Common use of Repurchase of Accounts Receivable Clause in Contracts

Repurchase of Accounts Receivable. Within 10 days following the expiration of the Collection Period, Buyer shall deliver to Seller one or more statements setting forth a list of Closing Date Receivables (which has clearly identified thereon the names of the customers, invoice numbers and uncollected amounts by invoice, together with copies of all invoices and, if required, supporting documentation) that were not collected during the Collection Period and the total of such uncollected amounts. Such statement shall not include the amount of any balances owed on notes or accounts receivable that have been paid down in accordance with their terms but the statement shall reflect as a deduction from total uncollected amounts shown thereon (i) the total amount of any credit balances included in the Closing Date Receivables not applied against invoices for the same customer included in the Closing Date Receivables and (ii) the amount of the reserve for bad debts determined as of the Closing Date. The net amount set forth on the statement remaining, after giving effect to the exclusions, if any, and deductions set forth in the preceding sentence, shall be the net amount of receivables to be repurchased by the Seller (the "Uncollected Receivables"); provided that, with respect to those Closing Date Receivables that Buyer made a good faith effort to collect but were not collected because Buyer reasonably concluded that the customer may have a bona fide claim with respect thereto (the "Contested Receivables"), Buyer shall have the option to sell such Closing Date Receivable to Seller for 75% of the amount thereof, provided that Seller shall immediately cancel and not at any time make any efforts to collect such Closing Date Receivable. Within ten (10) business days following Seller's receipt of such statement, Seller shall pay to Buyer, by wire transfer of immediately available funds, to the account specified in writing by Buyer to Seller, the amount of the Uncollected Receivables. Upon receipt of such payment, Buyer shall assign to Seller, without recourse to the Buyer and subject to the second previous sentence, the claims included in the Uncollected Receivables, including any lien or other rights related thereto.

Repurchase of Accounts Receivable. Within 10 days Promptly following the expiration of the Collection PeriodPeriod (but not earlier than ten (10) days following determination of the Final Closing Balance Sheet), Buyer Purchaser shall deliver to Seller one or more statements the Selling Entities a statement setting forth (i) a list and description of the Closing Date Receivables (which has clearly identified thereon the names of the customers, invoice numbers and uncollected amounts by invoice, together with copies of all invoices and, if required, supporting documentation) that were not collected during the Collection Period and the total of such uncollected amounts. Such statement shall not include the amount of excluding any balances owed on notes or accounts receivable that have been paid down in accordance with their terms but terms) that were not collected during the statement shall reflect as a deduction from total uncollected amounts shown thereon Collection Period (i) the total amount of any credit balances included in the Closing Date Receivables not applied against invoices for the same customer included in the Closing Date Receivables "UNCOLLECTED RECEIVABLES"), and (ii) a schedule setting forth the calculation of the aggregate amount of Uncollected Receivables, LESS credit balances, unearned revenue and the reserve for bad debts determined as of the Closing Date. The net amount set forth on the statement remaining, after giving effect to the exclusionsuncollectible accounts, if any, and deductions set forth included in the preceding sentence, shall be the net amount of receivables to be repurchased by the Seller (the "Uncollected Receivables"); provided that, with respect to those Final Closing Date Receivables that Buyer made a good faith effort to collect but were not collected because Buyer reasonably concluded that the customer may have a bona fide claim with respect thereto (the "Contested Receivables"), Buyer shall have the option to sell such Closing Date Receivable to Seller for 75% of the amount thereof, provided that Seller shall immediately cancel and not at any time make any efforts to collect such Closing Date ReceivableBalance Sheet. Within ten (10) business days following Seller's the Selling Entities' receipt of such statement, Seller the Selling Entities shall pay to BuyerPurchaser, by wire transfer of immediately available funds, to the account specified in writing by Buyer to Seller, the amount of the Uncollected Receivables. Upon such statement, and upon receipt of such payment, Buyer Purchaser shall assign to Seller, without recourse the Uncollected Receivables to the Buyer Selling Entities. If Purchaser does not provide the Selling Entities with a list and subject description of Uncollected Receivables within thirty (30) days after expiration of the Collection Period, Purchaser may not demand that the Selling Entities repurchase the Uncollected Receivables or otherwise hold the Selling Entities responsible for nonpayment thereof and Purchaser shall have no other remedy against the Selling Entities with respect to the second previous sentence, the claims included in the Uncollected Receivables, including . Purchaser shall promptly remit to the Selling Entities any lien or other rights related theretopayment it may receive in respect of Uncollected Receivables which have been assigned to the Selling Entities.

