Common use of SALES OF ACCOUNTS RECEIVABLE Clause in Contracts

SALES OF ACCOUNTS RECEIVABLE. Borrower may, and may permit its Subsidiaries to: (a) in any calendar year, sell, without recourse, accounts receivable arising in the ordinary course of business in an aggregate face amount not exceeding $25,000,000, (b) in any calendar year, sell, with recourse, accounts receivable arising in the ordinary course of business in an amount not exceeding 10% of Consolidated Tangible Net Worth as at the beginning of such calendar year and (c) enter into one or more transactions or programs (each such transaction or program being referred to herein as a "Receivables Program") involving (i) the sale or other financing by Borrower or any of its Subsidiaries, without recourse based solely upon a default by one or more account debtors in the payment of any accounts receivable included in the applicable Receivables Program, of accounts receivable arising in the ordinary course of business of Borrower or any of its Subsidiaries or (ii) the incurrence by Borrower or any of its Subsidiaries of Non- Recourse Debt secured by Liens on accounts receivable arising in the ordinary course of business of Borrower or any of its Subsidiaries if Borrower shall have delivered to each Bank, at least 15 Business Days prior to the consummation of any Receivables Program, a copy of the proposed terms and conditions of such Receivables Program and, if within the 15 Business Day period the Requisite Banks shall not have objected; provided that in the case of clauses (a) and (b) above, such sale of accounts receivable shall be for a net cash sales price of no less than 70% of the face amount thereof; and provided, further, that Borrower and its Subsidiaries shall not sell or otherwise finance any accounts receivable pursuant to a Receivables Program if the aggregate amount of the Receivables Programs at the time of any such sale or financing would exceed 50% of the aggregate amount of the accounts receivable of Borrower and its Subsidiaries at such time (after giving effect to any sales permitted by clauses (a) and (b) but without giving effect to sales made under such Receivables Programs).

SALES OF ACCOUNTS RECEIVABLE. Borrower Grove Investors may, and may permit any of its Restricted Subsidiaries to: (a) in may, sell at any calendar year, sell, without recoursetime and from time to time, accounts receivable arising in the ordinary course of business in and or Debentures receivables and related assets to an aggregate face amount not exceeding $25,000,000, (b) in any calendar year, sell, with recourse, accounts receivable arising in the ordinary course of business in an amount not exceeding 10% of Consolidated Tangible Net Worth as at the beginning of such calendar year and (c) enter into one or more transactions or programs (each such transaction or program being referred to herein as a "Receivables Program") involving Accounts Receivable Subsidiary; PROVIDED that (i) the aggregate consideration received in each such sale is a least equal to the aggregate fair market value of the receivables sold, as determined by the Management Committee in good faith, (ii) no less than 80% of the consideration received in each such sale consists of either cash or a promissory note (a "PROMISSORY NOTE") which is subordinated to no Indebtedness or obligation other than the financial institution or other entity providing the financing by Borrower to the Accounts Receivable Subsidiary with respect to such accounts receivable (the "FINANCIER") or an Equity Interest in such Accounts Receivable Subsidiary; PROVIDED FURTHER that the initial sale shall include all accounts receivable of Grove Investors and/or its Restricted Subsidiaries that are party to such arrangements that constitute eligible receivables under such arrangements, and (iii) Grove Investors and its Restricted Subsidiaries shall sell all accounts receivables that constitute eligible receivables under such arrangements to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. Grove Investors (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from Grove Investors or any of its Subsidiaries, without recourse based Restricted Subsidiaries to any other person except on an arms-length basis and solely upon a default by one or more account debtors for consideration in the payment form of cash or Cash Equivalents, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any accounts receivable included in business or transaction other than the applicable Receivables Programpurchase, financing and sale of accounts receivable arising of Grove Investors and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the ordinary course book value of business such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to Grove Investors as payment on the Promissory Notes or a dividend, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of Borrower the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall not, and shall not permit any of its Subsidiaries or to, sell accounts receivable to any Accounts Receivable Subsidiary upon (ii1) the incurrence by Borrower or any occurrence of a Default with respect to Grove Investors and its Restricted Subsidiaries of Non- Recourse Debt secured by Liens on accounts receivable arising in the ordinary course of business of Borrower or any of its Subsidiaries if Borrower shall have delivered to each Bank, at least 15 Business Days prior to the consummation of any Receivables Program, a copy of the proposed terms and conditions of such Receivables Program and, if within the 15 Business Day period the Requisite Banks shall not have objected; provided that in the case of clauses (a) and (b2) above, the occurrence of certain events of bankruptcy or insolvency with respect to such sale of accounts receivable shall be for a net cash sales price of no less than 70% of the face amount thereof; and provided, further, that Borrower and its Subsidiaries shall not sell or otherwise finance any accounts receivable pursuant to a Receivables Program if the aggregate amount of the Receivables Programs at the time of any such sale or financing would exceed 50% of the aggregate amount of the accounts receivable of Borrower and its Subsidiaries at such time (after giving effect to any sales permitted by clauses (a) and (b) but without giving effect to sales made under such Receivables Programs)Accounts Receivable Subsidiary.

