Eligible Accounts and Eligible Unbilled Accounts. All of the Accounts owned by Borrowers and their Subsidiaries and reflected in the most recent Borrowing Base Certificate (to the extent required to be reflected pursuant to Section 6.01(e)) delivered by Borrowers to Administrative Agent shall be “Eligible Accounts” or, as applicable, “Eligible Unbilled Accounts” for purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies. Administrative Agent shall have the right, in its commercially reasonable judgment that there has been a material and adverse change from historical performance with respect to the value of Eligible Accounts and/or Eligible Unbilled Accounts, at any time either (a) an Event of Default has occurred and is then continuing and/or (b) Borrowing Availability is less than the Borrowing Base Adjustment Limit, to (i) establish, modify or eliminate Reserves against Eligible Accounts and/or Eligible Unbilled Accounts from time to time and/or (ii) adjust from time to time any of the criteria set forth below, establish new criteria and adjust advance rates with respect to Eligible Accounts and/or Eligible Unbilled Accounts, in each case effective on prior written notice delivered by Administrative Agent to the Borrowers, the effect of which, along with any other changes to Reserves, eligibility criteria, advance rates and the exercise of other Administrative Agent rights under this Section 2.15 and/or under Section 2.16, shall not reduce the Borrowing Base by an aggregate amount in excess of the Borrowing Base Adjustment Limit. Any exercise of rights by Administrative Agent pursuant to the immediately preceding sentence (x) shall be reversed, automatically and without further action by Administrative Agent, at such time that no Event of Default shall have occurred and remain continuing and Borrowing Availability, calculated without giving effect to any actions taken by Administrative Agent pursuant to the immediately preceding sentence, is greater than the Borrowing Base Adjustment Limit and (y) subject to the provisions of the immediately preceding clause (x), shall be subject to the approval of Supermajority Required Lenders in the case of adjustments, new criteria, changes in advance rates or the elimination of Reserves which have the effect of making more credit available. (a) Eligible Accounts shall not include any Account of any Borrower or any of its Subsidiaries: (i) that does not arise from the sale or rental of goods or the performance of services by any Borrower or any of its Subsidiaries that are Loan Parties in the ordinary course of its business and in the amount of the Account; (ii) (x) upon which any Borrower’s or any Subsidiary’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever or (y) as to which any Borrower or any Subsidiary is not legally able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process; (iii) with respect to which an invoice, reasonably acceptable to Administrative Agent in form and substance, has not been sent to the applicable Account Debtor; (iv) that (x) is not owned by any Borrower or any Subsidiary or (y) is subject to any right, claim, security interest or other interest of any other Person, other than Liens in favor of Administrative Agent, on behalf of itself and Lenders or Permitted Liens under Section 7.01(b), (c), (h), (j), (k), (n), (p), (q), (u), (v), (x), (aa) and (bb); (v) that is the obligation of an Account Debtor located in a foreign country other than Canada unless payment thereof is assured by a letter of credit assigned and delivered to Administrative Agent, reasonably satisfactory to Administrative Agent as to form, amount and issuer; (vi) that arises with respect to goods that are delivered on a xxxx and hold, cash on delivery basis or placed on consignment, sale or return, sale on approval, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional; (vii) that is in default, as established upon the occurrence of any of the following: (A) the Account is not paid within 90 days following its original invoice date; (B) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or (C) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors; (viii) as to which Administrative Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien; (ix) as to which any of the representations or warranties in the Loan Documents are untrue; (x) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper (unless such Chattel Paper has been delivered to the Collateral Agent or bears the legend set forth in Section 4 of the Security Agreement); (xi) to the extent that both (x) the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to any Borrower’s or any Subsidiary’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer and (y) the aggregate face amount of all Accounts described in this clause (xi) exceeds $500,000; (xii) to the extent that any defense, counterclaim, setoff or dispute has been asserted as to such Account, up to the amount of the defense, counterclaim, setoff or dispute so asserted; (xiii) that arises from a sale or rental to any director, officer, other employee or Affiliate of any Loan Party, or to any entity that has any common officer or director with any Loan Party (it being understood and agreed that sales to any portfolio companies of Sponsor shall not be excluded from the category of Eligible Accounts solely by operation of this clause (xiii)); (xiv) to the extent that both (x) the Account is the obligation of an Account Debtor that is the United States government, or any department, agency or instrumentality thereof, unless the Administrative Agent, in its sole discretion, has agreed to the contrary in writing and the relevant Borrower or a Subsidiary, if necessary or desirable, has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, and (y) the aggregate face amount of all Accounts described in this clause (xiv) and in clause (b)(xiv) below with respect to Unbilled Accounts, exceed $1,000,000; (xv) unless the aggregate amount for all Account Debtors would not in the reasonable determination of the Borrowers exceed $250,000, to the extent any Borrower or any Subsidiary is liable for goods sold or services rendered by the applicable Account Debtor to any Borrower or any Subsidiary but only to the extent of the potential offset; (xvi) that is the obligation of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this Section 2.15; or (xvii) to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates as of any date of determination exceed ten percent (10%) of all Eligible Accounts and/or all Eligible Unbilled Accounts. (b) Eligible Unbilled Accounts shall not include any Account of any Borrower or any of its Subsidiaries: (i) that does not arise from the sale or rental of goods or the performance of services by any Borrower or any of its Subsidiaries in the ordinary course of its business and in the amount of the Account ; (ii) (x) upon which any Borrower’s or any Subsidiary’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever (other than the issuance of an invoice) or (y) as to which any Borrower or any Subsidiary is not legally able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process; (iii) that is not an Unbilled Account; (iv) that (x) is not owned by any Borrower or any Subsidiary or (y) is subject to any right, claim, security interest or other interest of any other Person, other than Liens in favor of the Collateral Agent, on behalf of itself and Lenders; (v) that is the obligation of an Account Debtor located in a foreign country other than Canada unless payment thereof is assured by a letter of credit assigned and delivered to the Collateral Agent, reasonably satisfactory to the Collateral Agent as to form, amount and issuer; (vi) that arises with respect to goods that are delivered on a xxxx and hold, cash on delivery basis or placed on consignment, sale or return, sale on approval, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional; (vii) that is in default, as established upon the occurrence of any of the following: (A) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or (B) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors; (C) as to which the Collateral Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien; (viii) as to which any of the representations or warranties in the Loan Documents are untrue; (ix) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper (unless such Chattel Paper has been delivered to the Collateral Agent or bears the legend set forth in Section 4 of the Security Agreement); (x) that has remained an Unbilled Account for more than seven (7) Business Days following the date of the Borrowing Base Certificate that includes such Unbilled Accounts as Eligible Unbilled Accounts. (xi) to the extent that both (x) the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contact under which the Account Debtor’s obligation to pay that invoice is subject to any Borrower’s or any Subsidiary’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer and (y) that aggregate face amount of all Accounts described in this clause (xi) exceeds $500,000; (xii) to the extent that any defense, counterclaim, setoff or dispute has been asserted as to such Account, up to the amount of the defense, counterclaim, setoff or dispute so asserted; (xiii) that arises from a sale or rental to any director, officer, other employee or Affiliate of any Loan Party, or to any entity that has any common officer or director with any Loan Party (it being understood and agreed that sales to any portfolio companies of Sponsor shall not be excluded from the category of Eligible Accounts solely by operation of this clause (xiii)); (xiv) to the extent that both (x) the Account is the obligation of an Account Debtor that is the United States government, or any department, agency or instrumentality thereof, unless the Administrative Agent, in its sole discretion, has agreed to the contrary in writing and the relevant Borrower or a Subsidiary, if necessary or desirable, has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, and (y) the aggregate face amount of all Accounts described in this clause (xiv) and in clause (a)(xiv) above with respect to Billed Accounts, exceed $1,000,000; (xv) unless the aggregate amount for all Account Debtors would not in the reasonable determination of the Borrowers exceed $250,000, to the extent any Borrower or any Subsidiary is liable for goods sold or services rendered by the applicable Account Debtor to any Borrower or any Subsidiary but only to the extent of the potential offset; (xvi) that is the obligation of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this Section 2.15; (xvii) to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates as of any date of determination exceed ten percent (10%) of all Eligible Accounts and/or all Eligible Unbilled Accounts.
