Common use of WARRANTIES, REPRESENTATIONS AND COVENANTS Clause in Contracts

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Dental Medical Diagnostic Systems Inc)

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WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall may retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Business Resource Group)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's The aggregate amount of the Borrowing Base at all times pertinent hereto during the effectiveness of this Agreement shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's the Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any accountAccount, or any account Account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts Accounts owing by that account debtor, and reduce Borrower's the Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accountsAccounts, whether eligible or ineligible, until all Obligations have Indebtedness has been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's ’s name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's ’s consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's ’s loan account with only the net amounts received by Bank in payment of the accountsAccounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank).; b. All accounts Accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, offsets counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account Account due from such account debtor is assigned to Bank.; and c. At the time each account Account is assigned to Bank, all property giving rise to such account Account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's ’s purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account Account is assigned to Bank, all such eligible accounts Eligible Accounts will be due and payable on terms set forth in Section 1.1 21.18, or on such other terms approved in writing by Bank in advance of the creation of such accounts Accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account Eligible Account will then be past due. 6.5 Borrower shall keep the Inventory only at the following locations: and the owner or mortgagees of the respective locations are: . a. Borrower, immediately upon demand by Bank therefor, shall now and from time to time hereafter, at such intervals as are reasonably requested by Bank, deliver to Bank, designations of Inventory specifying Borrower’s cost of Inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; b. Borrower’s Inventory, valued at the lower of Borrower’s cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than N/A Dollars ($ N/A) of which no less than N/A Dollars ($ N/A) shall be in raw materials and finished goods; c. All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank; d. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank’s officers, agents and employees for inspection and copying; e. All Inventory, now and hereafter at all times, shall be new Inventory of good and merchantable quality free from material defects; f. Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank’s prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, warehouse receipts in Bank’s name evidencing the storage of Inventory and/or an acknowledgment by such bailee of Bank’s prior rights in the Inventory, in each case in form and substance acceptable to Bank. In any event, Borrower shall instruct any third party to hold all such Inventory for Bank’s account subject to Bank’s security interests and its instructions; and g. Bank shall have the right upon demand now and/or at all times hereafter, during Borrower’s usual business hours, after reasonable notice, to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition and Borrower agrees to reimburse Bank for Bank’s reasonable costs and expenses in so doing.

Appears in 1 contract

Samples: Loan and Security Agreement (Cygne Designs Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any accountAccount, or any account Account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts Accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accountsAccounts, whether eligible or ineligible, until all Obligations have Indebtedness has been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims, where the return, recovery, dispute or claim involves more than Fifty Thousand Dollars ($50,000). Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's ’s name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's ’s consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's ’s loan account with only the net amounts received by Bank in payment of the accountsAccounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liensLiens, encumbrances and security interests (except those in favor of Bank).for Permitted Liens; b. All accounts Accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liensall Liens, claims, encumbrances and security interests (except as hold by Bank and except as may be consented to, in writing, by Bank) for Permitted Liens and are unconditionally owed to Borrower without defenses, disputes, offsets, offsets counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account Account due from such account debtor is assigned to Bank.; and c. At the time each account Account is assigned to Bank, all property giving rise to such account Account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's ’s purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Loan and Security Agreement (Chordiant Software Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. (a) Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. (b) All accounts are and will, at all times pertinent hereto, be bona fide existing obligations Obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Loan & Security Agreement (Hall Kinion & Associates Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by BankBorrower hereby warrants, Borrower shallrepresents and covenants that, at such intervals designated by Bank, during the term hereof execute and deliver a Report as of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that:hereof: ny-1976262 a. Borrower has is the actual, record and beneficial owner and holder of a good and marketable title to an indefeasible fee estate in the CollateralMortgaged Property, subject to no lien, charge or encumbrance, except for Permitted Encumbrances. Bank has and shall continue In addition to have a first priority perfected security interest in and to said fee estate, Borrower is the Collateral. The Collateral shall at owner of all times remain of the Mortgaged Property; Borrower owns the Chattels free and clear of all liensliens and claims, encumbrances except for Permitted Encumbrances. This Mortgage is and security interests (will remain a valid and enforceable first priority lien on the Mortgaged Property, except those in favor of Bank)for Permitted Encumbrances. b. All accounts are Borrower has full power and willlawful authority to mortgage the Mortgaged Property in the manner and form herein done or intended hereafter to be done. Borrower will preserve such title, at and will forever warrant and defend the validity and priority of the lien hereof, against the claims of all times pertinent heretopersons and parties whomsoever. c. The Mortgage Amount is the principal indebtedness owed hereunder by Borrower to Administrative Agent and the Lenders without offset, be bona fide existing obligations created counterclaim or defense by the sale Borrower in any event whatsoever. d. The execution and delivery of merchandise this Mortgage by the Borrower does not constitute a “fraudulent conveyance” within the meaning of Title 11 of the United States Code as now constituted or under any other applicable statute. e. No provision of any applicable state, law (including, without limitation, any applicable usury or similar law), rule or regulation of any Governmental Authority prevents the rendition execution, delivery or performance of, or affects the validity of, this Mortgage. f. This Mortgage constitutes the valid and legally binding obligation of services Borrower enforceable in accordance with its terms, subject to account debtors in applicable bankruptcy, insolvency, or similar laws generally affecting the ordinary course enforcement of business, free of liens, claims, encumbrances and security interests (except as hold by Bank and except as may be consented creditors’ rights. g. No notice to, in writingor filing with, by Bank) any Governmental Authority is required for the due execution, delivery and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights performance of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency this Mortgage. h. No provision of any account debtor at existing mortgage, indenture, contract, agreement, statute, rule, regulation, judgment, decree or order binding on Borrower or affecting the time an account due from such account debtor is assigned to Bank. c. At Mortgaged Property conflicts with, or requires any consent which has not already been obtained under, or would in any way prevent the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time requireexecution, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance performance of the creation of such accounts and which are expressly set forth on the face of all invoicesterms of, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past duethis Mortgage.

Appears in 1 contract

Samples: Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Alexanders Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90Ninety ( 90 ) days from the ------ ---- date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Loan & Security Agreement (Provena Foods Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY Thirty* (9030) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest thereinxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. * 45 days for foreign accounts. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 21.12, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due. 6.5 Borrower shall keep the Inventory only at the following locations: 0000 X. Xxxxxxx St., Santa Ana, CA 92705, 0 Xxxxx Xx., Wheeling, WV 26003; and 0000 Xxxxxxxx, Irvine, CA 92606 and the owner or mortgagees of the respective locations are: Dirk Investments Inc., Radco, and Sanwa Bank (as trustee). a. Borrower, immediately upon demand by Bank therefor, shall now and from time to time hereafter, at such intervals as are requested by Bank, deliver to Bank, designations of inventory specifying Borrower's cost of inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; b. Borrower's Inventory, valued at the lower of Borrower's cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than N/A Dollars ($N/A) of which no less than N/A Dollars ($N/A) shall be in raw materials and finished goods; c. All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank; d. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank's officers, agents and employees for inspection and copying; e. All inventory, now and hereafter at all times, shall be new inventory of good and merchantable quality free from defects; f. Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank's prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, in a form acceptable to Bank, warehouse receipts in Bank's name evidencing the storage of inventory or other evidence of Bank's prior rights in the inventory. In any event, Borrower shall instruct any third party to hold all such inventory for Bank's account subject to Bank's security interests and its instructions; and g. Bank shall have the right upon demand now and/or at all times hereafter, during Borrower's usual business hours, to inspect and examine the inventory and to check and test the same as to quality, quantity, value and condition and Borrower agrees to reimburse Bank for Bank's reasonable costs and expenses in so doing. 6.6 Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank's prior written consent: x. Xxxxx a security interest in or permit a lien, claim or encumbrance upon any of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality; b. Permit any levy, attachment or restraint to be made affecting any of Borrower's assets; c. Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of Borrower's* * assets d. Other than sales of inventory in the ordinary course of Borrower's business, to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower's assets; e. Change its name, business structure, corporate identity or structure; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization; f. Move or relocate any Collateral; g. Acquire any other business organization; wherein Bank financing is required in excess of $3,000,000.00. h. Enter into any transaction not in the usual course of Borrower's business; i. Make any investment in securities of any person, association, firm, entity, or corporation other than the securities of the United States of America; j. Make any change in Borrower's financial structure or in any of its business objectives, purposes or operations which would adversely affect the ability of Borrower to repay Borrower's Obligations; k. Incur any debts outside the ordinary course of Borrower's business except renewals or extensions of existing debts and interest thereon; l. Make any advance or loan except in the ordinary course of Borrower's business as currently conducted; m. Make loans, advances or extensions of credit to any Person, except for sales on open account and otherwise in the ordinary course of business; n. Guarantee or otherwise, directly or indirectly, in any way be or become responsible for obligations of any other person, whether by agreement to purchase the indebtedness of any other Person, agreement for the furnishing of funds to any other Person through the furnishing of goods, supplies or services, by way of stock purchase, capital contribution, advance or loan, for the purpose of paying or discharging (or causing the payment or discharge of) the indebtedness of any other person, or otherwise, except for the endorsement of negotiable instruments by the Borrower in the ordinary course of business for deposit or collection;