SALES OF ACCOUNTS RECEIVABLE. Borrower The Company may, and may permit any of its Restricted Subsidiaries to: (a) in any calendar yearmay, sell, without recourseat any time and from time to time, all of their respective accounts receivable arising in the ordinary course of business in to an aggregate face amount not exceeding $25,000,000, (b) in any calendar year, sell, with recourse, accounts receivable arising in the ordinary course of business in an amount not exceeding 10% of Consolidated Tangible Net Worth as at the beginning of such calendar year and (c) enter into one or more transactions or programs (each such transaction or program being referred to herein as a "Receivables Program") involving Accounts Receivable Subsidiary; provided that (i) the cash received in each sale is not less than 90% of the aggregate face value of the receivables sold and the remainder of the consideration received in each such sale is a promissory note (a "Promissory Note") which is subordinated to no Indebtedness --------------- or obligation other than that due to the financial institution or other entity providing the financing by Borrower to the Accounts Receivable Subsidiary with respect to such accounts receivable (a "Financier"); provided further that the Initial Sale --------- shall include all eligible accounts receivable of the Company and/or its Restricted Subsidiaries that shall be party to such arrangements in existence on the date of the Initial Sale, (ii) the cash proceeds received from the Initial Sale less reasonable and customary transaction costs will be deemed to be Net Cash Proceeds and shall be applied in accordance with Section 4.16; and (iii) the Company and its Restricted Subsidiaries shall sell their accounts receivable to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company or any of its Subsidiaries, without recourse based Restricted Subsidiaries to any other person except on an arm's-length basis and solely upon a default by one or more account debtors for consideration in the payment form of any accounts receivable included in the applicable Receivables Programcash or Cash Equivalents, of accounts receivable arising in the ordinary course of business of Borrower or any of its Subsidiaries or (ii) the incurrence by Borrower or any of its Subsidiaries of Non- Recourse Debt secured by Liens on accounts receivable arising in the ordinary course of business of Borrower or any of its Subsidiaries if Borrower shall have delivered to each Bank, at least 15 Business Days prior to the consummation of any Receivables Program, a copy of the proposed terms and conditions of such Receivables Program and, if within the 15 Business Day period the Requisite Banks shall not have objected; provided that permit the Accounts Receivable Subsidiary to engage in any business or transaction other than the case of clauses (a) purchase, financing and (b) above, such sale of accounts receivable shall be for a net cash sales price of no less than 70% of the face amount thereof; and provided, further, that Borrower Company and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the book value of such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company, or the relevant Restricted Subsidiary, as the case may be, as payment on the Promissory Notes, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall not, and shall not permit any of its Restricted Subsidiaries to, sell or otherwise finance any accounts receivable pursuant to any Accounts Receivable Subsidiary upon (1) the occurrence of a Receivables Program if Default with respect to the aggregate amount Company and its Restricted Subsidiaries and (2) the occurrence of any of the Receivables Programs at the time of any events specified in Section 6.1(6) with respect to such sale or financing would exceed 50% of the aggregate amount of the accounts receivable of Borrower and its Subsidiaries at such time (after giving effect to any sales permitted by clauses (a) and (b) but without giving effect to sales made under such Receivables Programs)Accounts Receivable Subsidiary.