Appears in 2 contracts
Samples: Credit Agreement (Universal Hospital Services Inc), Credit Agreement (Universal Hospital Services Inc)
Eligible Accounts and Eligible Unbilled Accounts. All of the Accounts owned by Borrowers Borrower and their its Subsidiaries and reflected in the most recent Borrowing Base Certificate (to the extent required to be reflected pursuant to Section 6.01(e)) delivered by Borrowers Borrower to Administrative Agent shall be “"Eligible Accounts” " or, as applicable, “"Eligible Unbilled Accounts” " for purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies. Administrative Agent shall have the right, in its commercially reasonable judgment that there has been a material and adverse change from historical performance with respect to the value of Eligible Accounts and/or Eligible Unbilled Accounts, at any time either (ax) an Event of Default has occurred and is then continuing and/or (by) Borrowing Availability is less than the Borrowing Base Adjustment Limit, to (i) establish, modify or eliminate Reserves against Eligible Accounts and/or Eligible Unbilled Accounts from time to time and/or (ii) adjust from time to time any of the criteria set forth below, establish new criteria and adjust advance rates with respect to Eligible Accounts and/or Eligible Unbilled Accounts, in each case effective on prior written notice delivered by Administrative Agent to the BorrowersBorrower, the effect of which, along with any other changes to Reserves, eligibility criteria, advance rates and the exercise of other Administrative Agent rights under this Section 2.15 1.6 and/or under Section 2.161.7, shall not reduce the Borrowing Base by an aggregate amount in excess of the Borrowing Base Adjustment Limit. Any exercise of rights by Administrative Agent pursuant to the immediately preceding sentence (xA) shall be reversed, automatically and without further action by Administrative Agent, at such time that no Event of Default shall have occurred and remain continuing and Borrowing Availability, calculated without giving effect to any actions taken by Administrative Agent pursuant to the immediately preceding sentence, is greater than the Borrowing Base Adjustment Limit and (yB) subject to the provisions of the immediately preceding clause (xA), shall be subject to the approval of Supermajority Required Lenders in the case of adjustments, new criteria, changes in advance rates or the elimination of Reserves which have the effect of making more credit available.
(a) . Eligible Accounts shall not include any Account of any Borrower or any of its Subsidiaries:
(ia) that does not arise from the sale or rental of goods or the performance of services by any Borrower or any of its Subsidiaries that are Loan Parties in the ordinary course of its business and in the amount of the Account;
(ii) (x) upon which any Borrower’s or any Subsidiary’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever or (y) as to which any Borrower or any Subsidiary is not legally able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;
(iii) with respect to which an invoice, reasonably acceptable to Administrative Agent in form and substance, has not been sent to the applicable Account Debtor;
(iv) that (x) is not owned by any Borrower or any Subsidiary or (y) is subject to any right, claim, security interest or other interest of any other Person, other than Liens in favor of Administrative Agent, on behalf of itself and Lenders or Permitted Liens under Section 7.01(b), (c), (h), (j), (k), (n), (p), (q), (u), (v), (x), (aa) and (bb);
(v) that is the obligation of an Account Debtor located in a foreign country other than Canada unless payment thereof is assured by a letter of credit assigned and delivered to Administrative Agent, reasonably satisfactory to Administrative Agent as to form, amount and issuer;
(vi) that arises with respect to goods that are delivered on a xxxx and hold, cash on delivery basis or placed on consignment, sale or return, sale on approval, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional;
(vii) that is in default, as established upon the occurrence of any of the following:
(A) the Account is not paid within 90 days following its original invoice date;
(B) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or
(C) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(viii) as to which Administrative Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien;
(ix) as to which any of the representations or warranties in the Loan Documents are untrue;
(x) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper (unless such Chattel Paper has been delivered to the Collateral Agent or bears the legend set forth in Section 4 of the Security Agreement);
(xi) to the extent that both (x) the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to any Borrower’s or any Subsidiary’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer and (y) the aggregate face amount of all Accounts described in this clause (xi) exceeds $500,000;
(xii) to the extent that any defense, counterclaim, setoff or dispute has been asserted as to such Account, up to the amount of the defense, counterclaim, setoff or dispute so asserted;
(xiii) that arises from a sale or rental to any director, officer, other employee or Affiliate of any Loan Party, or to any entity that has any common officer or director with any Loan Party (it being understood and agreed that sales to any portfolio companies of Sponsor shall not be excluded from the category of Eligible Accounts solely by operation of this clause (xiii));
(xiv) to the extent that both (x) the Account is the obligation of an Account Debtor that is the United States government, or any department, agency or instrumentality thereof, unless the Administrative Agent, in its sole discretion, has agreed to the contrary in writing and the relevant Borrower or a Subsidiary, if necessary or desirable, has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, and (y) the aggregate face amount of all Accounts described in this clause (xiv) and in clause (b)(xiv) below with respect to Unbilled Accounts, exceed $1,000,000;
(xv) unless the aggregate amount for all Account Debtors would not in the reasonable determination of the Borrowers exceed $250,000, to the extent any Borrower or any Subsidiary is liable for goods sold or services rendered by the applicable Account Debtor to any Borrower or any Subsidiary but only to the extent of the potential offset;
(xvi) that is the obligation of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this Section 2.15; or
(xvii) to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates as of any date of determination exceed ten percent (10%) of all Eligible Accounts and/or all Eligible Unbilled Accounts.
