Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five percent (75%) of Borrower's eligible accounts receivable. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include: (i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due; (ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted; (iii) any account which represents an obligation of an account debtor located in a foreign country; (iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower; (v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor; (vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts; (vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's ’s eligible accounts receivable. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's ’s eligible accounts receivable. As used herein, "“eligible accounts receivable" ” shall consist solely of trade accounts created in the ordinary course of Borrower's ’s business, upon which Borrower's ’s right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty ninety (180) days, any such account which is more than thirty (3090) days past duefrom invoice date;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof;
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any , except for Eligible Foreign Accounts or as approved by Bank in writing. As used herein, “Eligible Foreign Accounts” means those accounts which represent obligations of account which arises debtors located in Canada, Australia, United Kingdom, Germany, Denmark, Netherlands, and Sweden and only to the extent such accounts from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any said account which represents an obligation of any account debtor when debtors do not exceed twenty percent (20%) or more of Borrower's ’s total eligible accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorreceivable;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed the then-current borrowing base (the “Borrowing Base”) equal to the following amount as determined in good faith by Bank based upon a Borrowing Base Certificate (herein so called) in the form of Exhibit A attached hereto and incorporated herein by reference or in such other form as may be acceptable to Bank and such other information as Bank may consider relevant to such determination: the lesser of (i) $5,000,000.00 or (ii) an aggregate of amount equal to seventy-five percent (75%) of the aggregate value of Borrower's eligible accounts receivable’s Eligible Accounts Receivable, (which lesser amount, as of any date of determination, is hereinafter called the “Borrowing Base Amount”). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time reasonably require. Borrower acknowledges that said borrowing base the Borrowing Base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s aggregate gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s aggregate gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of any Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable Eligible Accounts Receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactoryBorrowers’ Eligible Accounts Receivable.
Appears in 1 contract
Limitation on Borrowings. Outstanding The outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five Seventy Five percent (75%) of Borrower's ’s eligible accounts receivable, plus Forty percent (40%) of the value of Borrower’s eligible inventory and eligible inventory of The Golf Warehouse, Inc., a Delaware corporation (“TGW”) (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as the lower of cost or market value. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five ten percent (510%) of Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five ten percent (510%) of Borrower's ’s gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion Portion of Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's ’s eligible accounts receivable. As used herein, "“eligible accounts receivable" ” shall consist solely of trade accounts created in the ordinary course of Borrower's ’s business, upon which Borrower's ’s right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's ’s standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank’s satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress bxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's ’s accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's ’s total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's ’s total accounts;
(viiix) any account deemed ineligible by Bank when BankBank in its reasonable discretion, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, Credit shall not at any time exceed the then-current borrowing base (the “Borrowing Base”) equal to the following amount as determined in good faith by Bank based upon a Borrowing Base Certificate (herein so called) in the form of Exhibit A attached hereto and incorporated herein by reference or in such other form as may be acceptable to Bank and such other information as Bank may consider relevant to such determination: an aggregate of seventy-five amount equal to eighty percent (7580%) of the aggregate value of Borrower's eligible accounts receivable’s Eligible Accounts Receivable (which amount, as of any date of determination, is hereinafter called the “Borrowing Base Amount”), minus all outstanding Letter of Credit Liabilities, minus all outstanding indebtedness under the Term Loan, as hereinafter defined. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time reasonably require. Borrower acknowledges that said borrowing base the Borrowing Base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s aggregate gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s aggregate gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of any Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable Eligible Accounts Receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactoryBorrowers’ Eligible Accounts Receivable.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed the then-current borrowing base (the “Borrowing Base”) equal to the following amount as determined in good faith by Bank based upon a Borrowing Base Certificate (herein so called) in the form of Exhibit A attached hereto and incorporated herein by reference or in such other form as may be acceptable to Bank and such other information as Bank may consider relevant to such determination: the lesser of (i) $1,500,000.00 or (ii) an aggregate of seventyamount equal to sixty-five percent (7565%) of the aggregate value of Borrower's eligible accounts receivable’s Eligible Accounts Receivable, (which lesser amount, as of any date of determination, is hereinafter called the “Borrowing Base Amount”). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time reasonably require. Borrower acknowledges that said borrowing base the Borrowing Base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s aggregate gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s aggregate gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of any Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable Eligible Accounts Receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactoryBorrowers’ Eligible Accounts Receivable.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventyeighty-five percent (7585%) of Borrower's ’s eligible accounts receivable, plus fifty percent (50%) of the value of Borrower’s eligible inventory (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as the lower of cost or market value; provided however, that outstanding borrowings against inventory shall not at any time exceed an aggregate of Three Million Dollars ($3,000,000.00). