Liens, demands, penalties and rights asserted by any Person or Persons other than Permitted Liens. Without derogating the obligation of the Borrower under Section 8(o) below in the event that the Borrower acquires any interest in any property that is not subject to a perfected Lien in favor of the Lender prior to but no later than simultaneously with any each requisition the Borrower shall take such action (including, without limitation, the preparation and filing of financing statements and aircraft chattel mortgage in form and substance satisfactory to the Lender) as the Lender shall request in order to create and/or perfect a first priority Lien in favor of the Lender on such property.
(e) keep and maintain the Equipment and all property in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;:
(eA) Without in any way limiting the generality of the foregoing, the Borrower agrees to keep and maintain, or cause to be kept and maintained, the Aircraft, the Airframes, the Aircraft Engines and the Aircraft Parts in good operating condition, except for ordinary wear and tear, and to make or cause to be made all necessary repairs and replacements thereof so that the value and operating efficiency thereof shall at all times be maintained and preserved in accordance with industry standards and any and all applicable Requirements of Law and, in the case of each Aircraft not registered with the FAA, so as to maintain such Aircraft as readily certifiable as airworthy under Part 121 or Part 125 of the U.S. Federal Aviation Regulations, and any successor, substitute or equivalent regulations applicable to the operation of commercial aircraft (regardless of the jurisdiction of its registration). Without in any way limiting the foregoing, all Aircraft held by the Borrower for lease or sale shall, while not in passenger or cargo operation, be stored and maintained in accordance with all manufacturers approved storage procedures for long-term or short-term storage, as the case may be.
(B) Maintain or cause to be maintained in the English language, or provide or cause to be provided promptly upon the request of the Lender English translations of, all records, logs and other materials required to be maintained in respect of the Aircraft under each applicable Requirement of Law.
(f) not extend the payment terms of any Receivable without prompt notice thereof to Lender;
(fg) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all partiesCollateral; and
(h) cause, Borrower shall promptly (if requested by Lender to do so) provide Lender with duplicate originals of all credits which Borrower issues to its Customers and immediately notify Lender of any merchandise returns or Disputes. Borrower shall settle all Disputes at least annually, an appraisal to be performed by an appraiser satisfactory no cost or expense to Lender. Should Lender so elect, upon the occurrence of its Equipment and any Event of Default, Lender shall have the right may at any time in its sole discretion based (i) withdraw Borrower's authority to issue credits to its Customers without Lender's prior written consent; (ii) litigate Disputes or settle them directly with Customers on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is terms acceptable to Lender Lender; or (iii) direct Borrower to set aside and identify as Lender's property any returned or repossessed merchandise or other goods which by sale resulted in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver Receivables theretofore assigned to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability."Retained Goods"
Appears in 1 contract
Samples: Credit and Security Agreement (Aviation Distributors Inc)
Covenants Concerning the Collateral. During the Term, each Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value for all Borrowers of not more than $10,000 100,000 and only to the extent that (x) the proceeds (if any) of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds (if any) of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets of Borrowers to anyone other than Lender and except for Permitted Liens;
(c) place notations upon each Borrower's books of account and any financial statement prepared by such Borrower to disclose Lender's security interest in the Collateral;
(d) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and except for obsolete and worn-out equipment, shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. No Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(e) not extend the payment terms of any Receivable beyond thirty (30) days from invoice date without prompt notice thereof to Lender;
(f) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all parties; and
(h) cause, cause at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment Inventory and the ADC Inventory and Lender shall have the right in its sole discretion based on upon such appraisal to decrease the amount to the amount of Amortizing Availability Inventory availability to a sum an amount not greater than seventy percent eighty (7080%) of the knockdown liquidation auction value of the Equipment Inventory and ADC Inventory which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on interest as set forth such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availabilityappraisal.