Appears in 1 contract

Samples: Loan & Security Agreement (Troy Group Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Banknot more frequently than once per calendar month, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunderhereunder when the Daily Balance exceeds $500,000. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any accountaccount previously included in the Borrowing Base, or any such account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoiceinvoice and such failure relates to more than twenty-five percent (25%) of outstanding Receivables from such account debtor, or an account debtor disputes liability or makes any claim with respect theretoliability, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. thereof Bank shall may retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bankclaims, relating to the Collateral, in excess of $50,000. After default by Borrower hereunderDuring the continuance of an Event of Default, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrowerduring the continuance of an Event of Default, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. (a) Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of BankBank and Permitted Liens). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Accelerated Networks Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto The Formula shall not be lose than established in conformity with the advances made hereunderReport of Accounts Receivable, if such report is reasonably acceptable to Bank. Bank shall have recompute the right to recompute Borrower's Borrowing Base Formula in conformity with this Agreementthe Report of Accounts Receivable if reasonably acceptable to Bank. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, accounts until all Obligations (other than Surviving Indemnities) have been fully paid and satisfied. Returns and allowances, if any, as between Borrower or Guarantor, as the case may be, and its customers, will be on the same basis and in accordance with the usual customary practices of Borrower or Guarantor, as the Borrowercase may be, as they exist at this time. Any merchandise which After an Event of Default occurs and is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower continuing hereunder, no material discount, credit or allowance shall be granted to any account debtor by Borrower or Guarantor, as the case may be, and no material return of merchandise shall be accepted by Borrower or Guarantor, as the case may be, without Bank's consent, which shall not be unreasonably withheld. Bank may, after default by Borroweran Event of Default occurs and is continuing, settle or adjust material disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrantsis in the business of providing work space products, representswork space product services and work space management services. 6.4 Borrower and Guarantor, covenants as the case may be, warrant, represent, covenant and agrees agree that: a. Borrower or Guarantor, as the case may be, has good and marketable title to the Collateral. It is the intention of the parties that Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral including, without limitation, the Inventory, Receivables and Intangibles shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank)Permitted Liens. b. All accounts Receivables are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold by Bank Permitted Liens and except as may be consented to, in writing, by Bank) and ). Substantially all Receivables are unconditionally owed to Borrower or Guarantor, as the case may be, without material defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower or Guarantor, as the case may be, shall have received no notice of actual or imminent bankruptcy or insolvency of any material account debtor at of Borrower or Guarantor, as the time an account due from case may be, without Borrower or Guarantor, as the case may be, having given notice to Bank within ten (10) days of learning of such account debtor is assigned to Bankactual or imminent bankruptcy or insolvency. c. At the time each account is assigned to Bank, all property giving rise to such account All Receivables shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower or Guarantor, as the case may be, shall deliver to Bank, as Bank may from time to time require, copies of delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower or Guarantor, as custodian for Bankthe case may be. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be 6.5 All Receivables are due and payable on reasonable commercial terms set forth applicable to the industry of Borrower or Guarantor, as the case may be. 6.6 Borrower and Guarantor shall keep the Inventory only at the locations specified on Schedule B and the owner or mortgagor of such location are: See Schedule B. a. Borrower or Guarantor, as the case may be, upon demand by Bank therefor, shall now and from time to time hereafter, at such intervals as are reasonably requested by Bank, deliver to Bank, designations of Inventory specifying Borrower's or Guarantor's, as the case may be, cost of Inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; b. Borrower and Guarantor do now keep and hereafter at all times in Section 1.1 all material respects shall keep correct and accurate records itemizing and describing in all material respects the kind, type, quality and quantity of the Inventory, their cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank's officers, agents and employees for inspection and copying upon reasonable prior notice; c. All Inventory, now and hereafter at all times, shall be in all material respects new Inventory of good and merchantable quality free from material defects with the exception of refurbished goods sold in the ordinary course of Borrower's or Guarantor's, as the case may be, business; d. Except as listed in Schedule B hereto, Inventory is not now and shall not at any time or times hereafter be located or stored for more than two (2) weeks with a bailee, warehouseman or other third party without Bank's prior written consent. In the event that Inventory is stored or with a Bailee, warehouseman or other third party for more than two (2) weeks, Borrower or Guarantor, as the case may be, will promptly cause any such bailee, warehouseman or other third party to issue and deliver to Bank, in a form acceptable to Bank, warehouse receipts in Bank's name evidencing the storage of Inventory or other evidence of Bank's security interests in the Inventory; and e. Upon reasonable prior notice, Bank shall have the right upon demand now and/or at all times hereafter, during Borrower's or Guarantor's, as the case may be, usual business hours, to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition and Borrower or Guarantor, as the case may be, agrees to reimburse Bank for Bank's reasonable costs and expenses in so doing. 6.7 Borrower and Guarantor represent, warrant and covenant with Bank that Borrower or Guarantor, as the case may be, will not, without Bank's prior written consent: x. Xxxxx a security interest in or permit a lien, claim or encumbrance except Permitted Liens upon any of the Collateral to any person, association, firm, corporation, entity or government agency or instrumentality; b. Permit any levy, attachment or restraint to be made affecting any of the assets of Borrower or Guarantor, as the case may be; c. Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of the assets of Borrower or Guarantor, as the case may be; d. Other than sales of Inventory in the ordinary course of Borrower's or Guarantor's, as the case may be, business, to sell, lease, or on such other terms approved in writing otherwise dispose of, move, or transfer, whether by Bank in advance sale or otherwise, any of the creation assets of such accounts Borrower or Guarantor, as the case may be; e. Without Bank's prior consent, which shall not be unreasonably withheld, change their respective names, identities or corporate structures; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization; f. Move or relocate any Collateral; g. Without Bank's prior consent, which shall not be unreasonably withheld, acquire any other business organization; h. Without Bank's prior consent, which shall not be unreasonably withheld, enter into any transaction not in the usual course of Borrower's business in excess of Five Hundred Thousand and 00/100 Dollars ($500,000) in the aggregate per year; i. Make any material change in Borrower's financial structure or operations which would adversely affect the ability of Borrower to repay Borrower's Obligations; j. Incur any debts outside the ordinary course of Borrower's business except renewals or extensions of existing debts and interest thereof; k. Make any advance or loan not in the ordinary course of Borrower's business as currently conducted in excess of Two Hundred Thousand and 00/100 Dollars ($200,000) in principal amount outstanding at any given time; l. Make loans, advances or extensions of credit to any Person not in the ordinary course of Borrower's business as currently conducted in excess of Two Hundred Thousand and 00/100 Dollars ($200,000) in principal amount outstanding at any given time, except for sales on open account which are expressly set forth on not subject to the face restrictions in this paragraph 6.7(l); m. Guarantee or otherwise, directly or indirectly, in any way be or become responsible for obligations of all invoicesany other Person, copies whether by agreement to purchase the indebtedness of which shall be held any other Person, agreement for furnishing of funds to any other Person through the furnishing of goods, supplies or services, by way of stock purchase, capital contribution, advance or loan, for the purpose of paying or discharging (or causing the payment or discharge of) the indebtedness of any other Person, or otherwise, except for the endorsement of negotiable instruments by Borrower as custodian in the ordinary course of business for Bank, and no such eligible account will then be past due.deposit or collection;

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Business Resource Group)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition position in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that:; a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank).. Exhibit 10.5 LOAN & SECURITY AGREEMENT (Accounts & Inventory) b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations Obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without with defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 21.7, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due. 6.5 Borrower shall keep the inventory only at the following locations: _____________________________________________________ and the owner or mortgagees of the respective locations are _____________________________________ ______________________________________________________________________________. a. Borrower, immediately upon demand by Bank therefor, shall now and from time to time hereafter, at such intervals as are requested by Bank, deliver to Bank, designations of inventory specifying Borrower's cost of Inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; b. Borrower's Inventory, valued at the lower of Borrower's cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than N/A Dollars ($ N/A ) which no less than N/A ---------- -------- ------------------- Dollars ($ N/A ) shall be in raw materials and finished --------------------- goods; c. All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank; d. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of Exhibit 10.5 LOAN & SECURITY AGREEMENT (Accounts & Inventory) the Inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank's officers, agents and employees for inspection and copying; e. All Inventory, now and hereafter at all times, shall be new inventory of good and merchantable quality free from defects; f. Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank's prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, in a form acceptable to Bank, warehouse receipts in Bank's name evidencing the storage of Inventory or other evidence of Bank's prior rights in the Inventory. In any event, Borrower shall instruct any third party to hold all such inventory for Bank's account subject to Bank's security interests and its instructions; and g. Bank shall have the right upon demand now and/or at all times hereafter, during Borrower's usual business hours, to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition and Borrower agrees to reimburse Bank for Bank's reasonable costs and expenses in so doing. 6.6 Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank's prior written consent: x. Xxxxx a security interest in or permit a lien, claim or encumbrance upon any of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality; b. Permit any levy, attachment or restraint to be made affecting any of Borrower's assets; c. Permit any judicial officer or assignees to be appointed or to take possession of any or all of Borrower's assets; d. Other than sales of inventory in the ordinary course of Borrower's business, to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower's assets; e. Change its name, business structure, corporate identity or structure; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization; f. Move or relocate any Collateral; g. Acquire any other business organization; Exhibit 10.5 LOAN & SECURITY AGREEMENT (Accounts & Inventory) h. Enter into any transaction not in the usual course of Borrower's business; i. Make any investment in securities of any person, association, firm, entity, or corporation other than the securities of the United States of America; j. Make any change in Borrower's financial structure or in any of its business objectives, purposes or operations which would adversely affect the ability of Borrower to repay Borrower's Obligations; k. Incur any debts outside the ordinary course of Borrower's business except renewals or extensions of existing debts and interest thereon; l. Make any advance or loan except in the ordinary course of Borrower's business as currently conducted; m. Make loans, advances or extensions of credit to any Person, except for sales on open account and otherwise in the ordinary course of business; n. Guarantee or otherwise, directly or indirectly, in any way be or become responsible for obligations of any other person, whether by agreement to purchase the indebtedness of any other Person, agreement for the furnishing of funds to any other Person through the furnishing of goods, supplies or services, by way of stock purchase, capital contribution, advance or loan, for the purpose of paying or discharging (or causing the payment or discharge of) the indebtedness of any other person, or otherwise, except for the endorsement of negotiable instruments by the Borrower in the ordinary course of business for deposit or collection;

Appears in 1 contract

Samples: Loan & Security Agreement (Sonicwall Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's The aggregate amount of the Borrowing Base at all times pertinent hereto during the effectiveness of this Agreement shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's the Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any accountAccount, or any account Account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts Accounts owing by that account debtor, and reduce Borrower's the Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accountsAccounts, whether eligible or ineligible, until all Obligations have Indebtedness has been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's loan account with only the net amounts received by Bank in payment of the accountsAccounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bankfor any permitted Liens).; b. All accounts Accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold by Bank Permitted Liens and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, offsets counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account Account due from such account debtor is assigned to Bank.; and c. At the time each account Account is pledged and assigned to Bank, Bank as Collateral all property giving rise to such account Account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's customers purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account Account is assigned to Bank, all such eligible accounts Eligible Accounts will be due and payable on terms set forth in Section 1.1 21.19 and 1.20, or on such other terms approved in writing by Bank in advance of the creation of such accounts Accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account Eligible Account will then be past due. 6.5 Borrower shall keep the inventory only at the locations set forth on Schedule 6.5 to this Agreement, attached hereto and Incorporated herein by this reference. The owner or mortgagees of the respective locations are as set forth in Schedule 6.5. a. Borrower, promptly upon demand by Bank therefor, but in any event within ten (10) business days of any such demand therefor, shall now and from time to time hereafter, at such intervals as are reasonably requested by Bank, deliver to Bank, designations of Inventory specifying Borrower's cost of Inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; b. All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except Permitted Liens; c. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available promptly upon demand by Bank therefor, but in any event within ten (10) business days of any such demand therefor, to any of Bank's officers, agents and employees for inspection and copying; d. Except for any work-in-process, all Inventory, now and hereafter at all times, shall be new Inventory of good and merchantable quality free from material defects; e. Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank's prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, warehouse receipts in Bank's name evidencing the storage of inventory and/or an acknowledgment by such bailee of Bank's prior rights in the Inventory, in each case in form and substance acceptable to Bank. In any event, Borrower shall instruct any third party to hold all such inventory for Bank's account subject to Bank's security interests and its instructions; and f. Bank shall have the right upon demand now and/or at all times hereafter, during Borrower's usual business hours, after reasonable notice, to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition and, subject to the limitations set forth in Section 6.24, Borrower agrees to reimburse Bank for Bank's reasonable costs and expenses in so doing; provided, however, that Bank agrees to reimburse Borrower for physical damage to any item of inventory tested by Bank that results from Bank's gross negligence or intentional misconduct. 6.6 At all times during the effectiveness of this Agreement, any Cash Collateral not on deposit with Bank shall be subject to a control agreement with the depository Institution or securities Intermediary at which any such Cash Collateral is on deposit, in form and substance satisfactory to Bank. 6.7 Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank's prior written consent: a. Grant a security interest in or permit a lien, claim or encumbranxx xxxx any of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality (except for any Permitted Liens); b. Permit any levy, attachment or restraint in an aggregate amount in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00) to be made affecting any of Borrower's assets: c. Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of Borrower's assets; d. Other then sales or transfers of inventory in the ordinary course of Borrower's business, to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower's assets; e. Change its name, the location of its sole place of business, chief executive office or residence, business structure, corporate identity or structure, form of organization or the state in which it has been formed or organized; add any new fictitious names; provided, however, that prior to the occurrence of an Event of Default, and subject to (i) Borrower's delivery to Bank of not less than ninety (90) days prior notice thereof and (ii) Borrower's execution of any document, instrument or agreement as Bank shall require, in such form as Bank may require, in order to reflect, perfect or protect Bank's first priority security interest in the Collateral and in order to continue the effectiveness of this Agreement and the other Loan Documents. Borrower may change its name, the location of its sole place of business, chief executive office or residence, business structure, corporate identity or structure, form of organization or the state in which it has been formed or organized or add any new fictitious names. f. Move or relocate any Collateral to any location not set forth on Schedule 6.5 to this Agreement; provided, however, that anything contained in the forgoing to the contrary notwithstanding, Borrower shall not move any material portion of the Collateral to any location outside the United States of America without the prior written consent of Bank; g. Enter into any transaction not in the usual course of Borrower's business; h. Make any change in Borrower's financial structure or in any of its business objectives, purposes or operations which would materially adversely affect the ability of Borrower to repay Borrower's Indebtedness; i. Incur any Debts except for Permitted Indebtedness and renewals or extensions thereof and Interest thereon in excess of Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00) in any one year, j. Except for Permitted Investments and loans to employees of Borrower in an aggregate amount not to exceed Eight Hundred Fifty Thousand and No/100 Dollars ($850,000.00) per employee or Five Million and No/100 Dollars ($5,000,000.00) in the aggregate, or short term loans to employees from time to time to facilitate the exercise of such employee's options on Borrower's capital stock granted to such employee by Borrower, make loans, advances or extensions of credit to any other Person except in the ordinary course of business, or purchase or hold beneficially any stock or other securities of, or make any Investment or acquire any securities or other interest whatsoever in, any other Person; k. Guarantee or otherwise, directly or indirectly, in any way be or become responsible for obligations of any other Person, whether by agreement to purchase the Indebtedness of any other Person, agreement for the furnishing of funds to any other Person through the furnishing of goods, supplies or services, by way of stock purchase, capital contribution, advance or loan, for the purpose of paying or discharging (or causing the payment or discharge of) the indebtedness of any other Person, or otherwise, except for the endorsement of negotiable instruments by Borrower in the ordinary course of business for deposit or collection; l. Make any payment on account of any Subordinated Debt except for regularly scheduled payments of interest and principal in accordance with the provisions of any Subordination Agreement executed by Bank and the subordinated debt holder, or amend any provision contained in any documentation relating to any such Subordinated Debt without Bank's prior written consent: and m. Liquidate, dissolve, merge or consolidate with or into any other business organization, permit another corporation to liquidate, dissolve, merge or consolidate into it; purchase or otherwise acquire all or substantially all the properties, assets or business of any third Person or entity; enter into any reorganization or recapitalization or

