INVENTORIES, APPRAISALS, AND AUDITS. (a) The Lender shall be permitted, either directly or through agents retained for that purpose, after delivery of reasonable advance notice to the Lead Borrower, and at the Borrowers’ reasonable expense in each instance, to conduct during regular business hours such audits, inspections, and field examinations of the Borrowers’ books, records, and assets as the Lender, in its reasonable discretion, may determine are necessary and/or appropriate from time to time. The Lender contemplates conducting no more than 3 audits per year in accordance with the following schedule based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents as of the end of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one audit per year Greater than $4,000,000, but less than or equal to $12,500,000 Up to two audits per year Less than or equal to $4,000,000 Up to three audits per year The foregoing frequency of audits shall be reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing Notwithstanding the foregoing, the Lender may cause additional audits to be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing. The Borrowers, subject to receipt of reasonable advance notice, during regular business hours shall cooperate with and assist the Lender, or its agents, in connection with the performance of any such audit, inspection, and field examination, which audit, inspection and field examination shall be subject to reasonable requirements of confidentiality, including requirements imposed by Applicable Law or contract. (b) The Lender, at the reasonable expense of the Borrowers, may participate in and/or observe each physical count and/or inventory of so much of the Collateral as consists of Inventory which is undertaken on behalf of any Borrower. (c) The Borrowers shall obtain (at the Borrowers’ expense in all instances) financial or SKU based physical counts and/or inventories conducted by such inventory takers as are reasonably satisfactory to the Lender and following such methodology as is consistent with the Borrowers’ practices in effect at the execution of this Agreement and as provided in this Section. (i) Unless an Event of Default has occurred and is continuing, the Borrowers shall cause the following number of such counts/inventories to be undertaken in each twelve (12) month period during which this Agreement is in effect: (A) Retail operations : One (1). (B) Direct operations (catalogue and web): One (1). (ii) If an Event of Default occurs and is continuing, the foregoing limit on the number of such counts and/or inventories shall terminate and the Lender may require such counts and/or inventories (at the reasonable expense of the Borrowers in each instance) at such intervals as the Lender, in its discretion, may determine as being appropriate. (iii) The Borrowers shall cause their accountants to observe the Borrowers’ year end retail operations and direct operations counts / inventories (and such other counts / inventories as the accountants may require so as to permit those accountants to express its opinion on the Lead Borrower’s annual Consolidated financial statement to the standard set out in this Agreement). (iv) The Lead Borrower shall provide the Lender with a copy of the preliminary results of each such count and/or inventory (as well as of any other physical inventory undertaken by any Borrower) within ten (10) business days following the completion of such inventory. (v) The Lead Borrower, within thirty (30) days following the completion of such count and/or inventory, shall provide the Lender with a reconciliation of the results of each such count and/or inventory (as well as of any other physical inventory undertaken by any Borrower) and shall, in the case of a year-end inventory, post such results to the Borrowers’ stock ledger and, as applicable to the Borrowers’ other financial books and records. The Lender may use the reconciliation and results of each such count and/or inventory and implement them in accordance with the terms of this Agreement. (d) The Lender may obtain such appraisals of Collateral consisting of Inventory, from time to time during the period that this Agreement is in effect, conducted by such appraisers as are reasonably satisfactory to the Lender (at the Borrowers’ reasonable expense in each instance). The Lender contemplates conducting no more than 3 appraisals per year in accordance with the following schedule based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents as of the end of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one appraisal per year Greater than $4,000,000, but less than or equal to $12,500,000 Up to two appraisals per year Less than or equal to $4,000,000 Up to three appraisals per year The foregoing frequency shall be reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any such additional appraisals unless an Event of Default has occurred and is continuing. Notwithstanding the foregoing, the Lender may cause additional appraisals to be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional appraisals unless an Event of Default has occurred and is continuing. (e) The Lender from time to time (in all events, at the Borrowers’ reasonable expense) may undertake “mystery shopping” (so-called) visits to all or any of the Borrowers’ business premises.
