Common use of Covenants Concerning the Collateral Clause in Contracts

Covenants Concerning the Collateral. (a) Each Borrower shall immediately inform the Administrative Agent of (1) any dispute in excess of $250,000 with a Customer and (2) the bankruptcy, insolvency, receivership, assignment for the benefit of creditors or suspension of business of any material Customer of which such Borrower has knowledge. No Borrower shall compromise or discount any Receivable without the prior written consent of the Administrative Agent except for (i) ordinary trade discounts or allowances for prompt payment, and (ii) prior to the occurrence of an Event of Default, such compromises or discounts that, after giving effect thereto, will not cause the Borrowing Base to be less than the unpaid principal balance of the Revolving Credit Exposure then outstanding. (b) Upon the written demand of the Administrative Agent following the occurrence of an Event of Default, each Borrower shall establish and maintain a lockbox with the Administrative Agent and shall direct all Customers to make payments on Collateral to such lockbox by printing such direction on all invoices given to Customers. Each Borrower also shall remit to such lockbox or deliver to the Administrative Agent all payments on Collateral received by such Borrower. Such payments shall be remitted or delivered in their original form on the day of receipt. All notes, checks and other instruments so received by each Borrower shall be duly endorsed to the order of the Administrative Agent. The payments remitted to the lockbox and all payments delivered to the Administrative Agent shall be credited to a cash collateral account maintained by the Administrative Agent in the name of the Company over which the Administrative Agent shall have the exclusive power of withdrawal. All collected funds in such cash collateral account shall be applied to the Obligations by the Administrative Agent on each Business Day, whether or not the Obligations are then due. (c) Upon the occurrence and during the continuation of an Event of Default, to facilitate direct collection of the Collateral, the Administrative Agent shall have the right to take over the post office boxes of the Borrowers or make other arrangements, with which the Borrowers shall cooperate, to receive the mail of each Borrower. (d) The Borrowers shall execute all other agreements, instruments and documents and shall perform all further acts that the Administrative Agent may require with respect to Receivables owing by the Government to ensure compliance with the Assignment of Claims Act, provided that, as long as no Event of Default has occurred and is continuing, the Administrative Agent has no present intent to require, but reserves the right to so require whether or not any Event of Default has occurred and is continuing, Assignment of Claims Act filings for any Government Contract. (e) All of the inventory and equipment of each Borrower will be kept only at the locations set forth on Schedule 3.2, or at such other locations as shall be disclosed in writing to the Administrative Agent by the Borrowers, other than inventory and equipment with an aggregate book value of not more than $250,000. The Borrowers shall give the Administrative Agent prior written notice before any material inventory or equipment is moved or delivered to a location other than such designated places of business, and the lien and security interest of the Administrative Agent for the ratable benefit of the Lenders will be maintained despite the location of the inventory or equipment. Without the prior written consent of the Administrative Agent, no Borrower shall move or deliver inventory or equipment with a book value in any instance or in the aggregate of $250,000 or more to a location outside of the United States of America. The foregoing provisions shall not apply to inventory sold in the ordinary course of business of the Borrowers. (f) Each Borrower shall have its equipment and inventory insured against loss or damage by fire, theft, burglary, pilferage, loss in transportation and such other hazards as the Administrative Agent shall reasonably specify, by insurers reasonably satisfactory to the Administrative Agent, in amounts reasonably satisfactory to the Administrative Agent and under policies containing loss payable clauses satisfactory to the Administrative Agent. Any such insurance policies, or certificates or other evidence thereof satisfactory to the Administrative Agent, shall be deposited with the Administrative Agent. Each Borrower agrees that the Administrative Agent, for the ratable benefit of the Lenders, shall have a security interest in such policies and the proceeds of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, the proceeds relating to the loss or damage of the equipment or inventory may be applied to the payment of the Obligations or to the replacement or restoration of the inventory or equipment damaged or destroyed, as the Administrative Agent may elect or direct. After the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right to file claims under any insurance policies, to receive, receipt and given acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to the collection, compromise, or settlement of any claims under any of the insurance policies.

Appears in 3 contracts

Samples: Loan and Security Agreement (Global Defense Technology & Systems, Inc.), Loan and Security Agreement (Global Defense Technology & Systems, Inc.), Loan and Security Agreement (Global Defense Technology & Systems, Inc.)