Appears in 1 contract
Covenants Concerning the Collateral. During the Term, Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer of obsolete and wornout Equipment in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 100,000 and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets to anyone other than Lender except as set forth on Schedule 1(A) attached hereto and except for Permitted Liensmade a part hereof;
(c) place notations upon Borrower's books of account and any financial statement (or the notes thereto) prepared by Borrower to disclose Lender's security interest in the Collateral;
(d) defend the Collateral against the claims and demands of all parties.
(e) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preservedin accordance with Borrower's current practices. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(ef) not extend the payment terms of any Receivable without prompt notice thereof to Lender;
(fg) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all partiesCollateral; and
(h) cause, promptly provide Lender with duplicate originals of all credits which Borrower issues to its Customers and promptly notify Lender of any material Disputes. Borrower shall settle all Disputes at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment and Lender shall have the right in its sole discretion based on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is acceptable no cost or expense to Lender in accordance with its sole past practices. Should Lender so elect, upon the occurrence of any Event of Default, Lender may at any time in its discretion (i) withdraw Borrower's authority to issue credits to its Customers without Lender's prior written consent; (ii) litigate Disputes or settle them directly with Customers on terms acceptable to Lender; or (iii) direct Borrower to set aside and on identify as Lender's property any returned or repossessed merchandise or other goods which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver sale resulted in Receivables theretofore assigned to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability."Retained Goods"
Appears in 1 contract
Samples: Revolving Credit and Security Agreement (Morgan Group Inc)
Covenants Concerning the Collateral. During the Term, Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer of obsolete and wornout Equipment in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment Borrower having an aggregate fair market value of not more than $10,000 250,000 and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets to anyone other than Lender except as set forth on Schedule 1(C) attached hereto and except for Permitted Liensmade a part hereof;
(c) place notations upon Borrower's books of account and any financial statement prepared by Borrower to disclose Lender's security interest in the Collateral;
(d) defend the Collateral against the claims and demands of all parties.
(e) keep and maintain the Equipment Collateral in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(ef) not extend the payment terms of any Receivable without prompt notice thereof to Lender;
(fg) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all partiesCollateral; and
(h) cause, promptly provide Lender with duplicate originals of all credits which Borrower issues to its Customers and immediately notify Lender of any merchandise returns or Disputes. Borrower shall settle all Disputes at least annually, an appraisal to be performed by an appraiser satisfactory no cost or expense to Lender. Should Lender so elect, upon the occurrence of its Equipment and any Event of Default, Lender shall have the right may at any time in its sole discretion based (i) withdraw Borrower's authority to issue credits to its Customers without Lender's prior written consent; (ii) litigate Disputes or settle them directly with Customers on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is terms acceptable to Lender Lender; or (iii) direct Borrower to set aside and identify as Lender's property any returned or repossessed merchandise or other goods which by sale resulted in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver Receivables theretofore assigned to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability."Retained Goods"
Appears in 1 contract
Covenants Concerning the Collateral. During the Term, each Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer of Equipment in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having the Term aving an aggregate fair market value of not more than $10,000 200,000 so long as such disposition does not adversely affect the business, prospects, profits or condition (financial or otherwise) of Borrowers and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest interest, subject to the Intercreditor Agreement or (y) the proceeds of which are remitted to Lender in reduction of the Obligations, subject to the Intercreditor Agreement;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's Borrowers' other assets to anyone other than Lender except as set forth on SCHEDULE 1(A) attached hereto and except for Permitted Liensmade a part hereof;
(c) place notations upon Borrower's Borrowers' books of account and any financial statement prepared by Borrower Borrowers to disclose Lender's security interest in the Collateral;
(d) defend the Collateral against the claims and demands of all parties;
(e) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower Borrowers shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(ef) not extend the payment terms of any Receivable without prompt notice thereof to Lender;; and
(fg) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all parties; and
(h) cause, at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment and Lender shall have the right in its sole discretion based on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing AvailabilityCollateral.
