Common use of Eligible Accounts Receivable Clause in Contracts

Eligible Accounts Receivable. That portion of the Accounts Receivable which is owned by a Borrower, subject to a Security Agreement, in which Agent has a perfected first priority security interest, subject to no other security interest, lien, charge or other encumbrance of any nature, evidenced by promissory notes or other documentation acceptable to Agent, and consisting of accounts which have payment terms acceptable to the Agent and which: (i) are and shall be created in the ordinary course of business of the Borrowers, except with respect to Accounts Receivable described in (ix) below so long as Land Company and Account Debtor are in compliance with (A) through (D) described therein; (ii) arise from a complete bona fide transaction and which require no further act under any circumstances on the part of any Borrower to make such receivable payable by the Account Debtor; (iii) are not subject to dispute, offset or counterclaim; (iv) do not arise out of any transaction with an Account Debtor which is insolvent or the subject of any bankruptcy or insolvency proceedings of any kind or of any other proceeding or action, threatened or pending, which might have a material adverse effect on the financial condition of such Account Debtors; (v) conform to all representations and warranties made by Borrowers in this Agreement and the other Loan Documents; (vi) have not remained unpaid for more than thirty (30) days from any payment date; (vii) do not arise out of any transaction with any affiliate of either Borrower, the General Partner, a Second Tier Partner, a Third Tier Partner, any Guarantor or any affiliate thereof; (viii) are owed by Account Debtors located within the United States of America; (ix) with respect to each Municipal Utility District Contract, (A) Land Company is in full compliance with the applicable CON-10 necessary to give rise to the obligation of the applicable Municipal Utility District to purchase the relevant facilities in accordance with the applicable CON-10, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction or Acquisition of Facilities, (B) except with respect to Accounts Receivable related to the San Jacinto River Authority contracts, Land Company has obtained and delivered to the Agent a copy of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated by the applicable Policy, (C) the obligation of the applicable Municipal Utility District to acquire the “facility” has not lapsed or expired, and (D) Land Company has delivered satisfactory evidence to the Agent that each Municipal Utility District Contract does not exceed the applicable Municipal Utility District’s authority to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District Contract; and (x) are not determined by the Majority Lenders in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as part of the Collateral). Eligible Accounts Receivable shall in no event include any Investments of the type described in §8.3(k).

Eligible Accounts Receivable. That portion The aggregate of the unpaid portions of Accounts Receivable of the Borrower and its Subsidiaries (other than the Mexican Subsidiary) which is owned by a are parties to the Guaranty (net of any credits, rebates, offsets, holdbacks or other adjustments payable to third parties that are adjustments to such Accounts Receivable but without deducting therefrom any commissions payable to sales representatives) (a) that the Borrower reasonably and in good faith determine to be collectible; (b) that are with account debtors that (i) are not Affiliates of the Borrower, (ii) purchased the goods or services giving rise to the relevant Account Receivable in an arm's length transaction, (iii) are not insolvent or involved in any case or proceeding, whether voluntary or involuntary, under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar law of any jurisdiction and (iv) are, in the Agents' reasonable judgment, creditworthy; (c) that are in payment of obligations that have been fully performed and are not subject to a Security Agreementdispute or any other similar claims that would reduce the cash amount payable therefor; (d) that are not subject to any pledge, security interest or other lien or encumbrance other than those created by the Loan Documents and other than any Permitted Liens pursuant to ss.ss.12.2(b) and (e) hereof which are subordinate and junior to the interest of the Collateral Agent therein; (e) in which the Collateral Agent has a valid and perfected first priority security interest; (f) that are not Overdue Receivables; (g) that are not due from an account debtor located in Indiana, subject to no other security interest, lien, charge Minnesota or other encumbrance of any nature, evidenced by promissory notes or other documentation acceptable to Agent, and consisting of accounts which have payment terms acceptable to New Jersey unless the Agent and which: Borrower (i) are has received a certificate of authority to do business and shall be created is in the ordinary course good standing in such state or (ii) has filed a notice of business activities report with the appropriate office or agency of such state for the Borrowers, except current year; (h) that are not due from any single account debtor if more than (i) with respect to Accounts Receivable described in owing by independent sales representatives of the division of the Borrower previously constituting the "Scholastic Division" of the Balfour Sellers, fifty percent (ix50%) below so long as Land Company and Account Debtor are in compliance with (A) through (D) described therein; of the aggregate amount of all Accounts Receivable owing from such account debtor would otherwise not be Eligible Accounts Receivable, (ii) arise from a complete bona fide transaction and which require no further act under any circumstances on the part of any Borrower to make such receivable payable by the Account Debtor; (iii) are not subject to dispute, offset or counterclaim; (iv) do not arise out of any transaction with an Account Debtor which is insolvent or the subject of any bankruptcy or insolvency proceedings of any kind or of any other proceeding or action, threatened or pending, which might have a material adverse effect on the financial condition of such Account Debtors; (v) conform to all representations and warranties made by Borrowers in this Agreement and the other Loan Documents; (vi) have not remained unpaid for more than thirty (30) days from any payment date; (vii) do not arise out of any transaction with any affiliate of either Borrower, the General Partner, a Second Tier Partner, a Third Tier Partner, any Guarantor or any affiliate thereof; (viii) are owed by Account Debtors located within the United States of America; (ix) with respect to each Municipal Utility District Contract, (A) Land Company is in full compliance with the applicable CON-10 necessary to give rise to the obligation of the applicable Municipal Utility District to purchase the relevant facilities in accordance with the applicable CON-10, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction or Acquisition of Facilities, (B) except with respect to Accounts Receivable related to the San Jacinto River Authority contracts, Land Company has obtained and delivered to the Agent a copy of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated by Borrower generated in connection with the applicable Policy, (C) the obligation division of the applicable Municipal Utility District to acquire Borrower previously constituting the “facility” has "Specialty Division" of the Balfour Sellers, twenty percent (20%) of the aggregate amount of all Accounts Receivable owing from such account debtor would otherwise not lapsed or expiredbe Eligible Accounts Receivable, and (Diii) Land Company has delivered satisfactory evidence with respect to Accounts Receivable owing by any Specified Account Debtors thirty-five percent (35%) of the Agent aggregate amount of all Accounts Receivable owing from such Specified Account Debtor would otherwise not be Eligible Accounts Receivable; (i) that each Municipal Utility District Contract does are payable in Dollars; (j) that are not exceed payable from an office outside of the applicable Municipal Utility District’s authority to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District ContractUnited States; and (xk) that are not determined secured by a letter of credit unless the Majority Lenders Collateral Agent has a prior, perfected security interest in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as part such letter of the Collateral). Eligible Accounts Receivable shall in no event include any Investments of the type described in §8.3(k)credit.