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Covenants Concerning the Collateral. During the Term, Borrower covenants that it shall: (a) Each Borrower shall immediately inform not dispose of any of the Administrative Agent of (1) any dispute in excess of $250,000 with a Customer and (2) the bankruptcyCollateral whether by sale, insolvency, receivership, assignment lease or otherwise except for the benefit disposition or transfer of creditors or suspension of business of any material Customer of which such Borrower has knowledge. No Borrower shall compromise or discount any Receivable without the prior written consent of the Administrative Agent except for (i) ordinary trade discounts or allowances for prompt payment, obsolete and (ii) prior to the occurrence of an Event of Default, such compromises or discounts that, after giving effect thereto, will not cause the Borrowing Base to be less than the unpaid principal balance of the Revolving Credit Exposure then outstanding. (b) Upon the written demand of the Administrative Agent following the occurrence of an Event of Default, each Borrower shall establish and maintain a lockbox with the Administrative Agent and shall direct all Customers to make payments on Collateral to such lockbox by printing such direction on all invoices given to Customers. Each Borrower also shall remit to such lockbox or deliver to the Administrative Agent all payments on Collateral received by such Borrower. Such payments shall be remitted or delivered in their original form on the day of receipt. All notes, checks and other instruments so received by each Borrower shall be duly endorsed to the order of the Administrative Agent. The payments remitted to the lockbox and all payments delivered to the Administrative Agent shall be credited to a cash collateral account maintained by the Administrative Agent in the name of the Company over which the Administrative Agent shall have the exclusive power of withdrawal. All collected funds in such cash collateral account shall be applied to the Obligations by the Administrative Agent on each Business Day, whether or not the Obligations are then due. (c) Upon the occurrence and during the continuation of an Event of Default, to facilitate direct collection of the Collateral, the Administrative Agent shall have the right to take over the post office boxes of the Borrowers or make other arrangements, with which the Borrowers shall cooperate, to receive the mail of each Borrower. (d) The Borrowers shall execute all other agreements, instruments and documents and shall perform all further acts that the Administrative Agent may require with respect to Receivables owing by the Government to ensure compliance with the Assignment of Claims Act, provided that, as long as no Event of Default has occurred and is continuing, the Administrative Agent has no present intent to require, but reserves the right to so require whether or not any Event of Default has occurred and is continuing, Assignment of Claims Act filings for any Government Contract. (e) All of the inventory and equipment of each Borrower will be kept only at the locations set forth on Schedule 3.2, or at such other locations as shall be disclosed in writing to the Administrative Agent by the Borrowers, other than inventory and equipment with an aggregate book value of not more than $250,000. The Borrowers shall give the Administrative Agent prior written notice before any material inventory or equipment is moved or delivered to a location other than such designated places of business, and the lien and security interest of the Administrative Agent for the ratable benefit of the Lenders will be maintained despite the location of the inventory or equipment. Without the prior written consent of the Administrative Agent, no Borrower shall move or deliver inventory or equipment with a book value in any instance or in the aggregate of $250,000 or more to a location outside of the United States of America. The foregoing provisions shall not apply to inventory sold worn-out Equipment in the ordinary course of business during any fiscal year and provided the proceeds of any such 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 Agent's first priority security interest (subject to Permitted Liens as described in clause (v) of the Borrowersdefinition 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 Agent in repayment 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 Agent except (i) Permitted Liens and (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 Agent'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 obsolete or worn-out Equipment, 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; (f) Each Borrower shall have its equipment not extend the payment terms of any Receivable without prompt notice thereof to Agent; (g) perform all other steps requested by Agent to create and inventory insured against loss or damage by fire, theft, burglary, pilferage, loss maintain in transportation and such other hazards as the Administrative Agent shall reasonably specify, by insurers reasonably satisfactory to the Administrative Agent, in amounts reasonably satisfactory to the Administrative Agent and under policies containing loss payable clauses satisfactory to the Administrative Agent. Any such insurance policies, or certificates or other evidence thereof satisfactory to the Administrative Agent, shall be deposited with the Administrative Agent. Each Borrower agrees that the Administrative Agent, for the ratable benefit of the Lenders, shall have 's favor a valid perfected first security interest in such policies all Collateral (subject to Permitted Liens); and (h) Borrower shall promptly upon request provide Agent with duplicate originals of all credits which Borrower issues to 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 proceeds occurrence of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, the proceeds relating to the loss or damage of the equipment or inventory may be applied to the payment of the Obligations or to the replacement or restoration of the inventory or equipment damaged or destroyed, as the Administrative Agent may elect at any time in its discretion (i) withdraw Borrower's authority to issue credits to its Customers without Agent's prior written consent; (ii) litigate Disputes or direct. After the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right settle them directly with Customers on terms acceptable to file claims under any insurance policies, to receive, receipt and given acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to the collection, compromise, or settlement of any claims under any of the insurance policies.Agent; or

Appears in 2 contracts

Samples: Accounts Receivable Management and Security Agreement (TMP Worldwide Inc), Accounts Receivable Management and Security Agreement (TMP Worldwide Inc)

