USE AND COLLECTION OF COLLATERAL. 56 6.1. Use of Inventory Collateral.........................................................56 6.2. Inventory Quality...................................................................57 6.3. Adjustments and Allowances..........................................................57 6.4.
USE AND COLLECTION OF COLLATERAL. 7-1. Use of Inventory Collateral.......................................... 60 7-2. Inventory Quality.................................................... 60 7-3. Adjustments and Allowances........................................... 60 7-4. Validity of Accounts................................................. 61 7-5. Notification to Account Debtors...................................... 61 ARTICLE 8 - CASH MANAGEMENT. PAYMENT OF LIABILITIES: 8-1 Depository Accounts.................................................. 61 8-2. Credit Card Receipts................................................. 62 8-3. The Concentration and the Disbursement Accounts...................... 62 8-4. Proceeds and Collection of Accounts.................................. 62 8-5. Payment of Liabilities............................................... 63 8-6. The Disbursement Account............................................. 64
USE AND COLLECTION OF COLLATERAL. 6-1. Use of Inventory Collateral 6-2. Inventory Quality 6-3. Adjustments and Allowances 6-4. Validity of Accounts 6-5. Notification to Account Debtors
USE AND COLLECTION OF COLLATERAL. 86 6.1 INVENTORY COVENANTS 86 6.2 ACCOUNT COVENANTS 86 6.3 NOTIFICATION TO ACCOUNT DEBTORS 87 6.4 RIGHT TO CURE 87 ARTICLE VII. - CASH MANAGEMENT; PAYMENT OF LIABILITIES: 88 7.1 DEPOSITORY ACCOUNTS 88 7.2 CREDIT CARD RECEIPTS 89 7.3 THE CONCENTRATION, BLOCKED, OPERATING ACCOUNTS AND INVESTMENT ACCOUNTS 89 7.4 PROCEEDS AND COLLECTION OF ACCOUNTS 91 7.5 PAYMENT OF LIABILITIES 92 7.6 THE OPERATING ACCOUNTS AND DISBURSEMENT ACCOUNT 93 ARTICLE VIII. - GRANT OF SECURITY INTEREST: 93 8.1 GRANT OF SECURITY INTEREST 93 8.2 EXTENT AND DURATION OF SECURITY INTEREST 94 8.3 PERFECTION OF SECURITY INTERESTS 95 ARTICLE IX. - AGENT AS BORROWER’S ATTORNEY-IN-FACT: 98 9.1 APPOINTMENT AS ATTORNEY IN FACT 98 9.2 NO OBLIGATION TO ACT 99 ARTICLE X. - EVENTS OF DEFAULT: 99 10.1 FAILURE TO PAY REVOLVING CREDIT 99 10.2 FAILURE TO MAKE OTHER PAYMENTS 99 10.3 FAILURE TO PERFORM COVENANT OR LIABILITY (NO GRACE PERIOD) 100 10.4 FAILURE TO PERFORM COVENANT OR LIABILITY (GRACE PERIOD) 100 10.5 MISREPRESENTATION 101 10.6 BREACH OF MATERIAL CONTRACTS. BREACH OF LEASE 101 10.7 DEFAULT UNDER OTHER AGREEMENTS 102 10.8 UNINSURED CASUALTY LOSS 103 10.9 ATTACHMENT; JUDGMENT; RESTRAINT OF BUSINESS 103 10.10 BUSINESS FAILURE 103 10.11 BANKRUPTCY 104 10.12 DEFAULT BY GUARANTOR OR AFFILIATE 104 10.13 INDICTMENT 104 10.14 CHALLENGE TO LOAN DOCUMENTS 104 10.15 KEY MANAGEMENT 105 10.16 CHANGE IN CONTROL 105 ARTICLE XI. - RIGHTS AND REMEDIES UPON DEFAULT: 105 11.2 RIGHTS OF ENFORCEMENT 106 11.3 SALE OF COLLATERAL 106 11.4 OCCUPATION OF BUSINESS LOCATION 107 11.5 GRANT OF NONEXCLUSIVE LICENSE 108 11.6 ASSEMBLY OF COLLATERAL 108 11.7 RIGHTS AND REMEDIES 108 ARTICLE XII. - NOTICES: 108 12.1 NOTICE ADDRESSES 108 12.2 NOTICE GIVEN 109 ARTICLE XIII. - TERM: 110 13.1 TERMINATION OF REVOLVING CREDIT 110 13.2 ACTIONS ON TERMINATION 110 ARTICLE XIV. - THE AGENT 110 14.1 DESIGNATION OF AGENT 110 14.2 RESPONSIBILITIES OF AGENT 111 14.3 DISTRIBUTIONS BY THE AGENT 112 14.4 [RESERVED] 113 14.5 DISTRIBUTIONS OF NOTICES AND OF DOCUMENTS 113 14.6 [RESERVED] 114 14.7 CONFIDENTIAL INFORMATION 114 14.8 RELIANCE BY AGENT 114 14.9 NON-RELIANCE ON AGENT AND OTHER LENDERS 114 14.10 INDEMNIFICATION 115 14.11 RESIGNATIONS OF AGENT 116 ARTICLE XV. - FUNDINGS AND DISTRIBUTIONS 116 15.1 FUNDING PROCEDURES 116 15.2 SWINGLINE LOANS 117 15.3 AGENT’S COVERING OF FUNDINGS 117 15.4 ORDINARY COURSE DISTRIBUTIONS 120 ARTICLE XVI. - INTENTIONALLY OMITTED 121 ARTICLE XVII. - LIQUIDATIONS 121 17.1 ACCELERATION 121 17.2 INITIATION OF LIQUIDATI...