Appears in 1 contract
Covenants Concerning the Collateral. During the Term, each Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory Inventory, to the extent applicable, in the ordinary course of business, and (ii) the disposition or transfer in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 and only provided, that, Private Cable shall be permitted to sell any Equipment or wiring to a Customer pursuant to the extent that "buy back" provision of the Cable Contract with such Customer so long as (x) the proceeds of any such disposition are used applicable Borrower receives the purchase price specified in the applicable Cable Contract with respect to acquire replacement Equipment which is subject to Lender's first priority security interest or the Collateral sold and (y) all of the proceeds of which each such sale up to an amount equal to the aggregate Revolving Advances made by Access Capital in connection with such Cable Contract are remitted to Lender in reduction Access Capital for application to the outstanding principal amount of the Obligations;Revolving Advances.
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets of any Borrower to anyone other than Lender Access Capital and except for Permitted Liens, provided, however, that to the extent any Person shall make an equity contribution/investment in Wireless in an amount greater than $1,000,000 and as a condition of such contribution/investment, such Person requires that Wireless grant such Person a security interest in any of its assets, Access Capital will not unreasonably withhold or delay its consent to such a transaction so long as (i) Access Capital shall have received copies of all documentation relating to the equity contribution/investment and the security interest being granted with respect thereto, which documentation shall be in form and substance satisfactory to Access Capital and (ii) such Person shall have entered into a subordination and/or intercreditor agreement with Access Capital, which agreement(s) shall be in form and substance satisfactory to Access Capital in all respects;
(c) place notations upon each Borrower's books of account and any financial statement prepared by Borrower to disclose LenderAccess Capital's security interest in the Collateral;
(d) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times to the extent possible be maintained and preserved. To the extent possible, no Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(e) not extend the payment terms of any Receivable without prompt notice thereof to LenderAccess Capital;
(f) perform all other steps reasonably requested by Lender Access Capital to create and maintain in LenderAccess Capital's favor a valid perfected first security interest in all Collateral (except for of each Borrower subject only to Permitted Liens);.
(g) defend the Collateral against the claims and demands of all parties; and
(h) cause, at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment and Lender shall have the right in its sole discretion based on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability.
Appears in 1 contract
Samples: Loan and Security Agreement (Magnavision Corporation)
Covenants Concerning the Collateral. During the Term, Borrower each Borrower, EPSC and ADI covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value for all Borrower's, EPSC and ADI of not more than $10,000 100,000 and only to the extent that (x) the proceeds (if any) of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds (if any) of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets of Borrowers, EPSC or ADI to anyone other than Lender and except for Permitted Liens;
(c) place notations upon each Borrower's, EPSC's or ADI's books of account and any financial statement prepared by Borrower each such entity to disclose Lender's security interest in the Collateral;
(d) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and except for obsolete and worn-out equipment, shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. No Borrower shall not and neither EPSC nor ADI shall permit any such items to become a fixture to real estate or accessions to other personal property;
(e) not extend the payment terms of any Receivable beyond thirty (30) days from invoice date without prompt notice thereof to Lender;
(f) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all al parties; and
(h) cause, cause at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment the Inventory of Borrowers and the ADC Inventory and Lender shall have the right in its sole discretion based on upon such appraisal to decrease the amount to the amount of Amortizing Availability Inventory availability to a sum an amount not greater than seventy percent eighty (7080%) of the knockdown liquidation auction value of the Equipment Inventory of Borrowers and ADC Inventory which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver to Lender within sixty interest as set forth such appraisal."