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's ’s eligible accounts receivable. As used herein, "“eligible accounts receivable" ” shall consist solely of trade accounts created in the ordinary course of Borrower's ’s business, upon which Borrower's ’s right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's ’s standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank’s satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's ’s accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's ’s total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's ’s total accounts, except that Borrower’s total accounts from account debtors Obesity Research, Fiber Thin and Mannatech, Inc. shall not exceed thirty-five percent (35%) as determined by semi-monthly report pursuant to Section 4.3.(d) below;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Natural Alternatives International Inc)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed the then-current borrowing base (the “Borrowing Base”) equal to the following amount as determined in good faith by Bank based upon a Borrowing Base Certificate (herein so called) in the form of Exhibit A attached hereto and incorporated herein by reference or in such other form as may be acceptable to Bank and such other information as Bank may consider relevant to such determination: the lesser of (i) $500,000.00 or (ii) an aggregate of seventy-five amount equal to eighty percent (7580.0%) of the aggregate value of Borrower's eligible accounts receivable’s Eligible Accounts Receivable, (which lesser amount, as of any date of determination, is hereinafter called the “Borrowing Base Amount”). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time reasonably require. Borrower acknowledges that said borrowing base the Borrowing Base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s aggregate gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s aggregate gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of any Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable Eligible Accounts Receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactoryBorrowers’ Eligible Accounts Receivable.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's eligible accounts receivable, plus forty percent (40%) of the value of Borrower's eligible inventory (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as the lower of cost or market value; provided however, that outstanding borrowing against inventory shall not at any time exceed an aggregate of One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling termsninety (90) days past due, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country, except to the extent any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's eligible accounts receivable, plus the amount of $350,000.00 from March 29, 2005 through April 15, 2005. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty ninety (180) days, any such account which is more than thirty (3090) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress billings or retention rights on the part of the account debxxx;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
(x) that portion of any account from Standard Insurance or Washington Mutual which represents the amount by which Borrower's total accounts from said account debtor exceeds forty percent (40%) of Borrower's total accounts; "
Appears in 1 contract
Limitation on Borrowings. (i) Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five (A) fifty percent (7550%) of unbilled accounts receivable, up to an amount of the lesser of (1) $7,500,000.00 and (2) thirty percent (30%) of eligible accounts receivable, and (B) eighty percent (80%) of Borrower's eligible accounts receivablereceivable (the sum of “A” and “B”, hereafter, the “Availability”). All of the The foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. .
(ii) As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(iA) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty ninety (180) days, any such account which is more than thirty (3090) days past due;
(iiB) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iiiC) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(D) any account which represents an obligation of an account debtor located in a foreign country;
(ivE) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vF) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(G) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viH) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiI) that portion of any account for which the due date has been extended after original delivery to the account debtor; and
(J) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Englobal Corp)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit (including outstanding Letters of Credit), to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five (i) eighty percent (7580%) of Borrower's ’s eligible accounts receivable, (ii) fifty percent (50%) of the value of Borrower’s eligible inventory and (iii) thirty percent (30%) of Borrower-owned net property, plant and equipment at book value determined in accordance with generally accepted accounting principles, consistently applied (“GAAP”) (collectively, “PPE”) in which Bank has a perfected security interest of first priority less (A) PPE not located in the United States and (B) all rolling stock, furniture and fixtures. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s gross sales for said period, period or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's ’s eligible accounts receivable. As used herein, "“eligible accounts receivable" ” shall consist solely of trade accounts (exclusive of amounts to be collected by Borrower and paid to third parties, including, but not limited to, amounts to pay sales, use and other similar taxes, costs of shipping and handling, governmental duties and fees and similar items) created in the ordinary course of Borrower's ’s business, upon which Borrower's ’s right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, other than the obligation to provide future deliveries under phased purchase contracts, and in which Bank has a perfected security interest of first priority, and shall not include, unless agreed to by Bank in writing and in advance:
(i) any account which is past due more than twice Borrower's standard selling termssixty (60) days past due, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, days and any such extended payment account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank’s satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign countrycountry other than an account debtor located in the Canadian provinces of Alberta, British Columbia, Manitoba, Ontario, Saskatchewan, the Yukon Territory, or other jurisdiction approved in advance and in writing by Bank, as long as, in Bank’s determination, such Canadian or other jurisdictions recognize Bank’s first priority security interest in and right to collect such account as a consequence of any security agreements and UCC filings in favor of Bank;
(ivv) any account account, which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's ’s accounts from such account debtor are not eligible pursuant to clause (i) above excepting therefrom any amounts classified as retentions up to a maximum and for the purposes of 10% of the original contract amount of account debtorthis test, 120 days shall be substituted for 60 in clause (i);
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's ’s total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's ’s total accounts;; and