Covenants Concerning the Collateral. The Credit Parties covenant that they shall: (a) Each Borrower shall immediately inform place notations upon their respective books of account and any financial statement prepared by them to disclose the Administrative Collateral Agent’s security interest in the Collateral; (b) defend the Collateral against the claims and demands of all parties; (c) not extend the payment terms of any Receivable without prompt notice thereof to the Collateral Agent; (d) perform all other steps reasonably requested by the Collateral Agent of (1) any dispute to create and maintain in excess of $250,000 with a Customer and (2) the bankruptcyCollateral Agent’s favor, insolvency, receivership, assignment for the benefit of creditors or suspension of business of any material Customer of which such Borrower has knowledge. No Borrower shall compromise or discount any Receivable without the prior written consent of the Administrative Agent except for (i) ordinary trade discounts or allowances for prompt paymentPurchasers, and (ii) prior to the occurrence of an Event of Default, such compromises or discounts that, after giving effect thereto, will not cause the Borrowing Base to be less than the unpaid principal balance of the Revolving Credit Exposure then outstanding. (b) Upon the written demand of the Administrative Agent following the occurrence of an Event of Default, each Borrower shall establish and maintain a lockbox valid perfected security interest in all Collateral in accordance with the Administrative Agent and shall direct all Customers to make payments on Collateral to such lockbox by printing such direction on all invoices given to Customers. Each Borrower also shall remit to such lockbox or deliver to the Administrative Agent all payments on Collateral received by such Borrower. Such payments shall be remitted or delivered priorities set forth in their original form on the day of receipt. All notes, checks and other instruments so received by each Borrower shall be duly endorsed to the order of the Administrative Agent. The payments remitted to the lockbox and all payments delivered to the Administrative Agent shall be credited to a cash collateral account maintained by the Administrative Agent in the name of the Company over which the Administrative Agent shall have the exclusive power of withdrawal. All collected funds in such cash collateral account shall be applied to the Obligations by the Administrative Agent on each Business Day, whether or not the Obligations are then due. (c) Upon the occurrence and during the continuation of an Event of Default, to facilitate direct collection of the Collateral, the Administrative Agent shall have the right to take over the post office boxes of the Borrowers or make other arrangements, with which the Borrowers shall cooperate, to receive the mail of each Borrower. (d) The Borrowers shall execute all other agreements, instruments and documents and shall perform all further acts that the Administrative Agent may require with respect to Receivables owing by the Government to ensure compliance with the Assignment of Claims Act, provided that, as long as no Event of Default has occurred and is continuing, the Administrative Agent has no present intent to require, but reserves the right to so require whether or not any Event of Default has occurred and is continuing, Assignment of Claims Act filings for any Government Contract.Section 3.9 hereof; and (e) All promptly provide the Collateral Agent with duplicate originals of all credits which any Credit Party issues to its Customers with respect to any Receivable and immediately notify the inventory and equipment Collateral Agent of each Borrower will be kept only any merchandise returns or Disputes with respect to any Receivable. The Credit Parties shall settle all Disputes at the locations set forth on Schedule 3.2, no cost or at such other locations as shall be disclosed in writing expense to the Administrative Agent by the Borrowers, other than inventory and equipment with an aggregate book value of not more than $250,000. The Borrowers shall give the Administrative Agent prior written notice before any material inventory or equipment is moved or delivered to a location other than such designated places of business, and the lien and security interest of the Administrative Agent for the ratable benefit of the Lenders will be maintained despite the location of the inventory or equipment. Without the prior written consent of the Administrative Agent, no Borrower shall move or deliver inventory or equipment with a book value in any instance or in the aggregate of $250,000 or more to a location outside of the United States of America. The foregoing provisions shall not apply to inventory sold in the ordinary course of business of the Borrowers. (f) Each Borrower shall have its equipment and inventory insured against loss or damage by fire, theft, burglary, pilferage, loss in transportation and such other hazards as the Administrative Agent shall reasonably specify, by insurers reasonably satisfactory to the Administrative Agent, in amounts reasonably satisfactory to the Administrative Agent and under policies containing loss payable clauses satisfactory to the Administrative Collateral Agent. Any such insurance policiesShould the Collateral Agent so elect, or certificates or other evidence thereof satisfactory to upon the Administrative Agent, shall be deposited with the Administrative Agent. Each Borrower agrees that the Administrative Agent, for the ratable benefit occurrence of the Lenders, shall have a security interest in such policies and the proceeds of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, the proceeds relating Collateral Agent may at any time in its discretion: (i) withdraw any Credit Party’s authority to issue credits to its Customers with respect to any Receivable without the Collateral Agent’s prior written consent; (ii) litigate Disputes with respect to any Receivable or settle them directly with Customers on terms acceptable to the loss Collateral Agent; or damage of (iii) direct any Credit Party to set aside and identify as the equipment Collateral Agent’s property any returned or inventory may be applied repossessed merchandise or other goods which by sale resulted in Receivables theretofore assigned to the payment of Collateral Agent (“Retained Goods”). All Retained Goods (and the Obligations or proceeds thereof) shall be (A) held by the Credit Parties in trust for the Collateral Agent, (B) subject to the replacement or restoration of the inventory or equipment damaged or destroyed, as the Administrative Agent may elect or direct. After the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right to file claims under any insurance policies, to receive, receipt and given acquittance for any payments that may be made thereunderCollateral Agent’s security interest hereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to (C) disposed of only in accordance with the collection, compromise, or settlement of any claims under any of the insurance policiesCollateral Agent’s express written instructions.