SALES OF ACCOUNTS RECEIVABLE. Borrower The Company may, and may permit any of its Restricted Subsidiaries to: (a) in may, sell at any calendar year, sell, without recoursetime and from time to time, accounts receivable arising in the ordinary course of business in and or notes receivables and related assets to an aggregate face amount not exceeding $25,000,000, (b) in any calendar year, sell, with recourse, accounts receivable arising in the ordinary course of business in an amount not exceeding 10% of Consolidated Tangible Net Worth as at the beginning of such calendar year and (c) enter into one or more transactions or programs (each such transaction or program being referred to herein as a "Receivables Program") involving Accounts Receivable Subsidiary; provided that (i) the aggregate consideration received in each such sale is a least equal to the aggregate fair market value of the receivables sold, as determined by the Management Committee in good faith, (ii) no less than 80% of the consideration received in each such sale consists of either cash or a promissory note (a "Promissory Note") which is subordinated to no Indebtedness or obligation other than the financial institution or other entity providing the financing by Borrower to the Accounts Receivable Subsidiary with respect to such accounts receivable (the "Financier") or an Equity Interest in such Accounts Receivable Subsidiary; provided further that the initial sale will include all accounts receivable of the Company and/or its Restricted Subsidiaries that are party to such arrangements that constitute eligible receivables under such arrangements, (iii) the cash proceeds received from the initial sale less reasonable and customary transaction costs will be deemed to be Net Proceeds and will be applied in accordance with the second paragraph of Section 4.10 hereof, and (iv) the Company and its Restricted Subsidiaries will sell all accounts receivables that constitute eligible receivables under such arrangements to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company or any of its Subsidiaries, without recourse based Restricted Subsidiaries to any other person except on an arms-length basis and solely upon a default by one or more account debtors for consideration in the payment form of cash or Cash Equivalents, (ii) will not permit the Accounts Receivable Subsidiary to engage in any accounts receivable included in business or transaction other than the applicable Receivables Programpurchase, financing and sale of accounts receivable arising of the Company and its Restricted Subsidiaries and activities incidental thereto, (iii) will not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the ordinary course book value of business such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) will, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company as payment on the Promissory Notes or a dividend, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of Borrower the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) will not, and will not permit any of its Subsidiaries or to, sell accounts receivable to any Accounts Receivable Subsidiary upon (ii1) the incurrence by Borrower or any occurrence of its Subsidiaries of Non- Recourse Debt secured by Liens on accounts receivable arising in the ordinary course of business of Borrower or any of its Subsidiaries if Borrower shall have delivered to each Bank, at least 15 Business Days prior a Default with respect to the consummation of any Receivables Program, a copy of the proposed terms Company and conditions of such Receivables Program and, if within the 15 Business Day period the Requisite Banks shall not have objected; provided that in the case of clauses (a) its Restricted Subsidiaries and (b2) above, the occurrence of certain events of bankruptcy or insolvency with respect to such sale of accounts receivable shall be for a net cash sales price of no less than 70% of the face amount thereof; and provided, further, that Borrower and its Subsidiaries shall not sell or otherwise finance any accounts receivable pursuant to a Receivables Program if the aggregate amount of the Receivables Programs at the time of any such sale or financing would exceed 50% of the aggregate amount of the accounts receivable of Borrower and its Subsidiaries at such time (after giving effect to any sales permitted by clauses (a) and (b) but without giving effect to sales made under such Receivables Programs)Accounts Receivable Subsidiary.