Repurchase of Accounts Receivable. (a) For a period of 90 days after the Closing Date (the "COLLECTION PERIOD"), the Buyer shall use its reasonable efforts to collect the Accounts Receivable. The Buyer may, but shall not be obligated to, use a collection agency or commence legal actions in connection with such collection efforts. On the Schedule Date, the Buyer shall give notice to the Seller Entities designating those Accounts Receivable which the Buyer wishes the Seller to purchase. Within 10 ten days following after receipt of such notice from the expiration Buyer, the Seller shall purchase (without recourse to the Buyer) such designated Accounts Receivable then remaining unpaid for a purchase price equal to 90% of the Collection Periodface amount thereof. Thirty days after the Schedule Date, the Buyer shall deliver give notice to the Seller one or more statements setting forth designating those remaining Accounts Receivable which the Buyer wishes the Seller to purchase. Within ten days after receipt of such notice from the Buyer, the Seller shall purchase (without recourse to the Buyer) such remaining designated Accounts Receivable for a list of Closing Date Receivables (which has clearly identified thereon the names purchase price equal to 80% of the customersface amount thereof. Sixty days after the Schedule Date, invoice numbers and uncollected amounts by invoice, together with copies of all invoices and, if required, supporting documentation) that were not collected during the Collection Period and Buyer shall give notice to the total Seller designating those remaining Accounts Receivable which the Buyer wishes the Seller to purchase. Within ten days after the receipt of such uncollected amountsnotice from the Buyer, the Seller shall purchase such remaining designated Accounts Receivable for a purchase price equal to 70% of the face amount thereof. Such statement Ninety days after the Schedule Date, the Buyer shall not include give notice to the Seller designating those remaining Accounts Receivable which the Buyer wishes the Seller to purchase. Within ten days after the receipt of such notice from the Buyer, the Seller shall purchase such remaining designated Accounts Receivable for a purchase price equal to 60% of the face amount thereof. (b) Upon the Seller's repurchase of any balances owed on notes or accounts receivable that have been paid down in accordance with their terms but the statement shall reflect as a deduction from total uncollected amounts shown thereon unpaid Account Receivable pursuant to this Subsection 11.7, (i) the total amount Buyer shall promptly deliver to the Seller any tangible evidence of any credit balances included such Account Receivable then in the Closing Date Receivables not applied against invoices for possession of the same customer included in the Closing Date Receivables Buyer or under its control, and (ii) the amount Seller shall be entitled to such customary and reasonable actions as it deems necessary or desirable in order to collect such unpaid Account Receivable; provided, that the Seller shall consult with the Buyer prior to taking any collection action which might reasonably be expected to jeopardize the Buyer's relationship with such customer. The Buyer will, from time to time after such repurchase, execute and deliver to the Seller such instruments and other documents as the Seller may reasonably request to assist the Seller in its collection efforts. (c) In the event that any payment received by the Buyer during the Collection Period is remitted by a customer which is indebted under both Accounts Receivable and an account receivable arising out of the reserve for bad debts determined as sale or license of inventory, products or services in the ordinary course of business after the Closing Date (a "NEW RECEIVABLE"), such payments shall first be applied to the Accounts Receivable due from such customer and the balance remaining after payment in full of all Accounts Receivable due from such customer shall be applied to the New Receivable; provided, however, that (i) with respect to any Account Receivable being contested or disputed by the payor thereof, no portion of the Closing Dateamount in dispute shall be deemed to have been collected by the Buyer in respect of the Account Receivable due from such customer (unless otherwise directed by the customer) until all amounts owed by such customer to the Buyer for New Receivables have been paid or such dispute has been resolved, whichever occurs first (it being understood that undisputed amounts of Accounts Receivable shall be applied in accordance with the priorities set forth above in this Subsection 11.7) and (ii) the foregoing priorities shall not apply to sums