(60f) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may Paragraph 10 is amended in its sole discretion based on such appraisal increase the Amortizing Availability entirety to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability.provide as follows:
Appears in 1 contract
Samples: Amendment and Assumption Agreement (Ecoscience Corp/De)
Covenants Concerning the Collateral. During the Term, each Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer of obsolete or worn-out Equipment in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 250,000 in the aggregate for such Borrower and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of such Borrower's other assets to anyone other than Lender and except for Permitted Liens;
(c) place notations upon Borrower's books of account and disclose in appropriate footnotes under GAAP in any financial statement prepared by Borrower it to disclose Lender's security interest in the Collateral;
(d) defend the Collateral against the claims and demands of all parties;
(e) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all reasonable and necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. No Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal propertyproperty if such items have an original cost in excess of $250,000 in the aggregate;
(ef) not extend the payment terms of any Receivable in excess of $250,000 without prompt notice thereof to Lender;
(fg) at any time and from time to time, take such steps as Lender may reasonably request (i) to obtain an acknowledgment, in form and substance reasonably satisfactory to Lender, of any bailee having possession of any of the Collateral, stating that the bailee holds such Collateral for Lender, (ii) to obtain "control" of any letter-of-credit rights, deposit accounts or electronic chattel paper (as such terms are defined in UCC Article 9 with corresponding provisions thereof defining what constitutes "control" for such items of Collateral), with any agreements establishing control to be in form and substance reasonably satisfactory to Lender, and (iii) otherwise to insure the continued perfection and priority of Lender's security interest in any of the Collateral and of its rights therein;
(h) if such Borrower acquires a "commercial tort claim" (as such term is defined in UCC Article 9) in excess of $250,000, promptly notify Lender in writing therein providing a reasonable description and summary thereof, and upon delivery thereof to Lender, such Borrower shall be deemed to thereby grant to Lender (and each Borrower hereby grants to Lender) a security interest and lien in and to such commercial tort claim and all proceeds thereof, all upon the terms of and governed by this Agreement[, provided, that so long as no Default has occurred, this provision shall not limit Borrowers' right to litigate any such claims]; and
(i) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all parties; and
(h) cause, at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment and Lender shall have the right in its sole discretion based on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing AvailabilityCollateral.
Appears in 1 contract
Samples: Revolving Credit and Security Agreement (Spar Group Inc)
Covenants Concerning the Collateral. During the Term, Borrower covenants Borrowers covenant that it they shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer of obsolete and wornout Equipment in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 100,000.00 and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's Borrowers' other assets to anyone other than Lender and except for Permitted Liens;
(c) place notations to the extent required by GAAP and as required by the Securities and Exchange Commission upon Borrower's Borrowers' books of account and any financial statement prepared by Borrower to disclose Lender's security interest in the Collateral;
(d) defend the Collateral against the claims and demands of all parties;
(e) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(ef) not extend the payment terms of any Receivable without prompt notice thereof to Lender;
(fg) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all parties; and
(h) cause, Borrowers shall promptly provide Lender with duplicate originals of all credits which Borrowers issue to their Customers and immediately notify Lender of any Disputes. Borrowers shall settle all Disputes at least annually, an appraisal to be performed by an appraiser satisfactory no cost or expense to Lender. Should Lender so elect, upon the occurrence and during the continuance of its Equipment and any Event of Default, Lender shall have the right may at any time in its sole discretion based (i) withdraw Borrowers' authority to issue credits to its Customers without Lender's prior written consent; (ii) litigate Disputes or settle them directly with Customers on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is terms acceptable to Lender Lender; or (iii) direct Borrowers to set aside and identify as Lender's property any returned or repossessed merchandise or other goods which by sale resulted in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver Receivables theretofore assigned to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability."Retained Goods"
Appears in 1 contract
Samples: Accounts Receivable Management and Security Agreement (Precision Standard Inc)
Covenants Concerning the Collateral. During the Term, Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 25,000 and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations and (iii) the disposition of Equipment located in China provided that at the time of such disposition no Incipient Event of Default or Event of Default shall have occurred and the proceeds of such disposition are remitted to Lender in reduction of the Obligations;.
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets to anyone other than Lender and except for Permitted Liens;
(c) place notations upon Borrower's books of account and any financial statement prepared by Borrower to disclose Lender's security interest in the Collateral;
(d) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(e) not extend the payment terms of any Receivable without prompt notice thereof to Lender;
(f) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);; and
(g) defend the Collateral against the claims and demands of all parties; and
(h) cause, at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment and Lender shall have the right in its sole discretion based on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability.
