Collateral Administration. (a) All Collateral (except funds required to be deposited in the Lockbox Accounts) will at all times be kept by Borrower at the locations (including warehouses) set forth on Schedule 5.18 hereto and shall not, without concurrent written notice to Lender, be moved therefrom and in any case shall not be moved outside the continental United States. (b) Borrower shall keep accurate and complete records of its Accounts and all payments and collections thereon and shall submit such records to Lender on such periodic basis as Lender may request. After the occurrence and during the continuance of an Event of Default, and upon Lender’s request, Borrower shall execute and deliver to Lender formal written assignments of all of its Accounts weekly or daily as Lender may request, including all Accounts created since the date of the last assignment, together with copies of invoices and/or other information related thereto. To the extent that collections from such assigned Accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of Borrower, but shall be available to Borrower upon Borrower’s written request. (c) Any of Lender’s officers, employees, representatives or agents shall have the right, at any time during normal business hours upon reasonable prior notice to Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrower. Borrower shall cooperate fully with Lender in an effort to facilitate and promptly conclude such verification. (d) Lender shall have the right at all times after the occurrence and during the continuance of an Event of Default to notify Account Debtors owing Accounts to Borrower that their Accounts have been assigned to Lender and to collect such Accounts directly in its own name and to charge collection costs and expenses, including reasonable attorneys’ fees, to Borrower. (e) As and when determined by Lender in its Permitted Discretion, Lender shall have the right to perform the searches described in clauses (i) and (ii) below against Borrower and Guarantors (the results of which are to be consistent with Borrower’s representations and warranties under this Agreement), at Borrower’s reasonable expense: (i) UCC searches with the Secretary of State and local filing offices of each jurisdiction where Borrower maintains its executive offices, a place of business or assets or in which they are organized; and (ii) judgment and federal, state and local tax lien searches, in each jurisdiction searched under clause (i) above. (f) Borrower (i) shall provide prompt written notice to its current bank to transfer all items, collections and remittances to the Concentration Account, (ii) shall direct each Account Debtor to make payments to the Lockbox Account as set forth in Section 2.5, and Borrower hereby authorizes Lender, upon any failure to send such notices and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor), to send any and all similar notices and directions to such Account Debtors, and (iii) shall do anything further that may be lawfully required by Lender to secure Lender and effectuate the intentions of the Loan Documents. (g) As of the Closing Date, no Borrower has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account or commodities account of Borrowers is maintained). (h) Borrowers will conduct a physical count of the Inventory at least twice per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries. (i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries. (j) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts. (k) Without limiting the generality of Sections 2.10(g) and (j): (A) Borrowers shall deliver to Lender all tangible Chattel Paper and all Instruments and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents. (B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender. (C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim. (D) Except for Accounts and Inventory in an aggregate amount of $25,000, no Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; provided, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit. (E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender. (F) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof. (G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may request, to comply with any such applicable Law. (H) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.
Appears in 1 contract
Sources: Credit and Security Agreement (ALKALINE WATER Co INC)
Collateral Administration. (a) All Collateral (except funds required to be deposited in the Lockbox Accounts) will at all times be kept by Borrower at the locations (including warehouses) set forth on Schedule 5.18 hereto and shall not, without concurrent written notice to Lender, be moved therefrom and in any case shall not be moved outside the continental United States.
(b) Borrower shall keep accurate and complete records of its Accounts and all payments and collections thereon and shall submit such records to Lender on such periodic basis as Lender may request. After the occurrence and during the continuance of an Event of Default, and upon Lender’s request, Borrower shall execute and deliver to Lender formal written assignments of all of its Accounts weekly or daily as Lender may request, including all Accounts created since the date of the last assignment, together with copies of invoices and/or other information related thereto. To the extent that collections from such assigned Accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of Borrower, but shall be available to Borrower upon Borrower’s written request.
(c) Any of Lender’s officers, employees, representatives or agents shall have the right, at any time during normal business hours upon reasonable prior notice to Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrower. Borrower shall cooperate fully with Lender in an effort to facilitate and promptly conclude such verification.
(d) Lender shall have the right at all times after the occurrence and during the continuance of an Event of Default to notify Account Debtors owing Accounts to Borrower that their Accounts have been assigned to Lender and to collect such Accounts directly in its own name and to charge collection costs and expenses, including reasonable attorneys’ fees, to Borrower.
(e) As and when determined by Lender in its Permitted Discretion, Lender shall have the right to perform the searches described in clauses (i) and (ii) below against Borrower and Guarantors (the results of which are to be consistent with Borrower’s representations and warranties under this Agreement), at Borrower’s reasonable expense: (i) UCC searches with the Secretary of State and local filing offices of each jurisdiction where Borrower maintains its executive offices, a place of business or assets or in which they are organized; and (ii) judgment and federal, state and local tax lien searches, in each jurisdiction searched under clause (i) above.
(f) Borrower (i) shall provide prompt written notice to its current bank to transfer all items, collections and remittances to the Concentration Account, (ii) shall direct each Account Debtor to make payments to the Lockbox Account as set forth in Section 2.5, and Borrower hereby authorizes Lender, upon any failure to send such notices and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor), to send any and all similar notices and directions to such Account Debtors, and (iii) shall do anything further that may be lawfully required by Lender to secure Lender and effectuate the intentions of the Loan Documents.
(g) As of the Closing Date, no Borrower has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account or commodities account of Borrowers is maintained).
(h) Borrowers will conduct a physical count of the Inventory at least twice once per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries.
(i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries.
(j) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(k) Without limiting the generality of Sections 2.10(g) and (j):
(A) Borrowers shall deliver to Lender all tangible Chattel Paper and all Instruments and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents.
(B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender.
(C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim.
(D) Except for Accounts and Inventory in an aggregate amount of $25,000, no Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; provided, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit.
(E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender.
(F) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof.
(G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may reasonably request, to comply with any such applicable Law.
(H) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.
Appears in 1 contract
Collateral Administration. (a) All Collateral (except funds required to be deposited in the Lockbox Accounts) will at all times be kept by Borrower at the locations (including warehouses) set forth on Schedule 5.18 hereto and shall not, without concurrent written notice to Lender, be moved therefrom and in any case shall not be moved outside the continental United StatesStates or Canada, as applicable.