received by the Buyer which are specifically identified by the customer as being tendered in payment of a New Receivable. The net amount set forth on the statement remainingBuyer agrees not to induce any customer to identify any payment as being in respect of a New Receivable, after giving effect to the exclusions, if any, and deductions set forth except in the preceding sentenceevent the Buyer reasonably determines to sell to said customer on a C.O.D. basis only. (d) The Buyer will cooperate, shall be at the net amount of receivables to be Seller's expense, with the Seller in collecting any Accounts Receivable which are repurchased by the Seller pursuant to this Subsection 11.7; provided, however, that the foregoing shall not require the Buyer to be a party to any action brought by the Seller to collect such Accounts Receivable. (e) The Buyer agrees to furnish to the "Uncollected Receivables"); provided thatSeller within 15 days after the end of each month during the Collection Period a statement setting forth the Accounts Receivable collected during such month and a trial balance of the uncollected Accounts Receivable showing the aging thereof as of the end of such month. (f) The Seller hereby authorizes the Buyer to open any and all mail addressed to either Seller Entity (if delivered to the Buyer) if received on or after the Closing Date and hereby grants to the Buyer a power of attorney to endorse and cash any checks or instruments made payable or endorsed to either Seller Entity or its order and received by the Buyer with respect to the MDI Business. (g) The Seller agrees that it will forward promptly to the Buyer any monies, checks or instruments received by the Seller after the Closing Date with respect to the Accounts Receivable, except with respect to those Closing Date Receivables that Accounts Receivable which are repurchased by the Seller pursuant to this Subsection 11.7. (h) Any sums received by the Buyer made a good faith effort in respect of Accounts Receivable (and so identified by the relevant account debtor) after their repurchase by the Seller pursuant to collect but were not collected because Subsections 11.7 (a) hereof shall be promptly transmitted by the Buyer reasonably concluded that to the customer may have a bona fide claim Seller. In addition, if receipt by the Buyer of unidentified sums of money from an account debtor who owes any Account Receivable repurchased by the Seller pursuant to Subsections 11.7(a) hereof results in such account debtor having an aggregate credit balance with respect thereto (the "Contested Receivables")Buyer, the Buyer shall have the option to sell such Closing Date Receivable to Seller for 75% of the amount thereof, provided that Seller shall immediately cancel and not at any time make any efforts to collect such Closing Date Receivable. Within ten (10) business days following Seller's receipt of such statement, Seller shall pay to Buyer, by wire transfer of immediately available funds, promptly transmit to the account specified in writing by Buyer to Seller, the Seller an amount of the Uncollected Receivables. Upon receipt of such payment, Buyer shall assign to Seller, without recourse money equal to the Buyer lesser of (a) such aggregate credit balance or (b) the remaining unpaid balance of all Accounts Receivable which have been repurchased by the Seller and subject are payable by such account debtor to the second previous sentence, the claims included in the Uncollected Receivables, including any lien or other rights related theretoSeller.

Repurchase of Accounts Receivable. Within 10 days following In the expiration event that any of the Collection Period, Buyer shall deliver to Seller one or more statements setting forth a list of Closing Date Receivables (which has clearly identified thereon the names of the customers, invoice numbers and uncollected amounts by invoice, together with copies of all invoices and, if required, supporting documentation) that were not collected during the Collection Period and the total of such uncollected amounts. Such statement shall not include the amount of any balances owed on notes Accounts Receivable or accounts receivable that have been paid down in accordance with their terms but the statement shall reflect as a deduction from total uncollected amounts shown thereon (i) the total amount of any credit balances included in the Closing Date Receivables not applied against invoices for the same customer included in the Closing Date Receivables and (ii) the amount of the reserve for bad debts determined Companies as of the Closing Date. The net amount set forth on Date (other than any accounts receivable excluded from the statement remaining, Closing Balance Sheet) remain