Eligible Accounts Receivable. That portion With respect to each Receivable that Borrower represents or warrants to Lender to be an Eligible Accounts Receivable, or an Insured Eligible Foreign Accounts Receivable or an Uninsured Eligible Foreign Accounts Receivable in each Borrowing Base Certificate or other certification delivered by Borrower to Lender pursuant to this Agreement, Borrower warrants and represents to Lender that, unless otherwise indicated in writing by Borrower from time to time including in any Borrowing Base Certificate: (a) They are genuine, are in all respects what they purport to be, are not evidenced by a judgment and are only evidenced by one, if any, executed original instrument, agreement, contract or document, which has been delivered to Lender; (b) They represent undisputed, bona fide transactions completed in accordance with the terms and provisions contained in any documents related thereto; (c) The amounts of the Accounts Receivable which is owned by a Borrower, subject face value shown on any schedule of accounts or accounts receivable aging report provided to a Security Agreement, in which Agent has a perfected first priority security interest, subject to no other security interest, lien, charge or other encumbrance of any nature, evidenced by promissory notes or other documentation acceptable to AgentLender, and consisting of accounts which have payment terms acceptable all invoices and statements delivered to the Agent Lender with respect to any Receivable are actually and which: absolutely owing to Borrower and are not contingent for any reason; (id) are and shall be created Borrower has not made any agreement with any Account Debtor thereunder for any deduction therefrom, except a discount or allowance allowed by Borrower in the ordinary course of its business for prompt payment; (e) To the knowledge of Borrower, there are no facts, events or occurrences which in any way impair the validity or enforcement thereof or tend to reduce, in any material way, the amount payable thereunder from the amount of the Borrowers, except invoice face value with respect to any, Eligible Accounts Receivable described in or Insured Eligible Foreign Accounts Receivable or Uninsured Eligible Foreign Accounts Receivable, and on all contracts, invoices and statements delivered to Lender with respect thereto; (ixf) below so long as Land Company To the knowledge of Borrower's officers, directors and key employees, all Account Debtor are in compliance with Debtors, under any Eligible Accounts Receivable or Insured Eligible Foreign Accounts Receivable or Uninsured Eligible Foreign Accounts Receivable, (Ai) through (D) described therein; had the capacity to contract at the time any contract or other document giving rise to the Receivable was executed, (ii) arise from a complete bona fide transaction are solvent, and which require no further act under any circumstances on the part of any Borrower to make such receivable payable by the Account Debtor; (iii) are not subject to dispute, offset or counterclaim; (iv) do not arise out of any transaction with an Account Debtor which is insolvent or the subject of any a bankruptcy or insolvency proceedings proceeding of any kind kind; (g) The goods giving rise thereto are not, and were not at the time of the sale thereof, subject to any lien, claim, encumbrance or security interest, except those of Lender, those terminated prior to the date hereof or those subordinate to Lender's security interest; (h) Borrower has no knowledge of any other proceeding fact or actioncircumstance which would materially impair the validity or collectability thereof; (i) To Borrower's knowledge, threatened there are no proceedings or pending, actions which are pending against any Account Debtor thereunder which might have a result in any material adverse effect on change in the financial condition of such Account DebtorsDebtor; and (vj) conform to all representations and warranties made by Borrowers in this Agreement and the other Loan Documents; (vi) They have not remained unpaid for more than thirty (30) days from any payment date; (vii) do not arise out of any transaction with any affiliate of either Borrowerbeen pledged, the General Partner, a Second Tier Partner, a Third Tier Partner, any Guarantor assigned or any affiliate thereof; (viii) are owed by Account Debtors located within the United States of America; (ix) with respect transferred to each Municipal Utility District Contract, (A) Land Company is in full compliance with the applicable CON-10 necessary to give rise to the obligation of the applicable Municipal Utility District to purchase the relevant facilities in accordance with the applicable CON-10, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction or Acquisition of Facilities, (B) except with respect to Accounts Receivable related to the San Jacinto River Authority contracts, Land Company has obtained and delivered to the Agent a copy of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated by the applicable Policy, (C) the obligation of the applicable Municipal Utility District to acquire the “facility” has not lapsed or expired, and (D) Land Company has delivered satisfactory evidence to the Agent that each Municipal Utility District Contract does not exceed the applicable Municipal Utility District’s authority to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District Contract; and (x) are not determined by the Majority Lenders in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as part of the Collateral). Eligible Accounts Receivable shall in no event include any Investments of the type described in §8.3(k)Person.