SALES OF ACCOUNTS RECEIVABLE. Borrower Holdings may, and may permit any of its Restricted Subsidiaries to: (a) in may, sell at any calendar year, sell, without recoursetime and from time to time, accounts receivable arising in the ordinary course of business in and or notes receivables and related assets to an aggregate face amount not exceeding $25,000,000, (b) in any calendar year, sell, with recourse, accounts receivable arising in the ordinary course of business in an amount not exceeding 10% of Consolidated Tangible Net Worth as at the beginning of such calendar year and (c) enter into one or more transactions or programs (each such transaction or program being referred to herein as a "Receivables Program") involving Accounts Receivable Subsidiary; provided that (i) the aggregate consideration received in each such sale is a least equal to the aggregate fair market value of the receivables sold, as determined by the Management Committee in good faith, (ii) no less than 80% of the consideration received in each such sale consists of either cash or a promissory note (a "Promissory Note") which is subordinated to no Indebtedness or obligation other than the financial institution or other entity providing the financing by Borrower to the Accounts Receivable Subsidiary with respect to such accounts receivable (the "Financier") or an Equity Interest in such Accounts Receivable Subsidiary; provided further that the initial sale will include all accounts receivable of Holdings and/or its Restricted Subsidiaries that are party to such arrangements that constitute eligible receivables under such arrangements, (iii) the cash proceeds received from the initial sale less reasonable and customary transaction costs shall be deemed to be Net Proceeds and shall be applied in accordance with the second paragraph of Section 4.10 hereof, and (iv) Holdings and its Restricted Subsidiaries shall sell all accounts receivable that constitute eligible receivables under such arrangements to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. Holdings (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from Holdings or any of its Subsidiaries, without recourse based Restricted Subsidiaries to any other person except on an arms-length basis and solely upon a default by one or more account debtors for consideration in the payment form of cash or Cash Equivalents, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any accounts receivable included in business or transaction other than the applicable Receivables Programpurchase, financing and sale of accounts receivable arising of Holdings and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the ordinary course book value of business of Borrower such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to Holdings or any of its Subsidiaries Restricted Subsidiaries, as payment on the Promissory Notes or a dividend, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (iiv) the incurrence by Borrower or shall not, and shall not permit any of its Subsidiaries of Non- Recourse Debt secured by Liens on to, sell accounts receivable arising in to any Accounts Receivable Subsidiary upon (1) the ordinary course occurrence of business of Borrower or any of a Default with respect to Holdings and its Restricted Subsidiaries if Borrower shall have delivered to each Bank, at least 15 Business Days prior to the consummation of any Receivables Program, a copy of the proposed terms and conditions of such Receivables Program and, if within the 15 Business Day period the Requisite Banks shall not have objected; provided that in the case of clauses (a) and (b2) above, the occurrence of certain events of bankruptcy or insolvency with respect to such sale of accounts receivable shall be for a net cash sales price of no less than 70% of the face amount thereof; and provided, further, that Borrower and its Subsidiaries shall not sell or otherwise finance any accounts receivable pursuant to a Receivables Program if the aggregate amount of the Receivables Programs at the time of any such sale or financing would exceed 50% of the aggregate amount of the accounts receivable of Borrower and its Subsidiaries at such time (after giving effect to any sales permitted by clauses (a) and (b) but without giving effect to sales made under such Receivables Programs)Accounts Receivable Subsidiary.

SALES OF ACCOUNTS RECEIVABLE. Borrower Sell, transfer or dispose of ---------------------------- (with or without recourse) or otherwise finance, or permit any of its Subsidiaries to sell, transfer or dispose of (with or without recourse) or otherwise finance, accounts receivable except (i) Merisel Canada or Merisel ------ Americas may sell accounts receivable pursuant to the securitization programs identified on Schedule III hereto (the "Existing Receivables Programs"); ----------------------------- provided that any renewal, amendment, replacement or refinancing of any Existing -------- Receivables Program shall not be on terms more adverse to Merisel Canada or Merisel Americas, as the case may be, than the terms of the Existing Receivables Program being so renewed, amended, replaced or refinanced (it being agreed that an increase in the interest rate is not an adverse change); (ii) Merisel Americas and its wholly- owned Subsidiaries may sell or transfer accounts receivable to Merisel Americas and its wholly-owned Subsidiaries; provided that the aggregate value of such -------- accounts receivable sold or transferred by Merisel Americas and its wholly-owned Subsidiaries under this Section 5.02(j)(ii) to Persons other than Merisel Americas and its wholly-owned Subsidiaries shall not exceed $0; and (iii) Merisel Parent may, and may permit its Subsidiaries to: (a) in any calendar year, sell, without recourse, accounts receivable arising in the ordinary course of business in an aggregate face amount not exceeding $25,000,000, (b) in any calendar year, sell, with recourse, accounts receivable arising in the ordinary course of business in an amount not exceeding 10% of Consolidated Tangible Net Worth as at the beginning of such calendar year and (c) enter into one