(b) Borrower shall keep accurate and complete records of its Accounts and all payments and collections thereon and shall submit such records to Lender on such periodic basis as Lender may request. After the occurrence and during the continuance of an Event of Default, and upon Lender’s request, Borrower shall execute and deliver to Lender formal written assignments of all of its Accounts weekly or daily as Lender may request, including all Accounts created since the date of the last assignment, together with copies of invoices and/or other information related thereto. To the extent that collections from such assigned Accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of Borrower, but shall be available to Borrower upon Borrower’s written request.
(c) Any of Lender’s officers, employees, representatives or agents shall have the right, at any time during normal business hours upon reasonable prior notice to Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrower. Borrower shall cooperate fully with Lender in an effort to facilitate and promptly conclude such verification.
(d) Lender shall have the right at all times after the occurrence and during the continuance of an Event of Default to notify Account Debtors owing Accounts to Borrower that their Accounts have been assigned to Lender and to collect such Accounts directly in its own name and to charge collection costs and expenses, including reasonable attorneys’ fees, to Borrower.
(e) As and when determined by Lender in its Permitted Discretion, Lender shall have the right to perform the searches described in clauses (i) and (ii) below against Borrower and any Guarantors (the results of which are to be consistent with Borrower’s representations and warranties under this Agreement), at Borrower’s reasonable expense: (i) UCC searches with the Secretary of State and local filing offices of each jurisdiction where Borrower maintains its executive offices, a place of business or assets or in which they are organized; and (ii) judgment and federal, state and local tax lien searches, in each jurisdiction searched under clause (i) above.
(f) Borrower (i) shall provide prompt written notice to its current bank to transfer all items, collections and remittances to the Concentration Account, (ii) shall direct each Account Debtor to make payments to the Lockbox Account as set forth in Section 2.5, and Borrower hereby authorizes Lender, upon any failure to send such notices and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor), to send any and all similar notices and directions to such Account Debtors, and (iii) shall do anything further that may be lawfully required by Lender to secure Lender and effectuate the intentions of the Loan Documents.
(g) As of the Closing Date, except as disclosed on Schedule 5.3, no Borrower has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts Securities Accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account Securities Account or commodities account of Borrowers is maintained).
(h) Borrowers will conduct a physical count of the Inventory at the locations which contain Eligible Inventory at least twice once per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries.
(i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries.
(j) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(k) Without limiting the generality of Sections 2.10(g) and (j):
(A) Borrowers shall deliver to Lender all tangible Chattel Paper and all Instruments and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents.
(B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender.
(C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim.
(D) Except for Accounts and Inventory in an aggregate amount of $25,000, no No Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; provided, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit.
(E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender.
(F) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof.
(G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may request, to comply with any such applicable Law.
(H) Borrower shall provide Lender with a letter agreement acceptable in form and substance to Lender with regards to each manufacturer of Borrower that as of the Closing Date and from time to time thereafter accounts at any time for five percent (5%) or more of Borrower’s aggregate Inventory pursuant to which such manufacturer shall (i) consent to the assignment by Borrower to Lender of all of Borrower’s rights and remedies under such manufacturing agreement and (ii) upon the occurrence of an Event of Default hereunder, agree to work with Lender to complete the production of any Inventory that manufacturer is manufacturing on behalf of Borrower at such time.
(I) Borrower shall provide Lender with a collateral assignment acceptable in form and substance to Lender of each Services Outsourcing Agreement entered into by Borrower as of the Closing Date from time to time thereafter, including without limitation the ▇▇▇▇▇▇▇ Agreement, which collateral assignment shall be by and between Borrower and Lender and acknowledged by each Servicer party to such Services Outsourcing Agreement.
(J) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.
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Collateral Administration. (a) All Collateral (except funds required to be deposited in the Lockbox Accounts) will at all times be kept by Borrower at the locations (including warehouses) set forth on Schedule 5.18 hereto and shall not, without concurrent written notice to Lender, be moved therefrom and in any case shall not be moved outside the continental United States.
(b) Borrower shall keep accurate and complete records of its Accounts and all payments and collections thereon and shall submit such records to Lender on such periodic basis as Lender may request. After the occurrence and during the continuance of an Event of Default, and upon Lender’s request, Borrower shall execute and deliver to Lender formal written assignments of all of its Accounts weekly or daily as Lender may request, including all Accounts created since the date of the last assignment, together with copies of invoices and/or other information related thereto. To the extent that collections from such assigned Accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of Borrower, but shall be available to Borrower upon Borrower’s written request.
(c) Any of Lender’s officers, employees, representatives or agents shall have the right, at any time during normal business hours upon reasonable prior notice to Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrower. Borrower shall cooperate fully with Lender in an effort to facilitate and promptly conclude such verification.
(d) Lender shall have the right at all times after the occurrence and during the continuance of an Event of Default to notify Account Debtors owing Accounts to Borrower that their Accounts have been assigned to Lender and to collect such Accounts directly in its own name and to charge collection costs and expenses, including reasonable attorneys’ fees, to Borrower.
(e) As and when determined by Lender in its Permitted Discretion, Lender shall have the right to perform the searches described in clauses (i) and (ii) below against Borrower and Guarantors (the results of which are to be consistent with Borrower’s representations and warranties under this Agreement), at Borrower’s reasonable expense: (i) UCC searches with the Secretary of State and local filing offices of each jurisdiction where Borrower maintains its executive offices, a place of business or assets or in which they are organized; and (ii) judgment and federal, state and local tax lien searches, in each jurisdiction searched under clause (i) above.
(f) Borrower (i) shall provide prompt written notice to its current bank to transfer all items, collections and remittances to the Concentration Account, (ii) shall direct each Account Debtor to make payments to the Lockbox Account as set forth in Section 2.5, and Borrower hereby authorizes Lender, upon any failure to send such notices and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor), to send any and all similar notices and directions to such Account Debtors, and (iii) shall do anything further that may be lawfully required by Lender to secure Lender and effectuate the intentions of the Loan Documents.
(g) As of the Closing Date, no Borrower has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts Securities Accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account Securities Account or commodities account of Borrowers is maintained).