Appears in 1 contract

Samples: Securities Purchase Agreement (Greka Energy Corp)

Covenants Concerning the Collateral. During the Term, Borrower covenants as to itself and each Subsidiary Guarantor and each Subsidiary Guarantor covenants as to itself that it shall: (a) Each not dispose of any of its Collateral whether by sale, lease or otherwise except for the sale of Inventory in the ordinary course of business; (b) not encumber, mortgage, pledge, assign or granx x Xxxx xx any of its Collateral except Permitted Liens; (c) place notations upon Borrower's or such Subsidiary Guarantor's, as the case may be, books of account and any annual audited consolidated financial statement of Borrower shall immediately inform and its Subsidiaries prepared by Borrower to disclose Lender's security interest in the Administrative Agent Collateral; (d) defend the Collateral against the claims and demands of all Persons; (1e) not extend the payment terms of any dispute (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 (but subject to Permitted Liens) in all Collateral; (g) promptly provide Lender with a Customer duplicate originals of all credits which it issues to its Customers and (2) the bankruptcy, insolvency, receivership, assignment for the benefit of creditors or suspension of business immediately notify Lender of any material Customer of which such Borrower has knowledge. No Borrower shall compromise or discount any Receivable without the prior written consent of the Administrative Agent except for (i) ordinary trade discounts or allowances for prompt payment, and (ii) prior to the occurrence of an Event of Default, such compromises or discounts that, after giving effect thereto, will not cause the Borrowing Base to be less than the unpaid principal balance of the Revolving Credit Exposure then outstanding. (b) Upon the written demand of the Administrative Agent following the occurrence of an Event of Default, each Borrower shall establish and maintain a lockbox with the Administrative Agent and shall direct all Customers to make payments on Collateral to such lockbox by printing such direction on all invoices given to CustomersDisputes. Each of Borrower also and each Subsidiary Guarantor shall remit bear the cost of resolving all Disputes at no cost or expense to such lockbox or deliver to the Administrative Agent all payments on Collateral received by such BorrowerLender. Such payments shall be remitted or delivered in their original form on the day of receipt. All notesShould Lender so elect, checks and other instruments so received by each Borrower shall be duly endorsed to the order of the Administrative Agent. The payments remitted to the lockbox and all payments delivered to the Administrative Agent shall be credited to a cash collateral account maintained by the Administrative Agent in the name of the Company over which the Administrative Agent shall have the exclusive power of withdrawal. All collected funds in such cash collateral account shall be applied to the Obligations by the Administrative Agent on each Business Day, whether or not the Obligations are then due. (c) Upon upon the occurrence and during the continuation of an any Event of Default, Lender may at any time in its discretion (i) withdraw Borrower's and each Subsidiary Guarantor's authority to facilitate direct collection of the Collateral, the Administrative Agent shall have the right issue credits to take over the post office boxes of the Borrowers or make other arrangements, with which the Borrowers shall cooperate, to receive the mail of each Borrower. (d) The Borrowers shall execute all other agreements, instruments and documents and shall perform all further acts that the Administrative Agent may require with respect to Receivables owing by the Government to ensure compliance with the Assignment of Claims Act, provided that, as long as no Event of Default has occurred and is continuing, the Administrative Agent has no present intent to require, but reserves the right to so require whether or not any Event of Default has occurred and is continuing, Assignment of Claims Act filings for any Government Contract. (e) All of the inventory and equipment of each Borrower will be kept only at the locations set forth on Schedule 3.2, or at such other locations as shall be disclosed in writing to the Administrative Agent by the Borrowers, other than inventory and equipment with an aggregate book value of not more than $250,000. The Borrowers shall give the Administrative Agent prior written notice before any material inventory or equipment is moved or delivered to a location other than such designated places of business, and the lien and security interest of the Administrative Agent for the ratable benefit of the Lenders will be maintained despite the location of the inventory or equipment. Without the 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 in form and substance satisfactory to Lender which report will contain, among other items (i) a listing of all additional Receivables created since the date of the Administrative Agentprevious report delivered pursuant to this Section 8(h), no Borrower shall move or deliver inventory or equipment 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 book value reconciliation in reasonable detail of any instance or differences between invoices issued and Receivables created as described in the aggregate of $250,000 or more to preceding clause (i), (iii) a location outside computation in reasonable detail of the United States Formula Amount as of America. The foregoing provisions shall not apply to inventory sold in the ordinary course close of business the immediately preceding Business Day, (iv) a listing as of the close of business of the Borrowers. immediately preceding Business Day of the Inventory located at the locations specified in Schedule 13(d), (fv) Each 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 shall have its equipment and inventory insured against loss the Subsidiary Guarantors secured by a UCC 0.000 Xxxx, xxether or damage not the Person entitled to such Lien has asserted or claimed such Lien, including, without limitation, a listing broken down by firemonth incurred of all (a) obligations of Borrower and the Subsidiary Guarantors to royalty interest owners, theft(b) obligations of Borrower and the Subsidiary Guarantors to any other Hydrocarbon interest owners, burglary(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, pilferage, loss in transportation and such other hazards as the Administrative Agent shall reasonably specify, by insurers reasonably satisfactory xxich would be entitled to the Administrative Agentbenefits of a UCC 9.319 Lien (provided that notwithstanding the foregoing, in amounts reasonably satisfactory prior to the Administrative Agent occurrence and under policies containing loss payable clauses satisfactory to the Administrative Agent. Any such insurance policies, or certificates or other evidence thereof satisfactory to the Administrative Agent, shall be deposited with the Administrative Agent. Each Borrower agrees that the Administrative Agent, for the ratable benefit of the Lenders, shall have a security interest in such policies and the proceeds of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, unless otherwise requested by Lender, Borrower and each Subsidiary Guarantor shall only be obligated to deliver a report containing the proceeds relating to information described in the loss or damage foregoing clause (iv) and in this clause (v) monthly, within two Business Days after the 15th of the equipment month) and (vi) such other information as Lender may reasonably request concerning the Collateral; and (i) deliver to Lender, monthly, on or inventory may be applied to before the payment fifteenth day of each month, a report showing in detail all obligations of Borrower and each Subsidiary Guarantor created during any previous month which remain unpaid as of the Obligations date of such report and which are secured by a UCC 0.000 Xxxx, xxether or not the Person entitled to the replacement such Lien has asserted or restoration of the inventory claimed such Lien. (j) immediately notify Lender if Borrower or equipment damaged any Subsidiary Guarantor shall drill and complete or destroyed, as the Administrative Agent may elect acquire any oil or direct. After the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right to file claims under any insurance policies, to receive, receipt and given acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to the collection, compromisegas well, or settlement of any claims under any of the insurance policies.interest therein, located other than in Waynx Xxxnty, Mississippi, Billxxxx, Xxnn xx Starxx Xxxnty, North Dakota, or Chamxxxx, Xxlveston, Goliad, Hidaxxx,