(b) Eligible Unbilled Accounts shall not include any Account of any Borrower or any of its Subsidiaries:
(i) that does not arise from the sale or rental of goods or the performance of services by any Borrower or any of its Subsidiaries in the ordinary course of its business and in the amount of the Account business;
(ii) (x) upon which any Borrower’s or any Subsidiary’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever (other than the issuance of an invoice) or (y) as to which any Borrower or any Subsidiary is not legally able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;
(iii) that is not an Unbilled Account;
(iv) that (x) is not owned by any Borrower or any Subsidiary or (y) is subject to any right, claim, security interest or other interest of any other Person, other than Liens in favor of the Collateral Agent, on behalf of itself and Lenders;
(v) that is the obligation of an Account Debtor located in a foreign country other than Canada unless payment thereof is assured by a letter of credit assigned and delivered to the Collateral Agent, reasonably satisfactory to the Collateral Agent as to form, amount and issuer;
(vi) that arises with respect to goods that are delivered on a xxxx and hold, cash on delivery basis or placed on consignment, sale or return, sale on approval, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional;
(vii) that is in default, as established upon the occurrence of any of the following:
(A) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or
(B) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(C) as to which the Collateral Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien;
(viii) as to which any of the representations or warranties in the Loan Documents are untrue;
(ix) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper (unless such Chattel Paper has been delivered to the Collateral Agent or bears the legend set forth in Section 4 of the Security Agreement);
(x) that has remained an Unbilled Account for more than seven (7) Business Days following the date of the Borrowing Base Certificate that includes such Unbilled Accounts as Eligible Unbilled Accounts.
(xi) to the extent that both (x) the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contact under which the Account Debtor’s obligation to pay that invoice is subject to any Borrower’s or any Subsidiary’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer and (y) that aggregate face amount of all Accounts described in this clause (xi) exceeds $500,000;
(xii) to the extent that any defense, counterclaim, setoff or dispute has been asserted as to such Account, up to the amount of the defense, counterclaim, setoff or dispute so asserted;
(xiii) that arises from a sale or rental to any director, officer, other employee or Affiliate of any Loan Party, or to any entity that has any common officer or director with any Loan Party (it being understood and agreed that sales to any portfolio companies of Sponsor shall not be excluded from the category of Eligible Accounts solely by operation of this clause (xiii));
(xiv) to the extent that both (x) the Account is the obligation of an Account Debtor that is the United States government, or any department, agency or instrumentality thereof, unless the Administrative Agent, in its sole discretion, has agreed to the contrary in writing and the relevant Borrower or a Subsidiary, if necessary or desirable, has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, and (y) the aggregate face amount of all Accounts described in this clause (xiv) and in clause (a)(xiv) above with respect to Billed Accounts, exceed $1,000,000;
(xv) unless the aggregate amount for all Account Debtors would not in the reasonable determination of the Borrowers exceed $250,000, to the extent any Borrower or any Subsidiary is liable for goods sold or services rendered by the applicable Account Debtor to any Borrower or any Subsidiary but only to the extent of the potential offset;
(xvi) that is the obligation of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this Section 2.15;
(xvii) to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates as of any date of determination exceed ten percent (10%) of all Eligible Accounts and/or all Eligible Unbilled Accounts.