(h) Borrowers will conduct a physical count of the Inventory at least twice per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries.
(i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries.
(j) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(k) Without limiting the generality of Sections 2.10(g) and (j):
(A) Borrowers shall deliver to Lender all tangible Chattel Paper and all Instruments and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents.
(B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender.
(C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim.
(D) Except for Accounts and Inventory in an aggregate amount of $25,00025,000 and Inventory or other Collateral in transit, no Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; provided, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit.
(E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender.
(F) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof.
(G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may request, to comply with any such applicable Law.
(H) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.
Appears in 1 contract
Collateral Administration. (a) All Collateral (except funds required to be deposited in the Lockbox Controlled Deposit Accounts) will at all times be kept by Borrower Borrowers at the locations set forth on Schedule 5.17B (including warehouses) set forth on Schedule 5.18 hereto and shall not, without concurrent written notice to Lender, be moved therefrom and in any case shall not be moved outside the continental United States.
(b) Borrower Borrowers shall in all material respects keep accurate and complete records of its their Accounts and all payments and collections thereon and shall submit such records to Lender on such periodic basis as Lender may request. After the occurrence and during the continuance of an Event of Default, and upon Lender’s request, Borrower Borrowers shall execute and deliver to Lender formal written assignments of all of its their Accounts weekly or daily as Lender may request, including all Accounts created since the date of the last assignment, together with copies of claims, invoices and/or or other information related thereto. To the extent that collections from such assigned Accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of BorrowerBorrowers, but shall be available to Borrower Borrowers upon Borrower’s Borrowers’ written request.
(c) Any of Lender’s officers, employees, representatives or agents shall have the right, at any time during normal business hours upon reasonable prior notice to BorrowerBorrowers, to verify the validity, amount or any other matter relating to any Accounts of BorrowerAccounts. Borrower Borrowers shall cooperate fully with Lender in an effort to facilitate and promptly conclude such verification.
(d) Lender shall have the right at all times after the occurrence and during the continuance of an Event of Default to notify Account Debtors owing Accounts to Borrower Borrowers that their Accounts have been assigned to Lender and to collect such Accounts directly in its own name and to charge collection costs and expenses, including reasonable attorneys’ fees, to BorrowerBorrowers.
(e) As and when determined by Lender in its Permitted Discretion, Lender shall have the right to perform the searches described in clauses (i) and (ii) below against Borrower Borrowers and Guarantors (the results of which are to be consistent with Borrower’s Borrowers’ representations and warranties under this Agreement), at Borrower’s Borrowers’ reasonable expense: (i) UCC searches with the Secretary of State and or local filing offices of the state where each jurisdiction where Borrower maintains its executive offices, a place of business or assets or in which they are is organized; and (ii) judgment and bankruptcy, judgment, federal, state and local tax lien and litigation searches, in each jurisdiction searched under clause (i) abovein which such actions, or Liens may be recorded.
(f) Borrower Borrowers (i) shall provide prompt written notice to its their current bank to transfer all items, collections and remittances to the Concentration Account, (ii) shall direct each Account Debtor to make payments to the Lockbox appropriate Controlled Deposit Account as set forth in Section 2.5, and Borrower Borrowers hereby authorizes authorize Lender, upon any failure to send such notices and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor), to send any and all similar notices and directions to such Account Debtors, and (iii) shall do anything further that may be lawfully required by Lender to secure Lender and effectuate the intentions of the Loan Documents.
(g) As of the Closing Date, no Borrower has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account or commodities account of Borrowers is maintained).
(h) Borrowers will conduct a physical count of the Inventory at least twice per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries.
(i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries.
(j) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(k) Without limiting the generality of Sections 2.10(g) and (j):
(A) Borrowers shall deliver to Lender all tangible Chattel Paper and all Instruments and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents.
(B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender.
(C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim.
(D) Except for Accounts and Inventory in an aggregate amount of $25,000, no Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; provided, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit.
(E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender.
(F) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof.
(G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may request, to comply with any such applicable Law.
(H) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.and
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Collateral Administration. (a) All Collateral (except funds required to be deposited As and when determined by the Administrative Agent or the Requisite Lenders in its or their reasonable discretion, upon the Lockbox Accounts) will at all times be kept by Borrower occurrence and during the continuation of a Default or an Event of Default, the Administrative Agent or the Requisite Lenders may, at the locations (including warehouses) set forth on Schedule 5.18 hereto Borrower’s expense, perform UCC, judgment, litigation, tax Lien and shall notother similar searches, without concurrent written notice to Lender, be moved therefrom and in any case shall not be moved outside jurisdictions determined by the continental United StatesAdministrative Agent or the Requisite Lenders from time to time, against any Loan Party.
(b) Borrower The Borrower, and Manager, as applicable, shall keep accurate and complete records of its Accounts the Customer Agreements and all payments and collections Collections thereon and shall submit such records to Lender the Administrative Agent on such periodic basis (and at least quarterly) as Lender the Administrative Agent or the Requisite Lenders may reasonably request. After If requested by the Administrative Agent upon the occurrence and during the continuance continuation of an Event of Default, the Borrower, and upon Lender’s requesteach other Loan Party, Borrower as applicable, shall execute and deliver to Lender the Administrative Agent, formal written assignments or allonges, in form and substance reasonably acceptable to the Administrative Agent, of any or all of its Accounts weekly or daily the Customer Agreements as Lender the Administrative Agent may reasonably request, including all Accounts created since the date of the last assignment, together with copies of claims, invoices and/or other information related thereto. To the extent that collections from such assigned Accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of Borrower, but shall be available to Borrower upon Borrower’s written request.
(c) Any of LenderThe Borrower shall, upon the Collateral Agent’s officers, employees, representatives or agents shall have the right, at any time during normal business hours written request upon reasonable prior notice to Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrower. Borrower shall cooperate fully with Lender in an effort to facilitate and promptly conclude such verification.
(d) Lender shall have the right at all times after the occurrence and during the continuance continuation of an Event of Default to notify Account Debtors owing Accounts to Borrower that their Accounts have been assigned to Lender and to collect such Accounts directly in its own name and to charge collection costs and expensesDefault, including reasonable attorneys’ fees, to Borrower.