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Northwest Pipe Co)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's eligible accounts receivable. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty ninety (180) days, any such account which is more than thirty (3090) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress billings or retention rights on the part of the account debtxx;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy(i) eighty percent 80% of Borrower’s eligible accounts receivable (Non-five Gov’t/Non-Consulting) (ii) Forty percent (7540%) of Borrower's ’s eligible accounts receivablereceivable (Gov’t/Consulting) provided that outstanding borrowings against such accounts receivable shall not exceed Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00), and (iii) fifty percent (50%) of the value of Borrowers eligible inventory, (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as the lower of cost or market value, provided however, that outstanding borrowing against inventory shall not at any time exceed an aggregate of One Million and 00/100 Dollars ($1,000,000). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's Borrowers eligible accounts receivable. As used herein, "“eligible accounts receivable" ” shall consist solely of trade accounts created in the ordinary course of Borrower's ’s business, upon which Borrower's ’s right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any Non-Gov’t/Non-Consulting account which is past due more than twice Borrower's standard selling termsninety (90) days, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) any Gov’t/Consulting account which is past due more than sixty (60) days;
(iii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iiiiv) any account which represents an obligation of an account debtor located in a foreign countrycountry except (A) to the extent any such account, in Bank’s determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank and (B) accounts of Daimler Chrysler and Valeo to the extent that the accounts of Daimler Chrysler and Valeo, in the aggregate, do not exceed 10% of the total eligible accounts receivable and such accounts otherwise qualify as eligible accounts receivable;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's Borrowers accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorand (ii) above;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's ’s total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's ’s total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretionreasonable discretion from the standpoint of a secured creditor, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Iteris, Inc.)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit (including outstanding Letters of Credit), to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five (i) eighty percent (7580%) of Borrower's ’s eligible accounts receivable, (ii) fifty percent (50%) of the value of Borrower’s eligible inventory and (iii) thirty percent (30%) of Borrower-owned net property, plant and equipment at book value determined in accordance with generally accepted accounting principles, consistently applied (“GAAP”) (collectively, “PPE”) in which Bank has a perfected security interest of first priority, except for real property (land and buildings) comprising PPE, which instead must be unencumbered (except for the IDB Collateral until the obligations currently secured by the IDB Collateral are defeased or paid) and available to satisfy the requirements of Section 1.1(d)(ii), less (A) PPE not located in the United States and (B) all rolling stock, furniture and fixtures. In determining the limitation on borrowings under the Line of Credit, the Bank shall also reduce the sum of (i) through (iii) above by the amount of the Consolidated Total Debt other than the Debt under the Line of Credit (including outstanding Letters of Credit that have not yet been funded or drawn). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s gross sales for said period, period or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's ’s eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Northwest Pipe Co)
Limitation on Borrowings. Outstanding Notwithstanding anything herein to the contrary, if the average daily amount outstanding under the Line of Credit (including without limitation any undrawn amounts under any outstanding Letters of Credit (defined below)) in any calendar month exceeds Five Million Dollars ($5,000,000.00) (“Designated Amount”), then outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth in Section 1.1(a) above, shall not at any time thereafter exceed an aggregate a borrowing base (“Borrowing Base”) which is the sum of seventy-five eighty percent (7580%) of Borrower's ’s eligible accounts receivable. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's ’s eligible accounts receivable. As used herein, "“eligible accounts receivable" ” shall consist solely of trade accounts created in the ordinary course of Borrower's ’s business, upon which Borrower's ’s right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty ninety (180) days, any such account which is more than thirty (3090) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank’s satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country;country other than an account debtor located in a Canadian province or territory, so long as, in Bank’s determination, such Canadian jurisdiction recognizes Bank’s first priority security interest in and right to collect such account as a consequence of any security agreements and UCC filings in favor of Bank; provided, that outstanding borrowings against accounts from account debtors located in a non-Canadian jurisdiction shall not exceed an aggregate of Five Hundred Thousand Dollars ($500,000.00) at any time.
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty thirty percent (2030%) or more of Borrower's ’s accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's ’s total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's ’s total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole reasonable discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of eighty-five percent (85%) of Borrower’s Eligible Accounts Receivable, plus seventy-five percent (75%) of Borrower's eligible accounts receivable’s Insured Foreign Eligible Accounts Receivable, plus ten percent (10%) of the value of Borrower’s Eligible Inventory (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value determined based on Borrower’s cost; provided however, that outstanding borrowings against inventory shall not at any time exceed an aggregate of Five Hundred Thousand Dollars ($500,000). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's ’s accounts, Bank, in its sole discretiondiscretion upon seven (7) days prior written notice to Borrower, may reduce the foregoing advance rate against eligible accounts receivable Eligible Accounts Receivable or Insured Foreign Eligible Accounts Receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense ’s Eligible Accounts Receivable or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactoryInsured Foreign Eligible Accounts Receivable.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's eligible accounts receivable, plus sixty five percent (65%) of dated accounts receivable, plus fifty percent (50%) of the value of Borrower's eligible inventory (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as lower of cost or market per generally accepted accounting principals; provided however, that outstanding borrowings against inventory shall not at any time exceed an aggregate of Three Million Dollars ($3,000,000.00) for inventory and One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) for dated accounts receivable less 105% of the balance payable to Deutche Financial. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, cash discounts, credits and allowances for the immediately preceding three twelve (312) months at all times shall be less than five six percent (56%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three twelve (312) months at any time exceeds five six percent (56%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling termsninety (90) days past due, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty fifty (180150) days, any such account which is more than thirty sixty (3060) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except any accounts which represents an obligation of City governments as approved by Bank or any accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign countrycountry other than an account debtor located in a Canadian province or territory, so long as, in Bank's determination, such Canadian jurisdiction recognizes Bank's first priority security interest in and right to collect such account as a consequence of any security agreements and UCC filings in favor of Bank, except to the extent any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress billings or retention rights on the part of the account dxxxxx;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, ,deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Hia Inc)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580.0%) of Borrower's eligible accounts receivable. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling termsterms or 90 days after the invoice date, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which whichever is more than thirty (30) days past dueearlier;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof, other than the University of Alabama, University of Iowa, University of Illinois, University of Maryland, University of Virginia, University Medical Center-Las Vegas, University of CA-Xxxxx, University of Colorado, University of Mississippi, University of Tennessee, and such other hospitals or medical centers affiliated with states or municipalities as may be approved by Bank in writing in its sole discretion;
(iv) any account which represents an obligation of an account debtor located in a foreign country;, except to the extent any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank:
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Micrus Corp)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrowerthe aggregate amount of eligible accounts receivable of BPI, Wingtip, Relay Couriers Inc., and LSL, plus thirty percent (30%) of the value of BPI's eligible accounts receivableinventory, (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as fair market value; provided however, that outstanding borrowings against BPI's inventory shall not at any time exceed an aggregate of One Million Dollars ($1,000,000.00). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding assumption that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months immediately preceding any date of determination shall at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable; provided, however, that the Bank shall make no such reduction in excess of twenty-five percent (25%) of the then existing advance rate during any 90-day period. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty sixty (180) days, any such account which is more than thirty (3060) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which Bank's forms N-138 and N-139 have been duly executed and acknowledged);
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's eligible accounts receivable. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Bank's determination of the value of eligible accounts receivable shall at all times be indisputable and deemed correct. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "“eligible accounts receivable" ” shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty ninety (180) days, any such account which is more than thirty (3090) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) [Intentionally Deleted];
(vii) any account which represents an obligation of any account debtor when twenty thirty percent (2030%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five thirty percent (2530%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole commercially reasonable discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory. For purposes of this Agreement, “commercially reasonable” means conducted in good faith and in accordance with commonly accepted commercial practice in the context of a commercial finance lender providing a revolving credit facility against the value of accounts.
Appears in 1 contract
Samples: Credit Agreement (Fortress International Group, Inc.)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to Credit**to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventyeighty percent (80%) of the aggregate amount of eligible accounts receivable of PBI, Wingtip, Relay, PTST, PLLC, Xxxxxxxx River Rouge, Inc., Jetport Express, Inc. and Transportation Systems Corporation, Inc., PLUS thirty percent (30%) of the value of eligible inventory of the Borrowers, (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as fair market value; provided however, that outstanding borrowings against Borrowers' inventory shall not at any time exceed an aggregate of Five Million Dollars ($5,000,000.00); plus twenty-five percent (7525%) of Borrower's eligible accounts receivablethe net fixed assets (as defined by generally accepted accounting principles) of Borrowers; provided however that outstanding borrowings against net fixed assets shall not at any time exceed an aggregate of One Million Dollars ($1,000,000.00) . All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges Borrowers acknowledge that said borrowing base was established by Bank with the understanding assumption that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months immediately preceding any date of determination shall at all times shall be less than five percent (5%) of BorrowerXxxxxxxx's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable; provided, however, that the Bank shall make no such reduction in excess of twenty-five percent (25%) of the then existing advance rate during any 90-day period. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of BorrowerXxxxxxxx's business, upon which BorrowerXxxxxxxx's right to receive payment is absolute and not contingent upon the fulfillment of ** except for the amount of any undrawn Letter or Letters of Credit issued pursuant to paragraph (c) hereof any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty sixty (180) days, any such account which is more than thirty (3060) days past pasT due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which Bank's forms N-138 and N-139 have been duly executed and acknowledged);
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of any Borrower;
(vvi) that portion of any account which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's Borrowers' accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which BorrowerXxxxxxxx's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's Borrowers' total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory. Notwithstanding anything in this Section 1.1(b) to the contrary, from the date hereof, to and including May 31, 1998, the limitation on borrowings pursuant to this Section 1.1(b) shall be increased by $2,000,000.00.