Appears in 1 contract

Samples: Loan and Security Agreement (Formfactor Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's The aggregate amount of the Borrowing Base at all times pertinent hereto during the effectiveness of this Agreement shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's the Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any accountAccount, or any account Account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, cancellation or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts Accounts owing by that account debtor, and reduce Borrower's the Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accountsAccounts, whether eligible or ineligible, until all Obligations have Indebtedness has been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's loan account with only the net amounts received by Bank in payment of the accountsAccounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank).; b. All accounts Accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, offsets counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account Account due from such account debtor is assigned to Bank.; and c. At the time each account Account is assigned to Bank, all property giving rise to such account Account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account Account is assigned to Bank, all such eligible accounts Eligible Accounts will be due and payable on terms set forth in Section 1.1 21.16, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for BankAccounts, and no such eligible account Eligible Account will then be past due. a. Borrower shall permit representatives of Bank to conduct semi-annual audits of Borrower's books and records relating to the Accounts and other Collateral and make extracts therefrom, with results satisfactory to Bank, provided that Bank shall use its best efforts to not interfere with the conduct of Borrower's business, and to the extent possible to arrange for verification of the Accounts directly with the account debtors obligated thereon or otherwise, all under reasonable procedures acceptable to Bank and at Borrower's sole expense; provided, further, that, prior to an Event of Default, Borrower shall not be responsible for the expense of more than two (2) such audits, in any fiscal year. Notwithstanding any of the provisions contained in Section 1.6 hereof, Borrower hereby acknowledges and agrees that upon completion of any such audit Bank shall have the right to adjust any Borrowing Base percentage, in its sole and reasonable discretion, based on its review of the results of such collateral audit. 6.5 Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank's prior written consent: a. Grant a security interest in or permit a lien, claim or encumbrance xxxx xxx of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality; b. Permit any levy, attachment or restraint to be made affecting any of Borrower's assets; c. Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of Borrower's assets; d. Sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower's assets; e. Change its name, the location of its sole place of business, chief executive office or residence, business structure, corporate identity or structure, form of organization or the state in which it has been formed or organized; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization; f. Move or relocate any Collateral; g. Acquire any other business organization; h. Enter into any transaction not in the usual course of Borrower's business; i. Make any change in Borrower's financial structure or in any of its business objectives, purposes or operations which would materially adversely affect the ability of Borrower to repay Borrower's Indebtedness; j. Incur any debts outside the ordinary course of Borrower's business except renewals or extensions of existing debts and interest thereon; k. Make loans, advances or extensions of credit to any Person, except in the ordinary course of business; l. Guarantee or otherwise, directly or indirectly, in any way be or become responsible for obligations of any other Person, whether by agreement to purchase the indebtedness of any other Person, agreement for the furnishing of funds to any other Person through the furnishing of goods, supplies or services, by way of stock purchase, capital contribution, advance or loan, for the purpose of paying or discharging (or causing the payment or discharge of) the indebtedness of any other Person, or otherwise, except for the endorsement of negotiable instruments by Borrower in the ordinary course of business for deposit or collection; m. Make any payment on account of any Subordinated Debt except for regularly scheduled payments of interest and principal in accordance with the provisions of any Subordination Agreement executed by Bank and the subordinated debt holder, or amend any provision contained in any documentation relating to any such Subordinated Debt without Bank's prior written consent; (a) Sell, lease, transfer or otherwise dispose of properties and assets (whether in one transaction or in a series of transactions); (b) change its name, consolidate with or merge into any other corporation, permit another corporation to merge into it, acquire all or substantially all the properties or assets of any other Person, enter into any reorganization or recapitalization or reclassify its capital stock, or (c) enter into any sale-leaseback transaction; o. Purchase or hold beneficially any stock or other securities of, or make any investment or acquire any securities or other interest whatsoever in, any other Person, except for the common stock of the Subsidiaries owned by Borrower on the date of this Agreement and except for certificates of deposit with maturities of one year or less of United States commercial banks with capital, surplus and undivided profits in excess of One Hundred Million Dollars ($100,000,000) and the securities or other direct obligations of the United States Government maturing within one year from the date of acquisition thereof; and p. Allow any fact, condition or event to occur or exist with respect to any employee pension or profit sharing plans established or maintained by it which might constitute grounds for termination of any such plan or for the court appointment of a trustee to administer any such plan.

Appears in 1 contract

Samples: Loan and Security Agreement (Meadowbrook Insurance Group Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals Intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in In form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY Ninety (90) days from the date of invoiceInvoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible Ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in In such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account Eligible Account is assigned to Bank, all such eligible accounts Eligible Accounts will be due and payable on terms set forth in Section 1.1 21.12, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due. 6.5 Borrower shall keep the Inventory only at the following locations: _______________________________________________________________________ and the owner or mortgagees of the respective locations are: __________________________ __________________________. a. Borrower, immediately upon demand by Bank therefor, shall now and from time to time hereafter, at such intervals as are requested by Bank, deliver to Bank, designations of Inventory specifying Borrower's cost of Inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; b. Borrower's Inventory, valued at the lower of Borrower's cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than N/A Dollars ($ N/A) of which no less than N/A Dollars($ N/A) shall be in raw materials and finished goods; c. All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank; d. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank's officers, agents and employees for inspection and copying; e. All Inventory, now and hereafter at all times, shall be new Inventory of good and merchantable quality free from defects; f. Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank's prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, in a form acceptable to Bank, warehouse receipts in Bank's name evidencing the storage of Inventory or other evidence of Bank's prior rights in the Inventory. In any event, Borrower shall instruct any third party to hold all such Inventory for Bank's account subject to Bank's security interests and its instructions; and g. Bank shall have the right upon demand now and/or at all times hereafter, during Borrower's usual business hours, to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition and Borrower agrees to reimburse Bank for Bank's reasonable costs and expenses in so doing. 6.6 Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank's prior written consent: x. Xxxxx a security interest in or permit a lien, claim or encumbrance upon any of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality; b. Permit any levy, attachment or restraint to be made affecting any of Borrower's assets; c. Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of Borrower's assets; d. Other than sales of Inventory in the ordinary course of Borrower's business, to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower's assets; e. Change its name, business structure, corporate identity or structure; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization; f. Move or relocate any Collateral; g. Acquire any other business organization; h. Enter into any transaction not in the usual course of Borrowers business; i. Make any investment in securities of any person, association, firm, entity, or corporation other than the securities of the United States of America; j. Make any change in Borrower's financial structure or in any of its business objectives, purposes or operations which would adversely effect the ability of Borrower to repay Borrower's Obligations; k. Incur any debts outside the ordinary course of Borrower's business except renewals or extensions of existing debts and interest thereon; l. Make any advance or loan except in the ordinary course of Borrower's business as currently conducted;

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Viador Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY ninety (90) days days, or, with respect to Kontron, one hundred twenty (120) days, from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall may retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Masimo Corp)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If It so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Bank Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90) days from -------------- --- the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, defenses disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, Bank as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 21.12, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due. 6.5 Borrower shall keep the inventory only at the following locations: N/A and the owner or mortgagees of the respective locations ------------------ are: ------------------------------------------------------------------------- ------------------------------------------------------------------------------ a. Borrower, immediately upon demand by Bank therefor, shall now and from time to time hereafter, at such intervals as are requested by Bank, deliver to Bank, designations of inventory specifying Borrower's cost of inventory, the wholesale market value thereof and such other matters and information relating to the inventory as Bank may request; b. Borrower's inventory, valued at the lower of Borrower's cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than N/A -------------------------------------------------- Dollars ($ N/A ) of which no less than ----------------------------------- N/A Dollars ($ N/A ) -------------- ----------------------------------- shall be in raw materials and finished goods; c. All of the inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank; d. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank's officers, agents and employees for inspection and copying;

