Collection of Accounts Clause Samples
The Collection of Accounts clause establishes the rights and responsibilities regarding the collection of outstanding receivables or debts owed to a party. Typically, it outlines which party is authorized to pursue payment, the procedures for remitting collected funds, and any limitations or obligations related to the collection process. For example, in a sale of business assets, the seller may retain the right to collect accounts receivable that accrued before the sale date. This clause ensures clarity over who controls and benefits from the collection of accounts, thereby preventing disputes and facilitating smooth financial transitions between parties.
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Collection of Accounts. (a) Borrower shall establish and maintain, at its expense, blocked accounts or lockboxes and related blocked accounts (in either case, "Blocked Accounts"), as Lender may specify, with such banks as are acceptable to Lender into which Borrower shall promptly deposit and direct its account debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner. The banks at which the Blocked Accounts are established shall enter into an agreement, in form and substance satisfactory to Lender, providing that all items received or deposited in the Blocked Accounts are the property of Lender, that the depository bank has no lien upon, or right to setoff against, the Blocked Accounts, the items received for deposit therein, or the funds from time to time on deposit therein and that the depository bank will wire, or otherwise transfer, in immediately available funds, on a daily basis, all funds received or deposited into the Blocked Accounts to such bank account of Lender as Lender may from time to time designate for such purpose ("Payment Account"). Borrower agrees that all payments made to such Blocked Accounts or other funds received and collected by Lender, whether on the Accounts or as proceeds of Inventory or other Collateral or otherwise shall be the property of Lender.
(b) For purposes of calculating the amount of the Loans available to Borrower, such payments will be applied (conditional upon final collection) to the Obligations on the business day of receipt by Lender of immediately available funds in the Payment Account provided such payments and notice thereof are received in accordance with Lender's usual and customary practices as in effect from time to time and within sufficient time to credit Borrower's loan account on such day, and if not, then on the next business day. For the purposes of calculating interest on the Obligations, such payments or other funds received will be applied (conditional upon final collection) to the Obligations one (1) business day following the date of receipt of immediately available funds by Lender in the Payment Account provided such payments or other funds and notice thereof are received in accordance with Lender's usual and customary practices as in effect from time to time and within sufficient time to credit Borrower's loan account on such day, and if not, then on the nex...
Collection of Accounts. 43 5.4 Payments ............................................................................. 44 5.5 Authorization to Make Loans .......................................................... 44 5.6
Collection of Accounts. The Lender, at any time or from time to time following the occurrence of an Event of Default which is a continuing Event of Default, and unless and until the same is cured (if Borrower has the right to cure such Event of Default hereunder) may terminate the Borrower's authority to collect the Accounts and-may exercise any or all of the rights contained herein to directly collect all Accounts. Upon such a termination of the Borrower's authority, the Lender shall have the right to send notice of assignment or notice of the Lender's security interest to any and all customers or any third party holding or otherwise concerned with any of the Accounts, and thereafter the Lender shall have the sole right to collect the Receivables and take possession of the Accounts and Records relating thereto. All of the Lender's collection expenses shall be charged to the Borrower's account and added to the Obligations. If the Lender is collecting the Accounts as provided, the Lender shall have the right to receive, indorse, assign and deliver in the Lender's name or the Borrower's name any and all checks, drafts and other instruments for the payment of money relating to the Accounts, and the Borrower hereby waives notice of presentment, protest and non-payment of any instrument so endorsed. If the Lender is collecting the Accounts, directly as above provided, the Borrower hereby constitutes the Lender or the Lender's designee as the Borrower's attorney-in-fact with power with respect to the Accounts: (a) to indorse the Borrower's name upon any note, acceptances, checks, drafts, money orders or other evidences of payment that may come into the Lender's possession; (b) to sign the Borrower's name on any invoice relating to any of the Accounts, drafts against customers, assignments and verifications of Accounts and notices to Customers; (c) to send verifications of Accounts to any customer; (d) to notify the Post Office authorities to change the address for delivery of mail addressed to the Borrower; (f) to do all other acts and things necessary, proper, or convenient to carry out the terms and conditions and purposes and intent of this Agreement. All acts of such attorney or designee are hereby ratified and approved, and such attorney or designee shall not be liable for any acts of omission or commission other than acts of intentional wrongdoing, nor for any error of judgment or mistake of fact of law in accordance with this Agreement. The power of attorney hereby granted, bein...
Collection of Accounts. (a) American Ski and the Borrowers shall establish and maintain, at their expense, deposit account arrangements with the Agent and the other banks set forth on SCHEDULE 2.17 hereto and after prior written notice to the Agent, such other banks as any Borrower may hereafter select that are acceptable to the Agent. The banks set forth on SCHEDULE 2.17 constitute all of the banks with whom American Ski, any Borrower and any Restricted Subsidiary has deposit account arrangements as of the date hereof and identifies each of the deposit accounts at such banks to an operating location of such Borrower or otherwise describes the nature of the use of such deposit account by such Borrower.