Appears in 1 contract
Samples: Revolving Line of Credit Note (Precept Business Services Inc)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth for the above, shall not at any time after the occurrence of the Borrowing Base Event (as defined below) exceed an the aggregate of seventy-five seventy percent (7570%) of Borrower's ’s eligible accounts receivable, plus 40% (40%) of the value of Borrower’s eligible inventory (exclusive of work in process and inventory which is obsolete, unsalable or damaged), with value defined as the lower of cost or market. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of the Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies contingencies, which Bank reasonably believes may affect payment of any portion of Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's ’s eligible accounts receivable. As used herein, "the “Borrowing Base Event” shall be deemed to have occurred when outstanding borrowings under the Line of Credit exceed Five Hundred Thousand Dollars ($500,000.00), and shall be deemed to be continuing at all times thereafter, notwithstanding any subsequent decrease below such amount in the borrowings outstanding under the Line of Credit. As used herein, “eligible accounts receivable" ” shall consist solely of trade accounts created in the ordinary course of Borrower's ’s business, upon which Borrower's ’s right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and which shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such Any account which is more than thirty ninety (3090) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense defense, or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to the Bank’s satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country, except to the extent any such account, in Bank’s determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance, and issued by a party acceptable to Bank;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's ’s accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's ’s total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's ’s total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Pro Dex Inc)
Limitation on Borrowings. Outstanding borrowings under the Revolving Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an the Borrowing Base with the Borrowing Base defined as the aggregate of seventy-five percent (75%) of Borrower's eligible accounts receivable, plus fifty percent (50%) of the value of Borrower's eligible inventory (exclusive of work in process and inventory which is obsolete, unsalable or damaged), with value defined as the lessor of Borrowers cost or current market value; plus seventy-five percent (75%) of the net book value of Eligible vending machines (with Eligible vending machines defined as vending machines with respect to which the Bank has either a lien of first priority or a second priority lien where the first lien has been subordinated to the lien of the Bank) and transportation equipment. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's 2 right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty sixty (180) days, any such account which is more than thirty (3060) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which Bank's forms N-138 and N-139 have been duly executed and acknowledged);
(iv) any account which represents an obligation of an account debtor located in a foreign country, other than Canada;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower; provided, however, receivables from franchisees shall be "Eligible Accounts" if they meet all the other requirements of eligible accounts set forth herein;
(vvi) that portion of any account which represents interim or progress billxxxx xx retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty fifty percent (2050%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole reasonable discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding At any time when combined outstanding borrowings under the Line of Credit and Term Loan exceed $20,000,000.00, the outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five Seventy Five percent (75%) of Borrower's eligible accounts receivable, plus Fifty percent (50%) of the value of Borrower's eligible inventory and eligible inventory of The Golf Warehouse, Inc. (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as the lower of cost or market value. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five ten percent (510%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five ten percent (510%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of CreditCredit together with all amounts reserved thereunder, to a maximum of the principal amount set forth aboveof the Line of Credit, shall not at any time exceed an aggregate the result of seventy-five percent (75%i) of Borrower's eligible accounts receivableMargined Eligible Accounts Receivable (as defined below), plus (ii) Margined Eligible Inventory (as defined below), plus (iii) Deemed Margined Eligible Equipment (as defined below), minus (iv) the Availability Block (as defined below) (said result, the “Borrowing Base”). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower Xxxxxxxx acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five ten percent (510%) of BorrowerXxxxxxxx's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five ten percent (510%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable Eligible Accounts Receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against BorrowerXxxxxxxx's eligible accounts receivableEligible Accounts Receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Natural Alternatives International Inc)
Limitation on Borrowings. Outstanding borrowings and Letter of Credit liabilities under the Line of CreditCredit (collectively “Outstandings”), to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's ’s eligible accounts receivablereceivable (the “Borrowing Base”) plus an additional amount not to exceed $3,000,000.00. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's ’s eligible accounts receivable. As used herein, "“eligible accounts receivable" ” shall consist solely of trade accounts created in the ordinary course of Borrower's ’s business, upon which Borrower's ’s right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due unpaid more than twice Borrower's standard selling terms90 days after invoice date or, except with respect to any account for which Borrower has provided extended if the payment terms not to exceed one hundred eighty (180) term is less than net 30 days, any such account which is unpaid more than thirty (30) days past due3 times the payment term;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Revolving Line of Credit Note
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed the then-current borrowing base (the “Borrowing Base”) equal to the following amount as determined in good faith by Bank based upon a Borrowing Base Certificate (herein so called) in the form of Exhibit A attached hereto and incorporated herein by reference or in such other form as may be acceptable to Bank and such other information as Bank may consider relevant to such determination: an aggregate of amount equal to seventy-five percent (75%) of the aggregate value of Borrower's eligible accounts receivable’s Eligible Accounts Receivable (which amount, as of any date of determination, is hereinafter called the “Borrowing Base Amount”), minus all outstanding Letter of Credit Liabilities. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time reasonably require. Borrower acknowledges that said borrowing base the Borrowing Base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s aggregate gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s aggregate gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of any Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable Eligible Accounts Receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactoryBorrowers’ Eligible Accounts Receivable.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five percent (75%) of Borrower's eligible accounts receivable, plus fifty percent (50%) of the value of Borrower's eligible inventory (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as the lesser of cost or market value. All of the foregoing shall be determined by Bank upon receipt and review of all collateral borrowing base reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts receivables and notes receivable created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty ninety (180) days, any such account which is more than thirty (3090) days past due;
(ii) royalty receivables;