Appears in 1 contract
INVENTORIES, APPRAISALS, AND AUDITS. (a) The Lender shall be permittedCollateral Agent may, either directly or through agents retained for that purpose, after delivery of reasonable advance notice to the Lead Borrower, and at the Borrowers’ reasonable expense in each instance, to conduct during regular business hours such audits, inspections, and field examinations of the Borrowers’ books, records, participate in and/or observe each inventory and assets as the Lender, in its reasonable discretion, may determine are necessary and/or appropriate from time to time. The Lender contemplates conducting no more than 3 audits per year in accordance with the following schedule based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents as any cycle count of the end Collateral which is undertaken on behalf of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one audit per year Greater than $4,000,000, but less than or equal to $12,500,000 Up to two audits per year Less than or equal to $4,000,000 Up to three audits per year The foregoing frequency Borrowers (provided that any expenses of audits Collateral Agent for which Collateral Agent seeks reimbursement shall be reasonably adjusted quarterly as reasonable expenses). No Borrower may, without the prior written consent of the first day of each Fiscal quarterCollateral Agent, based upon change the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing Notwithstanding the foregoing, the Lender may cause additional audits methodology to be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing. The Borrowers, subject to receipt of reasonable advance notice, during regular business hours shall cooperate with and assist the Lender, or its agents, followed in connection with the performance conduct of any and reporting on the results of such audit, inspection, and field examination, which audit, inspection and field examination shall be subject to reasonable requirements inventory from the methodology employed by the Borrowers as of confidentiality, including requirements imposed by Applicable Law or contractthe date of this Agreement.
(b) The LenderBorrowers, at their expense, shall cause each store location, warehouse, and distribution center to have not less than One (1) physical inventory or cycle count in each Twelve (12) month period to be undertaken consistent with current practice, while this Agreement is in effect (the reasonable expense scheduling of the Borrowers, may participate in and/or observe each physical count and/or inventory of so much of which shall be subject to the Collateral as consists of Inventory which is undertaken on behalf of any Borrower.
(c) The Borrowers shall obtain (at the Borrowers’ expense in all instances) financial or SKU based physical counts and/or inventories Agent’s reasonable discretion), conducted by such inventory takers as are reasonably satisfactory to the Lender Collateral Agent and following such methodology as is consistent with may be reasonably satisfactory to the Borrowers’ practices in effect at the execution of this Agreement and as provided in this SectionAgent.
(i) Unless an Event The Lead Borrower shall provide the Collateral Agent with a copy of Default has occurred the preliminary results of each such inventory (as well as of any other physical inventory undertaken by the Borrowers) within Ten (10) days after its completion.
(ii) The Lead Borrower shall provide the Collateral Agent with a reconciliation of the results of each such inventory (as well as of any other physical inventory undertaken by the Borrowers) to the Borrowers’ books and is continuing, records within Thirty (30) days following the Borrowers shall cause the following number completion of such counts/inventory.
(iii) The Collateral Agent, in its discretion, following the occurrence of and during the continuance of a Suspension Event, may cause such additional inventories to be undertaken in taken as the Collateral Agent determines (each, at the expense of the Borrowers).
(c) The Collateral Agent contemplates obtaining up to One (1) appraisal (at the expense of the Borrower) of the Borrowers’ Inventory during each twelve Twelve (12) month period during which this Agreement is in effect:
(A) Retail operations : , each conducted by such appraisers as are satisfactory to the Collateral Agent, and contemplates obtaining up to One (1).
(B) Direct operations (catalogue and web): One (1).
(ii) If an Event of Default occurs and is continuing, the foregoing limit on the number of such counts and/or inventories shall terminate and the Lender may require such counts and/or inventories additional appraisal (at the reasonable expense of the Borrowers Borrowers) during any Twelve (12) month period in each instance) which Excess Availability falls below $20,000,000 at such intervals as the Lenderany time, but in its discretion, may determine as being appropriate.
(iii) The Borrowers shall cause their accountants to observe obtain additional appraisals of the Borrowers’ year end retail operations Inventory and direct operations counts / inventories Real Estate in the event it deems it reasonably necessary in its discretion (such additional appraisals, if not conducted after and such other counts / inventories as during the accountants may require so as to permit those accountants to express its opinion on the Lead Borrower’s annual Consolidated financial statement to the standard set out in this Agreement).