Appears in 1 contract

Samples: Accounts Receivable Management and Security Agreement (Transtexas Gas Corp)

Covenants Concerning the Collateral. (a) Each Borrower shall immediately promptly inform the Administrative Agent of (1) any dispute in excess of $250,000 500,000 with a Customer and (2) the bankruptcy, insolvency, receivership, assignment for the benefit of creditors or suspension of business of any material Customer of which such Borrower has knowledge. No Borrower shall compromise or discount any Receivable without the prior written consent of the Administrative Agent except for (i) ordinary trade discounts or allowances for prompt payment, and (ii) prior to the occurrence of an Event of Default, payment or as otherwise deemed by such compromises or discounts that, after giving effect thereto, will not cause the Borrowing Base Borrower to be less than the unpaid principal balance of the Revolving Credit Exposure then outstandingin its best commercial interests. (b) Upon the written demand of occurrence and during the Administrative Agent following the occurrence continuation of an Event of Default, upon demand by the Administrative Agent, each Borrower shall establish and maintain a lockbox with the Administrative Agent and shall direct all Customers to make payments on Collateral to such lockbox by printing such direction on all invoices given to Customers. Each Borrower also shall remit to such lockbox or deliver to the Administrative Agent all payments on Collateral received by such Borrower. Such payments shall be remitted or delivered in their original form on the day of receipt. All notes, checks and other instruments so received by each Borrower shall be duly endorsed to the order of the Administrative Agent. The payments remitted to the lockbox and all payments delivered to the Administrative Agent shall be credited to a cash collateral account maintained by the Administrative Agent in the name of the Company over which the Administrative Agent shall have the exclusive power of withdrawal. All collected funds in such cash collateral account shall be applied to the Obligations by the Administrative Agent on each Business Day, whether or not the Obligations are then due. (c) Upon the occurrence and during the continuation of an Event of Default, to facilitate direct collection of the Collateral, the Administrative Agent shall have the right to take over the post office boxes of the Borrowers or make other arrangements, with which the Borrowers shall cooperate, to receive the mail of each Borrower. (d) The Borrowers shall execute all other agreements, instruments and documents and shall perform all further acts that the Administrative Agent may require with respect to Receivables owing by the Government to ensure compliance with the Assignment of Claims Act, provided that, as long as no Event of Default has occurred and is continuing, the Administrative Agent has no present intent to require, but reserves the right to so require whether or not any Event of Default has occurred and is continuingrequire, Assignment of Claims Act filings for any Government Contract. (e) All of the inventory and equipment of each Borrower will be kept only at the locations set forth on Schedule 3.2, or at such other locations as shall be disclosed in writing amended from time to time upon written notice from the Company to the Administrative Agent by the Borrowers, other than inventory and equipment with an aggregate book value of not more than $250,000. The Borrowers shall give the Administrative Agent prior written notice before any material inventory or equipment is moved or delivered to a location other than such designated places of business, and the lien and security interest of the Administrative Agent for the ratable benefit of the Lenders will be maintained despite the location of the inventory or equipment. Without the prior written consent of the Administrative Agent, no Borrower shall move or deliver inventory or equipment with a book value in any instance or in the aggregate of $250,000 200,000 or more to a location outside of the United States of America. The foregoing provisions shall not apply to inventory sold in the ordinary course of business of the Borrowers. (f) Each Borrower shall have its equipment and inventory insured against loss or damage by fire, theft, burglary, pilferage, loss in transportation and such other hazards as the Administrative Agent shall reasonably specify, by insurers reasonably satisfactory to the Administrative Agent, in amounts reasonably satisfactory to the Administrative Agent and under policies containing loss payable clauses satisfactory to the Administrative Agent. Any such insurance policies, or certificates or other evidence thereof satisfactory to the Administrative Agent, shall be deposited with the Administrative Agent. Each Borrower agrees that the Administrative Agent, for the ratable benefit of the Lenders, shall have a security interest in such policies and the proceeds of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, the proceeds relating to the loss or damage of the equipment or inventory may be applied to the payment of the Obligations or to the replacement or restoration of the inventory or equipment damaged or destroyed, as the Administrative Agent may elect or direct. After the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right to file claims under any insurance policies, to receive, receipt and given acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to the collection, compromise, or settlement of any claims under any of the insurance policies. (g) Each Borrower, at its expense, will defend the Collateral against any claims or demands adverse to the Administrative Agent’s security interest and will promptly pay when due all taxes or assessments levied against such Borrower on the Collateral, except for Liens created or permitted by this Agreement, or as contested by such Borrower in good faith and in appropriate proceedings, provided that the enforcement of any such claim or demand is stayed during the term of such contest and proceedings. (h) Each Borrower shall provide the Administrative Agent such information as the Administrative Agent from time to time reasonably may request with respect to the Collateral, including, without limitation, statements describing, designating, identifying and evaluating all Collateral.