Appears in 1 contract
Eligible Accounts and Eligible Unbilled Accounts. All of the Accounts owned by Borrowers and their Subsidiaries the Borrowing Base Parties and reflected in the most recent Borrowing Base Certificate (to the extent required to be reflected pursuant to Section 6.01(e)) delivered by Borrowers the Borrower to the Administrative Agent shall be “Eligible Accounts” or, as applicable, “Eligible Unbilled Accounts” for purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies. Administrative Agent shall have the right, in its commercially reasonable judgment that there has been a material and adverse change from historical performance with respect to the value of Eligible Accounts and/or Eligible Unbilled Accounts, at any time either (a) an Event of Default has occurred and is then continuing and/or (b) Borrowing Availability is less than the Borrowing Base Adjustment LimitPermitted Discretion, to (i) establish, modify or eliminate Reserves against Eligible Accounts and/or Eligible Unbilled Accounts from time to time and/or (ii) adjust from time to time any of the criteria set forth below, establish new criteria and adjust advance rates with respect to Eligible Accounts and/or Eligible Unbilled Accounts, in each case effective on prior written notice delivered by the Administrative Agent to the Borrowers, the effect of which, along with any other changes to Reserves, eligibility criteria, advance rates and the exercise of other Administrative Agent rights under this Section 2.15 and/or under Section 2.16, shall not reduce the Borrowing Base by an aggregate amount in excess of the Borrowing Base Adjustment LimitBorrower. Any exercise of rights by Administrative Agent pursuant to clause (ii) of the immediately preceding sentence (x) shall be reversed, automatically and without further action by Administrative Agent, at such time that no Event of Default shall have occurred and remain continuing and Borrowing Availability, calculated without giving effect to any actions taken by Administrative Agent pursuant to the immediately preceding sentence, is greater than the Borrowing Base Adjustment Limit and (y) subject to the provisions of the immediately preceding clause (x), shall be subject to the approval of Supermajority Required Lenders in the case of adjustments, new criteria, criteria or changes in advance rates or the elimination of Reserves which have the effect of making more credit available.
(a) Eligible Accounts shall not include any Account of any Borrower or any of its SubsidiariesBorrowing Base Party:
(i) that does not arise from the sale or rental of goods or the performance of services by any Borrower or any of its Subsidiaries that are Loan Parties Borrowing Base Party in the ordinary course of its business and in the amount of the Account;
(ii) (x) upon which any Borrower’s or any SubsidiaryBorrowing Base Party’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever or (y) as to which any Borrower or any Subsidiary Borrowing Base Party is not legally able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;
(iii) with respect to which an invoice, reasonably acceptable to Administrative Agent in form and substance, has not been sent to the applicable Account Debtor;
(iv) that (x) is not owned by any Borrower or any Subsidiary Borrowing Base Party or (y) is subject to any right, claim, security interest or other interest of any other Person, other than Liens in favor of Administrative Agent, on behalf of itself and Lenders or Permitted Liens under Section 7.01(b), (c), (h), (j), (k), (n), (p), (q), (u), (v), (x), (aa) and (bb);
(v) that is the obligation of an Account Debtor located in a foreign country other than Canada unless payment thereof is assured by a letter of credit assigned and delivered to Administrative Agent, reasonably satisfactory to Administrative Agent as to form, amount and issuer;
(vi) that arises with respect to goods that are delivered on a xxxx and hold, cash on delivery basis or placed on consignment, sale or return, sale on approval, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional;
(vii) that is in default, as established upon the occurrence of any of the following:
(A) the Account is not paid within 90 days following its original invoice date;
(B) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or
(C) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(viii) as to which Administrative Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien;
(ix) as to which any of the representations or warranties in the Loan Documents are untrue;
(x) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper (unless such Chattel Paper has been delivered to the Collateral Agent or bears the legend set forth in Section 4 of the Security Agreement);
(xi) to the extent that both (x) the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to any Borrower’s or any SubsidiaryBorrowing Base Party’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer and (y) the aggregate face amount of all Accounts described in this clause (xi) exceeds $500,000;
(xii) to the extent that any defense, counterclaim, setoff or dispute has been asserted as to such Account, up to the amount of the defense, counterclaim, setoff or dispute so asserted;
(xiii) that arises from a sale or rental to any director, officer, other employee or Affiliate of any Loan Party, or to any entity that has any common officer or director with any Loan Party (it being understood and agreed that sales to any portfolio companies of Sponsor shall not be excluded from the category of Eligible Accounts solely by operation of this clause (xiii));
(xiv) to the extent that both (x) the Account is the obligation of an Account Debtor that is the United States government, or any department, agency or instrumentality thereof, unless the Administrative Agent, in its sole discretion, has agreed to the contrary in writing and the relevant Borrower or a SubsidiaryBorrowing Base Party, if necessary or desirable, has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, and (y) the aggregate face amount of all Accounts described in this clause (xiv) and in clause (b)(xiv) below with respect to Unbilled Accounts, exceed $1,000,000;
(xv) unless the aggregate amount for all Account Debtors would not in the reasonable determination of the Borrowers Borrower exceed $250,000, to the extent any Borrower or any Subsidiary Borrowing Base Party is liable for goods sold or services rendered by the applicable Account Debtor to any Borrower or any Subsidiary Borrowing Base Party but only to the extent of the potential offset;
(xvi) that is the obligation of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this Section 2.15;
(xvii) as to which the Account Debtor is subject to any Sanction or any designated nationals list maintained by OFAC; or
(xviixviii) to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates as of any date of determination exceed ten percent (10%) of all Eligible Accounts and/or all Eligible Unbilled Accounts.