(iii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iiiiv) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(v) any account which represents an obligation of an account debtor located in a foreign country, except to the extent any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank;
(ivvi) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;; and
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vivii) that portion of any account from an account debtor account, which represents interim or progress bilxxxxx xx retention right on the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition part of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Rocky Mountain Chocolate Factory Inc)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five percent (75%) of Borrower's and Houston Dynamic's eligible accounts receivable. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's and Houston Dynamic's gross sales for said period. If such dilution of Borrower's and Houston Dynamics accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's and/or Houston Dynamic's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's and Houston Dynamic's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's and Houston Dynamic's business, upon which Borrower's and Houston Dynamic's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty sixty (180) days, any such account which is more than thirty (3060) days past duedue or ninety (90) days from the invoice date;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country, except to the extent any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of BorrowerBorrower and/or Houston Dynamics;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's and/or Houston Dynamic's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's and/or Houston Dynamic's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's and/or Houston Dynamic's total accounts;
(viiix) any account in which services have not been rendered or goods have not been shipped; and
(x) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Section 2.4 Amendment to Section 1.3(a). Effective as of the date hereof, Section 1.3(a) is hereby amended to read in its entirety as follows:
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth aboveherein, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's eligible accounts receivable, plus fifty percent (50%) of the value of Borrower's eligible finished goods inventory, plus thirty percent (30%) of the value of Borrower’s eligible raw material inventory (such aggregate amount, collectively, “Availability”); provided however, that outstanding borrowings against inventory shall not at any time exceed an aggregate of the lesser of (i) Twenty Million and No/100 Dollars ($20,000,000.00) and (ii) an amount such that aggregate Availability for inventory (i.e., eligible finished goods inventory plus eligible raw material inventory) does not exceed (x) 65% of total Availability until the end of the Fiscal Quarter ending on or about January 31, 2023 and (y) 50% of total Availability at all times thereafter. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time reasonably require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "“eligible accounts receivable" ” shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is that has been outstanding more than 60 days past due more than twice Borrower's standard selling termsor 90 days from the date of the invoice, whichever is greater, except with respect to any account for which Borrower has provided extended payment terms of more than 60 days but not to exceed one hundred eighty (180) daysmore than 150 days from the date of the invoice, any such account which that is more than thirty (30) 30 days past duethe extended payment due date;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country, other than an account debtor located in a Canadian province or territory, so long as, in Bank's determination, such Canadian jurisdiction recognizes Bank's first priority security interest in and right to collect such account as a consequence of any security agreements and UCC filings in favor of Bank;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty thirty percent (2030%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty(x) thirty-five percent (2535%) of Borrower’s total accounts for accounts from La-Z-Boy Inc. or Tempur Sealy International, Inc. and (y) thirty percent (30%) of Borrower's total accountsaccounts for accounts from any other account debtor;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, based on a reasonable, good faith determination, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory. As used herein, (i) “eligible finished goods inventory” means inventory that qualifies as “eligible inventory” (defined below) and consists of first quality finished goods held for sale in the ordinary course of Borrower’s business; (ii) “eligible raw material inventory” means inventory that qualifies as “eligible inventory” (defined below) and consists of goods that are first quality raw materials; and (iii) “eligible inventory” means inventory owned by Borrower or the Canadian Subsidiaries (and in the case of inventory of the Canadian Subsidiaries, such inventory will be eligible only up to an amount not to exceed $4,000,000 in the aggregate), valued at the lower of cost or market in accordance with GAAP in which, with respect solely to inventory owned by Borrower, Bank has a perfected security interest of first priority, and shall not include:
(i) inventory that is in-transit (provided, however, that such limitation on eligibility will not apply to any inventory that is in transit between the Borrower and any Subsidiary or any inventory that is in transit between any of the Borrower’s Subsidiaries, provided that such inventory is (A) in transit en route to a facility of the Borrower or such Subsidiary located in the United States or Canada; and (B) insured on commercially reasonable terms for their replacement value; provided further, however, that eligibility of in-transit inventory under the foregoing clauses (A) and (B) will be limited to an amount not to exceed $10,000,000 in the aggregate);
(ii) inventory that is located at any warehouse, job site or other premises not approved by Bank; covered by any negotiable or non-negotiable warehouse receipt, xxxx of lading or other document of title; on consignment from any consignor; or on consignment to any consignee or subject to any bailment unless the consignee or bailee has executed an agreement with Bank;
(iii) supplies, parts or sample inventory, tooling inventory, customer supplied inventory;
(iv) work-in-process inventory;
(v) inventory that is damaged, defective, obsolete or not currently saleable in the ordinary course of Borrower’s business, or is past its expiration date, or the amount of such inventory that has been reduced by shrinkage;
(vi) inventory that Borrower has returned, has attempted to return, is in the process of returning or intends to return to the vendor of the inventory;
(vii) inventory manufactured or held for resale by Borrower pursuant to a license unless the applicable licensor has agreed in writing to permit Bank to exercise its rights and remedies against such inventory;
(viii) inventory that is subject to a security interest or lien in favor of any third party.
Appears in 1 contract
Samples: Credit Agreement (Culp Inc)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's assigned eligible accounts receivable. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoffset off, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which Bank's forms N-138 and N-139 have been duly executed and acknowledged);
(iv) any account which represents an obligation of an account debtor located in a foreign countrycountry except to the any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of (i) eighty-five percent (85%) of Borrower's eligible billed accounts receivable, plus (ii) sixty-five percent (65%) of Borrower's eligible unbilled accounts receivable (not to exceed $2,500,000.00), plus (iii) seventy-five percent (75%) of the appraised value of Borrower's eligible accounts receivablereal property collateral granted to Bank (in Section 1.5 Collateral below) minus amount of outstanding Term Loan. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account (exceeding 90 days from date of invoice, or for which Borrower has provided extended payment terms not to exceed one hundred eighty professional employer organization (180"PEO") daysaccounts, any such account which is more than thirty (30) exceeding 30 days past due;from date of invoice).