uncollected by Buyers ninety (90) days after giving effect to the exclusions, if any, and deductions set forth in the preceding sentence, shall be the net amount of receivables to be repurchased by the Seller Closing Date (the "Uncollected ReceivablesAccounts Receivable"), at Buyers' election, Buyers may require GTC or Seller, as applicable, to purchase all or any portion of the Uncollected Accounts Receivable for an amount equal to the book value as of the Closing Date of the Uncollected Accounts Receivable as determined from GTC's or the Companies' customary books and records (less amounts recovered pursuant to this provision) by providing written notice to GTC or Seller within thirty (30) days after such ninety (90) day period. It shall be a condition to GTC's or Seller's obligation to purchase such Accounts Receivable that [i] Buyers and SCI shall have used "Best Efforts" to collect the Uncollected Accounts Receivable during the ninety (90) day period following Closing, "Best Efforts" defined as all commercially reasonable actions that Buyers or SCI would typically employ in collecting their other accounts receivable, including without limitation dedicating personnel to collect the accounts, working with customers to satisfy any complaints or problems, credit holds with customers, and any other such actions, steps or initiatives, including the settlement of accounts receivable for less than the Closing book value thereof with the prior written consent and approval of GTC and Seller, and including threats of legal actions to collect such accounts receivable (but without the requirement of instituting litigation); provided that[ii] each of Buyers and the Companies shall then not be in default under any obligations it may have with the originator of the accounts receivable (which default, as to the Companies, did not exist as of the Closing and is the cause of nonpayment of the accounts receivable); and [iii] Buyers and SCI shall not then be in default under any of their material obligations under this Agreement. During such ninety (90) day period, (a) Buyers shall provide Seller and GTC with monthly reports detailing the status of such accounts receivable and a summary of the collection efforts with respect thereto, (b) Seller and GTC shall have the opportunity to assist in such collection efforts, and (c) Buyers shall provide Seller and GTC and their accountants and representatives with reasonable access to and an opportunity to review the books and records of Buyer and the Companies with respect to those Closing Date Receivables that Buyer made a good faith effort to collect but were not collected because Buyer reasonably concluded that the customer may have a bona fide claim with respect thereto (the "Contested Receivables")such accounts receivable. Upon receipt by GTC or Seller of such notice from Buyers, Buyer GTC and Seller shall have the option thirty (30) days to sell contest or confirm such Closing Date Receivable notice by written notification to Seller for 75% of the amount thereof, provided that Seller shall immediately cancel Buyers and not at any time make any efforts to collect such Closing Date Receivable. Within which Buyers must then dispute within ten (10) business days following days. If Buyers fail to object to a notice of contest by GTC or Seller, GTC and Seller shall have no obligation to purchase Uncollected Accounts Receivable. If GTC or Seller contest such matters, and such dispute is not conceded by Buyers, the dispute shall be submitted to binding arbitration as contemplated by Section 9.C hereof. In the event GTC or Seller purchase such Uncollected Accounts Receivable, Buyers shall execute such bills of sale and assignments as are reasonably necessary to vest title to the Uncollected Accounts Receivable in GTC or Seller, as appropriate, free and clear of any and all liens, security interests, claims or encumbrances arising after the Closing Date. At Closing, SCI, Seller and GTC shall enter into an escrow agreement in substantially the form of Exhibit B hereto, with $250,000 of the Purchase Price being deposited in escrow to fund GTC's or Seller's receipt of potential obligation to purchase such statement, Seller shall pay Uncollected Accounts Receivable and Unused Inventory (as described below) pursuant to Buyer, by wire transfer of immediately available funds, to the account specified in writing by Buyer to Seller, the amount of the Uncollected Receivables. Upon receipt of such payment, Buyer shall assign to Seller, without recourse to the Buyer this Section 7.C.4 and subject to the second previous sentence, the claims included in the Uncollected Receivables, including any lien or other rights related theretoSection 7.C.5.