(iv) The Lead Borrower shall provide the Lender with a copy continuance of the preliminary results an Event of each such count and/or inventory (as well as of any other physical inventory undertaken by any Borrower) within ten (10) business days following the completion of such inventory.
(v) The Lead Borrower, within thirty (30) days following the completion of such count and/or inventoryDefault, shall provide the Lender with a reconciliation of the results of each such count and/or inventory (as well as of any other physical inventory undertaken by any Borrower) and shall, in the case of a year-end inventory, post such results to the Borrowers’ stock ledger and, as applicable to the Borrowers’ other financial books and records. The Lender may use the reconciliation and results of each such count and/or inventory and implement them in accordance with the terms of this Agreementbe at Collateral Agent’s expense).
(d) The Lender may obtain such appraisals Collateral Agent contemplates conducting One (1) commercial finance audit (at the expense of Collateral consisting the Borrowers) of Inventory, from time to time the Borrowers’ books and records during the each Twelve (12) month period that during which this Agreement is in effect, conducted by such appraisers as are reasonably satisfactory effect and contemplates conducting up to the Lender One (1) additional commercial finance audit (at the expense of the Borrowers’ reasonable expense ) during any Twelve (12) month period in each instance). The Lender contemplates conducting no more than 3 appraisals per year in accordance with the following schedule based upon the aggregate of Average which Excess Availability and Qualified Cash and Cash Equivalents as of the end of the immediately preceding Fiscal quarter: Greater than falls below $12,500,000 Up to one appraisal per year Greater than $4,000,00020,000,000 at any time, but less than or equal to $12,500,000 Up to two appraisals per year Less than or equal to $4,000,000 Up to three appraisals per year The foregoing frequency shall be in its discretion, may obtain more in the event it deems it reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any necessary in its discretion (such additional appraisals unless commercial finance audits, if not conducted after and during the continuance of an Event of Default has occurred and is continuing. Notwithstanding the foregoingDefault, the Lender may cause additional appraisals to shall be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional appraisals unless an Event of Default has occurred and is continuingat Collateral Agent’s expense).
(e) The Lender from time to time (in all events, at the Borrowers’ reasonable expense) may undertake “mystery shopping” (so-called) visits to all or any of the Borrowers’ business premises.
Appears in 1 contract
INVENTORIES, APPRAISALS, AND AUDITS. (a) The Lender shall be permitted, either directly or through agents retained for that purpose, after delivery of reasonable advance notice to the Lead Borrower, and at the Borrowers’ reasonable expense in each instance, to conduct during regular business hours such audits, inspections, and field examinations of the Borrowers’ books, records, and assets as the Lender, in its reasonable discretion, may determine are necessary and/or appropriate from time to time. The Lender contemplates conducting no more than 3 audits per year in accordance with the following schedule based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents as of the end of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one audit per year Greater than $4,000,000, but less than or equal to $12,500,000 Up to two audits per year Less than or equal to $4,000,000 Up to three audits per year The foregoing frequency of audits shall be reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing Notwithstanding the foregoing, the Lender may cause additional audits to be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing. The Borrowers, subject to receipt of reasonable advance notice, during regular business hours shall cooperate with and assist the Lender, or its agents, in connection with the performance of any such audit, inspection, and field examination, which audit, inspection and field examination shall be subject to reasonable requirements of confidentiality, including requirements imposed by Applicable Law or contract.
(b) The Lender, at the reasonable expense of the Borrowers, may participate in and/or observe each physical count and/or inventory of so much of the Collateral as consists of Inventory which is undertaken on behalf of any Borrowerthe Borrowers.
(cb) The Upon the Lender’s request from time to time after reasonable notice (except after the occurrence of an Event of Default), the Borrowers shall obtain, or shall permit the Lender to obtain (in all events, at the Borrowers’ expense in all instancesexpense) financial or SKU based physical counts and/or inventories of the Collateral, conducted by such inventory takers as are reasonably satisfactory to the Lender and following such methodology as is consistent with may be required by the Lender, each of which physical counts and/or financial or SKU based inventories shall be observed by the Borrowers’ practices in effect at the execution of this Agreement and as provided in this Section.