USE AND COLLECTION OF COLLATERAL. 26- 6-1 USE OF INVENTORY COLLATERAL ................................................ -26- 6-2. INVENTORY QUALITY .......................................................... -27- 6-3. ADJUSTMENTS AND ALLOWANCES ................................................. -27- 6-4. VALIDITY OF ACCOUNTS ....................................................... -27- 6-5. NOTIFICATION TO ACCOUNT DEBTORS ............................................ -27- ARTICLE 7 - CASH MANAGEMENT ............................................................ -27- -iv- 7-1. DEPOSITORY ACCOUNTS ........................................................ -27- 7-2. CREDIT CARD RECEIPTS ....................................................... -28- 7-3. THE CONCENTRATION ACCOUNT, THE BLOCKED ACCOUNT AND THE FUNDING ACCOUNTS .... -29- 7-4. PROCEEDS AND COLLECTION OF ACCOUNTS ........................................ -29- 7-5. PAYMENT OF LIABILITIES ..................................................... -30- 7-6. THE FUNDING ACCOUNT ....................................................... -30- ARTICLE 8 - LENDER AS BORROWER'S ATTORNEY-IN-FACT ....................................... -30- 8-1. APPOINTMENT AS ATTORNEY-IN-FACT ............................................ -30- 8-2. NO OBLIGATION TO ACT ....................................................... -31- ARTICLE 9 - FINANCIAL AND OTHER REPORTING REQUIREMENTS/FINANCIAL COVENANTS ............. -32- 9-1. MAINTAIN RECORDS ........................................................... -32- 9-2. ACCESS TO RECORDS .......................................................... -32- 9-3. IMMEDIATE NOTICE TO LENDER ................................................. -33- 9-4. BORROWING BASE CERTIFICATE ................................................. -34- 9-5. WEEKLY REPORTS ............................................................. -34- 9-6. MONTHLY REPORTS ............................................................ -35- 9-7. ANNUAL REPORTS ............................................................. -35- 9-8. OFFICERS' CERTIFICATES ..................................................... -35- 9-9. INVENTORIES, APPRAISALS, AND AUDITS ........................................ -36- 9.10 ADDITIONAL FINANCIAL INFORMATION ........................................... -37- -v- 9-11. FINANCIAL PERFORMANCE AND INVENTORY COVENANTS .............................. -37- 9-12. ELECTRONIC REPORTING........................................................ -37- ARTICLE 10 - EVENTS OF DEFAUL...