(ii) that portion of any account for which there exists any right of setoff, defense or discount discount, including but not limited to accrued safety incentive rebates (to a maximum of the greater of $150,000.00 or the immediately preceding 3 months' safety incentive rebates paid), customer deposits, and internal billings (except regular discounts allowed in the ordinary course xxxxxx of business to promote prompt payment) ), or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country;, other than an account debtor located in the Canadian provinces of Alberta, British Columbia, Manitoba, Ontario, Saskatchewan or the Yukon Territory so long as, in Banks determination, such Canadian jurisdictions recognize Bank's first priority security interest in and right to collect such account as a consequence of any security agreements and UCC filing in favor of Bank.
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress billings or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of (i) seventy-five percent (7575.0%) of Borrower's eligible accounts receivableEligible Accounts Receivable (as defined below), plus (ii) the lesser of (A) $14,000,000, and (B) eighty percent (80.0%) of the Appraised Net Recovery Value (as defined below) of Borrower's inventory. The amount calculated pursuant to the preceding sentence is referred to herein as the "Borrowing Base". All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base the Borrowing Base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or that if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable Eligible Accounts Receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivableEligible Accounts Receivable. As used herein, "eligible accounts receivableEligible Accounts Receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, net of all (x) returned goods authorizations, and (y) allowances for warranties, and upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due remains unpaid more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty sixty (180) days, any such account which is more than thirty (3060) days past duethe due date thereof;
(ii) that portion of any account for which there exists any right of setoffsetoff (including deposits, loans and warranties), defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign countrycountry other than an account debtor located in the Canadian provinces of Alberta, British Columbia, Manitoba, Ontario, Saskatchewan or the Yukon Territory so long as, in Bank's determination, such Canadian jurisdictions recognize Bank's first priority security interest in and right to collect such account as a consequence of any security agreements and UCC filings in favor of Bank and except to the extent any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, director, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;; provided, however, that this limitation shall not apply to any accounts owing by AutoZone so long as the senior unsecured debt rating of AutoZone, Inc. by Standard & Poor's (a division of the McGraw-Hills Companies) is BBB- or better and such rating by Xxxxx'x Investors Service is Baa3 or better; and
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory. As used herein, "Appraised Net Recovery Value" of Borrower's inventory shall mean the amount reflected as the "net recovery value" of Borrower's inventory in the most recent quarterly appraisal of inventory (performed by the Great American Group or another appraiser acceptable to Bank) required pursuant to Section 4.11.
Appears in 1 contract
Samples: Credit Agreement (Motorcar Parts & Accessories Inc)
Limitation on Borrowings. Outstanding Subject to the maximum aggregate amount at any time outstanding set forth in subsection (a) immediately above of this Section 1.2, outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, Credit shall not at any time exceed an aggregate the sum, as of seventythe relevant date of determination (said sum as determined from time to time in accordance with the terms hereof and of the “Borrowing Base Certificate” (hereinafter defined), the “Borrowing Base”), of:
(i) eighty-five percent (7585.0%) of Borrower's eligible accounts receivable“Eligible Accounts Receivable” (hereinafter defined); plus (as applicable):
(ii) in respect of the Borrowing Base calculated for application in the months of December through April (both inclusive) during the term hereof (regardless of the calendar year), sixty-five percent (65.0%) of the “Value” (hereinafter defined) of “Eligible Finished Goods Inventory” (hereinafter defined);
(iii) in respect of the Borrowing Base calculated for application in the months of May and June during the term hereof (regardless of the calendar year), fifty-five percent (55.0%) of the Value of Eligible Finished Goods Inventory; or
(iv) in respect of the Borrowing Base calculated for application in the months of July through September (both inclusive) during the term hereof (regardless of the calendar year), fifty percent (50.0%) of the Value of Eligible Finished Goods Inventory;
(v) in respect of the Borrowing Base calculated for application in the months of October and November during the term hereof (regardless of the calendar year), fifty-five percent (55.0%) of the Value of Eligible Finished Goods Inventory. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require, including, without limitation, the Borrowing Base Certificates for the relevant month. Borrower acknowledges that said borrowing base the Borrowing Base was established by Bank with the understanding thatunderstanding, among other itemsthings, that the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales of Eligible Finished Goods Inventory for said period. If such dilution of Borrower's accounts receivable for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales of Eligible Finished Goods Inventory for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accountssuch accounts receivable, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable Eligible Accounts Receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified ’s Eligible Accounts Receivable as retentions up to a maximum of 10% of the original contract amount of account debtor;
(vi) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactorybut consistent with its commercial practices for similar loans shall determine.