(i) Unless an Event of Default has occurred and is continuing, accountants. The Lender will require the Borrowers shall cause the following number of to conduct one (1) such counts/inventories to be undertaken in count and/or inventory during each twelve (12) month period during which this Agreement is in effect:
(A) Retail operations : One (1).
(B) Direct operations (catalogue and web): One (1).
(ii) If an Event of Default occurs and is continuing, the foregoing limit on the number of such counts and/or inventories shall terminate and the Lender may require such counts and/or inventories (at the reasonable expense of the Borrowers in each instance) at such intervals as the Lender, but in its discretion, may determine as being appropriateundertake additional such counts or inventories during such period. The draft or unaudited results of all inventories or counts shall be furnished to Lender immediately thereafter and final, reconciled results within fifteen (15) days of the taking of such inventories or counts. The Lender reserves the right to seek directly unaudited or draft results from such inventory takers.
(iiic) The Upon the Lender’s request from time to time, the Borrowers shall cause their accountants permit the Lender to observe obtain appraisals (in all events, at the Borrowers’ year end retail operations and direct operations counts / inventories (and expense) conducted by such other counts / inventories appraisers as the accountants may require so as are satisfactory to permit those accountants to express its opinion on the Lead Borrower’s annual Consolidated financial statement to the standard set out in this Agreement).
(iv) The Lead Borrower shall provide the Lender with a copy such frequency as set forth in the Appraisal/Audit Grid. In its discretion, the Lender may obtain such additional appraisals (provided, however, absent an Event of the preliminary results of each Default, such count and/or inventory (as well as of any other physical inventory undertaken by any Borrower) within ten (10) business days additional appraisals shall be at Lender’s expense and, following the completion occurrence of an Event of Default, such inventory.
(v) The Lead Borrower, within thirty (30) days following the completion of such count and/or inventory, additional appraisals shall provide the Lender with a reconciliation of the results of each such count and/or inventory (as well as of any other physical inventory undertaken by any Borrower) and shall, in the case of a year-end inventory, post such results to the be at Borrowers’ stock ledger and, as applicable to the Borrowers’ other financial books and records. The Lender may use the reconciliation and results of each such count and/or inventory and implement them in accordance with the terms of this Agreementexpense.
(d) The Lender may obtain such appraisals of Collateral consisting of Inventorycontemplates conducting commercial finance audits (in each event, from time to time during the period that this Agreement is in effect, conducted by such appraisers as are reasonably satisfactory to the Lender (at the Borrowers’ reasonable expense expense) of the Borrowers’ books and records with such frequency as set forth in each instancethe Appraisal/Audit Grid. In its discretion the Lender may undertake such additional audits (provided, however, absent an Event of Default, such additional audits shall be at the Lender’s expense; however, following the occurrence of an Event of Default, such additional audits shall be at Borrowers’ expense). The current audit fees for a field examination conducted by the Lender contemplates conducting no more than 3 appraisals are Eight Hundred ($800) Dollars per year in accordance with the following schedule based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents as of the end of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one appraisal man, per year Greater than $4,000,000day, but less than or equal to $12,500,000 Up to two appraisals per year Less than or equal to $4,000,000 Up to three appraisals per year plus expenses. The foregoing frequency shall be reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided Borrowers acknowledge that the Borrowers shall not be obligated to pay for any such additional appraisals unless an Event of Default has occurred and is continuing. Notwithstanding the foregoing, the Lender may cause additional appraisals to be undertaken as conduct a field examination within ninety (90) days of the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional appraisals unless an Event of Default has occurred and is continuingdate hereof.
(e) The In the event that Borrowers do not undertake “mystery shopping” (so-called) and share the results of the same with Lender, Lender from time to time (in all events, at the Borrowers’ reasonable expense) may undertake “mystery shopping” (so-called) visits to all or any of the Borrowers’ business premises. The Lender shall provide the Borrowers with a copy of any non-company confidential results of such mystery shopping upon Borrowers’ written request.