Eligible Accounts Receivable. That portion The aggregate of the unpaid portions of Accounts Receivable which is owned by a (net of any credits, rebates, offsets, holdbacks or other adjustments or commissions payable to third parties that are adjustments to such Accounts Receivable) (a) that the Borrower reasonably and in good faith determines to be collectible; (b) that are with account debtors that (i) are not Affiliates of the Borrower, (ii) are Credit Card Providers, (iii) are not insolvent or involved in any case or proceeding, whether voluntary or involuntary, under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar law of any jurisdiction and (iv) are, in the Agent's reasonable judgment, creditworthy; (c) that are in payment of obligations that have been fully performed and are not subject to a Security Agreementdispute or any other similar claims that would reduce the cash amount payable therefor; (d) that are not subject to any pledge, restriction, security interest or other lien or encumbrance other than those created by the Loan Documents and Permitted Liens which are subordinate to the liens of the Agent; (e) in which the Agent has a valid and perfected first priority security interest, subject ; (f) that are not outstanding for more than five (5) Business Days past the date the applicable Credit Card Provider is required to no other security interest, lien, charge or other encumbrance make payment and that are not outstanding for more than ten (10) Business Days past the date of any nature, evidenced by promissory notes or other documentation acceptable sale of the underlying goods to Agent, and consisting of accounts which have payment terms acceptable to the Agent and which: (i) are and shall be created a retail customer in the ordinary course of business of the Borrowersbusiness; (g) that are not due from an account debtor located in Indiana, except with respect to Accounts Receivable described in (ix) below so long as Land Company and Account Debtor are in compliance with Minnesota or New Jersey unless such Borrower (A) through (D) described therein; (ii) arise from has received a complete bona fide transaction certificate of authority to do business and which require no further act under any circumstances on the part of any Borrower to make such receivable payable by the Account Debtor; (iii) are not subject to dispute, offset or counterclaim; (iv) do not arise out of any transaction with an Account Debtor which is insolvent or the subject of any bankruptcy or insolvency proceedings of any kind or of any other proceeding or action, threatened or pending, which might have a material adverse effect on the financial condition of such Account Debtors; (v) conform to all representations and warranties made by Borrowers in this Agreement and the other Loan Documents; (vi) have not remained unpaid for more than thirty (30) days from any payment date; (vii) do not arise out of any transaction with any affiliate of either Borrower, the General Partner, a Second Tier Partner, a Third Tier Partner, any Guarantor or any affiliate thereof; (viii) are owed by Account Debtors located within the United States of America; (ix) with respect to each Municipal Utility District Contract, (A) Land Company is in full compliance with the applicable CON-10 necessary to give rise to the obligation of the applicable Municipal Utility District to purchase the relevant facilities good standing in accordance with the applicable CON-10, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction such state or Acquisition of Facilities, (B) except has filed a notice of business activities report with respect to the appropriate office or agency of such state for the current year; (h) that are not due from any single account debtor if more than fifteen percent (15%) of the aggregate amount of all Accounts Receivable related to the San Jacinto River Authority contracts, Land Company has obtained and delivered to owing from such account debtor would otherwise not be Eligible Accounts Receivable; (i) that are payable in Dollars; (j) that are not secured by a letter of credit unless the Agent has a copy prior perfected security interest in such letters of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated by the applicable Policy, (C) the obligation of the applicable Municipal Utility District to acquire the “facility” has not lapsed or expired, and (D) Land Company has delivered satisfactory evidence to the Agent that each Municipal Utility District Contract does not exceed the applicable Municipal Utility District’s authority to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District Contractcredit; and (xk) that are not determined by the Majority Lenders in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as part payable from an office outside of the Collateral). Eligible Accounts Receivable shall in no event include any Investments of the type described in §8.3(k)United States.