(b) Eligible Unbilled Accounts shall not include any Account of any Borrower or any of its SubsidiariesBorrowing Base Party:
(i) that does not arise from the sale or rental of goods or the performance of services by any Borrower or any of its Subsidiaries Borrowing Base Party in the ordinary course of its business and in the amount of the Account Account;
(ii) (x) upon which any Borrower’s or any SubsidiaryBorrowing Base Party’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever (other than the issuance of an invoice) or (y) as to which any Borrower or any Subsidiary Borrowing Base Party is not legally able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;
(iii) that is not an Unbilled Account;
(iv) that (x) is not owned by any Borrower or any Subsidiary Borrowing Base Party or (y) is subject to any right, claim, security interest or other interest of any other Person, other than Liens in favor of the Collateral Agent, on behalf of itself and Lenders;
(v) that is the obligation of an Account Debtor located in a foreign country other than Canada unless payment thereof is assured by a letter of credit assigned and delivered to the Collateral Agent, reasonably satisfactory to the Collateral Agent as to form, amount and issuer;
(vi) that arises with respect to goods that are delivered on a xxxx and hold, cash on delivery basis or placed on consignment, sale or return, sale on approval, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional;
(vii) that is in default, as established upon the occurrence of any of the following:
(A) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or
(B) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(C) as to which the Collateral Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien;
(viii) as to which any of the representations or warranties in the Loan Documents are untrue;
(ix) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper (unless such Chattel Paper has been delivered to the Collateral Agent or bears the legend set forth in Section 4 of the Security Agreement);
(x) that has remained an Unbilled Account for more than seven (7) Business Days following the date of the Borrowing Base Certificate that includes such Unbilled Accounts as Eligible Unbilled Accounts.
(xi) to the extent that both (x) the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contact under which the Account Debtor’s obligation to pay that invoice is subject to any Borrower’s or any SubsidiaryBorrowing Base Party’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer and (y) that aggregate face amount of all Accounts described in this clause (xi) exceeds $500,000;
(xii) to the extent that any defense, counterclaim, setoff or dispute has been asserted as to such Account, up to the amount of the defense, counterclaim, setoff or dispute so asserted;
(xiii) that arises from a sale or rental to any director, officer, other employee or Affiliate of any Loan Party, or to any entity that has any common officer or director with any Loan Party (it being understood and agreed that sales to any portfolio companies of Sponsor shall not be excluded from the category of Eligible Accounts solely by operation of this clause (xiii));
(xiv) to the extent that both (x) the Account is the obligation of an Account Debtor that is the United States government, or any department, agency or instrumentality thereof, unless the Administrative Agent, in its sole discretion, has agreed to the contrary in writing and the relevant Borrower or a SubsidiaryBorrowing Base Party, if necessary or desirable, has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, and (y) the aggregate face amount of all Accounts described in this clause (xiv) and in clause (a)(xiv) above with respect to Billed Accounts, exceed $1,000,000;
(xv) unless the aggregate amount for all Account Debtors would not in the reasonable determination of the Borrowers Borrower exceed $250,000, to the extent any Borrower or any Subsidiary Borrowing Base Party is liable for goods sold or services rendered by the applicable Account Debtor to any Borrower or any Subsidiary Borrowing Base Party but only to the extent of the potential offset;
(xvi) that is the obligation of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this Section 2.15;
(xvii) as to which the Account Debtor is subject to any Sanction or any designated nationals list maintained by OFAC; or
(xviii) to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates as of any date of determination exceed ten percent (10%) of all Eligible Accounts and/or all Eligible Unbilled Accounts.