Appears in 1 contract
INVENTORIES, APPRAISALS, AND AUDITS. (ai) The Lender shall be permitted, either directly or through agents retained for that purpose, after delivery of reasonable advance notice to the Lead Borrower, and at the Borrowers’ reasonable expense in each instance, to conduct during regular business hours such audits, inspections, and field examinations of the Borrowers’ books, records, and assets as the Lender, in its reasonable discretion, may determine are necessary and/or appropriate from time to time. The Lender contemplates conducting no more than 3 audits per year in accordance with the following schedule based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents as of the end of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one audit per year Greater than $4,000,000, but less than or equal to $12,500,000 Up to two audits per year Less than or equal to $4,000,000 Up to three audits per year The foregoing frequency of audits shall be reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing Notwithstanding the foregoing, the Lender may cause additional audits to be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing. The Borrowers, subject to receipt of reasonable advance notice, during regular business hours shall cooperate with and assist the Lender, or its agents, in connection with the performance of any such audit, inspection, and field examination, which audit, inspection and field examination shall be subject to reasonable requirements of confidentiality, including requirements imposed by Applicable Law or contract.
(b) The LenderFoothill, at the reasonable expense of the BorrowersBorrower, may participate in and/or observe each physical count and/or inventory of so much of the Collateral as consists of Inventory which is undertaken on behalf of any Borrower.
(cii) The Borrowers Upon Foothill's request from time to time, Borrower shall obtain, or shall permit Foothill to obtain (at the Borrowers’ expense in all instances) financial or SKU based physical counts and/or inventories of the Collateral, conducted by such inventory takers as are reasonably satisfactory to the Lender Foothill and following such methodology as is consistent with the Borrowers’ practices in effect at the execution may be required by Foothill, each of this Agreement and which physical counts and/or financial or SKU based inventories shall be observed by Borrower's accountants; provided, however, that as provided in this Section.
(i) Unless long as there has not occurred an Event of Default has occurred and is continuingDefault, the Borrowers shall cause the following number of such counts/inventories Foothill will not require full on-site appraisal, more than once per calendar year (but may in addition require "desktop" appraisals up to be undertaken once per calendar quarter). For each fiscal year in each twelve (12) month period during which this Agreement is in effect:
, Borrower shall perform (Aat its expense) Retail operations : One one (1).
) full physical inventory as of fiscal year end for all locations. Foothill may require mid-year physical counts during any fiscal year of Borrower (Bat Borrower's expense) Direct operations if any physical inventory conducted in the prior year reveals shrinkage equal to or greater than five percent (catalogue and web): One (1).
(ii5.00%) If an Event of Default occurs and is continuing, retail sales. Foothill shall have the foregoing limit right to increase Reserves Against Availability based on the number any variance revealed by any physical inventory counts. The results of such mid-year counts and/or inventories shall terminate and the Lender may require such counts and/or inventories (at the reasonable expense be provided to Foothill within 10 Business Days of completion of the Borrowers in each instancecount. The draft or unaudited results of such required mid-year inventories or counts shall be furnished to Foothill within five (5) at Business Days of the taking of such intervals as the Lender, in its discretion, may determine as being appropriateinventories or counts.
(iii) The Borrowers shall cause their accountants to observe the Borrowers’ year end retail operations and direct operations counts / inventories (and such other counts / inventories as the accountants may require so as to permit those accountants to express its opinion on the Lead Borrower’s annual Consolidated financial statement to the standard set out in this Agreement).
(iv) The Lead Borrower shall provide the Lender with a copy of the preliminary results of each such count and/or inventory (as well as of any other physical inventory undertaken by any Borrower) within ten (10) business days following the completion of such inventory.
(v) The Lead Borrower, within thirty (30) days following the completion of such count and/or inventory, shall provide the Lender with a reconciliation of the results of each such count and/or inventory (as well as of any other physical inventory undertaken by any Borrower) and shall, in the case of a year-end inventory, post such results to the Borrowers’ stock ledger and, as applicable to the Borrowers’ other financial books and records. The Lender may use the reconciliation and results of each such count and/or inventory and implement them in accordance with the terms of this Agreement.