Eligible Accounts Receivable. That portion of the Accounts Receivable which is owned by a Borrower, subject to a Security Agreement, in which Agent has a perfected first priority security interest, subject to no other security interest, lien, charge or other encumbrance of any nature, evidenced by promissory notes or other documentation acceptable to Agent, and consisting of accounts which have payment terms acceptable to the Agent and which: (i) are and shall be created in the ordinary course of business of the Borrowers, except with respect to Accounts Receivable described in (ix) below so long as Land Company and Account Debtor are in compliance with (A) through Such accounts are each evidenced by an Eligible Note Receivable executed, endorsed and delivered to Lender. (B) Such accounts are not now, and will not at the time of any Advance, be subject to any offsets, claims, counterclaims, deductions, disputes or discounts of any nature whatsoever claimed or which, under the terms of any agreement or otherwise, may be claimed by the account debtor or accounts debtors with respect thereto, including, without limitation, any accounts where the account debtor is also a creditor of or supplier to Borrower. (C) Such accounts presently, and in the future at the time of any Advance, will represent undisputed, bona fide Indebtedness to Borrower of account debtors (who are not Affiliates or Subsidiaries of Borrower) located in jurisdictions in which Borrower is qualified to do business and is fully licensed by such jurisdiction to conduct its business. (D) described therein; The assignment of such accounts does not, and will not, violate any agreement with such account debtor or by which such account debtor is bound. (iiE) arise from Borrower is, and will be, the lawful owner of and have a complete bona fide transaction good right to pledge, sell, assign, transfer and to grant a security interest in such of the accounts as are offered by Borrower. (F) Such accounts have not been, nor hereafter will be, pledged, sold, assigned, transferred or encumbered to any Person other than Lender. (G) Such accounts are, or will be, owing by an underlying borrower and mortgagor who, since the date of the Eligible Note Receivable evidencing such accounts, has not died, terminated its existence, become insolvent (which require no further act under term shall include either a negative tangible net worth or an inability to pay its debts as they mature), suffered a business failure, been subjected either voluntarily or involuntarily to the appointment of a receiver of any circumstances on the part of his or its property, made an assignment for the benefit of his or its creditors, requested creditors to stand by, or has filed or had filed against him or it a petition in bankruptcy or any Borrower to make such receivable payable by the Account Debtor; (iii) are not subject to dispute, offset or counterclaim; (iv) do not arise out of any transaction with an Account Debtor which is insolvent or the subject of other proceeding under any bankruptcy or insolvency proceedings of any kind or of any other proceeding or actionlaws. (H) Borrower has, threatened or pendingand will have, which might have a material adverse effect on the financial condition of such Account Debtors; (v) conform to all representations and warranties made by Borrowers in this Agreement and the other Loan Documents; (vi) have not remained unpaid for more than thirty (30) days from any payment date; (vii) do not arise out of any transaction with any affiliate of either Borrower, the General Partner, a Second Tier Partner, a Third Tier Partner, any Guarantor or any affiliate thereof; (viii) are owed by Account Debtors located within the United States of America; (ix) with respect to each Municipal Utility District Contract, (A) Land Company is in full compliance with the applicable CON-10 necessary to give rise access to the obligation courts or arbitration panel or other tribunal of the applicable Municipal Utility District state or other jurisdiction which has or will have in personam jurisdiction over the account debtors owing on such accounts for purposes of collecting and enforcing such accounts. (I) Borrower is the sole owner of record and holder of the Eligible Notes Receivable and Eligible Mortgage relating to purchase such Eligible Accounts and has good, indefeasible and marketable title thereto, and has full right to transfer the relevant facilities in accordance with Eligible Accounts to Lender. There is no impediment to the applicable CON-10Borrower’s ability to enforce any Eligible Notes Receivable or Eligible Mortgages, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction or Acquisition of Facilitieslimitation, (B) except with respect to Accounts Receivable related state laws relating to the San Jacinto River Authority contracts, Land Company has obtained and delivered Borrower’s qualification to do business as a precondition to the Agent use of state courts and state laws relating to usury. (J) Borrower shall provide, at least monthly no later than the tenth (10th) day of each month, a copy revised complete listing of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated by the applicable Policy, (C) the obligation of the applicable Municipal Utility District to acquire the “facility” has not lapsed or expired, and (D) Land Company has delivered satisfactory evidence to the Agent that each Municipal Utility District Contract does not exceed the applicable Municipal Utility District’s authority to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District Contract; and (x) are not determined by the Majority Lenders in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as part of the Collateral). its Eligible Accounts Receivable shall in no event include any Investments as of the type described in §8.3(k)end of the prior month.

Eligible Accounts Receivable. That portion The aggregate of the unpaid portions of Accounts Receivable which is owned by a Borrower(net of any credits, subject to a Security Agreementrebates, in which Agent has a perfected first priority security interestoffsets, subject to no other security interest, lien, charge holdbacks or other encumbrance of any nature, evidenced by promissory notes adjustments or commissions payable to third parties that are adjustments to such Accounts Receivable) (a) that the Borrower reasonably and in good faith determines to be collectible; (b) that are with account debtors or other documentation acceptable to Agent, and consisting of accounts which have payment terms acceptable to the Agent and which: obligors that (i) are and shall be created in the ordinary course of business not Affiliates of the BorrowersBorrower (provided, except with respect to Accounts Receivable described in (ix) below so long as Land Company and Account Debtor are in compliance with (A) through (D) described therein; however, for purposes of this Credit Agreement, Unoptic AG shall not be considered an Affiliate of the Borrower unless it would also be a Controlled Entity), (ii) arise from a complete bona fide transaction purchased the goods or services giving rise to the relevant Account Receivable in an arm's length transaction, and which require no further act under any circumstances on the part of any Borrower to make such receivable payable by the Account Debtor; (iii) are not insolvent or involved in any case or proceeding, whether voluntary or involuntary, under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar law of any jurisdiction; (c) that are in payment of obligations that have been fully performed, do not consist of progress billxxxx (xxich for purposes of this Credit Agreement, does not include payment of obligations under a milestone or similar contract if such milestone or other condition to payment has been fully satisfied and for which invoices for such payment have been issued and are payable or, if such invoices have not been issued, which are readily identifiable on the books and records of the Borrower as an Account Receivable for which an invoice could, as if the date of determination, be issued and which, if so issued, be immediately due and payable) or bill xxx hold invoices and, if subject to dispute, offset any dispute or counterclaim; (iv) do not arise out of any transaction with an Account Debtor which is insolvent or the subject of any bankruptcy or insolvency proceedings of any kind or of any other proceeding or actionsimilar claims that would reduce the cash