Appears in 1 contract

Samples: Loan and Security Agreement (NCI, Inc.)

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Covenants Concerning the Collateral. (a) Each Borrower shall immediately inform the Administrative Agent of (1) any dispute in excess of $250,000 100,000 with a Customer and (2) the bankruptcy, insolvency, receivership, assignment for the benefit of creditors or suspension of business of any material Customer of which such Borrower has knowledge. No Borrower shall compromise or discount any Receivable without the prior written consent of the Administrative Agent except for (i) ordinary trade discounts or allowances for prompt payment, and (ii) prior to the occurrence of a Default or an Event of Default, such compromises or discounts that, after giving effect thereto, will not cause the Borrowing Base to be less than the unpaid principal balance of the Revolving Credit Exposure then outstanding. (b) Upon the written demand of the Administrative Agent following the occurrence of an Event of Default, each Each Borrower shall establish and maintain a lockbox with the Administrative Agent and shall direct all Customers to make payments on Collateral to such lockbox by printing such direction on all invoices given to Customers. Each Borrower also shall remit to such lockbox or deliver to the Administrative Agent all payments on Collateral received by such Borrower. Such payments shall be remitted or delivered in their original form on the day of receipt. All notes, checks and other instruments so received by each Borrower shall be duly endorsed to the order of the Administrative Agent. The payments remitted to the lockbox and all payments delivered to the Administrative Agent shall be credited to a cash collateral account maintained by the Administrative Agent in the name of the Company over which the Administrative Agent shall have the exclusive power of withdrawal. All collected funds in such cash collateral account shall be applied to the Obligations by the Administrative Agent on each Business Day, whether or not the Obligations are then due. (c) Upon the occurrence and during the continuation of an Event of Default, to facilitate direct collection of the Collateral, the Administrative Agent shall have the right to take over the post office boxes of the Borrowers or make other arrangements, with which the Borrowers shall cooperate, to receive the mail of each Borrower. (d) The Borrowers shall execute all other agreements, instruments and documents and shall perform all further acts that the Administrative Agent may require with respect to Receivables owing by the Government to ensure compliance with the Assignment of Claims Act, provided that, as long as no Event of Default has occurred and is continuing, the Administrative Agent has no present intent to require, but reserves the right to so require whether or not any Event of Default has occurred and is continuingrequire, Assignment of Claims Act filings for any Government Contract. (e) All of the inventory and equipment of each Borrower will be kept only at the locations set forth on Schedule 3.2, or at such other locations as shall be disclosed in writing to the Administrative Agent by the Borrowers, other than inventory and equipment with an aggregate book value of not more than $250,000. The Borrowers shall give the Administrative Agent prior written notice before any material inventory or equipment is moved or delivered to a location other than such designated places of business, and the lien and security interest of the Administrative Agent for the ratable benefit of the Lenders will be maintained despite the location of the inventory or equipment. Without the prior written consent of the Administrative Agent, no Borrower shall move or deliver inventory or equipment with a book value in any instance or in the aggregate of $250,000 200,000 or more to a location outside of the United States of America. The foregoing provisions shall not apply to inventory sold in the ordinary course of business of the Borrowers. (f) Each Borrower shall have its equipment and inventory insured against loss or damage by fire, theft, burglary, pilferage, loss in transportation and such other hazards as the Administrative Agent shall reasonably specify, by insurers reasonably satisfactory to the Administrative Agent, in amounts reasonably satisfactory to the Administrative Agent and under policies containing loss payable clauses satisfactory to the Administrative Agent. Any such insurance policies, or certificates or other evidence thereof satisfactory to the Administrative Agent, shall be deposited with the Administrative Agent. Each Borrower agrees that the Administrative Agent, for the ratable benefit of the Lenders, shall have a security interest in such policies and the proceeds of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, the proceeds relating to the loss or damage of the equipment or inventory may be applied to the payment of the Obligations or to the replacement or restoration of the inventory or equipment damaged or destroyed, as the Administrative Agent may elect or direct. After the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right to file claims under any insurance policies, to receive, receipt and given acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to the collection, compromise, or settlement of any claims under any of the insurance policies. (g) Each Borrower, at its expense, will defend the Collateral against any claims or demands adverse to the Administrative Agent’s security interest and will promptly pay when due all taxes or assessments levied against such Borrower on the Collateral, except for Liens created or permitted by this Agreement. (h) Each Borrower shall provide the Administrative Agent such information as the Administrative Agent from time to time reasonably may request with respect to the Collateral, including, without limitation, statements describing, designating, identifying and evaluating all Collateral.