(d) The Lender may obtain such appraisals of Collateral consisting of Inventory, Foothill from time to time during may request the period that this Agreement is in effect, conducted by such appraisers as are reasonably satisfactory to the Lender (at the Borrowers’ reasonable expense in each instance). The Lender contemplates conducting no more than 3 appraisals per year in accordance with the following schedule based upon the aggregate results of Average Excess Availability and Qualified Cash and Cash Equivalents as of the end of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one appraisal per year Greater than $4,000,000, but less than or equal to $12,500,000 Up to two appraisals per year Less than or equal to $4,000,000 Up to three appraisals per year The foregoing frequency shall be reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any such additional appraisals unless an Event of Default has occurred and is continuing. Notwithstanding the foregoing, the Lender may cause additional appraisals to be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional appraisals unless an Event of Default has occurred and is continuing.
(e) The Lender from time to time (in all events, at the Borrowers’ reasonable expense) may undertake “"mystery shopping” " (so-called) visits to all or any of the Borrowers’ Borrower's business premisespremises as conducted by or on behalf of Borrower.
Appears in 1 contract
Samples: Loan and Security Agreement (Ultimate Electronics Inc)
INVENTORIES, APPRAISALS, AND AUDITS. (a) The Lender shall be permitted, either directly or through agents retained for that purpose, after delivery of reasonable advance notice to the Lead Borrower, and at the Borrowers’ reasonable expense in each instance, to conduct during regular business hours such audits, inspections, and field examinations of the Borrowers’ books, records, and assets as the Lender, in its reasonable discretion, may determine are necessary and/or appropriate from time to time. The Lender contemplates conducting no more than 3 audits per year in accordance with the following schedule based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents as of the end of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one audit per year Greater than $4,000,000, but less than or equal to $12,500,000 Up to two audits per year Less than or equal to $4,000,000 Up to three audits per year The foregoing frequency of audits shall be reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing Notwithstanding the foregoing, the Lender may cause additional audits to be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing. The Borrowers, subject to receipt of reasonable advance notice, during regular business hours shall cooperate with and assist the Lender, or its agents, in connection with the performance of any such audit, inspection, and field examination, which audit, inspection and field examination shall be subject to reasonable requirements of confidentiality, including requirements imposed by Applicable Law or contract.
(b) The LenderAgent, at the reasonable expense of the Borrowers, may participate in and/or observe each physical count and/or inventory of so much of the Collateral as consists of Inventory which is undertaken on behalf of any Borrower.
(cb) The Upon Agent's request from time to time, Borrowers shall obtain, or shall permit Agent to obtain (at the Borrowers’ expense in all instances) financial or SKU based physical counts and/or inventories of the Collateral, conducted by such inventory takers as are reasonably satisfactory to the Lender Agent and following such methodology as is consistent with the Borrowers’ practices in effect at the execution may be required by Agent, each of this Agreement and which physical counts and/or financial or SKU based inventories shall be observed by Borrower's accountants; provided, however, that as provided in this Section.
(i) Unless long as there has not occurred an Event of Default has occurred Default, Agent will not require full on-site appraisal, more than once per calendar year (but may in addition require "desktop" appraisals up to once per calendar quarter). Notwithstanding the foregoing, Agent hereby agrees that the methodology in place on the Closing Date used by Borrowers to conduct SKU based physical counts and is continuinginventories of Collateral (as to what Persons take inventory, when Borrower's accountants observe such counts and inventories, etc.) are acceptable; PROVIDED, HOWEVER, changes in such methodology may be required by Agent after the Borrowers shall cause the following number occurrence of such counts/inventories to be undertaken an Event of Default. For each fiscal year in each twelve (12) month period during which this Agreement is in effect:
, Borrower shall perform (Aat their expense) Retail operations : One one (1).
) full physical inventory as of fiscal year end for all locations. Agent may require mid-year physical counts during any fiscal year of Parent (Bat Borrower's expense) Direct operations if any physical inventory conducted in the prior year reveals shrinkage equal to or greater than five percent (catalogue and web): One (1).
(ii5.00%) If an Event of Default occurs and is continuing, retail sales. Agent shall have the foregoing limit right to increase Reserves Against Availability based on the number any variance revealed by any physical inventory counts. The results of such mid-year counts and/or inventories shall terminate and the Lender may require such counts and/or inventories (at the reasonable expense of the Borrowers in each instance) at such intervals as the Lender, in its discretion, may determine as being appropriate.