(e) As and when determined by Lender in its Permitted Discretion, Lender shall have the right to perform the searches described in clauses (i) and (ii) below against Borrower and Guarantors (the results of which are to be consistent with Borrower’s representations and warranties under this Agreement), at Borrower’s reasonable expense: (i) UCC searches with the Secretary of State and local filing offices of each jurisdiction where Borrower maintains its executive offices, a place of business or assets or in which they are organized; and (ii) judgment and federal, state and local tax lien searches, in each jurisdiction searched under clause (i) above.
(f) Borrower (i) shall provide prompt written notice to its current bank each Customer that the Collateral Agent has been granted a Lien on and security interest in, upon and to transfer all items, collections Customer Agreements payable by such Customer and remittances to the Concentration Account, (ii) shall direct each Account Debtor to make payments to the Lockbox Account as set forth in Section 2.5, and Borrower hereby authorizes Lender, upon any failure to send such notices and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor), to send any and all similar notices and directions to such Account Debtors, and (iii) shall do anything further that may be lawfully required under Applicable Law and requested in writing by Lender the Administrative Agent or the Requisite Lenders in their reasonable discretion to secure Lender the Collateral Agent’s interest in the Collateral and effectuate the intentions of the Loan Documentsthis Agreement.
(g) As of the Closing Date, no Borrower has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account or commodities account of Borrowers is maintained).
(h) Borrowers will conduct a physical count of the Inventory at least twice per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries.
(i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries.
(j) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(k) Without limiting the generality of Sections 2.10(g) and (j):
(A) Borrowers shall deliver to Lender all tangible Chattel Paper and all Instruments and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents.
(B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender.
(C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim.
(D) Except for Accounts and Inventory in an aggregate amount of $25,000, no Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; provided, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit.
(E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender.
(F) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof.
(G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may request, to comply with any such applicable Law.
(H) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.
Appears in 1 contract
Sources: Loan and Security Agreement (Frontier Communications Parent, Inc.)
Collateral Administration. (a) All Collateral (except funds required to be deposited in the Lockbox Deposit Accounts) will at all times be kept by Borrower at the locations (including warehouses) set forth on Schedule 5.18 5.18B hereto and shall not, without concurrent thirty (30) calendar days prior written notice to Lender, be moved therefrom therefrom, and in any case shall not be moved outside the continental United States.
(b) Borrower shall keep accurate and complete records of its Accounts and all payments and collections thereon and shall submit such records to Lender on such periodic basis bases as Lender may request. After In addition, if Accounts of Borrower in an aggregate face amount in excess of $35,000 become ineligible because they fall within one of the specified categories of ineligibility set forth in the definition of Eligible Receivables, Borrower shall notify Lender of such occurrence with the next succeeding Borrowing Certificate containing an aging report as required in Section 2.4, and the Borrowing Base shall thereupon be adjusted to reflect such occurrence. If requested by Lender after the occurrence and or during the continuance continuation of an Event of Default, and upon Lender’s request, Borrower shall execute and deliver to Lender formal written assignments of all of its Accounts weekly or daily as Lender may request, including all Accounts created since the date of the last assignment, together with copies of claims, invoices and/or other information related thereto. To the extent that collections from such assigned Accounts accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of Borrower, but shall be available to Borrower upon Borrower’s written request.
(c) Any Whether or not an Event of Default has occurred, any of Lender’s officers, employees, representatives or agents shall have the right, at any time during normal business hours upon reasonable prior notice to hours, in the name of Lender, any designee of Lender or Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrower. Borrower shall cooperate fully with Lender in an effort to facilitate and promptly conclude such verificationverification process.
(d) To expedite collection, Borrower shall endeavor in the first instance to make collection of its Accounts for Lender. Lender shall have the right at all times after the occurrence and during the continuance of an Event of Default to notify (i) Account Debtors owing Accounts to Borrower other than Medicaid/Medicare Account Debtors that their Accounts have been assigned to Lender and to collect such Accounts directly in its own name and to charge collection costs and expenses, including reasonable attorneys’ attorney’s fees, to Borrower, and (ii) Medicaid/Medicare Account Debtors that Borrower has waived any and all defenses and counterclaims it may have or could interpose in any such action or procedure brought by Lender to obtain a court order recognizing the collateral assignment or security interest and lien of Lender in and to any Account or other Collateral and that Lender is seeking or may seek to obtain a court order recognizing the collateral assignment or security interest and lien of Lender in and to all Accounts and other Collateral payable by Medicaid/Medicare Account Debtors.
(e) As and when determined by Lender in its Permitted Discretionsole discretion, Lender shall have the right to will perform the searches described in clauses (i) and (ii) below against Borrower and Guarantors (the results of which are to be consistent with Borrower’s representations and warranties under this Agreement), all at Borrower’s reasonable expense: (i) UCC searches with the Secretary of State of the jurisdiction of organization of each Borrower and Guarantor and the Secretary of State and local filing offices of each jurisdiction where Borrower maintains its and/or any Guarantors maintain their respective executive offices, a place of business or assets or in which they are organizedassets; (ii) lien searches with the United States Patent and Trademark Office and the United States Copyright Office; and (iiiii) judgment judgment, federal tax lien and federal, state corporate and local partnership tax lien searches, in each jurisdiction searched under clause (i) above.
(f) Borrower (i) shall provide prompt written notice to its current bank to transfer all items, collections and remittances to the Concentration Account, (ii) shall provide prompt written notice to each Account Debtor (other than Medicaid/Medicare Account Debtors) that Lender has been granted a lien and security interest in, upon and to all Accounts applicable to such Account Debtor and shall direct each Account Debtor to make payments to the appropriate Lockbox Account as set forth in Section 2.5Account, and Borrower hereby authorizes Lender, upon any failure to send such notices and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor), to send any and all similar notices and directions to such Account Debtors, and (iii) shall do anything further that may be lawfully required by Lender to secure Lender create and perfect Lender’s lien on any collateral and effectuate the intentions of the Loan Documents.
(g) As of the Closing Date. At Lender’s request, no Borrower has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account or commodities account of Borrowers is maintained).
(h) Borrowers will conduct a physical count of the Inventory at least twice per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries.
(i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries.
