Common use of Limitation on Borrowings Clause in Contracts

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 percent (70%) of Borrower's eligible accounts receivable plus $2,750,000.00 of cash collateral (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 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 more than ninety (90) 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 country other than the United States or any of the following Canadian provinces: Alberta, British Columbia, Manitoba, Ontario, Saskatchewan and the Yukon Territory, 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; (v) 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; (vi) 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; (viii) 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; (ix) 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.

Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum (A) The Company shall procure that so long as any part of the Stocks remains outstanding the aggregate principal amount set forth above, (including any premium payable on final repayment) outstanding of borrowings by the Company and all its subsidiaries (but excluding borrowings by any of such companies from any other of them) shall not at exceed a sum equal to twice the adjusted total of capital and reserves (as defined below). (B) The Company shall procure that so long as any time exceed an aggregate of seventy percent (70%) of Borrower's eligible accounts receivable plus $2,750,000.00 of cash collateral (the "Borrowing Base"). All part 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, Stocks remains outstanding the aggregate principal amount (including any premium payable on final repayment) outstanding of (a) secured borrowings of the Company (otherwise than from any of its subsidiaries) and (b) all returns, rebates, discounts, credits and allowances for borrowings whether secured or unsecured of its subsidiaries (otherwise than from the immediately preceding three (3Company or from another subsidiary) 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 includeexceed a sum equal to two thirds of the adjusted total of capital and reserves. For the purposes of the provisions of (A) and (B) above relating to borrowing:– (i) the principal amount (together with any account which is more than ninety premium payable on final repayment) of any debentures within the meaning of Section 455 of the Companies Act, 1948 issued by the Company or any of its subsidiaries shall (90unless otherwise taken into account) days past duebe deemed to be borrowings; (ii) that portion the principal amount raised by the Company or any of its subsidiaries by acceptances under any account for which there exists acceptance credit opened on its behalf by any right of setoff, defense bank or discount (except regular discounts allowed in the ordinary course of business accepting house shall be deemed to promote prompt payment) or for which any defense or counterclaim has been assertedbe borrowings; (iii) any account which represents an obligation the nominal amount of any state issued share capital and the principal amount of any borrowings (together in each case with any premium on redemption or municipal government repayment) the repayment whereof is guaranteed by the Company or by any of its subsidiaries shall be deemed to be borrowings by 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)guaranteeing company unless otherwise taken into account; (iv) any account which represents an obligation borrowings of an account debtor located in a country other than the United States Company or any of its subsidiaries for the following Canadian provinces: Alberta, British Columbia, Manitoba, Ontario, Saskatchewan express purpose of repaying the whole or any part of any borrowings of the Company or any of its subsidiaries for the time being outstanding (including any premium on redemption or repayment) and the Yukon Territory, except taken into account and applied for that purpose within four months of such borrowing shall pending application for such purpose within such period be deemed not 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 Bankbe borrowings; (v) the nominal amount of any account which arises from issued share capital (not being equity share capital) of a subsidiary owned otherwise than by the sale Company or lease by a subsidiary shall be deemed to or performance be borrowings of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrowerthe subsidiary; (vi) that portion in the case of any account which represents interim or progress xxxxxxxx or retention rights on the a subsidiary, part of whose equity share capital is held otherwise than by the account debtor; (vii) any account which represents an obligation of any account debtor when twenty percent (20%) Company or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above; (viii) that portion of any account from an account debtor which represents another subsidiary, the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts; (ix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition proportion of the account debtor, total amounts borrowed by such subsidiary which is borrowed otherwise than from the Company or another subsidiary which corresponds to the industry in which proportion of the account debtor is engaged, total nominal amount of the issued equity share capital of such subsidiary held otherwise than by the Company or another subsidiary shall be deemed not to be unsatisfactoryborrowings.

Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum (A) The Company shall procure that so long as any part of the Stocks remains outstanding the aggregate principal amount set forth above, (including any premium payable on final repayment) outstanding of borrowings by the Company and all its subsidiaries (but excluding borrowings by any of such companies from any other of them) shall not at exceed a sum equal to twice the adjusted total of capital and reserves (as defined below). (B) The Company shall procure that so long as any time exceed an aggregate of seventy percent (70%) of Borrower's eligible accounts receivable plus $2,750,000.00 of cash collateral (the "Borrowing Base"). All part 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, Stocks remains outstanding the aggregate principal amount (including any premium payable on final repayment) outstanding of (a) secured borrowings of the Company (otherwise than from any of its subsidiaries) and (b) all returns, rebates, discounts, credits and allowances for borrowings whether secured or unsecured of its subsidiaries (otherwise than from the immediately preceding three (3Company or from another subsidiary) 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 includeexceed a sum equal to two thirds of the adjusted total of capital and reserves. For the purposes of the provisions of (A) and (B) above relating to borrowing:– (i) the principal amount (together with any account which is more than ninety premium payable on final repayment) of any debentures within the meaning of Section 455 of the Companies Act, 1948 issued by the Company or any of its subsidiaries shall (90unless otherwise taken into account) days past duebe deemed to be borrowings; (ii) that portion the principal amount raised by the Company or any of its subsidiaries by acceptances under any account for which there exists acceptance credit opened on its behalf by any right of setoff, defense bank or discount (except regular discounts allowed in the ordinary course of business accepting house shall be deemed to promote prompt payment) or for which any defense or counterclaim has been assertedbe borrowings; (iii) any account which represents an obligation the nominal amount of any state issued share capital and the principal amount of any borrowings (together in each case with any premium on redemption or municipal government repayment) the repayment whereof is guaranteed by the Company or by any of its subsidiaries shall be deemed to be borrowings by 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)guaranteeing company unless otherwise taken into account; (iv) any account which represents an obligation borrowings of an account debtor located in a country other than the United States Company or any of its subsidiaries for the following Canadian provinces: Alberta, British Columbia, Manitoba, Ontario, Saskatchewan express purpose of repaying the whole or any part of any borrowings of the Company or any of its subsidiaries for the time being outstanding (including any premium on redemption or repayment) and the Yukon Territory, except taken into account and applied for that purpose within four months of such borrowing shall pending application for such purpose within such period be deemed not 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; be borrowings; (v) the nominal amount of any account which arises from issued share capital (not being equity share capital) of a subsidiary owned otherwise than by the sale Company or lease by a subsidiary shall be deemed to or performance be borrowings of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrowerthe subsidiary; (vi) that portion in the case of any account which represents interim or progress xxxxxxxx or retention rights on the a subsidiary, part of whose equity share capital is held otherwise than by the account debtor; (vii) any account which represents an obligation of any account debtor when twenty percent (20%) Company or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above; (viii) that portion of any account from an account debtor which represents another subsidiary, the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts; (ix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition proportion of the account debtor, total amounts borrowed by such subsidiary which is borrowed otherwise than from the Company or another subsidiary which corresponds to the industry in which proportion of the account debtor is engaged, total nominal amount of the issued equity share capital of such subsidiary held otherwise than by the Company or another subsidiary shall be deemed not to be unsatisfactoryborrowings.

Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum (A) The Company shall procure that so long as any part of the Stocks remains outstanding the aggregate principal amount set forth above, (including any premium payable on final repayment) outstanding of borrowings by the Company and all its subsidiaries (but excluding borrowings by any of such companies from any other of them) shall not at exceed a sum equal to twice the adjusted total of capital and reserves (as defined below). (B) The Company shall procure that so long as any time exceed an aggregate of seventy percent (70%) of Borrower's eligible accounts receivable plus $2,750,000.00 of cash collateral (the "Borrowing Base"). All part 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, Stocks remains outstanding the aggregate principal amount (including any premium payable on final repayment) outstanding of (a) secured borrowings of the Company (otherwise than from any of its subsidiaries) and (b) all returns, rebates, discounts, credits and allowances for borrowings whether secured or unsecured of its subsidiaries (otherwise than from the immediately preceding three (3Company or from another subsidiary) 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 includeexceed a sum equal to two thirds of the adjusted total of capital and reserves. For the purposes of the provisions of (A) and (B) above relating to borrowing:– (i) the principal amount (together with any account which is more than ninety premium payable on final repayment) of any debentures within the meaning of Section 455 of the Companies Act, 1948 issued by the Company or any of its subsidiaries shall (90unless otherwise taken into account) days past duebe deemed to be borrowings; (ii) that portion the principal amount raised by the Company or any of its subsidiaries by acceptances under any account for which there exists acceptance credit opened on its behalf by any right of setoff, defense bank or discount (except regular discounts allowed in the ordinary course of business accepting house shall be deemed to promote prompt payment) or for which any defense or counterclaim has been assertedbe borrowings; (iii) any account which represents an obligation the nominal amount of any state issued share capital and the principal amount of any borrowings (together in each case with any premium on redemption or municipal government repayment) the repayment whereof is guaranteed by the Company or by any of its subsidiaries shall be deemed to be borrowings by 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)guaranteeing company unless otherwise taken into account; (iv) any account which represents an obligation borrowings of an account debtor located in a country other than the United States Company or any of its subsidiaries for the following Canadian provinces: Alberta, British Columbia, Manitoba, Ontario, Saskatchewan express purpose of repaying the whole or any part of any borrowings of the Company or any of its subsidiaries for the time being outstanding (including any premium on redemption or repayment) and the Yukon Territory, except taken into account and applied for that purpose within four months of such borrowing shall pending application for such purpose within such period be deemed not 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; be borrowings; (v) 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; (vi) that portion nominal amount of any account which represents interim issued share capital (not being equity share capital) of a subsidiary owned otherwise than by the Company or progress xxxxxxxx or retention rights on the part by a subsidiary shall be deemed to be borrowings of the account debtorsubsidiary; (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; (viii) 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; (ix) 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.