Appears in 1 contract

Samples: Loan & Security Agreement (Splash Technology Holdings Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations Obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Loan & Security Agreement (General Automation Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 Borrower shall, within 20 days of the end of each calendar month, provide to the Bank a Borrowing Base Certificate setting forth Eligible Accounts, Marketing Development Fund, Net Eligible Accounts and Eligible Inventory as defined in the Inventory Rider, and a proposed computation of the Borrowing Base based thereon. If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any Upon the occurrence and during the continuance of a default, any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. After default, Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisablereasonable in its sole and absolute discretion, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). Borrower is the sole and exclusive owner or licensee, as applicable, with respect to the Trademark Rights, fee and clear of any liens, charges, and encumbrances. b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellationcancellation other than those arising in the ordinary course of business, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. x. Xxxxxx Beverage Company (Services) Limited, a subsidiary of Xxxxxx Natural, conducts no business and has been deregistered in the United Kingdom. If such subsidiary commences business as a subsidiary of Xxxxxx Natural or any affiliate, such subsidiary will execute and deliver to Bank a guaranty substantially identical to those delivered pursuant to Section 5.1(b). 6.4 At the time each eligible account Eligible Account is assigned to Bank, all such eligible accounts Eligible Accounts will be due and payable on terms set forth in Section 1.1 21.14, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Hansen Natural Corp)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's The aggregate amount of the Borrowing Base at all times pertinent hereto during the effectiveness of this Agreement shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's the Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any accountAccount, or any account Account is not paid in full by an account debtor within NINETY Ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts Accounts owing by that account debtor, and reduce Borrower's the Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accountsAccounts, whether eligible or ineligible, until all Obligations have Indebtedness has been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's ’s name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's ’s consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's ’s loan account with only the net amounts received by Bank in payment of the accountsAccounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank).; b. All accounts Accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, offsets counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account Account due from such account debtor is assigned to Bank.; and c. At the time each account Account is assigned to Bank, all property giving rise to such account Account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's ’s purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account Account is assigned to Bank, all such eligible accounts Eligible Accounts will be due and payable on terms set forth in Section 1.1 21.18, or on such other terms approved in writing by Bank in advance of the creation of such accounts Accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account Eligible Account will then be past due. 6.5 Borrower shall keep the Inventory only at the following locations: ________________________________________ and the owner or mortgagees of the respective locations are: ______________________________________________________ _______________________________________________________________________________________________________. a. Borrower immediately upon demand by Bank therefor, shall now and from time to time hereafter, at such intervals as are reasonably requested by Bank, deliver to Bank, designations of Inventory specifying Borrower’s cost of Inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; b. Borrower’s Inventory, valued at the lower of Borrower’s cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than N/A Dollars ($ N/A) of which no less than N/A Dollars ($ N/A) shall be in raw materials and finished goods; c. All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank; d. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank’s officers, agents and employees for inspection and copying; e. All Inventory, now and hereafter at all times, shall be new Inventory of good and merchantable quality free from material defects; f. Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank’s prior written consent and, in such event Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, warehouse receipts in Bank’s name evidencing the storage of Inventory and/or an acknowledgment by such bailee of Bank’s prior rights in the Inventory, in each case in form and substance acceptable to Bank. In any event, Borrower shall instruct any third party to hold all such Inventory for Bank s account subject to Bank’s security interests and its instructions; and

Appears in 1 contract

Samples: Loan and Security Agreement (Provena Foods Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. * See Addendum attached hereto and made a part hereof. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY Ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowancesadvances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discountaccount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all the times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the any time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account Eligible Account is assigned to Bank, all such eligible accounts Eligible Accounts will be due and payable on terms set forth in Section 1.1 21.12, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due. 6.5 Borrower shall keep the Inventory only at the following locations: _______________________________________________________________ _____________________________________________________ and the owner or mortgagees of the respective locations are: ____________________________________________. a. Borrower, immediately upon demand by Bank therefor, shall now and from time to time hereafter, at such intervals as are requested by Bank, deliver to Bank, designations of Inventory specifying Borrower's cost of Inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; b. Borrower's Inventory, valued at the lower of Borrower's cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than _______________________ Dollars ($_________) of which no less than ________________________ Dollars ($_________) shall be in raw materials and finished goods; c. All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank; d. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank's officers, agents and employees for inspection and copying; e. All Inventory, now and hereafter at all times, shall be new Inventory of good and merchantable quality free from defect; f. Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank's prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, in a form acceptable to Bank, warehouse receipts in Bank's name evidencing the storage of Inventory or other evidence of Bank's prior rights in the Inventory. In any event, Borrower shall instruct any third party to hold all such Inventory for Bank's account subject to Bank's security interests and its instructions; and g. Bank shall have the right upon demand now and/or at all times hereafter, during Borrower's usual business hours, to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition and Borrower agrees to reimburse Bank for Bank's reasonable costs and expenses in so doing. 6.6 Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank's prior written consent: a. Xxxxx a security interest in or permit a lien, claim or encumbrance upon any of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality; b. Permit any levy, attachment or restraint to be made affecting any of Borrower's assets; c. Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of Borrower's assets; d. Other than sales of Inventory in the ordinary course of Borrower's business, to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower's assets; e. Change its name, business structure, corporate identity or structure; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization; f. Move or relocate any Collateral; g. Acquire any other business organization; h. Enter into any transaction not in the usual course of Borrower's business; i. Make any investment in securities of any person, association, firm, entity, or corporation other than the securities of the United States of America; j. Make any change in Borrower's financial structure or in any of its business objectives, purposes or operations which would adversely effect the ability of Borrower to repay Borrower's Obligations; k. Incur any debts outside the ordinary course of Borrower's business except renewals or extensions of existing debt and interest thereon; l. Make any advance or loan except in the ordinary course of Borrower's business as currently conducted;

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Hemacare Corp /Ca/)

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WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Bank Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and end all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Revolving Loan & Security Agreement (SCM Microsystems Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 21.12, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due. 6.5 Borrower shall keep the Inventory only at the following locations: 1380 XXXXXX XXXX, XXXXX XXXX, XX 00000 xxx the owner or mortgagees of the respective locations are: ____________. a. Borrower, immediately upon demand by Bank therefor shall now and from time to time hereafter, and such intervals as are requested by Bank, deliver to Bank, designations of Inventory specifying Borrowers cost of inventory, the wholesale market value thereof and such other matters and information relating to the inventory as Bank may request; b. Borrower's Inventory, valued at the lower of Borrower's cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than N/A Dollars ($N/A) of which no less than N/A Dollars ($N/A) shall be in raw materials and finished goods. c. All of the Inventory is and shall remain free from all purchase Money or other security interest, liens or encumbrances, except as held by Bank; d. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, its cost therefor and selling price thereof, and the dally withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank's officers, agents and employees for Inspection and copying; e. All Inventory, now and hereafter at all times, shall be new Inventory of good and merchantable quality free from defects; f. Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank's prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, in a form acceptable to Bank, warehouse receipts in Bank's name evidencing the storage of inventory or other evidence of Bank's prior rights in the Inventory. In any event, Borrower shall instruct any third party to hold all such Inventory for Bank's account subject to Bank's security interests and its instructions; and g. Bank shall have the right upon demand now and/or at all times hereafter, during Borrower's usual business hours, to Inspect and examine the inventory and to check and test the same as to quality, quantity, value and condition and Borrower agrees to reimburse Bank for Bank's reasonable costs and expenses in so doing. 6.6 Borrower represents, warrants and covenants with Bank that Borrower will not without Bank's prior written consent: a. Gxxxx x xecurity interest in or permit a lien, claim or encumbrance upon any of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality; b. Permit any levy, attachment or restraint to be made affecting any of Borrower's assets. c. Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of Borrower's assets; d. Other than sales of Inventory in the ordinary course of Borrower's business, to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower's assets; e. Change its name, business structure, corporate identity or structure; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization; f. Move or relocate any Collateral; g. Acquire any other business organization; h. Enter into any transaction not in the usual course of Borrower's business: i. Make any investment in securities of any person, association, firm entity, or corporation other than the securities of the United States of America; j. Make any change in Borrower's financial structure or in any of its business objectives, purposes or operations which would adversely effect the ability of Borrower to repay Borrower's Obligations; k. Incur any debts outside the ordinary course of Borrower's business except renewals or extensions of existing debts and Interest thereon; l. Make any advance or loan except in the ordinary course of Borrower's business as currently conducted; m. Make loans, advances or extensions of credit to any Person, except for sales on open account and otherwise in the ordinary course of business; n. Guarantee or otherwise, directly or indirectly, in any way be or become responsible for obligations of any other Person, whether by agreement to purchase the indebtedness of any other Person, agreement for the furnishing of funds to any other Person through the furnishing of goods, supplies or services, by way of stock purchase, capital contribution, advance or loan, for the purpose of paying or discharging (or causing the payment or discharge of) the indebtedness of any other Person, or otherwise, except for the endorsement of negotiable instruments by the Borrower in the ordinary course of business for deposit or collection. (a) Sell, lease, transfer or otherwise dispose of properties and assets having an aggregate book value of more than N/A Dollars ($N/A) (whether in one transaction or in a series of transactions) except as to the sale of inventory in the ordinary course of business; (b) change its name, consolidate with or merge into any other corporation, permit another corporation to merge into it, acquire all or substantially all the properties or assets of any other Person, enter into any reorganization or recapitalization or reclassify its capital stock, or (c) enter into any sale-leaseback transaction; p. Subordinate any indebtedness due to it from a person to indebtedness of other creditors of such person; q. Purchase or hold beneficially any stock or other securities of, or make any investment or acquire any interest whatsoever in, any other Person, except for the common stock of the Subsidiaries owned by the Borrower on the date of this Agreement and except for certificates of deposit with maturities of one year or less of United States commercial banks with capital, surplus and undivided profits in excess of $100,000,000 and direct obligations of the United States Government maturing within one year from the date of acquisition thereof; or r. Allow any fact, condition or event to occur or exist with respect to any employee pension or profit sharing plans established or maintained by it which might constitute grounds for termination of any such plan or for the court appointment of a trustee to administer any such plan. 6.7 Borrower is not a merchant whose sales for resale of goods for personal, family or household purposes exceeded seventy-five percent (75%) in dollar volume of its total sales of all goods during the 12 months preceding the filing by Bank of a financing statement describing the Collateral. At no time hereafter shall Borrower's sales for resale of goods for personal, family or household purposes exceed seventy-five percent (75 %) in dollar volume of its total sales. 6.8 Borrower's sole place of business or chief executive office or residence is located at the address indicated above and Borrower covenants and agrees that it will not, during the term of this Agreement, without prior written notification to Bank, relocate said sole place of business or chief executive office or residence. 6.9 If Borrower is a corporation, Borrower represents, warrants and covenants as follows: a. Borrower will not make any distribution or declare or pay any dividend (in stock or in cash) to any shareholder or on any of its capital stock, of any class, whether now or hereafter outstanding, or purchase, acquire, repurchase, redeem or retire any such capital stock; b. Borrower is and shall at all times hereafter be a corporation duly organized and existing in good standing under the laws of the state of its incorporation and qualified and licensed to do business in California or any other state in which it conducts its business; c. Borrower has the right and power and is duly authorized to enter into this Agreement; and d. The execution by Borrower of this Agreement shall not constitute a breach of any provision contained in Borrower's articles of incorporation or by-laws. 6.10 The execution of and performance by Borrower of all of the terms and provisions contained in this Agreement shall not result in a breach of or constitute an event of default under any agreement to which Borrower is now or hereafter becomes a party. 6.11 Borrower shall promptly notify Bank in writing of its acquisition by purchase, lease or otherwise of any after acquired property of the type included in the Collateral, with the exception of purchases of Inventory in the ordinary course of business. 6.12 All assessments and taxes, whether real, personal or otherwise, due or payable by, or imposed, levied or assessed against, Borrower or any of its property have been paid, and shall hereafter be paid in full, before delinquency. Borrower shall make due and timely payment or deposit of all federal, state and local taxes, assessments or contributions required of it by law, and will execute and deliver to Bank, on demand, appropriate certificates attesting to the payment or deposit thereof. Borrower will make timely payment or deposit of all F.I.C.A. payments and withholding taxes required of it by applicable laws, and will upon request furnish Bank with proof satisfactory to it that Borrower has made such payments or deposit. If Borrower fails to pay any such assessment, tax, contribution, or make such deposit, or furnish the required proof, Bank may, in its sole and absolute discretion and without notice to Borrower, (i) make payment of the same or any part thereof; or (ii) set up such reserves in Borrower's account as Bank deems necessary to satisfy the liability therefor, or both. Bank may conclusively rely on the usual statements of the amount owing or other official statements issued by the appropriate governmental agency. Each amount so paid or deposited by Bank shall constitute a Bank Expense and an additional advance to Borrower. 6.13 There are no actions or proceedings pending by or against Borrower or any guarantor of Borrower before any court or administrative agency and Borrower has no knowledge of any pending, threatened or imminent litigation, governmental investigations or claims, complaints, actions or prosecutions involving Borrower or any guarantor of Borrower, except as heretofore specifically disclosed in writing to Bank. If any of the foregoing arise during the term of the Agreement, Borrower shall immediately notify Bank in writing. 6.14 a. Borrower, at its expense, shall keep and maintain its assets insured against loss or damage by fire, theft, explosion, sprinklers and all other hazards and risks ordinarily insured against by other owners who use such properties in similar businesses for the full insurable value thereof. Borrower shall also keep and maintain business interruption insurance and public liability and property damage insurance relating to Borrower's ownership and use of the Collateral and its other assets. All such policies of insurance shall be in such form, with such companies, and in such amounts as may be satisfactory to Bank. Borrower shall deliver to Bank certified copies of such policies of insurance and evidence of the payments of all premiums therefor. All such policies of insurance (except those of public liability and property damage) shall contain an endorsement in a form satisfactory to Bank showing Bank as a loss payee thereof, with a waiver of warranties (Form 438-BFU), and all proceeds payable thereunder shall be payable to Bank and, upon receipt by Bank, shall be applied on account of the Obligations owing to Bank. To secure the payment of the Obligations, Borrower grants Bank a security interest in and to all such policies of insurance (except those of public liability and property damage) and the proceeds thereof, and Borrower shall direct all insurers under such policies of insurance to pay all proceeds thereof directly to Bank.