(j) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(k) Without limiting the generality of Sections 2.10(g) and (j):
(A) Borrowers shall immediately deliver to Lender all tangible Chattel Paper items for which Lender must receive possession to obtain a perfected security interest and all Instruments notes, certificates, and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignmenttitle, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legendPaper, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents.
(B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender.
(C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim.
(D) Except for Accounts and Inventory in an aggregate amount of $25,000, no Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; providedInstruments, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit.
(E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender.
(F) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof.
(G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may request, to comply with any such applicable Lawsimilar instruments constituting Collateral.
(H) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.
Appears in 1 contract
Sources: Revolving Credit and Security Agreement (Occupational Health & Rehabilitation Inc)
Collateral Administration. (a) All Collateral (except funds required to be deposited Deposit Accounts and equipment located at the premises of clients and used in the Lockbox Accountstheir ordinary course of business) will at all times be kept by Borrower Borrowers at the locations (including warehouses) set forth on Schedule 5.18 hereto 5.18B hereto, and such other locations as Borrowers shall notidentify to Agent upon ten (10) calendar days prior written notice, without concurrent written notice to Lender, be moved therefrom and in any case shall not be moved outside the continental United States.
(b) Each Borrower shall keep accurate and complete records of its Accounts and all payments and collections thereon and shall submit such records to Lender Agent on such periodic basis bases as Lender Agent may request. After In addition, if Accounts of any Borrower in an aggregate face amount in excess of $200,000 become ineligible because they fall within one of the specified categories of ineligibility set forth in the definition of Eligible Receivables, Borrowers shall notify Agent of such occurrence on the first Business Day following such occurrence and the Borrowing Base shall thereupon be adjusted to reflect such occurrence. If requested by Agent, after the occurrence and during the continuance of an Event of Default, and upon Lender’s request, Borrower Borrowers shall execute and deliver to Lender Agent formal written assignments of all of its Accounts weekly or daily as Lender Agent may request, including all Accounts created since the date of the last assignment, together with copies of claims, invoices and/or other information related thereto. To the extent that collections from such assigned Accounts accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of BorrowerBorrowers, but shall be available to Borrower Borrowers upon Borrower’s Borrowers' written request.
(c) Any Whether or not an Event of Lender’s Default has occurred, any of Agent's officers, employees, representatives or agents shall have the right, at any time during normal business hours upon reasonable prior notice to hours, in the name of Agent, any designee of Agent or any Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrower; provided that unless an Event of Default has occurred and is continuing, such verification shall only verify account balances and shall not give notice of Agent's security interest. Borrower Borrowers shall cooperate fully with Lender Agent in an effort to facilitate and promptly conclude such verificationverification process.
(d) Lender To expedite collection, each Borrower shall endeavor in the first instance to make collection of its Accounts for Agent. Agent shall have the right at all times after the occurrence and during the continuance of an Event of Default to notify (i) Account Debtors owing Accounts to Borrower Borrowers other than Medicaid/Medicare Account Debtors that their Accounts have been assigned to Lender Agent and to collect such Accounts directly in its own name and to charge collection costs and expenses, including reasonable attorneys’ attorney's fees, to BorrowerBorrowers, and (ii) Medicaid/Medicare Account Debtors that Borrowers have waived any and all defenses and counterclaims they may have or could interpose in any such action or procedure brought by Agent to obtain a court order recognizing the collateral assignment or security interest and lien of Agent in and to any Account or other Collateral payable by Medicaid/Medicare Account Debtors and that Agent is seeking or may seek to obtain a court order recognizing the collateral assignment or security interest and lien of Agent in and to all Accounts and other Collateral payable by Medicaid/Medicare Account Debtors.
(e) As and when determined by Lender Agent in its Permitted Discretion, Lender shall have the right to Agent will perform the searches described in clauses (i) and (ii) below against Borrower Borrowers and Guarantors (the results of which are to be consistent with Borrower’s Borrowers' representations and warranties under this Agreement), all at Borrower’s reasonable Borrowers' expense: (i) UCC searches with the Secretary of State and local filing offices of each jurisdiction where any Borrower maintains its and/or any Guarantors are organized and/or maintain their respective executive offices, a place of business or assets or in which they are organizedassets; and (ii) judgment judgment, federal tax lien and federal, state corporate and local partnership tax lien searches, in each jurisdiction searched under clause (i) above, provided that unless an Event of Default shall have occurred and during the continuance thereof, the Borrowers shall not be required to pay for more than one such search in any fiscal quarter under clause (i) and clause (ii) above.
(f) Borrower Borrowers (i) shall provide prompt written notice to its current bank to transfer all items, collections and remittances to the Concentration Account, (ii) shall direct provide prompt written notice to each Account Debtor (other than a Private Pay Debtor) directing them to make payments to the appropriate Lockbox Account as set forth in Section 2.5Account, and Borrower Borrowers hereby authorizes LenderAgent, upon any failure to send such notices notice and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor (other than a Private Pay Debtor)), to send any and all similar notices and directions to such Account Debtors, Debtors and (iii) shall do anything such further acts and deeds that may be lawfully required by Lender Agent to secure Lender and effectuate the intentions of the Loan Documents.
(g) As of the Closing Datemake, no Borrower has any ownership create, maintain, continue or perfect Agent's security interest in any the Lockbox Accounts or the Collateral. At Agent's request, Borrowers shall immediately deliver to Agent all items for which Agent must receive possession to obtain a perfected security interest and all notes, certificates, and documents of title, Chattel Paper (as defined in Article 9 of the UCC)Paper, letter of credit rights, commercial tort claimswarehouse receipts, Instruments, documents or investment property (and any other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (similar instruments constituting Collateral except for such control arising by operation of law promissory notes in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account or commodities account of Borrowers is maintained).
(h) Borrowers will conduct a physical count of principal amount less than $100,000 provided that the Inventory at least twice per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values aggregate principal amount of all or any portion of Inventory owned by each Borrower or any Subsidiaries.
(i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries.
(j) Borrowers such promissory notes shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts$500,000.
(k) Without limiting the generality of Sections 2.10(g) and (j):
(A) Borrowers shall deliver to Lender all tangible Chattel Paper and all Instruments and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents.
(B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender.