or more transactions or programs occurring after January 31, 1998 (other than those referred to in clause (ii) above, each such transaction or program being referred to herein as a "Receivables Program") involving (i) the sale or other financing by Borrower Merisel Parent ------------------- or any of its Subsidiaries, without recourse based solely upon a default by one or more account debtors in the payment of any accounts receivable included in the applicable Receivables Program, Subsidiaries of accounts receivable arising in the ordinary course of business of Borrower Merisel Parent or any its Subsidiaries; and provided further that 60% of its Subsidiaries or (ii) -------- ------- the incurrence by Borrower or any proceeds of its Subsidiaries of Non- Recourse Debt secured by Liens on accounts receivable arising in the ordinary course of business of Borrower or any of its Subsidiaries if Borrower shall have delivered to each Bank, at least 15 Business Days prior to the consummation of any Receivables Program, a copy of the proposed terms and conditions of all such Receivables Program and, if within the 15 Business Day period the Requisite Banks shall not have objected; provided that in the case of clauses (a) and (b) above, such sale of accounts receivable Programs shall be for a net cash sales price of no less than 70% of the face applied to repay any outstanding amount thereof; and provided, further, that Borrower and its Subsidiaries shall not sell or otherwise finance under any accounts receivable pursuant to a Receivables Program if the aggregate amount of the Receivables Programs at the time of any such sale or financing would exceed 50% of the aggregate amount of the accounts receivable of Borrower and its Subsidiaries at such time (after giving effect to any sales revolving credit facility permitted by clauses (a) and (b) but without giving effect to sales made under such Receivables ProgramsSection 5.02(b)(i).

SALES OF ACCOUNTS RECEIVABLE. Borrower The Company may, and may permit any of its Restricted Subsidiaries to: (a) in may, sell at any calendar yeartime and from time to time, sell, without recourse, all of their respective accounts receivable arising in the ordinary course of business in to an aggregate face amount not exceeding $25,000,000, (b) in any calendar year, sell, with recourse, accounts receivable arising in the ordinary course of business in an amount not exceeding 10% of Consolidated Tangible Net Worth as at the beginning of such calendar year and (c) enter into one or more transactions or programs (each such transaction or program being referred to herein as a "Receivables Program") involving Accounts Receivable Subsidiary; PROVIDED that (i) the cash received in each such sale is not less than 90% of the aggregate face value of the receivables sold and the remainder of the consideration received in each such sale is a promissory note (a "Promissory Note") which is subordinated to no Indebtedness or obligation other than the financial institution or other entity providing the financing by Borrower to the Accounts Receivable Subsidiary with respect to such accounts receivable (a "Financier"); PROVIDED FURTHER that the Initial Sale will include all eligible accounts receivable of the Company and/or its Restricted Subsidiaries that will be party to such arrangements in existence on the date of the Initial Sale, (ii) the cash proceeds received from the Initial Sale less reasonable and customary transaction costs will be deemed to be Net Proceeds and will be applied in accordance with the second paragraph of Section 4.10 hereof; and (iii) the Company and its Restricted Subsidiaries will sell their accounts receivable to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company or any of its Subsidiaries, without recourse based Restricted Subsidiaries to any other person except on an arms-length basis and solely upon a default by one or more account debtors for consideration in the payment form of cash or Marketable Securities, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any accounts receivable included in business or transaction other than the applicable Receivables Programpurchase, financing and sale of accounts receivable arising of the Company and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the ordinary course book value of business such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company as payment on the Promissory Notes, all available cash or Marketable Securities not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of Borrower the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall not, and shall not permit any of its Subsidiaries to, sell accounts receivable to any Accounts Receivable Subsidiary upon (1) the occurrence of a Default with respect to the Company and its Restricted Subsidiaries and (2) the occurrence of any event specified in Section 6.01(vii) or (iiviii) the incurrence by Borrower or any of its Subsidiaries of Non- Recourse Debt secured by Liens on accounts receivable arising in the ordinary course of business of Borrower or any of its Subsidiaries if Borrower shall have delivered to each Bank, at least 15 Business Days prior to the consummation of any Receivables Program, a copy of the proposed terms and conditions of such Receivables Program and, if within the 15 Business Day period the Requisite Banks shall not have objected; provided that in the case of clauses (a) and (b) above, such sale of accounts receivable shall be for a net cash sales price of no less than 70% of the face amount thereof; and provided, further, that Borrower and its Subsidiaries shall not sell or otherwise finance any accounts receivable pursuant to a Receivables Program if the aggregate amount of the Receivables Programs at the time of any such sale or financing would exceed 50% of the aggregate amount of the accounts receivable of Borrower and its Subsidiaries at such time (after without giving effect to any sales permitted by clauses (agrace periods specified therein) and (b) but without giving effect with respect to sales made under such Receivables Programs)Accounts Receivable Subsidiary.