Appears in 1 contract

Samples: Revolving Credit Loan and Security Agreement (Versant Corp)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. (a) Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to ; the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts Accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold by Bank and except as may be consented to, in writing, by BankPermitted Liens) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, or rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account Account due from such account debtor is assigned to BankLender. c. (b) At the time each account Eligible Account is assigned to BankLender, all services to have been rendered in connection with such Account and all property giving rise to such account Account shall have been rendered or delivered to the account debtor or to the agent for of the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to BankLender, as Bank Lender may from time to time require, delivery receipts, customer's purchase orders, shipping instructioninstructions, bills of lading and and, any other evidence of shipping arrangements. Absent such a request by BankLender, copies of all such documentation shall be held by Borrower as custodian for BankLender. 6.4 (c) At the time each eligible account Eligible Account is assigned to BankLender, all such eligible accounts Eligible Accounts will be due and payable on in accordance with the terms set forth in Section 1.1 21.12 of this Agreement, or on such other terms approved in writing by Bank Lender in advance of the creation of such accounts Accounts, and which are such terms shall be expressly set forth on the face of all invoices. No account will be past due at the time it is assigned to Lender. 6.2 Borrower covenants and agrees that it shall keep the Inventory only at the Premises, copies except for Inventory in transit to or from the Premises. In addition, Borrower covenants and agrees that: (a) All Inventory is now and at all times hereafter shall be of good and merchantable quality, free from defects, except for Inventory that Borrower rejects and is returning to the supplier thereof. (b) On a monthly basis and at such other times as Lender requests, Borrower shall execute and deliver to Lender designations of Inventory specifying Borrower's cost and the market value of Borrower's raw materials, work in process, and finished goods, and further specifying any other category which Lender may request, as well as such other matters and information relating to the Inventory as Lender may request. At least annually, and at such other times as Lender requests because its field audit, investigation, or other due diligence has produced reasonable evidence of a significant question about Inventory reporting, Borrower shall conduct a physical count of the Inventory, at which Lender may be present, and shall provide promptly to Lender a written report of such count. (c) All of the Inventory is and shall remain free from all liens, claims, encumbrances, and security interests (except Permitted Liens). (d) Borrower now keeps and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, and its cost therefor, all of which records shall be available upon demand to any of Lender's officers, agents and employees for inspection and copying. (e) The Inventory is not now and shall not at any time or times hereafter be stored with a bailee, warehouseman, processor, or similar party without Lender's prior written consent, and, in such event and prior to any such storage, Borrower will: (i) notify such bailee, warehouseman, processor, or similar party of Lender's security interest in such Inventory and instruct such Person to hold all such Inventory for Lender's account subject to Lender's instructions; and (ii) cause any such bailee, warehouseman, processor, or similar party to issue and deliver to Lender, in a form acceptable to Lender, warehouse receipts in Lender's name evidencing the storage of the Inventory. (f) Lender shall have the right, during Borrower's usual business hours, to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition. (g) Borrower has good and indefeasible title to all of its Equipment, except Equipment leased as shown on Exhibit C. (h) All Equipment is and will be free and clear of all liens, claims, encumbrances, and security interests (except Permitted Liens). (i) The Equipment shall be kept only at the Premises (except for vehicles and other mobile Equipment which need not be at such location when in use, and except for products molds used by manufacturers of Borrower's Inventory, but only if Borrower has given Lender prior written notice of such manufacturer's name and location), and Lender shall have the right upon demand, now and at all times hereafter, during Borrower's usual business hours, to inspect and examine the Equipment. (j) If at any time any Collateral is located at any premises leased or subleased by Borrower, or if the owner or lessor or sublessor of such premises, or any Person through whom any sublessor derives its rights thereto, shall change, then Borrower shall obtain written agreements from such Persons and any holders of mortgages on such premises, in form and substance satisfactory to Lender, waiving all present and future liens which such Persons may be entitled to assert against the Collateral, granting to Lender the right to cure any default or condition which may affect the Collateral or Borrower's right to occupy such premises, and containing such other terms as Lender reasonably requests. (k) All General Intangibles, Negotiable Collateral, and other Collateral in addition to the Accounts, Inventory, and Equipment is and will be free and clear of all liens, claims, encumbrances, and security interests (except Permitted Liens). (l) Title to the Mortgaged Premises is good and marketable, and there are no mechanics' liens, environmental liens or any encumbrances of title with respect to the Mortgaged Premises except for the Safeguard Technologies and Citicorp deeds of trust and a deed of trust held by Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxx for various individuals which is to be assigned to Lender or discharged at the time of the borrowing hereunder. Borrower as custodian shall maintain the Mortgaged Premises in good repair, free of encumbrances and liens (other than Permitted Liens) and shall observe all of the covenants of the Mortgage and any specifications thereof. 6.3 Borrower will not, without Lender's prior written consent: (a) Other than in the ordinary course of Borrower's business, sell, lease, or otherwise dispose of, move, relocate, or transfer, whether by sale or otherwise, any of Borrower's assets; (b) Change Borrower's name, business structure, or identity or add any new fictitious name; (c) Acquire, merge or consolidate with or into any other business organization; (d) Enter into any transaction not in the usual course of Borrower's business; (e) Guarantee or otherwise become in any way liable with respect to the obligations of any third party, except by endorsement of instruments or items of payment for Bankdeposit to the general account of Borrower or which are transmitted or turned over to Lender, and except for guarantees in favor of Lender; (f) Make any change in Borrower's financial structure or in any of its business objectives, purposes, or operations which could materially adversely affect the ability of Borrower to repay the Obligations; (g) Incur any debts outside the ordinary course of Borrower's business other than the Subordinated Note in form and substance satisfactory to Lender and its counsel with the principal thereafter to be amortized over three (3) years, which Subordinated Note shall be subordinate to Borrower's obligations to Lender. (h) Make any advance or loan except in the ordinary course of business as presently conducted. Borrower may, however, lend or advance to any employee, officer or director an amount up to $10,000. Notwithstanding the foregoing, Borrower agrees that there shall not at any time during the Term of this agreement, or any renewal thereof, be outstanding any such loans or advances in excess of $50,000 in the aggregate; (i) Prepay any indebtedness owing to any third party, other than up to an aggregate of $10,000 annually to retire or reduce indebtedness with respect to Equipment leases shown on Exhibit C; (j) Pay total compensation, including salaries, withdrawals, fees, bonuses, commissions, drawing accounts and other payments, whether directly or indirectly, in money or otherwise, during any Fiscal Year to all of Borrower's executives, officers, and directors (and any relatives thereof) in an aggregate amount in excess of 115% of that which was received in the prior Fiscal Year by any such individual; provided, however, Borrower may make a $500,000 dividend payment to its shareholders on or after June 1, 1993 provided that at the time of making any such payment no Event of Default has occurred and is continuing and if (i) at the time of making such eligible account will then payment and after giving effect to such payment, Undrawn Availability shall be past dueat least $500,000 and (ii) Borrower has provided Lender with its audited annual financial statement for Fiscal Year 1992 showing after tax net income of Borrower of at least $1,000,000. (k) Make any Capital Expenditures during any Fiscal Year in excess of (i) $200,000 plus (ii) the amount of its depreciation as reflected in Borrower's most recent annual financial statements delivered to Lender pursuant to Section 6.10 of this Agreement ("Depreciation"), provided, however, the aggregate amount of Capital Expenditures for the Fiscal Year ending December 31, 1992 may be less than or equal to $750,000; (l) Suspend or go out of business; (m) Enforce the indemnity obligations of CBA under Sections 1 and 2 of the Settlement Agreement by set-off against the Subordinated Note; (n) make any payments under the Subordinated Note unless each and every one of the following conditions have been satisfied: (i) No Event of Default shall have occurred and be continuing under the Agreement or any other document executed in connection therewith at the time of any payment under the Subordinated Note. (ii) Lender shall have received for the 1990 Fiscal Year audited financial statements of Borrower on a consolidating and consolidated basis including, but not limited to, a long-form balance sheet and the related statements of income, retained earnings and changes in cash flow as reported on without qualification by independent certified public accountants acceptable to Lender, all prepared in accordance with GAAP, which financial statements shall show net income of Borrower in excess of $1,000,000. (iii) Prior to each payment under the Subordinated Note, Lender shall have received the unaudited monthly financial statements of Borrower, for the month immediately ending forty-five (45) days prior to each such payment, on a consolidating and consolidated basis including, but not limited to, a long-form balance sheet and related statements of income, retained earnings and changes in cash flow. (iv) At the time of any payment under the Subordinated Note, "Undrawn Availability" shall be greater than the sum of (i) $250,000 plus (ii) the amount of any such payment. For the purposes of this Section, "Undrawn Availability" shall mean the amount available to be loaned to Quality under Section 2.1(a) of the Agreement minus the aggregate balance of loans or advances outstanding under Section 2.1(a) of the Agreement on such date.