amount payable therefor, threatened or pending, which might have a material adverse effect on the financial condition that portion of such Account DebtorsReceivable subject to such dispute or claim shall be excluded from being an Eligible Account Receivable; (vd) conform that are not subject to all representations and warranties made any pledge, restriction, security interest or other lien or encumbrance other than Permitted Liens permitted by Borrowers in this Agreement and the other Loan Documentsss.9.2(b) - (e) hereof; (vie) have that are not remained unpaid outstanding for more than one hundred twenty (120) days past the date of the respective invoices therefor; (f) that are not due from an account debtor or other obligor located in Minnesota unless the Borrower (i) has received a certificate of authority to do business and is in good standing in such state or (ii) has filed a notice of business activities report with the appropriate office or agency of such state for the current year; (g) that are not due from any single account debtor or other obligor if more than thirty percent (30%) days of the aggregate amount of all Accounts Receivable owing from any payment datesuch account debtor or other obligor would otherwise not be Eligible Accounts Receivable; (viih) do not arise out of any transaction with any affiliate of either Borrower, the General Partner, a Second Tier Partner, a Third Tier Partner, any Guarantor that are payable in Dollars or any affiliate thereof; (viii) are owed by Account Debtors located within the United States of America; (ix) with respect to each Municipal Utility District Contract, (A) Land Company such other currencies as is in full compliance with the applicable CON-10 necessary to give rise reasonably acceptable to the obligation of the applicable Municipal Utility District to purchase the relevant facilities in accordance with the applicable CON-10, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction or Acquisition of Facilities, (B) except with respect to Accounts Receivable related to the San Jacinto River Authority contracts, Land Company has obtained and delivered to the Agent a copy of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated by the applicable Policy, (C) the obligation of the applicable Municipal Utility District to acquire the “facility” has not lapsed or expired, and (D) Land Company has delivered satisfactory evidence to the Agent that each Municipal Utility District Contract does not exceed the applicable Municipal Utility District’s authority to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District ContractAgent; and (x) are not determined by the Majority Lenders in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as part for which invoices have been issued and are payable or, if invoices have not been issued, which are readily identifiable on the books and records of the Collateral). Eligible Accounts Borrower as an Account Receivable shall in no event include any Investments and for which invoices could, as of the type described in §8.3(k)date of determination, be issued and which would, if so issued, be immediately due and payable.

Eligible Accounts Receivable. That portion The aggregate of the unpaid portions of Accounts Receivable (net of any credits, rebates, offsets, holdbacks, contras or other adjustments or commissions payable to third parties that are adjustments to such Accounts Receivable) as to which is owned by the Borrower has furnished reasonably detailed information to the Banks in a Borrowing Base Report (i) that the Borrower reasonably and in good faith determines to be collectible; (ii) that are with account debtors that (A) are not factors or Affiliates of the Borrower, (B) purchased the goods or services giving rise to the relevant Account Receivable in an arm's length transaction, (C) are not insolvent or involved in any case or proceeding, whether voluntary or involuntary, under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar law of any jurisdiction and (D) are, in the Agent's reasonable judgment, creditworthy (in the event the Agent determines that any account debtor is not creditworthy, the Agent shall endeavor to notify the Borrower as to such account debtor); (iii) that are in payment of obligations that have been fully performed and are not subject to a Security Agreementdispute or any other similar claims that would reduce the cash amount payable therefor; (iv) that are not subject to any pledge, restriction, security interest or other lien or encumbrance other than those created by the Loan Documents; (v) in which the Agent has a valid and perfected first priority security interest, subject to no other security interest, lien, charge or other encumbrance of any nature, evidenced by promissory notes or other documentation acceptable to Agent, and consisting of accounts which have payment terms acceptable to the Agent and which: (i) are and shall be created in the ordinary course of business of the Borrowers, except with respect to Accounts Receivable described in (ix) below so long as Land Company and Account Debtor are in compliance with (A) through (D) described therein; (ii) arise from a complete bona fide transaction and which require no further act under any circumstances on the part of any Borrower to make such receivable payable by the Account Debtor; (iii) are not subject to dispute, offset or counterclaim; (iv) do not arise out of any transaction with an Account Debtor which is insolvent or the subject of any bankruptcy or insolvency proceedings of any kind or of any other proceeding or action, threatened or pending, which might have a material adverse effect on the financial condition of such Account Debtors; (v) conform to all representations and warranties made by Borrowers in this Agreement and the other Loan Documents; (vi) have not remained unpaid for that are neither more than thirty (30) days from any payment datepast due under the original terms of the sale nor outstanding more than ninety (90) days past the invoice date therefor; (vii) that are not due from an account debtor located in Minnesota or New Jersey unless the Borrower (A) has received a certificate of authority to do not arise out business and is in good standing in such state or (B) has filed a notice of any transaction business activities report with any affiliate the appropriate office or agency of either Borrower, such state for the General Partner, a Second Tier Partner, a Third Tier Partner, any Guarantor or any affiliate thereofcurrent year; (viii) that are owed by Account Debtors located within not due from any single account debtor if more than fifty percent (50%) of the United States aggregate amount of Americaall Accounts Receivable owing from such account debtor would otherwise not be Eligible Accounts Receivable; (ix) with respect to each Municipal Utility District Contract, (A) Land Company is that are payable in full compliance with the applicable CON-10 necessary to give rise to the obligation of the applicable Municipal Utility District to purchase the relevant facilities in accordance with the applicable CON-10, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction or Acquisition of Facilities, (B) except with respect to Accounts Receivable related to the San Jacinto River Authority contracts, Land Company has obtained and delivered to the Agent a copy of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated by the applicable Policy, (C) the obligation of the applicable Municipal Utility District to acquire the “facility” has not lapsed or expired, and (D) Land Company has delivered satisfactory evidence to the Agent that each Municipal Utility District Contract does not exceed the applicable Municipal Utility District’s authority to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District ContractDollars; and (x) that are not determined by the Majority Lenders in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as part payable from an office outside of the Collateral). Eligible Accounts Receivable shall in no event include any Investments United States or Canada unless such account debtor has provided to the Borrower an irrevocable letter of credit from a financial institution reasonably satisfactory to the Agent to secure such account debtor's obligations to the Borrower (but only to the extent of the type described in §8.3(kamount of such letter of credit and such Letter of Credit is immediately assigned to, and delivered into the possession of, the Agent).