Appears in 1 contract
Samples: Loan and Security Agreement (Creative Technologies Corp)
Covenants Concerning the Collateral. During the Term, each Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer of obsolete or worn-out Equipment in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 25,000 in the aggregate for such Borrower and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of such Borrower's other assets to anyone other than Lender and except for Permitted Liens;
(c) place notations upon Borrower's its books of account and disclose in appropriate footnotes under GAAP in any financial statement prepared by Borrower it to disclose Lender's security interest in the Collateral;
(d) defend the Collateral against the claims and demands of all parties;
(e) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. No Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(ef) not extend the payment terms of any Receivable without prompt notice thereof to Lender;; and
(fg) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all parties; and
(h) cause, at least annually, an appraisal to be performed by an appraiser satisfactory to Lender, of its Equipment and Lender shall have the right in its sole discretion based on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing AvailabilityCollateral.
Appears in 1 contract
Samples: Revolving Credit and Security Agreement (Spar Group Inc)
Covenants Concerning the Collateral. During the Term, Borrower covenants that it shall:
(a) not dispose of any of the its Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or granx x Xxxx xx any of Borrower's other assets to anyone other than Lender and its Collateral except for Permitted Liens;
(c) place notations upon Borrower's books of account and any annual audited consolidated financial statement of Borrower and its Subsidiaries prepared by Borrower to disclose Lender's security interest in the Collateral;
(d) keep defend the Collateral against the claims and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make demands of all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal propertyPersons;
(e) not extend the payment terms of any (i) Eligible Receivable or (ii) other Receivable in excess of $250,000 in the aggregate for all such other Receivables more than 30 Business Days, without prompt notice thereof to Lender;
(f) perform all other steps reasonably requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens)Collateral;
(g) defend promptly provide Lender with duplicate originals of all credits which it issues to its Customers and immediately notify Lender of any Disputes. Each of Borrower shall bear the cost of resolving all Disputes at no cost or expense to Lender. Should Lender so elect, upon the occurrence and during the continuation of any Event of Default, Lender may at any time in its discretion (i) withdraw Borrower's authority to issue credits to its Customers without Lender's prior written consent or (ii) litigate Disputes or settle them directly with Customers on terms acceptable to Lender;
(h) supply Lender each Business Day a report through the close of business the immediately preceding Business Day concerning the Collateral against the claims in form and demands substance satisfactory to Lender which report will contain, among other items (i) a listing of all partiesadditional Receivables created since the date of the previous report delivered pursuant to this Section 8(h), and setting forth the amount of such additional Receivables, the Customers of such Receivables, identified by Receivable, the volume of natural gas shipped to such Customers to create such Receivables, (ii) a listing of all invoices, by date, Customer and amount, issued since the date of the previous report delivered pursuant to this Section 8(h), together with a reconciliation in reasonable detail of any differences between invoices issued and Receivables created as described in the preceding clause (i), (iii) a computation in reasonable detail of the Formula Amount as of the close of business the immediately preceding Business Day, (iv) a listing as of the close of business of the immediately preceding Business Day of the Inventory located at the locations specified in Schedule 13(c), (v) a listing in reasonable detail as of the close of business of the immediately preceding Business Day setting forth the amount of obligations of Borrower secured by a UCC 0.000 Xxxx, xxether or not the Person entitled to such Lien has asserted or claimed such Lien, including, without limitation, a listing broken down by month incurred of an (a) obligations of Borrower to royalty interest owners, (b) obligations of Borrower to any other Hydrocarbon interest owners, (c) the payment of severance taxes on taxable wellx xxx (d) a calculation in reasonable detail showing the percentage of production from the Borrower's wellx, xxich would be entitled to the benefits of a UCC 9.319 Lien (provided that notwithstanding the foregoing, prior to the occurrence and continuation of an Event of Default, unless otherwise requested by Lender, Borrower shall only be obligated to deliver a report containing the information described in the foregoing clause (iv) and in this clause (v) monthly, within two Business Days after the 15th of the month) and (vi) such other information as Lender may reasonably request concerning the Collateral; and
(hi) cause, at least annually, an appraisal to be performed by an appraiser satisfactory deliver to Lender, monthly, on or before the fifteenth day of its Equipment and Lender shall have the right each month, a report, showing in its sole discretion based on such appraisal to decrease the amount detail all obligations of Amortizing Availability to a sum not greater than seventy percent (70%) Borrower created during any previous month which remain unpaid as of the knockdown liquidation value date of such report and which are secured by a UCC 0.000 Xxxx, xxether or not the Equipment which is acceptable Person entitled to such Lien has asserted or claimed such Lien.