Appears in 1 contract

Samples: Loan and Security Agreement (NCI, Inc.)

Covenants Concerning the Collateral. (a) Each Borrower shall immediately inform the Administrative Agent of (1) any dispute in excess of $250,000 500,000 with a Customer and (2) the bankruptcy, insolvency, receivership, assignment for the benefit of creditors or suspension of business of any material Customer of which such Borrower has knowledge. No Borrower shall compromise or discount any Receivable without the prior written consent of the Administrative Agent except for (i) ordinary trade discounts or allowances for prompt payment, and (ii) prior to the occurrence of an Event of Default, such compromises or discounts that, after giving effect thereto, will not cause the Borrowing Base to be less than the unpaid principal balance of the Revolving Credit Exposure then outstanding. (b) Upon the written demand of the Administrative Agent following the occurrence and during the continuance of an Event of Default, each Borrower shall establish and maintain a lockbox with the Administrative Agent and shall direct all Customers to make payments on Collateral to such lockbox by printing such direction on all invoices given to Customers. Each Borrower also shall remit to such lockbox or deliver to the Administrative Agent all payments on Collateral received by such Borrower. Such payments shall be remitted or delivered in their original form on the day of receipt. All notes, checks and other instruments so received by each Borrower shall be duly endorsed to the order of the Administrative Agent. The payments remitted to the lockbox and all payments delivered to the Administrative Agent shall be credited to a cash collateral account maintained by the Administrative Agent in the name of the Company over which the Administrative Agent shall have the exclusive power of withdrawal. All collected funds in such cash collateral account shall be applied to the Obligations by the Administrative Agent on each Business Day, whether or not the Obligations are then due. (c) Upon the occurrence and during the continuation of an Event of Default, to facilitate direct collection of the Collateral, the Administrative Agent shall have the right to take over the post office boxes of the Borrowers or make other arrangements, with which the Borrowers shall cooperate, to receive the mail of each Borrower. (d) The Borrowers shall execute all other agreements, instruments and documents and shall perform all further acts that the Administrative Agent may require with respect to Receivables owing by the Government to ensure compliance with the Assignment of Claims Act, provided that, as long as no Event of Default has occurred and is continuing, the Administrative Agent has no present intent to require, but reserves the right to so require whether or not any Event of Default has occurred and is continuing, Assignment of Claims Act filings for any Government Contract. (e) All of the inventory and equipment of each Borrower will be kept only at the locations set forth on Schedule 3.2, . or at such other locations as shall be disclosed in writing to the Administrative Agent by the Borrowers, other than inventory and equipment with an aggregate book value of not more than $250,000500,000. The Borrowers shall give the Administrative Agent prior written notice before any material inventory or equipment is moved or delivered to a location other than such designated places of business, and the lien and security interest of the Administrative Agent for the ratable benefit of the Lenders will be maintained despite the location of the inventory or equipment. Without the prior written consent of the Administrative Agent, no Borrower shall move or deliver inventory or equipment with a book value in any instance or in the aggregate of $250,000 500,000 or more to a location outside of the United States of America. The foregoing provisions shall not apply to inventory sold in the ordinary course of business of the Borrowers. (f) Each Borrower shall have its equipment and inventory insured against loss or damage by fire, theft, burglary, pilferage, loss in transportation and such other hazards as the Administrative Agent shall reasonably specify, by insurers reasonably satisfactory to the Administrative Agent, in amounts reasonably satisfactory to the Administrative Agent and under policies containing loss payable clauses satisfactory to the Administrative Agent. Any such insurance policies, or certificates or other evidence thereof satisfactory to the Administrative Agent, shall be deposited with the Administrative Agent. Each Borrower agrees that the Administrative Agent, for the ratable benefit of the Lenders, shall have a security interest in such policies and the proceeds of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, the proceeds relating to the loss or damage of the equipment or inventory may be applied to the payment of the Obligations or to the replacement or restoration of the inventory or equipment damaged or destroyed, as the Administrative Agent may elect or direct. After the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right to file claims under any insurance policies, to receive, receipt and given acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to the collection, compromise, or settlement of any claims under any of the insurance policies.