Appears in 1 contract
Samples: Credit Agreement (Acr Group Inc)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's ’s eligible accounts receivable. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's ’s gross sales for said period. If such dilution of Borrower's ’s accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's ’s gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's ’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's ’s eligible accounts receivable. As used herein, "“eligible accounts receivable" ” shall consist solely of trade accounts created in the ordinary course of Borrower's ’s business, upon which Borrower's ’s right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty ninety (180) days, any such account which is more than thirty (3090) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank’s satisfaction), provided however, that accounts which represent obligations of hospitals owned by Los Angeles County (e.g., Los Angeles County-USC Medical Center, Harbor-UCLA Medical Center and Olive View-UCLA Medical Center) shall be considered eligible for purposes of this subparagraph (iii);
(iv) any account which represents an obligation of an account debtor located in a foreign countrycountry other than an account debtor located in a Canadian province or territory, so long as, in Bank’s determination, such Canadian jurisdiction recognizes Bank’s first priority security interest in and right to collect such account as a consequence of any security agreements and UCC filings in favor of Bank, except to the extent any such account, in Bank’s determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's ’s accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's ’s total accounts from said account debtor exceeds fifteen percent (15%) of Borrower’s total accounts, except with respect to account debtors USC University Hospital and USC Xxxxxx Cancer Hospital (“USC Hospitals”), that portion of any account of USC Hospitals which represents the amount by which Borrower’s total accounts from USC Hospitals exceeds an aggregate of twenty-five percent (25%) of Borrower's ’s total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's assigned eligible accounts receivable, plus thirty percent (30%) of the value of Borrower's eligible inventory (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as lower of cost or market value; provided however, that the outstanding principal balance of all borrowings against Borrower's inventory shall not at any time exceed an aggregate of One Million Dollars ($1,000,000.00). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iiiiv) any account which represents an obligation of an account debtor located in a foreign country, except to the extent any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five eighty percent (7580%) of Borrower's the eligible accounts receivablereceivable of Borrower, RO Associates, Incorporated and CXR Larus Corporation (collectively, the "Borrowing Base Parties"). All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's the Borrowing Base Parties' gross sales for said period. If such dilution of Borrower's the Borrowing Base Parties' accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's the Borrowing Base Parties' gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's any of the Borrowing Base Parties' accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's the Borrowing Base Parties' eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrowera Borrowing Base Party's business, upon which Borrowersuch Borrowing Base Party's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed ninety-one hundred eighty (180) days, any such account which is more than thirty (3091) days past duethe date of invoice;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrowera Borrowing Base Party;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor:
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrowera Borrowing Base Party's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrowera Borrowing Base Party's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrowersuch Borrowing Base Party's total accounts;
(viiix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Emrise CORP)
Limitation on Borrowings. Outstanding Notwithstanding any other provision of this Agreement, the aggregate amount of all outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, Credit shall not at any time exceed an aggregate a maximum of seventy-five the following:
(i) eighty percent (7580%) of Borrower's billed eligible accounts receivable, as determined by Bank upon receipt and review of Borrower's monthly collateral reports and such other documents as Bank may require; plus
(ii) fifty percent (50%) of Borrower's unbilled eligible accounts receivable (net of claims and retentions), as determined by Bank upon receipt and review of said collateral reports and other documents; provided, however, that the outstanding principal balance against Borrower's eligible unbilled accounts receivable shall not at any time exceed the lesser of (a) an aggregate of One Million and No/100 Dollars ($1,000,000.00); or (b) thirty percent (30%) of the total borrowing base as determined by Bank. All of the foregoing shall be determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's standard selling termssixty (60) days past due, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days past due;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of an account debtor located in a foreign country, except for any account disclosed to Bank which is supported by a letter of credit acceptable to Bank and/or of a foreign account debtor acceptable to Bank;
(iv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(v) that portion of any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% retention rights on the part of the original contract amount of account debtor;
(vi) that portion of any account which arises from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) claims. As used herein claims refers to amounts billed to the U. S. government but not yet paid because of Borrower's total accountsa dispute;
(vii) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
Samples: Credit Agreement (Jaymark Inc)
Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of seventy-five Eighty and No/100 percent (7580.0%) of Borrower's eligible accounts receivablereceivable that are less than sixty (60) days old, plus Fifty and No/100 percent (50.0%) of Borrower's eligible accounts receivable that are between sixty (60) and ninety (90) days old. All of the foregoing shall be determined by Bank Lender upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank Lender may from time to time reasonably require. Borrower acknowledges that said borrowing base was established by Bank Lender with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank Lender reasonably believes may affect payment of any portion of Borrower's accounts, BankLender, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank Lender has a perfected security interest of first priority, and shall not include:
(i) any account which is past due that has been outstanding more than twice Borrower's standard selling terms, except with respect to any account for which Borrower has provided extended payment terms not to exceed one hundred eighty (180) days, any such account which is more than thirty (30) 90 days past duefrom the date of the invoice;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Lender's satisfaction);
(iv) any account which represents an obligation of an account debtor located in a foreign country;
(ivv) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vvi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above excepting therefrom any amounts classified as retentions up to a maximum of 10% of the original contract amount of account debtorabove;
(viviii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(viiix) any account deemed ineligible by Bank Lender when BankLender, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
Appears in 1 contract