USE AND COLLECTION OF COLLATERAL. 6-1. Use of Inventory Collateral --------------------------- 6-2. Inventory Quality ----------------- 6-3. Adjustments and Allowances -------------------------- 6-4. Validity of Accounts -------------------- 6-5. Notification to Account Debtors -------------------------------
USE AND COLLECTION OF COLLATERAL. 80 7.1 INVENTORY COVENANTS. 80 7.2 ACCOUNT COVENANTS. 81 7.3 NOTIFICATION TO ACCOUNT DEBTORS. 82 7.4 RIGHT TO CURE 82 ARTICLE VIII. - CASH MANAGEMENT; PAYMENT OF LIABILITIES: 82 8.1 DEPOSITORY ACCOUNTS. 82 8.2 CREDIT CARD RECEIPTS. 84 8.3 THE CONCENTRATION, BLOCKED, OPERATING ACCOUNTS AND INVESTMENT ACCOUNTS. 84 8.4 PROCEEDS AND COLLECTION OF ACCOUNTS. 86 8.5 PAYMENT OF LIABILITIES. 87 8.6 THE OPERATING ACCOUNTS AND DISBURSEMENT ACCOUNT. 88 ARTICLE IX. - GRANT OF SECURITY INTEREST: 89 9.1 GRANT OF SECURITY INTEREST. 89 9.2 EXTENT, DURATION AND RELEASE OF COLLATERAL INTEREST. 90 9.3 PERFECTION OF SECURITY INTERESTS. 91 ARTICLE X. - LENDER AS OBLIGORS’ ATTORNEY-IN-FACT: 94
USE AND COLLECTION OF COLLATERAL. 69 6-1. Use of Inventory Collateral. . . . . . . . . . . . . . . . . . .69 6-2. Inventory Quality. . . . . . . . . . . . . . . . . . . . . . . .69 6-3. Adjustments and Allowances . . . . . . . . . . . . . . . . . . .69 6-4. Validity of Accounts . . . . . . . . . . . . . . . . . . . . . .69 6-5. Notification to Account Debtors. . . . . . . . . . . . . . . . .70 ARTICLE 7 - CASH MANAGEMENT. PAYMENT OF LIABILITIES. . . . . . . . . . . . . .70 7-1 Depository Accounts. . . . . . . . . . . . . . . . . . . . . . .70 7-2. Credit Card Receipts . . . . . . . . . . . . . . . . . . . . . .70 7-3. The Concentration and the Funding Accounts . . . . . . . . . . .71 7-4. Proceeds and Collection of Accounts. . . . . . . . . . . . . . .72 7-5. Payment of Liabilities . . . . . . . . . . . . . . . . . . . . .72 7-6. The Funding Account. . . . . . . . . . . . . . . . . . . . . . .73 ARTICLE 8 - GRANT OF SECURITY INTEREST . . . . . . . . . . . . . . . . . . . .73 iii /October 28, 1997/ 8-1. Grant of Security Interest . . . . . . . . . . . . . . . . . . .73 8-2. Extent and Duration of Security Interest . . . . . . . . . . . .74
USE AND COLLECTION OF COLLATERAL. 28 6-1. Use of Inventory Collateral 28 6-2. Inventory Quality 29 6-3. Adjustments and Allowances 29 6-4. Validity of Accounts 29 6-5. Notification to Account Debtors 29 ARTICLE 7 - CASH MANAGEMENT 30 7-1. Depository Accounts 30 7-2. Credit Card Receipts 30 7-3. The Concentration and the Funding Accounts 31 7-4. Proceeds and Collection of Accounts 31 7-5. Payment of Liabilities 32 7-6. The Funding Account 32 8-1. Appointment as Attorney-In-Fact 33 8-2. No Obligation to Act 34 ARTICLE 9 - FINANCIAL AND OTHER REPORTING REQUIREMENTS/ FINANCIAL COVENANTS 34 9-1. Maintain Records 34 9-2. Access to Records 35 9-3. Immediate Notice to Lender 35 9-4. Borrowing Base Certificate 36 9-5. Weekly Reports 36 9-6. Monthly Reports 37 9-7. Quarterly Reports. 37 9-8. Annual Reports 37 9-9. Officers' Certificates 38 9-10. Inventories. Appraisals. and Audits 38 9-11. Additional Financial Information. 39 9-12. Financial Performance Covenants 40 9-13. Electronic Reporting 40 ARTICLE 10 - EVENTS OF DEFAULT 40 10-1. Failure to Pay Revolving Credit 40 10-2. Failure To Make Other Payments 40 10-3. Failure to Perform Covenant or Liability (No Grace Period) 40 10-4. Failure to Perform Covenant or Liability (Grace Period) 41 10-6. Acceleration of Other Debt. Breach of Lease 41 10-7. Default Under Other Agreements 41 10-8. Non-Ordinary Course Sales 41 10-9. Judgment. Restraint of Business 41 10-10. Business Failure 42 10-11. Bankruptcy 42 10-12. Insecurity 42 10-13. Default by Guarantor or Related Entity 42 10-14. Indictment - Forfeiture 42 10-15. Termination of Guaranty 43 10-16. Challenge to Loan Documents 43 10-18. Change in Control 43 10-19. Material Adverse Change 43
USE AND COLLECTION OF COLLATERAL. 54 8-1. Adjustments and Allowances 54 8-2. Validity of Accounts 54 8-3. Notification to Account Debtors 55 ARTICLE 9 - RECEIVABLES 55 9-1. Proceeds and Collection of Accounts 55 9-2. Proceeds and Collection of Accounts Held in Trust 56 9-3. Payment of Liabilities 56
