Common use of Net Disposition Proceeds Clause in Contracts

Net Disposition Proceeds. The Borrowers agree that notwithstanding anything to the contrary contained in the second sentence of the definition of “Net Disposition Proceeds” in the Credit Agreement, Net Disposition Proceeds shall exclude only an aggregate amount equal to $500,000 of proceeds of Permitted Dispositions received on or after July 1, 2001 through and until the termination of the Forbearance Period, provided that the proceeds of (i) any Permitted Disposition resulting in proceeds of less than $50,000 and (ii) the sale of Obsolete Inventory (as defined below), shall also be excluded from Net Disposition Proceeds and shall not be counted toward the $500,000 basket. “Obsolete Inventory” shall mean inventory for which the U.S. Borrower took an inventory reserve for Fiscal Year 2001 or which comprises part of a discontinued product line, other than inventory transferred in connection with a sale of all of the stock, all or substantially all of the assets, or a division or other similar operating or administrative unit of a Borrower or a Subsidiary or Affiliate of a Borrower. As part of the second weekly rolling cash flow forecast for any month, the U.S. Borrower shall deliver to the Agents, with respect to the prior month, a report certified by Xxxxx Xxxxx, of the sales value, standard cost and inventory reserve associated with the Obsolete Inventory sold in such month.

Appears in 3 contracts

Samples: Forbearance Agreement (Leiner Health Products Inc), Forbearance Agreement (Leiner Health Products Inc), Second Forbearance Agreement (Leiner Health Products Inc)

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Net Disposition Proceeds. The Borrowers agree that notwithstanding anything to the contrary contained in the second sentence of the definition of "Net Disposition Proceeds" in the Credit Agreement, Net Disposition Proceeds shall exclude only an aggregate amount equal to $500,000 of proceeds of Permitted Dispositions received on or after July 1, 2001 through and until the termination of the Forbearance Period, provided that the proceeds of (i) any Permitted Disposition resulting in proceeds of less than $50,000 and (ii) the sale of Obsolete Inventory (as defined below), shall also be excluded from Net Disposition Proceeds and shall not be counted toward the $500,000 basket. "Obsolete Inventory" shall mean inventory for which the U.S. Borrower took an inventory reserve for Fiscal Year 2001 or which comprises part of a discontinued product line, other than inventory transferred in connection with a sale of all of the stock, all or substantially all of the assets, or a division or other similar operating or administrative unit of a Borrower or a Subsidiary or Affiliate of a Borrower. As Commencing in August 2001, as part of the second weekly rolling cash flow forecast for any month, the U.S. Borrower shall deliver to the Agents, with respect to the prior month, a report certified by Xxxxx Xxxxx, of the sales value, standard cost and inventory reserve associated with the Obsolete Inventory sold in such month.

Appears in 1 contract

Samples: Forbearance Agreement (Leiner Health Products Inc)

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Net Disposition Proceeds. The Borrowers agree that notwithstanding anything to the contrary contained in the second sentence of the definition of “Net Disposition Proceeds” in the Credit Agreement, Net Disposition Proceeds shall exclude only an aggregate amount equal to $500,000 of proceeds of Permitted Dispositions received on or after July 1, 2001 through and until the termination of the Forbearance Period, provided that the proceeds of (i) any Permitted Disposition resulting in proceeds of less than $50,000 and (ii) the sale of Obsolete Inventory (as defined below), shall also be excluded from Net Disposition Proceeds and shall not be counted toward the $500,000 basket. “Obsolete Inventory” shall mean inventory for which the U.S. Borrower took an inventory reserve for Fiscal Year 2001 or which comprises part of a discontinued product line, other than inventory transferred in connection with a sale of all of the stock, all or substantially all of the assets, or a division or other similar operating or administrative unit of a Borrower or a Subsidiary or Affiliate of a Borrower. As part of the second weekly rolling cash flow forecast and the actual to forecast variance report for any month, the U.S. Borrower shall deliver to the Agents, with respect to the prior month, a report certified by Xxxxx XxxxxXxxxx or the CFO hired by the U.S. Borrower pursuant to Section 4(p) above, of the sales value, standard cost and inventory reserve associated with the Obsolete Inventory sold in such month.

Appears in 1 contract

Samples: Forbearance Agreement (Leiner Health Products Inc)

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