Appears in 1 contract

Samples: Loan and Security Agreement (Global Defense Technology & Systems, Inc.)

Covenants Concerning the Collateral. (a) Each Borrower shall immediately promptly inform the Administrative Agent of (1) any dispute in excess of $250,000 1,000,000 with a Customer and (2) the bankruptcy, insolvency, receivership, assignment for the benefit of creditors or suspension of business of any material Customer of which such Borrower has knowledge. No Borrower shall compromise or discount any Receivable without the prior written consent of the Administrative Agent except for (i) ordinary trade discounts or allowances for prompt payment, and (ii) prior to the occurrence of an Event of Default, payment or as otherwise deemed by such compromises or discounts that, after giving effect thereto, will not cause the Borrowing Base Borrower to be less than the unpaid principal balance of the Revolving Credit Exposure then outstandingin its best commercial interests. (b) Upon the written demand of the Administrative Agent Agent, following the occurrence and during the continuation of an Event of Default, each Borrower shall establish and maintain a lockbox with the Administrative Agent and shall direct all Customers to make payments on Collateral to such lockbox by printing such direction on all invoices given to Customers. Each Borrower also shall remit to such lockbox or deliver to the Administrative Agent all payments on Collateral received by such Borrower. Such payments shall be remitted or delivered in their original form on the day of receipt. All notes, checks and other instruments so received by each Borrower shall be duly endorsed to the order of the Administrative Agent. The payments remitted to the lockbox and all payments delivered to the Administrative Agent shall be credited to a cash collateral account maintained by the Administrative Agent in the name of the Company over which the Administrative Agent shall have the exclusive power of withdrawal. All collected funds in such cash collateral account shall be applied to the Obligations by the Administrative Agent on each Business Day, whether or not the Obligations are then due. (c) Upon the occurrence and during the continuation of an Event of Default, to facilitate direct collection of the Collateral, the Administrative Agent shall have the right to take over the post office boxes of the Borrowers or make other arrangements, with which the Borrowers shall cooperate, to receive the mail of each Borrower. (d) The Borrowers shall execute all other agreements, instruments and documents and shall perform all further acts that the Administrative Agent may require with respect to Receivables owing by the Government to ensure compliance with the Assignment of Claims Act, provided that, as long as no Event of Default has occurred and is continuing, the Administrative Agent has no present intent to require, but reserves the right to so require whether or not any Event of Default has occurred and is continuingrequire, Assignment of Claims Act filings for any Government Contract. (e) All of the inventory and equipment of each Borrower will be kept only at the locations set forth on Schedule 3.2, or at such other locations as shall be disclosed in writing amended from time to time upon written notice from the Company to the Administrative Agent by the BorrowersAgent, other than inventory and equipment with an aggregate book value of not more than $250,000500,000. The Borrowers shall give the Administrative Agent prior written notice before any material inventory or equipment is moved or delivered to a location other than such designated places of business, and the lien and security interest of the Administrative Agent for the ratable benefit of the Lenders will be maintained despite the location of the inventory or equipment. Without the prior written consent of the Administrative Agent, no Borrower shall move or deliver inventory or equipment with a book value in any instance or in the aggregate of $250,000 500,000 or more to a location outside of the United States of America. The foregoing provisions shall not apply to inventory sold in the ordinary course of business of the Borrowers. (f) Each Borrower shall have its equipment and inventory insured against loss or damage by fire, theft, burglary, pilferage, loss in transportation and such other hazards as the Administrative Agent shall reasonably specify, by insurers reasonably satisfactory to the Administrative Agent, in amounts reasonably satisfactory to the Administrative Agent and under policies containing loss payable clauses reasonably satisfactory to the Administrative Agent. Any such insurance policies, or certificates or other evidence thereof reasonably satisfactory to the Administrative Agent, shall be deposited with the Administrative Agent. Each Borrower agrees that the Administrative Agent, for the ratable benefit of the Lenders, shall have a security interest in such policies and the proceeds of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, the proceeds relating to the loss or damage of the equipment or inventory may be applied to the payment of the Obligations or to the replacement or restoration of the inventory or equipment damaged or destroyed, as the Administrative Agent may elect or direct. After the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right to file claims under any insurance policies, to receive, receipt and given acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to the collection, compromise, or settlement of any claims under any of the insurance policies. (g) Each Borrower, at its expense, will defend the Collateral against any claims or demands adverse to the Administrative Agent’s security interest and will promptly pay when due all taxes or assessments levied against such Borrower on the Collateral, except for Liens created or permitted by this Agreement, or as contested by such Borrower in good faith and in appropriate proceedings, provided that the enforcement of any such claim or demand is stayed during the term of such contest and proceedings. (h) Each Borrower shall provide the Administrative Agent such information as the Administrative Agent from time to time reasonably may request with respect to the Collateral, including, without limitation, statements describing, designating, identifying and evaluating all Collateral.

Appears in 1 contract

Samples: Loan and Security Agreement (NCI, Inc.)

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