Eligible Accounts Receivable. That portion For the purposes of determination of the Borrowing Base, Eligible Accounts Receivables shall be those Accounts Receivable which ("Receivable") meeting the following criteria: (1) The Receivable arose from a bona fide outright sale of goods or services performed under an enforceable contract, and such goods have been shipped to the appropriate account debtor, or the sale has otherwise been consummated or services have been performed for the appropriate account debtors in accordance with such order or contract; (2) Title to the receivable is owned by a Borrower, in the name of Borrower and such title is absolute and is not subject to a Security Agreementany prior assignment, in which Agent has a perfected first priority claim, lien or security interest, subject to no other security interest, lien, charge or other encumbrance ; (3) The amount shown on the books of any nature, evidenced by promissory notes or other documentation acceptable to Agent, and consisting of accounts which have payment terms acceptable to the Agent and which: (i) are and shall be created in the ordinary course of business of the Borrowers, except Borrower with respect to Accounts the Receivable described in and on any invoice or statement delivered to Bank is owing to Borrower, and no partial payment has been made thereon by anyone; (ix4) below so long as Land Company and Account Debtor are in compliance with (A) through (D) described therein; (ii) arise from a complete bona fide transaction and which require no further act under any circumstances on The Receivable is not the part subject of any Borrower to make such receivable payable claim of reduction, counterclaim, set-off, recoupment, or any claim for credits, allowances or adjustments by the Account Debtor; account Borrower because of returned, inferior or damaged goods or unsatisfactory services or for any other reason; (iii5) are The account debtor has not subject returned or refused to dispute, offset or counterclaim; retain any of the goods from the sale out of which the Receivable arose; (iv6) do The Receivable does not arise out of a contract or order from an account debtor that, by its terms, forbids an assignment or makes the assignment of the Receivable to Bank void or unenforceable; (7) Borrower has not received any transaction note, trade acceptance, draft or other instrument with an Account Debtor which is insolvent respect to or in payment of the receivable or any chattel paper with respect to the goods giving rise to the receivable; (8) Borrower has not received any notice of the death of the account debtor or a partner thereof, nor of the dissolution, termination of existence, insolvency, business failure, appointment of a receiver for any part of the property of, assignment for the benefit of creditors by, or the subject filing of any petition in bankruptcy or the commencement of any proceeding under any bankruptcy or insolvency proceedings laws by or against the account debtor of any kind Borrower (not including, however, a post-petition Receivable which has been ratified and reaffirmed by the account debtor); (9) The account debtor is not an affiliate of Borrower and is not a subsidiary thereof, nor is it under common management or of any other proceeding or action, threatened or pending, which might have ownership with Borrower; (10) The Receivable is not a material adverse effect on the financial condition of such Account Debtors; (v) conform to all representations and warranties made by Borrowers in this Agreement and the other Loan Documents; (vi) have not remained unpaid for more than thirty (30) days government receivable from any payment dategovernment; (vii) do not arise out of any transaction with any affiliate of either Borrowerprovided, the General Partnerhowever, a Second Tier Partner, a Third Tier Partner, any Guarantor or any affiliate thereof; (viii) are owed that an account payable by Account Debtors located within the United States government may become an Eligible Receivable after compliance with the Federal Assignment of America; Claims Act in a manner satisfactory to Bank; (ix11) The Receivable is not governed by the law of a jurisdiction that does not (i) recognize and conform to the Uniform Commercial Code with respect to each Municipal Utility District Contractsecured transactions, or (Aii) Land Company is acknowledge perfection of such secured transactions by the filing of a financing statement in full compliance with the applicable CON-10 necessary to give rise to the obligation jurisdiction of the applicable Municipal Utility District to purchase the relevant facilities in accordance with the applicable CON-10, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction or Acquisition chief executive office of Facilities, Borrower; (B12) except with respect to Accounts The Receivable related to the San Jacinto River Authority contracts, Land Company has obtained and delivered to the Agent a copy of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated by the applicable Policy, (C) the obligation of the applicable Municipal Utility District to acquire the “facility” has not lapsed or expired, and (D) Land Company has delivered satisfactory evidence to the Agent that each Municipal Utility District Contract does not exceed the applicable Municipal Utility District’s authority arise under an agreement of consignment, a sale or return, a sale with a right to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District Contractreturn for credit, a "guaranteed sale" or any other arrangement other than an outright, absolute and final sale; or (13) The Receivable is not an account that Bank, in its sole and (x) are not reasonable discretion and having a rational basis therefor, has determined by the Majority Lenders in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as whole or in part of the Collateral). Eligible Accounts Receivable shall in no event include any Investments of the type described in §8.3(k)and has notified Borrower thereof.