Appears in 1 contract

Samples: Revolving Credit, Term Loan and Security Agreement (Us Automotive Manufacturing Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90ninety ( 90 ) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails falls or goes out of business, then than Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations Obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Loan & Security Agreement (Pharmchem Laboratories Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bankwithin twenty (20) days of the last day of each month, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If Except as permitted in Section 1.12 hereof, if any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After the occurrence and during the continuance of a default by Borrower hereunder, no material discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise outside of the ordinary course of business shall be accepted by Borrower without Bank's consent, which shall not be unreasonably withheld. Bank may, after the occurrence and during the continuance of a default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. (a) Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the CollateralCollateral except with respect to Permitted Liens. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank)Permitted Liens. b. (b) All accounts are and will, at all times pertinent hereto, be bona fide existing obligations Obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellationcancellation in excess of an aggregate value of Fifty Thousand and 00/100 Dollars ($50,000) except in the ordinary course of business as Borrower's business is currently operated, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. (c) At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase purchaser orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account Eligible Account is assigned to Bankincluded in the Borrowing Base, all each such eligible accounts Eligible Account will be due and payable on terms set forth in Section 1.1 2, 1.12 hereof or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due. 6.5 Borrower shall keep the Inventory only at the following locations: See Schedule B and the owner or mortgagees of the respective locations are: See Schedule B (a) Borrower, immediately upon demand by Bank, shall now and from time to time hereafter, at such intervals as are requested by Bank, deliver to Bank therefor, designations of Inventory specifying Borrower's cost of Inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; (b) Borrower's Inventory, valued at the lower of Borrower's cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than N/A Dollars ($ N/A ) of which no less than N/A Dollars ($ N/A ) shall be in raw materials and finished goods; (c) All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances except Permitted Liens; (d) Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank's officers, agents and employees for inspection and copying; (e) All Inventory, now and hereafter at all times, shall be new (except for reconditioned units used to fulfill warranty claims) Inventory of good and merchantable quality free from defects; (f) Except for component parts, work in progress and finished goods stored by foreign third party manufacturers, Inventory is not now and shall not at all times hereafter be located or stored with a bailee, warehouseman or other third party without Bank's prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, in a form acceptable to Bank, warehouse receipts in Bank's name evidencing the storage of Inventory or other evidence of Bank's prior rights in the Inventory. In any event, Borrower shall instruct any third party to hold all such Inventory for Bank's account subject to Bank's security interests and its instructions; and (g) Bank shall have the right upon demand now and/or at all times hereafter, during Borrower's usual business hours, upon reasonable prior notice, to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition and Borrower agrees to reimburse Bank for Bank's reasonable costs and expenses in so doing. 6.6 Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank's prior written consent: (a) Grant a security interest in or permit a lien, claim or encumbrance except Permitted Liens upon any of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality; (b) Permit any levy, attachment or restraint to be made affecting any of Borrower's assets; (c) Permit any judicial officer or assignee to be appointed or to take possession of any or all of Borrower's assets; (d) Change its name, business structure, corporate identity or structure; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization other than with Borrower's stock; (e) Move or relocate any Collateral except in accordance with Subsection (n) hereof or otherwise in the normal course of business ; (f) Acquire any other business organization or organizations where the acquisition amount exceeds an aggregate of Two Million and 00/100 Dollars ($2,000,000) other than with Borrower's stock without Bank's prior written consent, which shall not be unreasonably withheld; (g) Enter into any transaction or transactions not in the usual course of Borrower's business in excess of an aggregate of Five Million and 00/100 Dollars ($5,000,000), without Bank's prior written consent, which shall not be unreasonably withheld; (h) Make any change in Borrower's financial structure or in any of its business objectives, purposes or operations which would adversely affect the ability of Borrower to repay Borrower's Obligations; (i) Incur any debts outside the ordinary course of Borrower's business except renewals or extensions of existing debts and interest thereon; (j) Make any advance or loan except in the ordinary course of Borrower's business as currently conducted; (k) Make loans, advances or extensions of credit to any Person, except for sales on open account and otherwise in the ordinary course of business; (l) Guarantee or otherwise, directly or indirectly, in any way be or become responsible for obligations of any other person, whether by agreement to purchase the Indebtedness of any other Person, agreement for furnishing of funds to any other Person through the furnishing of goods, supplies or services, by way of stock purchase, capital contribution, advance or loan, for the purpose of paying or discharging (or causing the payment or discharge of) the Indebtedness of any other person, or otherwise, except for the endorsement of negotiable instruments by Borrower in the ordinary course of business for deposit or collection; (a) Other than sales of Inventory in the ordinary course of Borrower's business, to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower's properties or assets having an aggregate book value of more than Five Million and 00/100 Dollars ($5,000,000) (whether in one transaction or in a series of transactions) without Bank's prior written consent, which shall not be unreasonably withheld; (b) change its name, consolidate with or merge into any other corporation, permit another corporation to merge into it, acquire all or substantially all the properties or assets of any other Person, enter into any reorganization or recapitalization or reclassify its capital stock, or (c) enter into any sale-leaseback transaction; (n) Purchase or hold beneficially any stock or other securities of, or make any investment, except for commercial paper rated A-1 or P-1 by Moody's Ratings, or acquire any interest whatsoever in, any other Person, except for the common stock of the Subsidiaries owned by Borrower on the date of this Agreement, the shares of stock in Infogear and CIDCO Europe currently owned by Borrower, investments or transactions consistent with Borrower's investment policy or as otherwise authorized by Borrower's Board of Directors, and as further consented to by Bank, which consent shall not be unreasonably withheld, and except for certificates of deposit with maturities of one year or less of United States commercial banks with capital, surplus and undivided profits in excess of One Hundred Million Dollars ($100,000,000) and direct obligations of the United States Government maturing within one year from the date of acquisition thereof; (o) Allow any fact, condition or event to occur or exist with respect to any employee pension or profit sharing plans established or maintained by it which might constitute grounds for termination of any such plan or for the court appointment of a trustee to administer any such plan; or (p) Make capital expenditures or lease equipment in an aggregate amount that exceeds Five Million and 00/100 Dollars ($5,000,000) in any fiscal year. 6.7 Borrower is not a merchant who resells goods for personal, family or household purposes.

Appears in 1 contract

Samples: Loan & Security Agreement (Cidco Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's The aggregate amount of the Borrowing Base at all times pertinent hereto during the effectiveness of this Agreement shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's the Borrowing Base in conformity with this Agreement. 6.2 . If any warranty is breached as to any accountAccount, or any account Account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accountsAccounts, whether eligible or ineligible, until all Obligations have indebtedness has been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's loan account with only the net amounts received by Bank in payment of the accountsAccounts, after deducting all Bank Expenses in connection therewith. 6.3 . Borrower warrants, represents, covenants and agrees that: a. : Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. ; All accounts Accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account Account due from such account debtor is assigned to Bank. c. ; and At the time each account Account is assigned to Bank, all property giving rise to such account Account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instructioninstructions, bills xxxx of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 . At the time each eligible account Account is assigned to Bank, all such eligible accounts Accounts will be due and payable on terms set forth in Section 1.1 21.17, or on such other terms approved in writing by Bank in advance of the creation of such accounts Accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account Eligible Account will then be past due. Borrower shall keep the inventory only at the following locations: 0000 Xxxxxxx xxxx, Union City, CA, and the owner or mortgages of the respective locations are Crossroads Technology Partners, Nearon Crossroads, LLC. Borrower, immediately upon demand by Bank therefor, shall now and from time to time hereafter, at such intervals as are reasonably requested by Bank, deliver to Bank, designations of inventory specifying Borrower's cost of inventory, the wholesale market value thereof and such other matters and information relating to the inventory as Bank may request. Borrower's inventory, valued at the lower of Borrower's cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than ____________N/A__________ Dollars ($____NA____) of which no less than _____NA_____ Dollars ($____NA____) shall be in raw materials and finished goods; All of the inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank; Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank's officers, agents and employees for inspection and copying; All inventory, now and hereafter at all times, shall be new inventory of good and merchantable quality free from material defects; Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank's prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, warehouse receipts in Bank's name evidencing the storage of inventory and/or an acknowledgment by such bailee of Bank's prior rights in the inventory. In each case in form and substance acceptable to Bank. In any event, Borrower shall instruct any third party to hold all such inventory for Bank's account subject to Bank's security interests and its instructions; and Bank shall have the right upon demand now and/or at all times hereafter, during Borrower's usual business hours, after reasonable notice, to inspect and examine the inventory and to check and test the same as to quality, quantity, value and condition and Borrower agrees to reimburse Bank for Bank's reasonable costs and expenses in so doing. Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank's prior written consent: Grant a security interest in or permit a lien, claim or encumbrance upon any of the Collateral to any person, association, firm, corporation, entity of governmental agency or instrumentality; Permit any levy, attachment or restraint to be made affecting any of Borrower's assets; Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of Borrower's assets; Other than sales of inventory in the ordinary course of Borrower's business, to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower's assets; Change its name, the location of its sole place of business, chief executive office or residence, business structure, corporate identity or structure, form of organization or the state in which it has been formed or organized; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization. Move or relocate any Collateral; Acquire any other business organization; Enter into any transaction not in the usual course of Borrower's business; Make any change in Borrower's financial structure or in any of its business objectives, purposes or operations which would materially adversely affect the ability of Borrower to repay Borrower's indebtedness; Incur any debts outside the ordinary course of Borrower's business except renewals or extensions of existing debts and interest thereon; Make loans, advances or extensions of credit to any Person, except in the ordinary course of business; Guarantee or otherwise, directly or indirectly, in any way be or become responsible for obligations of any other Person, whether by agreement to purchase the indebtedness of any other Person, agreement for the furnishing of funds to any other Person through the furnishing of goods, supplies or services, by way of stock purchase, capital contribution, advance or loan for the purpose of paying or discharging (or causing the payment or discharge of) the indebtedness of any other Person, or otherwise, except for the endorsement of negotiable instruments by Borrower in the ordinary course of business for deposit or collection; Make any payment on account of any Subordinated Debt except for regularly scheduled payments of interest and principal in accordance with the provisions of any Subordination Agreement executed by Bank and the subordinated debt holder, or amend any provision contained in any documentation relating to any such Subordinated Debt without Bank's prior written consent.

Appears in 1 contract

Samples: Loan and Security Agreement (Abaxis Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligibleAccounts, until all Obligations have Indebtedness has been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's ’s name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or on allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's ’s consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's ’s loan account with only the net amounts received by Bank in payment of the accountsAccounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral, subject to Permitted Liens. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (interests, except those in favor of Bank).for Permitted Liens; b. All accounts Accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, liens claims, encumbrances and security interests (interests, except as hold by Bank and except as may be consented tofor Permitted Liens, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, offsets counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account Account due from such account debtor is assigned to Bank.; and c. At the time each account Account is assigned to Bank, all property giving rise to such account Account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, receipts customer's ’s purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent (ILLEGIBLE) such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At Borrower shall keep the Inventory only at the following locations: 0000 Xxxxxxxxx Xxxxx, San Leandro, California (ILLEGIBLE) and the owner or mortgagees of such location is 2101 Xxxxxxxx Associates, LLC. a. Borrower, immediately upon demand by Bank therefor, shall now and from time each eligible account is assigned to time hereafter, at such intervals as are reasonably requested by Bank, deliver to Bank, designations of Inventory specifying Borrower’s cost (ILLEGIBLE) Inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; b. Borrower’s Inventory, valued at the lower of Borrower’s cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than N/A Dollars ($ N/A) of which no less than N/A Dollars ($ N/A shall be in raw materials and finished goods; c. All of the Inventory is and shall remain free from all purchase money or other security interests, liens (ILLEGIBLE) encumbrances, except for Permitted Liens; d. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank’s officers agents and employees for inspection and copying; e. All Inventory, now and hereafter at all times, shall be new Inventory of good and merchantable quality free from material defects; f. Inventory is not now and shall not at any time or times hereafter be located or stored with a (ILLEGIBLE) warehouseman or other third party without Bank’s prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, warehouse receipts (ILLEGIBLE) Bank’s name evidencing the storage of Inventory and/or an acknowledgment by such bailee of Bank’s prior rights in the Inventory, in each case in form and substance acceptable to Bank. In any event, Borrower shall instruct any third party to hold all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian Inventory for Bank’s account subject to Bank’s security interests and its instructions; and g. Bank shall have the right upon demand now and/or at all times hereafter, during Borrower’s usual business hours, after reasonable notice, to inspect and no such eligible account will then be past dueexamine the Inventory and to check and test the same as to quality, quantity value and condition and Borrower agrees to reimburse Bank for Bank’s reasonable costs and expenses in so doing.