(C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim.
(D) Except for Accounts and Inventory in an aggregate amount of $25,000, no Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; provided, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit.
(E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender.
(F) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof.
(G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may request, to comply with any such applicable Law.
(H) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.
Appears in 1 contract
Sources: Revolving Credit and Security Agreement (Skilled Healthcare Group Inc)
Collateral Administration. (a) All tangible Collateral (except funds required to be deposited in the excluding Lockbox Accounts) will at all times be kept by Borrower at the locations (including warehouses) set forth on Schedule 5.18 5.18B hereto and shall not, without concurrent thirty (30) calendar days prior written notice to Lender, be moved therefrom therefrom, and in any case shall not be moved outside the continental United States.
(b) Borrower shall keep accurate and complete records of its Accounts and all payments and collections thereon and shall submit such records to Lender on such periodic basis bases as Lender may reasonably request. After In addition, if after the Closing Date, Accounts of Borrower in an aggregate face amount in excess of $25,000 become ineligible because they fall within one of the specified categories of ineligibility set forth in the definition of Eligible Receivables, Borrower shall notify Lender of such occurrence on the first Business Day following such occurrence and during the continuance of an Event of Default, and upon Borrowing Base shall thereupon be adjusted to reflect such occurrence. If requested by Lender’s request, Borrower shall execute and deliver to Lender formal written assignments of all of its Accounts weekly or daily that are Eligible Receivables monthly as Lender may request, including all Accounts that are Eligible Receivables created since the date of the last assignment, together with copies of claims, invoices and/or other information related thereto. To the extent that collections from such assigned Accounts accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of Borrower, but shall be available promptly provided to Borrower upon Borrower(and in any event within two (2) Business Days of Lender’s written requestreceipt).
(c) Any Whether or not an Event of Default has occurred, any of Lender’s officers, employees, representatives or agents shall have the right, at any time during normal business hours upon reasonable prior notice to hours, in the name of Lender, any designee of Lender or Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrower. Borrower shall cooperate fully with Lender in an effort to facilitate and promptly conclude such verificationverification process.
(d) To expedite collection, Borrower shall endeavor in the first instance to make collection of its Accounts for Lender. Lender shall have the right at all times after the occurrence and during the continuance of an Event of Default (i) to notify Account Debtors owing Accounts that are Eligible Receivables to Borrower that their Accounts have been assigned to Lender and (ii) to collect such Accounts directly in its own name and to charge its reasonable and actual collection costs and expenses, including reasonable attorneys’ attorney’s fees, to Borrower.
(e) As Prior to the Closing, as and when determined by Lender in its Permitted Discretion, Lender shall have the right to will perform the searches described in clauses (i) and (ii) below against Borrower and any Guarantor (the results of which are to be consistent with Borrower’s representations): (i) UCC searches with the Secretary of State and local filing offices, as necessary, of each jurisdiction where Borrower and/or any Guarantor maintains its respective executive offices, a place of business or assets; and (ii) judgment, federal tax lien and corporate and partnership tax lien searches, in each jurisdiction searched under clause (i) above. After the Closing, as and when determined by Lender in its Permitted Discretion, Lender will perform the searches described in clauses (x) and (y) below against Borrower and Guarantors (the results of which are to be consistent with Borrower’s representations and warranties under this Agreement), not more often than quarterly at Borrower’s reasonable expense, unless a Default or an Event of Default has occurred and is continuing in which case such searches shall be conducted as often as Lender deems reasonably appropriate at Borrower’s expense: (ix) UCC searches with the Secretary of State and local filing offices offices, as necessary, of each jurisdiction where Borrower maintains and/or any Guarantor is incorporated or formed; and (y) judgment, federal tax lien and corporate and partnership tax lien searches, in each jurisdiction where Borrower and/or any Guarantor maintain its respective executive offices, a place of business or assets or in which they are organized; and (ii) judgment and federal, state and local tax lien searches, in each jurisdiction searched under clause (i) aboveassets.
(f) Borrower (i) shall provide prompt written notice to its current bank to transfer all items, collections and remittances to the Concentration Account, (ii) shall direct each Account Debtor to make payments to the appropriate Lockbox Account as set forth in Section 2.5Account, and Borrower hereby authorizes Lender, upon any failure to send such notices and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor), to send any and all similar notices and directions to such Account Debtors, (ii) shall provide prompt written notice to its current bank to transfer all items, collections and remittances in the Lockbox Accounts to the Concentration Account, (iii) after the occurrence and during the continuance of an Event of Default and upon Lender’s request, shall provide prompt written notice to each Account Debtor that Lender has been granted a lien and security interest in, upon and to all Accounts applicable to such Account Debtor and (iiiiv) shall do anything further that may be lawfully and reasonably required by Lender to secure Lender and effectuate the intentions of the Loan Documents.
(g) As of the Closing Date. At Lender’s request, no Borrower has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account or commodities account of Borrowers is maintained).
(h) Borrowers will conduct a physical count of the Inventory at least twice per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries.
(i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries.
(j) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(k) Without limiting the generality of Sections 2.10(g) and (j):
(A) Borrowers shall immediately deliver to Lender all tangible Chattel Paper items for which Lender must receive possession to obtain a perfected security interest and all Instruments notes, certificates, and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignmenttitle, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legendPaper, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents.
(B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender.
(C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim.
(D) Except for Accounts and Inventory in an aggregate amount of $25,000, no Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; providedInstruments, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit.
(E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender.
(F) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof.
(G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may request, to comply with any such applicable Lawsimilar instruments constituting Collateral.
(H) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.
Appears in 1 contract
Sources: Revolving Credit and Security Agreement (Women First Healthcare Inc)
Collateral Administration. (a) All Collateral (except funds required to be deposited in the Lockbox Accounts) will at all times be kept by Borrower Borrowers at the locations (including warehouses) set forth on Schedule 5.18 5.17B hereto and shall not, without concurrent written notice to Lender, be moved therefrom and in any case shall not be moved outside the continental United States.