(iii) The Borrowers shall cause their accountants be provided to observe the Borrowers’ year end retail operations and direct operations counts / inventories (and such other counts / inventories as the accountants may require so as to permit those accountants to express its opinion on the Lead Borrower’s annual Consolidated financial statement to the standard set out in this Agreement).
(iv) The Lead Borrower shall provide the Lender with a copy of the preliminary results of each such count and/or inventory (as well as of any other physical inventory undertaken by any Borrower) Agent within ten (10) business days following the Business Days of completion of the count. The draft or unaudited results of such inventoryrequired mid-year inventories or counts shall be furnished to Agent within five (5) Business Days of the taking of such inventories or counts.
(vc) The Lead Borrower, within thirty (30) days following the completion of such count and/or inventory, shall provide the Lender with a reconciliation of the results of each such count and/or inventory (as well as of any other physical inventory undertaken by any Borrower) and shall, in the case of a year-end inventory, post such results to the Borrowers’ stock ledger and, as applicable to the Borrowers’ other financial books and records. The Lender may use the reconciliation and results of each such count and/or inventory and implement them in accordance with the terms of this Agreement.
(d) The Lender may obtain such appraisals of Collateral consisting of Inventory, Agent from time to time during may request the period that this Agreement is in effect, conducted by such appraisers as are reasonably satisfactory to the Lender (at the Borrowers’ reasonable expense in each instance). The Lender contemplates conducting no more than 3 appraisals per year in accordance with the following schedule based upon the aggregate results of Average Excess Availability and Qualified Cash and Cash Equivalents as of the end of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one appraisal per year Greater than $4,000,000, but less than or equal to $12,500,000 Up to two appraisals per year Less than or equal to $4,000,000 Up to three appraisals per year The foregoing frequency shall be reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any such additional appraisals unless an Event of Default has occurred and is continuing. Notwithstanding the foregoing, the Lender may cause additional appraisals to be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional appraisals unless an Event of Default has occurred and is continuing.
(e) The Lender from time to time (in all events, at the Borrowers’ reasonable expense) may undertake “"mystery shopping” " (so-called) visits to all or any of any Borrower's business premises as conducted by or on behalf of Borrower.
(d) Provided that the Thornton Colorado Facility is a component of the Borrowing Base, Borrowers shall obtain and deliver to Agent, at Borrowers’ business premises' expense, once every calendar year, appraisal reports in form and substance and from appraisers satisfactory to Agent, stating the then current fair market value of the Thornton Colorado Facility. Borrowers hereby agree and acknowledge that the $25,000 cap on appraisal fees specified in SECTION 2.13(e) hereof shall not cover or apply to the appraisals required by this SECTION 6.17(d).
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Samples: Loan and Security Agreement (Ultimate Electronics Inc)
INVENTORIES, APPRAISALS, AND AUDITS. (a) The Lender shall be permitted, either directly or through agents retained for that purpose, after delivery of reasonable advance notice to the Lead Borrower, and at the Borrowers’ reasonable expense in each instance, to conduct during regular business hours such audits, inspections, and field examinations of the Borrowers’ books, records, and assets as the Lender, in its reasonable discretion, may determine are necessary and/or appropriate from time to time. The Lender contemplates conducting no more than 3 audits per year in accordance with the following schedule based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents as of the end of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one audit per year Greater than $4,000,000, but less than or equal to $12,500,000 Up to two audits per year Less than or equal to $4,000,000 Up to three audits per year The foregoing frequency of audits shall be reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing Notwithstanding the foregoing, the Lender may cause additional audits to be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any such additional audits unless an Event of Default has occurred and is continuing. The Borrowers, subject to receipt of reasonable advance notice, during regular business hours shall cooperate with and assist the Lender, or its agents, in connection with the performance of any such audit, inspection, and field examination, which audit, inspection and field examination shall be subject to reasonable requirements of confidentiality, including requirements imposed by Applicable Law or contract.
(b) The Lender, at the reasonable expense of the BorrowersBorrower, may participate in and/or observe each physical count and/or inventory of so much of the Collateral as consists of Inventory which is undertaken on behalf of any the Borrower.