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Eligible Accounts and Eligible Unbilled Accounts. All of the Accounts owned by Borrowers and their Subsidiaries the Borrowing Base Parties and reflected in the most recent Borrowing Base Certificate (to the extent required to be reflected pursuant to Section 6.01(e)) delivered by Borrowers the Borrower to the Administrative Agent shall be “Eligible Accounts” or, as applicable, “Eligible Unbilled Accounts” for purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies. Administrative Agent shall have the right, in its commercially reasonable judgment that there has been a material and adverse change from historical performance with respect to the value of Eligible Accounts and/or Eligible Unbilled Accounts, at any time either (a) an Event of Default has occurred and is then continuing and/or (b) Borrowing Availability is less than the Borrowing Base Adjustment Limit, to (i) establish, modify or eliminate Reserves against Eligible Accounts and/or Eligible Unbilled Accounts from time to time and/or (ii) adjust from time to time any of the criteria set forth below, establish new criteria and adjust advance rates with respect to Eligible Accounts and/or Eligible Unbilled Accounts, in each case effective on prior written notice delivered by the Administrative Agent to the BorrowersBorrower, the effect of which, along with any other changes to Reserves, eligibility criteria, advance rates and the exercise of other Administrative Agent rights under this Section 2.15 and/or under Section 2.16, shall not reduce the Borrowing Base by an aggregate amount in excess of the Borrowing Base Adjustment Limit. Any exercise of rights by Administrative Agent pursuant to the immediately preceding sentence (x) shall be reversed, automatically and without further action by Administrative Agent, at such time that no Event of Default shall have occurred and remain continuing and Borrowing Availability, calculated without giving effect to any actions taken by Administrative Agent pursuant to the immediately preceding sentence, is greater than the Borrowing Base Adjustment Limit and (y) subject to the provisions of the immediately preceding clause (x), shall be subject to the approval of Supermajority Required Lenders in the case of adjustments, new criteria, changes in advance rates or the elimination of Reserves which have the effect of making more credit available.
(a) Eligible Accounts shall not include any Account of any Borrower or any of its SubsidiariesBorrowing Base Party:
(i) that does not arise from the sale or rental of goods or the performance of services by any Borrower or any of its Subsidiaries that are Loan Parties Borrowing Base Party in the ordinary course of its business and in the amount of the Account;
(ii) (x) upon which any Borrower’s or any SubsidiaryBorrowing Base Party’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever or (y) as to which any Borrower or any Subsidiary Borrowing Base Party is not legally able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;
(iii) with respect to which an invoice, reasonably acceptable to Administrative Agent in form and substance, has not been sent to the applicable Account Debtor;
(iv) that (x) is not owned by any Borrower or any Subsidiary Borrowing Base Party or (y) is subject to any right, claim, security interest or other interest of any other Person, other than Liens in favor of Administrative Agent, on behalf of itself and Lenders or Permitted Liens under Section 7.01(b), (c), (h), (j), (k), (n), (p), (q), (u), (v), (x), (aa) and (bb);
(v) that is the obligation of an Account Debtor located in a foreign country other than Canada unless payment thereof is assured by a letter of credit assigned and delivered to Administrative Agent, reasonably satisfactory to Administrative Agent as to form, amount and issuer;
(vi) that arises with respect to goods that are delivered on a xxxx and hold, cash on delivery basis or placed on consignment, sale or return, sale on approval, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional;
(vii) that is in default, as established upon the occurrence of any of the following:
(A) the Account is not paid within 90 days following its original invoice date;
(B) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or
(C) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(viii) as to which Administrative Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien;
(ix) as to which any of the representations or warranties in the Loan Documents are untrue;
(x) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper (unless such Chattel Paper has been delivered to the Collateral Agent or bears the legend set forth in Section 4 of the Security Agreement);
(xi) to the extent that both (x) the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to any Borrower’s or any SubsidiaryBorrowing Base Party’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer and (y) the aggregate face amount of all Accounts described in this clause (xi) exceeds $500,000;
(xii) to the extent that any defense, counterclaim, setoff or dispute has been asserted as to such Account, up to the amount of the defense, counterclaim, setoff or dispute so asserted;
(xiii) that arises from a sale or rental to any director, officer, other employee or Affiliate of any Loan Party, or to any entity that has any common officer or director with any Loan Party (it being understood and agreed that sales to any portfolio companies of Sponsor shall not be excluded from the category of Eligible Accounts solely by operation of this clause (xiii));
(xiv) to the extent that both (x) the Account is the obligation of an Account Debtor that is the United States government, or any department, agency or instrumentality thereof, unless the Administrative Agent, in its sole discretion, has agreed to the contrary in writing and the relevant Borrower or a SubsidiaryBorrowing Base Party, if necessary or desirable, has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, and (y) the aggregate face amount of all Accounts described in this clause (xiv) and in clause (b)(xiv) below with respect to Unbilled Accounts, exceed $1,000,000;
(xv) unless the aggregate amount for all Account Debtors would not in the reasonable determination of the Borrowers Borrower exceed $250,000, to the extent any Borrower or any Subsidiary Borrowing Base Party is liable for goods sold or services rendered by the applicable Account Debtor to any Borrower or any Subsidiary Borrowing Base Party but only to the extent of the potential offset;
(xvi) that is the obligation of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this Section 2.15; or
(xvii) to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates as of any date of determination exceed ten percent (10%) of all Eligible Accounts and/or all Eligible Unbilled Accounts.