(b) Borrower Borrowers shall keep accurate and complete records of its their Accounts and all payments and collections thereon and shall submit such records to Lender on such periodic basis as Lender may request. After the occurrence and during the continuance of an Event of Default, and upon Lender’s request, Borrower Borrowers shall execute and deliver to Lender formal written assignments of all of its their Accounts weekly or daily as Lender may request, including all Accounts created since the date of the last assignment, together with copies of claims, invoices and/or other information related thereto. To the extent that collections from such assigned Accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of BorrowerBorrowers, but shall be available to Borrower Borrowers upon Borrower’s Borrowers’ written request.
(c) Any of Lender’s officers, employees, representatives or agents shall have the right, at any time during normal business hours upon reasonable prior notice to BorrowerBorrowers, to verify the validity, amount or any other matter relating to any Accounts of Borrowers; provided, however, Lender shall provide Borrower with 24 hours prior notice, unless such prior notice is otherwise waived by Borrower, before Lender may visit any of Borrower’s offices or properties or any other place where Collateral is located for the purpose set forth in this Section unless such visit is otherwise permitted hereunder or pursuant to the other Loan Documents; provided, further, upon the occurrence and during the continuance of an Event of Default, Lender shall not be required to give such prior notice to any Borrower. Borrower Borrowers shall cooperate fully with Lender in an effort to facilitate and promptly conclude such verification.
(d) Lender shall have the right at all times after the occurrence and during the continuance of an Event of Default to notify (i) Account Debtors owing Accounts to Borrower Borrowers other than Medicaid/Medicare Account Debtors that their Accounts have been assigned to Lender and to collect such Accounts directly in its own name and to charge collection costs and expenses, including reasonable attorneys’ fees, to BorrowerBorrowers, and (ii) Medicaid/Medicare Account Debtors that Borrowers have waived any and all defenses and counterclaims it may have or could interpose in any action or procedure brought by Lender to obtain a court order recognizing the collateral assignment or security interest and lien of Lender in and to any Account or other Collateral and that Lender is seeking or may seek to obtain a court order recognizing the collateral assignment or security interest and lien of Lender in and to any Account or Collateral and that Lender is seeking or may seek to obtain a court order recognizing the collateral assignment or security interest and lien of Lender in and to all Accounts and other Collateral payable by Medicaid/Medicare Account Debtors.
(e) As and when determined by Lender in its Permitted Discretion, Lender shall have the right to perform the searches described in clauses (i) and (ii) below against Borrower Borrowers and Guarantors (the results of which are to be consistent with Borrower’s Borrowers’ representations and warranties under this Agreement), at Borrower’s Borrowers’ reasonable expense: (i) UCC searches with the Secretary of State and local filing offices of each jurisdiction where Borrower maintains its Borrowers maintain their respective executive offices, a place of business or assets or in which they are organized; and (ii) judgment and bankruptcy, judgment, federal, state and local tax lien searches, in each jurisdiction searched under clause (i) above.
(f) Borrower Borrowers (i) shall provide prompt written notice to its their current bank to transfer all items, collections and remittances to the Concentration Account, (ii) shall direct each Account Debtor to make payments to the appropriate Lockbox Account as set forth in Section 2.5, and Borrower Borrowers hereby authorizes authorize Lender, upon any failure to send such notices and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor), to send any and all similar notices and directions to such Account Debtors, and (iii) shall do anything further that may be lawfully required by Lender to secure Lender and effectuate the intentions of the Loan Documents.
(g) As of the Closing Date, no Borrower has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account or commodities account of Borrowers is maintained).
(h) Borrowers will conduct a physical count of the Inventory at least twice per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries.
(i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries.
(j) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(k) Without limiting the generality of Sections 2.10(g) and (j):
(A) Borrowers shall deliver to Lender all tangible Chattel Paper and all Instruments and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents.
(B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender.
(C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim.
(D) Except for Accounts and Inventory in an aggregate amount of $25,000, no Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; provided, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit.
(E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender.
(Fh) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof.
(G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may request, to comply with any such applicable Law.
(Hi) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.
Appears in 1 contract
Sources: Credit and Security Agreement (Interpace Diagnostics Group, Inc.)
Collateral Administration. (a) All Collateral (except funds required to be deposited in the Lockbox Accountsdeposit accounts) will at all times be kept by Borrower at the locations (including warehousesits principal office(s) as set forth on Schedule 5.18 hereto 4.15 and shall not, without concurrent written notice to Lender, be moved therefrom and in any case shall not be moved outside from such locations without the continental United Statesprior written consent of Lender, which consent shall not be unreasonably withheld.
(b) Borrower shall keep accurate and complete records of its Accounts and all payments and collections thereon and shall submit such records to Lender on such periodic basis as Lender may requestshall request a sales and collections report for the preceding period, in form satisfactory to Lender. After In addition, if Accounts in an aggregate face amount in excess of $50,000.00 become ineligible because they fall within one of the specified categories of ineligibility set forth in the definition of Qualified Accounts or otherwise, Borrower shall notify Lender of such occurrence on the first Business Day following such occurrence and during the continuance of an Event of Default, and upon Borrowing Base shall thereupon be adjusted to reflect such occurrence. If requested by Lender’s request, Borrower shall execute and deliver to Lender formal written assignments of all of its Accounts weekly or daily as Lender may requestdaily, including which shall include all Accounts that have been created since the date of the last assignment, together with copies of claims, invoices and/or or other information related thereto. To the extent that collections from such assigned Accounts exceed the amount of the Obligations, such excess amount shall not accrue interest in favor of Borrower, but shall be available to Borrower upon Borrower’s written request.
(c) Any Whether or not an Event of Default has occurred, any of Lender’s 's officers, employees, representatives employees or agents shall have the right, at any time during normal business hours upon reasonable prior notice to or times hereafter, in the name of Lender or any designee of Lender or Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrowerby mail, telephone, telegraph or otherwise. Borrower shall cooperate fully with Lender in an effort to facilitate and promptly conclude such verificationverification process.
(d) To expedite collection, Borrower shall endeavor in the first instance to make collection of its Accounts for Lender. Lender shall have retains the right at all times after the occurrence and during the continuance of an Event of Default Default, to notify Account Debtors owing Accounts to Borrower that their Accounts have been assigned to Lender and to collect such Accounts directly in its own name and to charge the reasonable collection costs and expenses, ,including reasonable attorneys’ ' fees, to Borrower.