(cb) The Borrowers Borrower, at its own expense, shall obtain cause at least one (at 1) physical inventory to be undertaken with respect to each fulfillment center maintained by the Borrowers’ expense Borrower during each year in all instanceswhich this Agreement is in effect (the scheduling of which shall be subject to the Lender's discretion) financial or SKU based physical counts and/or inventories conducted by such inventory takers as are reasonably satisfactory to the Lender and following such methodology as is consistent with may be satisfactory to the Borrowers’ practices in effect at Lender, provided, however, that during the execution continuance of this Agreement and an Event of Default Lender may require such additional physical inventories as provided in this Sectionit shall deem necessary.
(i) Unless an Event of Default has occurred and is continuing, the Borrowers shall cause the following number of such counts/inventories to be undertaken in each twelve (12) month period during which this Agreement is in effect:
(A) Retail operations : One (1).
(B) Direct operations (catalogue and web): One (1).
(ii) If an Event of Default occurs and is continuing, the foregoing limit on the number of such counts and/or inventories shall terminate and the Lender may require such counts and/or inventories (at the reasonable expense of the Borrowers in each instance) at such intervals as the Lender, in its discretion, may determine as being appropriate.
(iii) The Borrowers shall cause their accountants to observe the Borrowers’ year end retail operations and direct operations counts / inventories (and such other counts / inventories as the accountants may require so as to permit those accountants to express its opinion on the Lead Borrower’s annual Consolidated financial statement to the standard set out in this Agreement).
(iv) The Lead Borrower shall provide the Lender with a copy of the preliminary results of each such count and/or inventory (as well as of any other physical inventory undertaken by any the Borrower) within ten Ten (10) business days following the completion of such inventory.
(vii) The Lead Borrower, within thirty Thirty (30) days following the completion of such count and/or inventory, shall provide the Lender with a reconciliation of the results of each such count and/or inventory (as well as of any other physical inventory undertaken by any the Borrower) and shall, in the case of a year-end inventory, shall post such results to the Borrowers’ Borrower's stock ledger and, as applicable to the Borrowers’ Borrower's other financial books and records. The Lender may use the reconciliation and results of each such count and/or inventory and implement them in accordance with the terms of this Agreement.
(diii) The Lender, in its discretion, may cause such additional inventories to be taken as the Lender determines (each at the expense of the Borrower).
(c) The Lender may obtain such contemplates conducting Three (3) appraisals of the Collateral consisting of Inventory, from time to time during the any Twelve (12) month period that during which this Agreement is in effect, conducted by such appraisers as are reasonably satisfactory to the Lender (Lender, each at the Borrowers’ reasonable expense of the Borrower. The Lender, in its discretion, may conduct such additional appraisals as the Lender determines (each instanceat the expense of the Borrower). .
(d) The Lender contemplates conducting no more than 3 appraisals per year in accordance with the following schedule based upon the aggregate of Average Excess Availability Three (3) commercial finance field examinations and Qualified Cash and Cash Equivalents as audits of the end Borrower's books and records during any Twelve (12) month period during which this Agreement is in effect, each at the expense of the immediately preceding Fiscal quarter: Greater than $12,500,000 Up to one appraisal per year Greater than $4,000,000, but less than or equal to $12,500,000 Up to two appraisals per year Less than or equal to $4,000,000 Up to three appraisals per year Borrower. The foregoing frequency shall be reasonably adjusted quarterly as of the first day of each Fiscal quarter, based upon the aggregate of Average Excess Availability and Qualified Cash and Cash Equivalents for the immediately preceding Fiscal quarter; provided that the Borrowers shall not be obligated to pay for any such additional appraisals unless an Event of Default has occurred and is continuing. Notwithstanding the foregoing, the Lender may cause additional appraisals to be undertaken as the Lender, in its reasonable discretion, otherwise deems necessary or appropriate, provided that the Borrowers shall not be obligated to pay for any may conduct such additional appraisals unless an Event of Default has occurred commercial finance field examinations and is continuing.
audits as the Lender determines (e) The Lender from time to time (in all events, each at the Borrowers’ reasonable expense) may undertake “mystery shopping” (so-called) visits to all or any expense of the Borrowers’ business premisesBorrower).
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