SALES OF ACCOUNTS RECEIVABLE. Borrower The Company may, and may permit any of its Restricted Subsidiaries to: (a) in any calendar yearmay, sell, without recourseat any time and from time to time, all of their respective accounts receivable arising in the ordinary course of business in (and related general intangibles) to an aggregate face amount not exceeding $25,000,000, (b) in any calendar year, sell, with recourse, accounts receivable arising in the ordinary course of business in an amount not exceeding 10% of Consolidated Tangible Net Worth as at the beginning of such calendar year and (c) enter into one or more transactions or programs (each such transaction or program being referred to herein as a "Receivables Program") involving Accounts Receivable Subsidiary; provided that (i) the cash received in each sale is not less than 90% of the aggregate face value of the receivables sold and the remainder of the consideration received in each such sale is a promissory note (a "Promissory Note") which is subordinated --------------- to no Indebtedness or obligation other than that due to the financial institution or other entity providing the financing by Borrower to the Accounts Receivable Subsidiary with respect to such accounts receivable (a "Financier"); provided --------- further that the Initial Sale shall include all eligible accounts receivable of the Company and/or its Restricted Subsidiaries that shall be party to such arrangements in existence on the date of the Initial Sale, (ii) the cash proceeds received from the Initial Sale less reasonable and customary transaction costs will be deemed to be Net Cash Proceeds and shall be applied in accordance with Section 4.16; and (iii) the Company and its Restricted Subsidiaries shall sell their accounts receivable to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company or any of its Subsidiaries, without recourse based Restricted Subsidiaries to any other person except on an arm's-length basis and solely upon a default by one or more account debtors for consideration in the payment form of cash or Cash Equivalents, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any accounts receivable included in business or transaction other than the applicable Receivables Programpurchase, financing and sale of accounts receivable arising of the Company and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the ordinary course book value of business such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company as payment on the Promissory Notes, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of Borrower the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall not, and shall not permit any of its Subsidiaries or to, sell accounts receivable to any Accounts Receivable Subsidiary upon (ii1) the incurrence by Borrower or occurrence of a Default with respect to the Company and its Restricted Subsidiaries and (2) the occurrence of any of its Subsidiaries of Non- Recourse Debt secured by Liens on accounts receivable arising the events specified in the ordinary course of business of Borrower or any of its Subsidiaries if Borrower shall have delivered Section 6.1(6) with respect to each Bank, at least 15 Business Days prior to the consummation of any Receivables Program, a copy of the proposed terms and conditions of such Receivables Program and, if within the 15 Business Day period the Requisite Banks shall not have objected; provided that in the case of clauses (a) and (b) above, such sale of accounts receivable shall be for a net cash sales price of no less than 70% of the face amount thereof; and provided, further, that Borrower and its Subsidiaries shall not sell or otherwise finance any accounts receivable pursuant to a Receivables Program if the aggregate amount of the Receivables Programs at the time of any such sale or financing would exceed 50% of the aggregate amount of the accounts receivable of Borrower and its Subsidiaries at such time (after giving effect to any sales permitted by clauses (a) and (b) but without giving effect to sales made under such Receivables Programs)Accounts Receivable Subsidiary.