Eligible Accounts Receivable. That portion The aggregate of the unpaid portions of ---------------------------- Accounts Receivable which is owned (net of any credits, rebates, offsets, holdbacks or other adjustments or commissions payable to third parties that are adjustments to such Accounts Receivable) (a) that the Borrower reasonably and in good faith determines to be collectible; (b) that are with account debtors or other obligors that (i) are not Affiliates of the Borrower; provided, however, at any ----------------- time up to $2,500,000 of Accounts Receivable owed by a Persons who are Affiliates of the Borrower (other than Subsidiaries of the Borrower or Persons who own Voting Stock of the Borrower) and otherwise qualify as Eligible Accounts Receivable may be considered Eligible Accounts Receivable, (ii) purchased the goods or services giving rise to the relevant Account Receivable in an arm's length transaction, (iii) are not insolvent or involved in any case or proceeding, whether voluntary or involuntary, under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar law of any jurisdiction and (iv) are, in the Loan and Collateral Agent's reasonable judgment, creditworthy; (c) that are in payment of obligations that have been fully performed, do not consist of progress xxxxxxxx or xxxx and hold invoices (except xxxx and hold invoices of up to $500,000 in the aggregate at any time) and are not subject to a Security Agreementdispute or any other similar claims that would reduce the cash amount payable therefor; (d) that are not subject to any pledge, restriction, security interest or other lien or encumbrance other than those created by the Loan Documents; (e) in which the Loan and Collateral Agent has a valid and perfected first priority security interest, subject to no other security interest, lien, charge or other encumbrance of any nature, evidenced by promissory notes or other documentation acceptable to Agent, and consisting of accounts which have payment terms acceptable to the Agent and which: ; (f) that are not outstanding for more than (i) are and shall be created in ninety (90) days past the ordinary course earlier to occur of business of the Borrowers, except with respect to Accounts Receivable described in (ix) below so long as Land Company and Account Debtor are in compliance with (A) through the date of the respective invoices therefor and (DB) described thereinthe date of shipment thereof in the case of goods or the end of the calendar month following the provision thereof in the case of services or (ii) sixty (60) days past the due date therefor; (g) that are not due from an account debtor or other obligor located in Minnesota unless the Borrower (i) has received a certificate of authority to do business and is in good standing in such state or (ii) has filed a notice of business activities report with the appropriate office or agency of such state for the current year; (h) that are not due from any single account debtor or other obligor if more than twenty percent (20%) of the aggregate amount of all Accounts Receivable owing from such account debtor or other obligor would otherwise not be Eligible Accounts Receivable; (i) that are payable in Dollars; (j) that are not payable from an office outside of the United States; (k) that are not secured by a letter of credit unless the Loan and Collateral Agent has a prior, perfected security interest in such letter of credit, and (l) not more than 10% of such Accounts Receivable may be from any single account debtor. Eligible Assignee. Any of (i) a commercial bank or finance company ----------------- organized under the laws of the United States, or any State thereof or the District of Columbia, and having total assets in excess of $1,000,000,000; (ii) arise from a complete bona fide transaction savings and which require no further act loan association or savings bank organized under the laws of the United States, or any circumstances on State thereof or the part District of any Borrower to make such receivable payable by the Account DebtorColumbia, and having a net worth of at least $100,000,000, calculated in accordance with generally accepted accounting principles; (iii) are not subject to disputea commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the "OECD"), offset or counterclaima political subdivision of any such ---- country, and having total assets in excess of $1,000,000,000, provided that such -------- bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD; (iv) do not arise out the central bank of any transaction with an Account Debtor country which is insolvent or a member of the subject of any bankruptcy or insolvency proceedings of any kind or of any other proceeding or action, threatened or pending, which might have a material adverse effect on the financial condition of such Account DebtorsOECD; and (v) conform to all representations and warranties made by Borrowers in this Agreement and the other Loan Documents; (vi) have not remained unpaid for more than thirty (30) days from any payment date; (vii) do not arise out of any transaction with any affiliate of either Borrowerif, the General Partner, a Second Tier Partner, a Third Tier Partnerbut only if, any Guarantor Event of Default has occurred and is continuing, any other bank, insurance company, commercial finance company or any affiliate thereof; (viii) are owed by Account Debtors located within the United States of America; (ix) with respect to each Municipal Utility District Contract, (A) Land Company is in full compliance with the applicable CON-10 necessary to give rise to the obligation of the applicable Municipal Utility District to purchase the relevant facilities in accordance with the applicable CON-10, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction other financial institution or Acquisition of Facilities, (B) except with respect to Accounts Receivable related to the San Jacinto River Authority contracts, Land Company has obtained and delivered to the Agent a copy of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated other Person approved by the applicable PolicyAgents, (C) the obligation of the applicable Municipal Utility District to acquire the “facility” has such approval not lapsed or expired, and (D) Land Company has delivered satisfactory evidence to the Agent that each Municipal Utility District Contract does not exceed the applicable Municipal Utility District’s authority to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District Contract; and (x) are not determined by the Majority Lenders in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as part of the Collateral). Eligible Accounts Receivable shall in no event include any Investments of the type described in §8.3(k)unreasonably withheld.