(e) As and when determined by Lender in its Permitted Discretion, Lender shall have the right to perform the searches described in clauses (i) and (ii) below against Borrower and Guarantors (the results of which are to be consistent with Borrower’s representations and warranties under this Agreement), at Borrower’s reasonable expense: (i) UCC searches with the Secretary of State and local filing offices of each jurisdiction where Borrower maintains its executive offices, a place of business or assets or in which they are organized; and (ii) judgment and federal, state and local tax lien searches, in each jurisdiction searched under clause (i) above.
(f) Borrower (i) shall provide prompt written notice to its current bank to transfer all items, collections and remittances to the Concentration Account, (ii) shall direct each Account Debtor to make payments to the Lockbox Account as set forth in Section 2.5, and Borrower hereby authorizes Lender, upon any failure to send such notices and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar days after the Person becomes an Account Debtor), to send any and all similar notices and directions to such Account Debtors, and (iii) shall do anything further that may be lawfully required by Lender to secure Lender and effectuate the intentions of the Loan Documents.
(g) As of the Closing Date, no Borrower has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 5.3) and Borrowers shall give notice to Lender promptly (but in any event not later than the delivery by Borrowers of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the acquisition by any Borrower of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including securities accounts and commodities account), letter of credit rights or electronic chattel paper in which any Borrower has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, securities account or commodities account of Borrowers is maintained).
(h) Borrowers will conduct a physical count of the Inventory at least twice per year and at such other times as Lender requests, and Borrowers shall provide to Lender a written accounting of such physical count in form and substance satisfactory to Lender. Each Borrower will use commercially reasonable efforts to at all times keep its Inventory in good and marketable condition. In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports in form and substance and from appraisers reasonably satisfactory to Lender stating the then current fair market values of all or any portion of Inventory owned by each Borrower or any Subsidiaries.
(i) In addition to the foregoing, from time to time, Lender may require Borrowers to obtain and deliver to Lender appraisal reports, at the Borrower’s expense, in form and substance and from appraisers reasonably satisfactory to Lender stating the then current Orderly Liquidation Values, as required by the Lender, and fair market values of all or any portion of Inventory, Intellectual Property and furniture, fixtures and equipment owned by each Borrower or any Subsidiaries.
(j) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the ordinary course of business, made while no Default exists and in amounts which are not material with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loans outstanding) without the prior written consent of Lender. Without limiting the generality of this Agreement or any other provisions of any of the Loan Documents relating to the rights of Lender after the occurrence and during the continuance of an Event of Default, Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(k) Without limiting the generality of Sections 2.10(g) and (j):
(A) Borrowers shall deliver to Lender all tangible Chattel Paper and all Instruments and documents owned by any Borrower and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Borrower and constituting part of the Collateral by having Lender identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Borrowers also shall deliver to Lender all security agreements securing any such Chattel Paper and securing any such Instruments. Borrowers will ▇▇▇▇ conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to Lender, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Lender created pursuant to this Agreement and the Security Documents.
(B) Borrowers shall deliver to Lender all letters of credit on which any Borrower is the beneficiary and which give rise to letter of credit rights owned by such Borrower which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Lender. Borrowers shall take any and all actions as may be necessary or desirable, or that Lender may request, from time to time, to cause Lender to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Lender.
(C) Borrowers shall promptly advise Lender upon any Borrower becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Borrowers shall, with respect to any such commercial tort claim, execute and deliver to Lender such documents as Lender shall request to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to any such commercial tort claim.
(D) Except for Accounts and Inventory in an aggregate amount of $25,000, no Accounts or Inventory or other Collateral shall at any time be in the possession or control of any warehouse, consignee, bailee or any of Borrowers’ agents or processors without prior written notice to Lender and the receipt by Lender, if Lender has so requested, of warehouse receipts, consignment agreements or bailee lien waivers (as applicable) satisfactory to Lender prior to the commencement of such possession or control; provided, however, that for Collateral located at the Creekside Springs, LLC facilities no such consent shall be required unless the value of the Collateral exceeds $30,000 at any time; provided, further, that for Collateral located at the Unix Packaging, Inc. facility the value of the Collateral shall not exceed $250,000 at any time. Borrower has notified Lender that Inventory is currently located at the locations set forth on Schedule 5.18. Borrowers shall, upon the request of Lender, notify any such warehouse, consignee, bailee, agent or processor of the security interests and Liens in favor of Lender created pursuant to this Agreement and the Loan Documents, instruct such Person to hold all such Collateral for Lender’s account subject to Lender’s instructions and shall obtain an acknowledgement from such Person that such Person holds the Collateral for Lender’s benefit.
(E) Borrowers shall cause all equipment and other tangible Personal Property other than Inventory to be maintained and preserved in the same condition, repair and in working order as when new, ordinary wear and tear excepted, and shall promptly make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Upon request of Lender, Borrowers shall promptly deliver to Lender any and all certificates of title, applications for title or similar evidence of ownership of all such tangible Personal Property and shall cause Lender to be named as lienholder on any such certificate of title or other evidence of ownership. Borrowers shall not permit any such tangible Personal Property to become fixtures to real estate unless such real estate is subject to a Lien in favor of Lender.
(F) Each Borrower acknowledges that Lender is authorized to file without the signature of such Borrower one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Lender as the “secured party” and such Borrower as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Loan Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Borrower now owned or hereafter acquired), in such jurisdictions as Lender from time to time determines are appropriate, and to file without the signature of such Borrower any continuations of or corrective amendments to any such financing statements, in any such case in order for Lender to perfect, preserve or protect the Liens, rights and remedies of Lender with respect to the Collateral. Each Borrower also ratifies its authorization for Lender to have filed in any jurisdiction any initial UCC financing statements or amendments thereto if filed prior to the date hereof.
(G) As of the Closing Date, no Borrower holds, and after the Closing Date Borrowers shall promptly notify Lender in writing upon creation or acquisition by any Borrower of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law. If any Collateral at any time constitutes a claim against a Governmental Authority, upon the request of Lender, Borrowers shall take such steps as may be necessary or desirable, or that Lender may request, to comply with any such applicable Law.
(H) Borrowers shall furnish to Lender from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Lender may reasonably request from time to time.
Appears in 1 contract