(b) Eligible Unbilled Accounts shall not include any Account of any Borrower or any of its SubsidiariesBorrowing Base Party:
(i) that does not arise from the sale or rental of goods or the performance of services by any Borrower or any of its Subsidiaries Borrowing Base Party in the ordinary course of its business and in the amount of the Account Account;
(ii) (x) upon which any Borrower’s or any SubsidiaryBorrowing Base Party’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever (other than the issuance of an invoice) or (y) as to which any Borrower or any Subsidiary Borrowing Base Party is not legally able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;
(iii) that is not an Unbilled Account;
(iv) that (x) is not owned by any Borrower or any Subsidiary Borrowing Base Party or (y) is subject to any right, claim, security interest or other interest of any other Person, other than Liens in favor of the Collateral Agent, on behalf of itself and Lenders;
(v) that is the obligation of an Account Debtor located in a foreign country other than Canada unless payment thereof is assured by a letter of credit assigned and delivered to the Collateral Agent, reasonably satisfactory to the Collateral Agent as to form, amount and issuer;
(vi) that arises with respect to goods that are delivered on a xxxx and hold, cash on delivery basis or placed on consignment, sale or return, sale on approval, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional;
(vii) that is in default, as established upon the occurrence of any of the following:
(A) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or
(B) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(C) as to which the Collateral Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien;
(viii) as to which any of the representations or warranties in the Loan Documents are untrue;
(ix) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper (unless such Chattel Paper has been delivered to the Collateral Agent or bears the legend set forth in Section 4 of the Security Agreement);
(x) that has remained an Unbilled Account for more than seven (7) Business Days following the date of the Borrowing Base Certificate that includes such Unbilled Accounts as Eligible Unbilled Accounts.
(xi) to the extent that both (x) the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contact under which the Account Debtor’s obligation to pay that invoice is subject to any Borrower’s or any SubsidiaryBorrowing Base Party’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer and (y) that aggregate face amount of all Accounts described in this clause (xi) exceeds $500,000;
(xii) to the extent that any defense, counterclaim, setoff or dispute has been asserted as to such Account, up to the amount of the defense, counterclaim, setoff or dispute so asserted;
(xiii) that arises from a sale or rental to any director, officer, other employee or Affiliate of any Loan Party, or to any entity that has any common officer or director with any Loan Party (it being understood and agreed that sales to any portfolio companies of Sponsor shall not be excluded from the category of Eligible Accounts solely by operation of this clause (xiii));
(xiv) to the extent that both (x) the Account is the obligation of an Account Debtor that is the United States government, or any department, agency or instrumentality thereof, unless the Administrative Agent, in its sole discretion, has agreed to the contrary in writing and the relevant Borrower or a SubsidiaryBorrowing Base Party, if necessary or desirable, has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, and (y) the aggregate face amount of all Accounts described in this clause (xiv) and in clause (a)(xiv) above with respect to Billed Accounts, exceed $1,000,000;
(xv) unless the aggregate amount for all Account Debtors would not in the reasonable determination of the Borrowers Borrower exceed $250,000, to the extent any Borrower or any Subsidiary Borrowing Base Party is liable for goods sold or services rendered by the applicable Account Debtor to any Borrower or any Subsidiary Borrowing Base Party but only to the extent of the potential offset;
(xvi) that is the obligation of an Account Debtor if fifty percent (50%) or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this Section 2.15;
(xvii) to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates as of any date of determination exceed ten percent (10%) of all Eligible Accounts and/or all Eligible Unbilled Accounts.
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