Repurchase of Accounts Receivable. Within 10 days following (a) For the period commencing on the Closing Date and ending on November 30, 1997 (the "Collection Period"), the Buyer shall use its reasonable efforts to collect the Accounts Receivable. The Buyer may, but shall not be obligated to, use a collection agency or commence legal actions in connection with such collection efforts. Promptly after the expiration of the Collection Period, the Buyer shall deliver give notice to the Seller one or more statements setting forth a list designating those Accounts Receivable in excess of Closing Date Receivables ($2,500 which has clearly identified thereon the names have not been collected as of the customers, invoice numbers and uncollected amounts by invoice, together with copies end of all invoices and, if required, supporting documentation) that were not collected during the Collection Period and which the total Buyer wishes the Seller to purchase. Within ten days after receipt of such uncollected amounts. Such statement notice from the Buyer, the Seller shall not include purchase (without recourse to the Buyer) such designated Accounts Receivable then remaining unpaid for a purchase price equal to the face amount thereof. (b) Upon the Seller's repurchase of any balances owed on notes or accounts receivable that have been paid down in accordance with their terms but the statement shall reflect as a deduction from total uncollected amounts shown thereon unpaid Account Receivable pursuant to this Subsection 10.7, (i) the total amount Buyer shall promptly deliver to the Seller any tangible evidence of any credit balances included such Account Receivable then in the Closing Date Receivables not applied against invoices for possession of the same customer included in the Closing Date Receivables Buyer or under its control, and (ii) the amount Seller shall be entitled to such customary and reasonable actions as it deems necessary or desirable in order to collect such unpaid Account Receivable; provided, that the Seller shall consult with the Buyer prior to taking any collection action which might reasonably 34 be expected to jeopardize the Buyer's relationship with such customer. The Buyer will, from time to time after such repurchase, execute and deliver to the Seller such instruments and other documents as the Seller may reasonably request to assist the Seller in its collection efforts. (c) In the event that any payment received by the Buyer during the Collection Period is remitted by a customer which is indebted under both Accounts Receivable and an account receivable arising out of the reserve for bad debts determined as sale of inventory in the ordinary course of business after the Closing Date (a "New Receivable"), such payments shall first be applied to the Accounts Receivable due from such customer and the balance remaining after payment in full of all Accounts Receivable due from such customer shall be applied to the New Receivable; provided, however, that (i) with respect to any Account Receivable being contested or disputed by the payor thereof, no portion of the Closing Dateamount in dispute shall be deemed to have been collected by the Buyer in respect of the Account Receivable due from such customer (unless otherwise directed by the customer) until all amounts owed by such customer to the Buyer for New Receivables have been paid or such dispute has been resolved, whichever occurs first (it being understood that undisputed amounts of Accounts Receivable shall be applied in accordance with the priorities set forth above in this Subsection 10.7) and (ii) the foregoing priorities shall not apply to sums received by the Buyer which are specifically identified by the customer as being tendered in payment of a New Receivable. The net amount set forth on the statement remainingBuyer agrees not to induce any customer to identify any payment as being in respect of a New Receivable, after giving effect to the exclusions, if any, and deductions set forth except in the preceding sentenceevent the Buyer reasonably determines to sell to said customer on a C.O.D. basis only. (d) The Buyer will cooperate, shall be at the net amount of receivables to be Seller's expense, with the Seller in collecting any Accounts Receivable which are repurchased by the Seller pursuant to this Subsection 10.7; provided, however, that the foregoing shall not require the Buyer to be a party to any action brought by the Seller to collect such Accounts Receivable. (e) The Buyer agrees to furnish to the "Uncollected Receivables"); provided thatSeller within 15 days after the end of each month during the Collection period a statement setting forth the Accounts Receivable collected during such month and a trial balance of the uncollected Accounts Receivable showing the aging thereof as of the end of such month. (f) The Seller hereby authorizes the Buyer to open any and all mail addressed to the Seller (if delivered to the Buyer) if received on or after the Closing Date and hereby grants to the buyer a power of attorney to endorse and cash any checks or instruments made payable or endorsed to the Seller or its order and received by the Buyer. (g) The Seller agrees that it will forward promptly to the Buyer any monies, checks or instruments received by the Seller after the Closing Date with respect to the Accounts Receivable, except with respect to those Closing Date Receivables that Buyer made a good faith effort Accounts Receivable which are repurchased by the Seller pursuant to collect but were not collected because Buyer reasonably concluded that the customer may have a bona fide claim with respect thereto (the "Contested Receivables"), Buyer shall have the option to sell such Closing Date Receivable to Seller for 75% of the amount thereof, provided that Seller shall immediately cancel and not at any time make any efforts to collect such Closing Date Receivable. Within ten (10) business days following Seller's receipt of such statement, Seller shall pay to Buyer, by wire transfer of immediately available funds, to the account specified in writing by Buyer to Seller, the amount of the Uncollected Receivables. Upon receipt of such payment, Buyer shall assign to Seller, without recourse to the Buyer and subject to the second previous sentence, the claims included in the Uncollected Receivables, including any lien or other rights related theretothis Subsection 10.7.