Appears in 1 contract

Samples: Loan and Security Agreement (Energy Recovery, Inc.)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. , Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY Ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of or Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 21.12, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due. 6.5 Borrower shall keep the Inventory only at the following locations: _______________ and the owner or mortgages of the respective locations are: _____________________________ a. Borrower, immediately upon demand by Bank therefor, shall now and from time to time hereafter, at such intervals as are requested by Bank, deliver to Bank, designations of Inventory specifying Borrower's cost of inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; b. Borrower's Inventory, valued at the lower of Borrower's cost or the wholesale market value thereof, at all times pertinent hereto shall not be less than N/A Dollars ($_______) of which no less than N/A Dollars ($______ N/A) shall be in raw materials and finished goods; c. All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank; d. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank's officers, agents and employees for inspection and copying; e. All Inventory, now and hereafter at all times, shall be new Inventory of good and merchantable quality free from defects; f. Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank's prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, in a form acceptable to Bank, warehouse receipts in Bank's name evidencing the storage of Inventory or other evidence of Bank's prior rights in the Inventory. In any event, Borrower shall instruct any third party to hold all such Inventory for Bank's account subject to Bank's security interests and its instructions; and g. Bank shall have the right upon demand now and/or at all times hereafter, during Borrower's usual business hours, to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition and Borrower agrees to reimburse Bank for Bank's reasonable costs and expenses in so doing. 6.6 Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank's prior written consent, SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD: x. Xxxxx a security interest in or permit a lien, claim or encumbrance upon any of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality; b. Permit any levy, attachment or restraint to be made affecting any of Borrower's assets; c. Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of Borrower's assets; d. Other than sales of Inventory in the ordinary course of Borrower's business, to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower's assets, OTHER THAN RENTAL EQUIPMENT OR AS OTHERWISE PERMITTED HEREUNDER; e. Change its name, business structure, corporate identity or structure; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization; f. Move or relocate any Collateral; g. Acquire any other business organization FOR A PURCHASE PRICE EXCEEDING $250,000.00; h. Enter into any transaction not in the usual course of Borrower's business; i. Make any investment in securities of any person, association, firm, entity, or corporation other than the securities of the United States of America OR CASH EQUIVALENT WITH THE MATURITY OF LESS THAN 180 DAYS; j. Make any change in Borrower's financial structure or in any of its business objectives, purposes or operations which would adversely effect the ability of Borrower to repay Borrower's Obligations; k. Incur any debts outside the ordinary course of Borrower's business except renewals or extensions of existing debts and interest thereon. IT IS SPECIFICALLY AGREED THAT BORROWER MAY, PROVIDED IT IS NOT IN DEFAULT HEREUNDER, SECURE ADDITIONAL DEBT FOR ITS RENTAL EQUIPMENT; l. Make any advance or loan except in the ordinary course of Borrower's business as currently conducted, NOT TO EXCEED, IN THE AGGREGATE, FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00).

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Showpower Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY Ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account Eligible Account is assigned to Bank, all such eligible accounts Eligible Accounts will be due and payable on terms set forth in Section 1.1 21.12, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Jmar Technologies Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's The aggregate amount of the Borrowing Base at all times pertinent hereto during the effectiveness of this Agreement shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's the Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any accountAccount, or any account Account is not paid in full by an account debtor within NINETY sixty (9060) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts Accounts owing by that account debtor, and reduce Borrower's the Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accountsAccounts, whether eligible or ineligible, until all Obligations have Indebtedness has been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's ’s name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's ’s consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's ’s loan account with only the net amounts received by Bank in payment of the accountsAccounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Subject to any Permitted Liens, Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of BankBank and except for Permitted Liens).; b. All accounts Accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank.further except for Permitted Liens); c. At the time each account Account is assigned to Bank, all property giving rise to such account Account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, to the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's ’s purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank; and d. Borrower shall permit representatives of Bank to conduct, up to once per year beginning on the first anniversary of this Agreement, an audit of Borrower’s books and records relating to the Accounts, Inventory and other Collateral and make extracts therefrom, with results satisfactory to Bank, provided that Bank shall use its best efforts to not interfere with the conduct of Borrower’s business, and to the extent possible to arrange for verification of the Accounts directly with the account debtors obligated thereon or otherwise, all under reasonable procedures acceptable to Bank and at Borrower’s sole expense; provided, further, that, prior to an Event of Default, Borrower shall not be responsible for the expense of more than one (1) such audit, in any fiscal year. Borrower hereby acknowledges and agrees that upon completion of any such audit Bank shall have the right to reasonably adjust the Borrowing Base percentage, in its sole and reasonable discretion, based on its review of the results of such collateral audit; provided, further, that if Bank makes an adjustment to the Borrowing Base percentage that results in there being an Event of Default, Borrower shall have a period of thirty (30) days following receipt of written notice from Bank of such Event of Default in which to cure the Event of Default. 6.4 At the time each eligible account Eligible Account and each Eligible Foreign Account is assigned to Bank, all such eligible accounts Eligible Accounts and Eligible Foreign Accounts will be due and payable on terms set forth in Section 1.1 2Sections 1.16 and 1.17 respectively, or on such other terms approved in writing by Bank in advance of the creation of such accounts Accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account Account will then be past due. 6.5 Borrower shall keep the Inventory at Borrower’s address set forth in the first paragraph of this Agreement or at the locations more particularly referenced on Exhibit E. a. All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank and except for Permitted Liens; b. Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, its cost therefor and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank’s officers, agents and employees for inspection and copying; and c. Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank’s prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, warehouse receipts in Bank’s name evidencing the storage of Inventory and/or an acknowledgment by such bailee of Bank’s prior rights in the Inventory, in each case in form and substance acceptable to Bank. In any event, Borrower shall instruct any third party to hold all such Inventory for Bank’s account subject to Bank’s security interests and its instructions. 6.6 Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank’s prior written consent: a. Xxxxx a security interest in or permit a lien, claim or encumbrance upon any of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality, except for Permitted Liens; b. Permit any levy, attachment or restraint to be made affecting any of Borrower’s assets, except for Permitted Liens; c. Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of Borrower’s assets; d. Other than sales of Inventory in the ordinary course of Borrower’s business or for dispositions permitted in clause (m) of this Section 6.6 below or for transactions having an aggregate book value of not more than One Hundred Thousand and No/100 Dollars ($100,000.00) (whether in one transaction or in a series of transactions), to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower’s assets; e. Change its name, the location of its sole place of business, chief executive office or residence, business structure, corporate identity or structure, form of organization or the state in which it has been formed or organized; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization; f. Move or relocate any Collateral other than in the ordinary course of Borrower’s business; g. Acquire any other business organization except as disclosed on Exhibit G; h. Enter into any transaction not in the usual course of Borrower’s business; i. Make any change in Borrower’s financial structure or in any of its business objectives, purposes or operations which would materially adversely affect the ability of Borrower to repay Borrower’s Indebtedness; j. Incur any debts other than Permitted Indebtedness; k. Make loans, advances or extensions of credit to any Person, except in the ordinary course of business; l. Guarantee or otherwise, directly or indirectly, in any way be or become responsible for obligations of any other Person, whether by agreement to purchase the indebtedness of any other Person, agreement for the furnishing of funds to any other Person through the furnishing of goods, supplies or services, by way of stock purchase, capital contribution, advance or loan, for the purpose of paying or discharging (or causing the payment or discharge of) the indebtedness of any other Person, or otherwise, except for the endorsement of negotiable instruments by Borrower in the ordinary course of business for deposit or collection; m. Except for ordinary course distributions from ProLink Solutions, LLC to ProLink Holdings Corp., make any distribution or declare or pay any dividend (in stock or in cash) to any member or shareholder (as applicable); n. Purchase or hold beneficially any stock or other securities of, or make any investment or acquire any securities or other interest whatsoever in, any other Person, except for the membership interest of ProLink Solutions, LLC owned by ProLink Holdings Corp. on the date of this Agreement and except for certificates of deposit with maturities of one year or less of United States commercial banks with capital, surplus and undivided profits in excess of One Hundred Million Dollars ($100,000,000) and the securities or other direct obligations of the United States Government maturing within one year from the date of acquisition thereof; and o. Allow any fact, condition or event to occur or exist with respect to any employee pension or profit sharing plans established or maintained by it which might constitute grounds for termination of any such plan or for the court appointment of a trustee to administer any such plan. 6.7 Borrower represents, warrants, covenants and agrees that: a. Borrower’s true and correct legal name is that set forth on the signature page to this Agreement. Except as disclosed in writing to Bank on or before the date of this Agreement or as set forth in the certificate of incorporation or certificate of formation provided to the Bank, Borrower has not done business under any name other than that set forth on the signature page to this Agreement; b. Borrower is and shall at all times hereafter be duly organized and/or incorporated and existing in good standing under the laws of the state of Delaware and qualified and licensed in all states in which it is required to do so; c. Borrower has the right and power and is duly authorized to enter into this Agreement; and d. The execution by Borrower of this Agreement shall not constitute a breach of any provision contained in Borrower’s Organizational Documents. 6.8 The execution of and performance by Borrower of all of the terms and provisions contained in this Agreement shall not result in a breach of or constitute an event of default under any agreement to which Borrower is now or hereafter becomes a party. 6.9 Borrower shall promptly notify Bank in writing of its acquisition by purchase, lease or otherwise of any after acquired property of the type included in the Collateral having an aggregate book value of more than One Hundred Thousand and No/100 Dollars ($100,000.00) (whether in one transaction or in a series of transactions), with the exception of purchases of Inventory in the ordinary course of business. 6.10 All assessments and taxes, whether real, personal or otherwise, due or payable by, or imposed, levied or assessed against, Borrower or any of its property have been paid, and shall hereafter be paid in full, before delinquency, except to the extent contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP. Borrower shall make due and timely payment or deposit of all federal, state and local taxes, assessments or contributions required of it by law (except as otherwise permitted by the immediately preceding sentence), and will execute and deliver to Bank, on demand, appropriate certificates attesting to the payment or deposit thereof. Borrower will make timely payment or deposit of all F.I.C.A. payments and withholding taxes required of it by applicable laws, and will upon request furnish Bank with proof satisfactory to it that Borrower has made such payments or deposit. If Borrower fails to pay any such assessment, tax, contribution, or make such deposit, or furnish the required proof, Bank may, in its sole and absolute discretion and without notice to Borrower, (I) make payment of the same or any part thereof, or (ii) set up such reserves in Borrower’s loan account as Bank deems necessary to satisfy the liability therefor, or both. Bank may conclusively rely on the usual statements of the amount owing or other official statements issued by the appropriate governmental agency. Each amount so paid or deposited by Bank shall constitute a Bank Expense and an additional advance to Borrower. 6.11 There are no material actions or proceedings pending by or against Borrower before any court or administrative agency and Borrower has no knowledge of any pending, threatened or imminent litigation, governmental investigations or claims, complaints, actions or prosecutions involving Borrower, except as disclosed to Bank and as more particularly referenced in Exhibit B attached hereto. If any of the foregoing arise during the term of the Agreement, Borrower shall immediately notify Bank in writing.