Eligible Accounts Receivable. That portion For the purposes of determination of the Borrowing Base, Eligible Accounts Receivables shall be those Accounts Receivable which ("Receivable") meeting the following criteria: (1) The Receivable arose from a bona fide outright sale of goods or services performed under an enforceable contract, and such goods have been shipped to the appropriate account debtor, or the sale has otherwise been consummated or services have been performed for the appropriate account debtors in accordance with such order or contract; (2) Title to the receivable is owned by a Borrower, in the name of Borrower and such title is absolute and is not subject to a Security Agreementany prior assignment, in which Agent has a perfected first priority claim, lien or security interest, subject to no other security interest, lien, charge or other encumbrance ; (3) The amount shown on the books of any nature, evidenced by promissory notes or other documentation acceptable to Agent, and consisting of accounts which have payment terms acceptable to the Agent and which: (i) are and shall be created in the ordinary course of business of the Borrowers, except Borrower with respect to Accounts the Receivable described in and on any invoice or statement delivered to Bank is owing to Borrower, and no partial payment has been made thereon by anyone; (ix4) below so long as Land Company and Account Debtor are in compliance with (A) through (D) described therein; (ii) arise from a complete bona fide transaction and which require no further act under any circumstances on the part of any Borrower to make such receivable payable by the Account Debtor; (iii) are The Receivable is not subject to disputeany claim of reduction, offset counterclaim, set-off, recoupment, or counterclaim; any claim for credits, allowances or adjustments by the account Borrower because of returned, inferior or damaged goods or unsatisfactory services or for any other reason; (iv5) do The account debtor has not returned or refused to retain any of the goods from the sale out of which the Receivable arose; (6) The Receivable does not arise out of a contract or order from an account debtor that, by its terms, forbids an assignment or makes the assignment of the Receivable to Bank void or unenforceable; (7) Borrower has not received any transaction note, trade acceptance, draft or other instrument with an Account Debtor which is insolvent respect to or in payment of the receivable or any chattel paper with respect to the goods giving rise to the receivable; (8) Borrower has not received any notice of the death of the account debtor or a partner thereof, nor of the dissolution, termination of existence, insolvency, business failure, appointment of a receiver for any part of the property of, assignment for the benefit of creditors by, or the subject filing of any petition in bankruptcy or the commencement of any proceeding under any bankruptcy or insolvency proceedings laws by or against the account debtor of any kind Borrower (not including, however, a post-petition Receivable which has been ratified and reaffirmed by the account debtor); (9) The account debtor is not an affiliate of Borrower and is not a subsidiary thereof, nor is it under common management or of any other proceeding or action, threatened or pending, which might have ownership with Borrower; (10) The Receivable is not a material adverse effect on the financial condition of such Account Debtors; (v) conform to all representations and warranties made by Borrowers in this Agreement and the other Loan Documents; (vi) have not remained unpaid for more than thirty (30) days government receivable from any payment dategovernment; (vii) do not arise out of any transaction with any affiliate of either Borrowerprovided, the General Partnerhowever, a Second Tier Partner, a Third Tier Partner, any Guarantor or any affiliate thereof; (viii) are owed that an account payable by Account Debtors located within the United States government may become an Eligible Receivable after compliance with the Federal Assignment of America; Claims Act in a manner satisfactory to Bank; (ix11) The Receivable is not governed by the law of a jurisdiction that does not (i) recognize and conform to the Uniform Commercial Code with respect to each Municipal Utility District Contractsecured transactions, or (Aii) Land Company is acknowledge perfection of such secured transactions by the filing of a financing statement in full compliance with the applicable CON-10 necessary to give rise to the obligation jurisdiction of the applicable Municipal Utility District to purchase the relevant facilities in accordance with the applicable CON-10, including without limitation the terms and conditions set forth in the applicable Policy Manual for Construction or Acquisition chief executive office of Facilities, Borrower; (B12) except with respect to Accounts The Receivable related to the San Jacinto River Authority contracts, Land Company has obtained and delivered to the Agent a copy of the executed confirmatory letter of such Municipal Utility District’s obligation contemplated by the applicable Policy, (C) the obligation of the applicable Municipal Utility District to acquire the “facility” has not lapsed or expired, and (D) Land Company has delivered satisfactory evidence to the Agent that each Municipal Utility District Contract does not exceed the applicable Municipal Utility District’s authority arise under an agreement of consignment a sale or return, a sale with a right to issue bond indebtedness to satisfy the Municipal Utility District’s obligations under the applicable Municipal Utility District Contractreturn for credit, a "guaranteed sale" or any other arrangement other than an outright, absolute and final sale; or (13) The Receivable is not an account that Bank, in its sole and (x) are not reasonable discretion and having a rational basis therefor, has determined by the Majority Lenders in their sole discretion to be otherwise ineligible for any other reason (it nevertheless being understood that the receivables described in (i) through (ix) above shall be included as whole or in part of the Collateral). Eligible Accounts Receivable shall in no event include any Investments of the type described in §8.3(k)and has notified Borrower thereof.