(j) immediately notify Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, if Borrower shall deliver to Lender within sixty (60) days drill and complete or acquire any oil or gas well, of any interest therein, located other than in Waynx, Xxxxxx xxx Issaquena Counties County, Mississippi, Billxxxx, Xxnn xx Starxx Xxxnties, North Dakota, Lee Xxxnty, Florida or Austin, Brazoria, Calhoun, Chambers, Galveston, Hidaxxx, Xxx Xxxg, Xxxx, Xxve Oak, Starx, Xxx Xxxde, Wharxxx xx Zapaxx Xxxnties, Texas which notice will specify the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount location of such Amortizing Availability.well or
Appears in 1 contract
Samples: Accounts Receivable Management and Security Agreement (Transtexas Gas Corp)
Covenants Concerning the Collateral. During the Term, Borrower covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or otherwise except for (i) the sale of Inventory in the ordinary course of business, and (ii) the disposition or transfer of obsolete and wornout Equipment in the ordinary course of business during any fiscal year of obsolete and worn-out Equipment having an aggregate fair market value of not more than $10,000 and only to the extent that (x) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Lender's first priority security interest or (y) the proceeds of which are remitted to Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security interest in any Collateral or any of Borrower's other assets to anyone other than Lender except as set forth on Schedule 1(C) attached hereto and except for Permitted Liensmade a part hereof;
(c) place notations upon Borrower's books of account and any financial statement prepared by Borrower to disclose Lender's security interest in the Collateral;
(d) defend the Collateral against the claims and demands of all parties.
(e) keep and maintain the Equipment in good operating condition, except for ordinary wear and tear, and shall make all necessary repairs and replacements thereof so that the value and operating efficiency shall at all times be maintained and preserved. Borrower shall not permit any such items to become a fixture to real estate or accessions to other personal property;
(ef) not extend the payment terms of any Receivable without prompt notice thereof to Lender;
(fg) perform all other steps requested by Lender to create and maintain in Lender's favor a valid perfected first security interest in all Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of all partiesCollateral; and
(h) cause, promptly provide Lender with duplicate originals of all credits which Borrower issues to its Customers and immediately notify Lender of any merchandise returns or Disputes. Borrower shall settle all Disputes at least annually, an appraisal to be performed by an appraiser satisfactory no cost or expense to Lender. Should Lender so elect, upon the occurrence of its Equipment and any Event of Default, Lender shall have the right may at any time in its sole discretion based (i) withdraw Borrower's authority to issue credits to its Customers without Lender's prior written consent; (ii) litigate Disputes or settle them directly with Customers on such appraisal to decrease the amount of Amortizing Availability to a sum not greater than seventy percent (70%) of the knockdown liquidation value of the Equipment which is terms acceptable to Lender Lender; or (iii) direct Borrower to set aside and identify as Lender's property any returned or repossessed merchandise or other goods which by sale resulted in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate to be determined by Lender. In the event Borrower desires that Lender increase the Amortizing Availability, Borrower shall deliver Receivables theretofore assigned to Lender within sixty (60) days of the Closing Date, a Knockdown liquidation value appraisal of its Equipment performed by an Appraiser satisfactory to Lender and Lender may in its sole discretion based on such appraisal increase the Amortizing Availability to a sum not greater than seventy percent (70%) of the Knockdown liquidation value of the Equipment which is acceptable to Lender in its sole discretion and on which Lender has a first perfected security interest, amortizable at a rate equal to 1/48 of the original principal amount of such Amortizing Availability."Retained Goods"
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