Appears in 1 contract

Samples: Loan and Security Agreement (ProLink Holdings Corp.)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so Borrower and Creditor represent and warrant that Creditor is the lawful owner of the Subordinated Debt and no part thereof has been assigned to, or subordinated or subjected to any other security interest in favor of, anyone other than Lender. Until this Agreement expires pursuant to Section 9 hereof, Borrower shall not issue, amend or modify any instrument, security or other writing evidencing any part of the Subordinated Debt except with the prior written approval of Lender or at the request of and in the manner requested by BankLender if the effect of such issuance, amendment or modification has the effect of (i) increasing the interest rate or rates on any of the Subordinated Debt, (ii) advancing the scheduled payment dates of interest or principal or final maturity date of any of the Subordinated Debt, (iii) making any covenant more restrictive on Borrower shall(except that if Lender changes any covenant in the Loan Agreement, at such intervals designated by BankCreditor and Borrower may make a similar change in the corresponding covenant contained in Subordinated Debt documents), during (iv) increasing the term hereof execute and deliver a Report amount of Accounts Receivable any fees payable under the Subordinated Debt documents (other than customary default waiver or similar reportamendment fees), in form customarily used by Bank(v) causing any “Event of Default” under the any Subordinated Debt documents to be less favorable to Borrower, or (vi) imposing any express restrictions on Borrower’s ability to make payments on the Superior Debt. Borrower's Borrowing Base at Creditor agrees that it will not transfer, assign or subordinate all times pertinent hereto or any portion of the Subordinated Debt without the prior written consent of Lender, which consent shall not be lose than unreasonably withheld, conditioned or delayed and provided that such any such transferee, assignee or other person to which rights are granted by Creditor under the advances made hereunder. Bank shall have Subordinated Debt becomes bound to the right obligations to recompute Borrower's Borrowing Base in conformity with Lender under this Agreement. 6.2 If . Creditor shall promptly provide Lender with notice of any warranty is breached as to any accountdefault or event of default (along with a description of the default) under the Subordinated Debt Note, the Stock Purchase Agreement, or any account is not paid in full by an account debtor within NINETY (90) days from the date of invoice, or an account debtor disputes liability or makes other instrument evidencing any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, Subordinated Debt as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment well as written notice of the accounts, after deducting all Bank Expenses in connection therewithcure or waiver of said default. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank). b. All accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account will then be past due.

Appears in 1 contract

Samples: Debt Subordination Agreement (Sten Corp)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's Borrowing Base at all times pertinent hereto shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any account, or any account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts owing by that account debtor, and reduce Borrower's Borrowing Base by the amount thereof. Bank shall may retain its security interest in all Receivables and accounts, whether eligible or ineligible, until all Obligations (other than inchoate indemnity obligations) have been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by After the occurrence of an account debtor or otherwise recovered shall be set asideEvent of Default and during the continuance thereof, marked with Bank's name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's consent. Bank may, after default by Borrower, settle or adjust REVOLVING CREDIT LOAN & SECURITY AGREEMENT (Accounts & Inventory) disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's account with only the net amounts received by Bank in payment of the accounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (a "Lien") (except those in favor of Bank except for Permitted Liens). "Permitted Liens" shall mean (i) the Lien in favor of Bank). b. All accounts , (ii) any Liens existing on the date of this Agreement and disclosed to Bank prior to signing this Loan and Security Agreement, (iii) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings and as to which adequate reserves are maintained on Borrower's Books in accordance with GAAP, provided the same have no priority over any of Bank's security interests; (iv) Liens (a) upon or in any equipment acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition of such equipment, or (b) existing on such equipment at the time of its acquisition, provided that -------- the Lien is confined solely to the property so acquired and willimprovements thereon, at all times pertinent heretoaccessions and additions thereto, be bona fide existing obligations created replacements and proceeds thereof; (v) leases or subleases and licenses or sublicenses granted to others in the ordinary course of Borrower's business not interfering in any material respect with the business of Borrower, and any interest or title of a lessor, licensor or under any lease or license provided that such leases, subleases, licenses and sublicenses do not prohibit the grant of a security interest to Bank; (vi) easements, reservations rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances affecting real property; (vii) xxxxxxx'x courier's or materialmen's Liens or other similar statutory or common law Liens incurred in the ordinary course of Borrower's business; (viii) Liens that are not prior to the Lien of Bank which constitute rights of set-off of a customary nature or bankers' Liens with respect to amounts of deposit, whether arising by the sale and delivery operation of merchandise law or the rendition of services to account debtors by contract, in connection with arrangements entered into with banks in the ordinary course of business, free of liens, claims, encumbrances ; (ix) earn-out and security interests (except as hold by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account due from such account debtor is assigned to Bank. c. At the time each account is assigned to Bank, all property giving rise to such account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's purchase orders, shipping instruction, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account is assigned to Bank, all such eligible accounts will be due and payable on terms set forth in Section 1.1 2, or on such other terms approved in writing by Bank in advance of the creation of such accounts and which are expressly set forth royalty obligations existing on the face of all invoices, copies of which shall be held date hereof or entered into in connection with an acquisition permitted by Borrower as custodian for Bank, and no such eligible account will then be past duethis addendum.

Appears in 1 contract

Samples: Revolving Credit Loan & Security Agreement (Pointcast Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 6.1 If so requested by Bank, Borrower shall, at such intervals designated by Bank, during the term hereof execute and deliver a Report of Accounts Receivable or similar report, in form customarily used by Bank. Borrower's The aggregate amount of the Borrowing Base at all times pertinent hereto during the effectiveness of this Agreement shall not be lose less than the advances made hereunder. Bank shall have the right to recompute Borrower's the Borrowing Base in conformity with this Agreement. 6.2 If any warranty is breached as to any accountAccount, or any account Account is not paid in full by an account debtor within NINETY ninety (90) days from the date of invoice, or an account debtor disputes liability or makes any claim with respect thereto, or a petition in bankruptcy or other application for relief under the Bankruptcy Code or any other insolvency law is filed by or against an account debtor, or an account debtor makes an assignment for the benefit of creditors, becomes insolvent, fails or goes out of business, then Bank may deem ineligible any and all accounts Accounts owing by that account debtor, and reduce Borrower's the Borrowing Base by the amount thereof. Bank shall retain its security interest in all Receivables and accountsAccounts, whether eligible or ineligible, until all Obligations have Indebtedness has been fully paid and satisfied. Returns and allowances, if any, as between Borrower and its customers, will be on the same basis and in accordance with the usual customary practices of the Borrower, as they exist at this time. Any merchandise which is returned by an account debtor or otherwise recovered shall be set aside, marked with Bank's ’s name, and Bank shall retain a security interest therein. Borrower shall promptly notify Bank of all disputes and claims and settle or adjust them on terms approved by Bank. After default by Borrower hereunder, no discount, credit or allowance shall be granted to any account debtor by Borrower and no return of merchandise shall be accepted by Borrower without Bank's ’s consent. Bank may, after default by Borrower, settle or adjust disputes and claims directly with account debtors for amounts and upon terms which Bank considers advisable, and in such cases Bank will credit Borrower's ’s loan account with only the net amounts received by Bank in payment of the accountsAccounts, after deducting all Bank Expenses in connection therewith. 6.3 Borrower warrants, represents, covenants and agrees that: a. (a) Borrower has good and marketable title to the Collateral. Bank has and shall continue to have a first priority perfected security interest in and to the Collateral. The Collateral shall at all times remain free and clear of all liens, encumbrances and security interests (except those in favor of Bank).; b. (b) All accounts Accounts are and will, at all times pertinent hereto, be bona fide existing obligations created by the sale and delivery of merchandise or the rendition of services to account debtors in the ordinary course of business, free of liens, claims, encumbrances and security interests (except as hold held by Bank and except as may be consented to, in writing, by Bank) and are unconditionally owed to Borrower without defenses, disputes, offsets, offsets counterclaims, rights of return or cancellation, and Borrower shall have received no notice of actual or imminent bankruptcy or insolvency of any account debtor at the time an account Account due from such account debtor is assigned to Bank.; and c. (c) At the time each account Account is assigned to Bank, all property giving rise to such account Account shall have been delivered to the account debtor or to the agent for the account debtor for immediate shipment to, and unconditional acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank may from time to time require, delivery receipts, customer's ’s purchase orders, shipping instructioninstructions, bills of lading and any other evidence of shipping arrangements. Absent such a request by Bank, copies of all such documentation shall be held by Borrower as custodian for Bank. 6.4 At the time each eligible account Account is assigned to Bank, all such eligible accounts Eligible Accounts will be due and payable on terms set forth in Section 1.1 21.16, or on such other terms approved in writing by Bank in advance of the creation of such accounts Accounts and which are expressly set forth on the face of all invoices, copies of which shall be held by Borrower as custodian for Bank, and no such eligible account Eligible Account will then be past due. 6.5 Borrower shall keep the Inventory only at the locations listed on Schedule 6.5 (a) Borrower, immediately upon demand by Bank _herefore, shall now and from time to time hereafter, at such intervals as are reasonably requested by Bank, deliver to Bank, designations of Inventory specifying Borrower’s cost of Inventory, the wholesale market value thereof and such other matters and information relating to the Inventory as Bank may request; (b) All of the Inventory is and shall remain free from all purchase money or other security interests, liens or encumbrances, except as held by Bank; (c) Borrower does now keep and hereafter at all times shall keep correct and accurate records itemizing and describing the kind, type, quality and quantity of the Inventory, its cost _herefore and selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available upon demand to any of Bank’s officers, agents and employees for inspection and copying; (d) All Inventory, now and hereafter at all times, shall be new Inventory of good and merchantable quality free from material defects; (e) Inventory is not now and shall not at any time or times hereafter be located or stored with a bailee, warehouseman or other third party without Bank’s prior written consent, and, in such event, Borrower will concurrently therewith cause any such bailee, warehouseman or other third party to issue and deliver to Bank, warehouse receipts in Bank’s name evidencing the storage of Inventory and/or an acknowledgment by such bailee of Bank’s prior rights in the Inventory, in each case in form and substance acceptable to Bank, in any event, Borrower shall instruct any third party to hold all such Inventory for Bank’s account subject to Bank’s security interests and its instructions; and (f) Bank shall have the right upon demand now and/or at all times hereafter, during Borrower’s usual business hours, after reasonable notice, to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition and Borrower agrees to reimburse Bank for Bank’s reasonable costs and expenses in so doing. 6.6 Borrower represents, warrants and covenants with Bank that Borrower will not, without Bank’s prior written consent: (a) Grant a security interest in or permit a lien, claim or encumbrance upon any of the Collateral to any person, association, firm, corporation, entity or governmental agency or instrumentality; (b) Permit any levy, attachment or restraint to be made affecting any of Borrower’s assets; (c) Permit any Judicial Officer or Assignee to be appointed or to take possession of any or all of Borrower’s assets; (d) Other than sales of Inventory in the ordinary course of Borrower’s business, to sell, lease, or otherwise dispose of, move, or transfer, whether by sale or otherwise, any of Borrower’s assets at any one time exceeding Fifty Thousand ($50,000) in value; (e) Change its name, the location of its sole place of business, chief executive office or residence, business structure, corporate identity or structure, form of organization or the state in which it has been formed or organized; add any new fictitious names, liquidate, merge or consolidate with or into any other business organization; (f) Move or relocate any Collateral; (g) Acquire any other business organization; (h) Enter into any transaction not in the usual course of Borrower’s business; (i) Make any change in Borrower’s financial structure or in any of its business objectives, purposes or operations which would materially adversely affect the ability of Borrower to repay Borrower’s Indebtedness; (j) Incur any debts outside the ordinary course of Borrower’s business except renewals or extensions of existing debts and interest thereon; (k) Make loans, advances or extensions of credit to any Person, except in the ordinary course of business; (1) Guarantee or otherwise, directly or indirectly, in any way be or become responsible for obligations of any other Person, whether by agreement to purchase the indebtedness of any other Person, agreement for the furnishing of funds to any other Person through the furnishing of goods, supplies or services, by way of stock purchase, capital contribution, advance or loan, for the purpose of paying or discharging (or causing the payment or discharge of) the indebtedness of any other Person, or otherwise, except for the endorsement of negotiable instruments by Borrower in the ordinary course of business for deposit or collection;

Appears in 1 contract

Samples: Loan and Security Agreement (Hemacare Corp /Ca/)

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