(b) Each Borrower shall deposit all proceeds (other than amounts of cash, not to exceed $100,000 for any location operated by such Borrower, for opening cash at such location consistent with past practices so long as no Default exists or has occurred) from sales of goods or services in every form, including, without limitation, cash, checks, credit or debit card sales drafts, credit or debit card sales or charge slips or receipts and other forms of daily receipts, from each location of each Borrower on each Business Day into the concentration accounts of the Borrowers identified to each Borrower location as set forth on SCHEDULE 2.17.
(c) For purposes of calculating interest on the Lender Obligations, the payments or other funds received pursuant to paragraph (b) above after 2:00 p.m. (Boston time) on any day will be applied (conditional upon final collection) to the Lender Obligations one (1) Business Day following the date of receipt of immediately available funds by the Agent from the concentration accounts identified on SCHEDULE 2.17. For purposes of calculating the amount of the Revolving Credit Advances or Swing Line Loans available to the Borrowers, such payments will be applied (conditional upon final collection) to the Lender Obligations on the Business Day of receipt by the Agent in the concentration accounts identified on SCHEDULE 2.17, if such payments are received within sufficient time (in accordance with the Agent's usual and customary practices as in effect from time to time) to credit Borrowers' loan account on such day, and if not, then on the next Business Day. All such payments shall be applied by the Agent FIRST to any outstanding Swing Line Loans and SECOND, at the Agent's election and in accordance with the provisions of Section 4.2(a), to any outstanding Rev...
Collection of Accounts. The Debtor shall, upon receipt of all checks, drafts, cash, and other remittances in payment of or on account of the Accounts, cause the same to be deposited in the Collateral Reserve Account. The remittance of the proceeds of such Accounts shall not, however, constitute payment or liquidation of such Accounts until the Collateral Agent as agent for the Secured Parties shall receive good funds for such proceeds. For purposes of computing interest, the Collateral Agent shall treat deposited checks, drafts and other items as collected in accordance with the Collateral Agent’s normal availability schedule, but in doing so the Collateral Agent is not agreeing that such funds have in fact been paid, nor is the Collateral Agent as agent for the Secured Parties waiving any right it may have to charge back returned items to the Debtor and to collect interest on such charged-back items. Funds placed in the Collateral Reserve Account shall be held by the Collateral Agent as agent for the Secured Parties as security for the Secured Obligations. These proceeds shall be deposited in precisely the form received, except for the endorsement of the Debtor where necessary to permit collection of items, which endorsement the Debtor agrees to make, and which endorsement the Collateral Agent is also hereby authorized to make on behalf of the Debtor. Pending such deposit, the Debtor agrees that it will not commingle any such checks, drafts, cash or other remittances with any funds or other property of the Debtor but will hold them separate and apart therefrom, and upon an express trust for the Collateral Agent until deposit thereof is made in the Collateral Reserve Account. The Collateral Agent as agent for the Secured Parties shall have the right, upon the occurrence and during the continuance of any Default or Event of Default, to apply the funds on deposit in the Collateral Reserve Account against the Obligations in such order of application as is required by the Credit Agreement.
Collection of Accounts. 26 2.8 Crediting Payments; Application of Collections...........................................26 2.9
Collection of Accounts. Borrower shall continue to collect its Accounts in the ordinary course of business.
Collection of Accounts. Borrower shall at all times maintain lockboxes (the "Lockboxes") and, immediately after the Closing Date, shall instruct all Account Debtors with respect to the Accounts, General Intangibles, and Negotiable Collateral of Borrower to remit all Collections in respect thereof to such Lockboxes. Borrower, Foothill, and the Lockbox Banks shall enter into the Lockbox Agreements, which among other things shall provide for the opening of a Lockbox Account for the deposit of Collections at a Lockbox Bank. Borrower agrees that all Collections and other amounts received by Borrower from any Account Debtor or any other source immediately upon receipt shall be deposited into a Lockbox Account. No Lockbox Agreement or arrangement contemplated thereby shall be modified by Borrower without the prior written consent of Foothill. Upon the terms and subject to the conditions set forth in the Lockbox Agreements, all amounts received in each Lockbox Account shall be wired each Business Day into an account (the "Foothill Account") maintained by Foothill at a depositary selected by Foothill.
Collection of Accounts. Borrower shall have the right to collect all Accounts, unless and until a Default or an Event of Default has occurred and is continuing. Whether or not an Event of Default has occurred and is continuing, Borrower shall hold all payments on, and proceeds of, Accounts in trust for Silicon, and Borrower shall immediately deliver all such payments and proceeds to Silicon in their original form, duly endorsed, to be applied to the Obligations in such order as Silicon shall determine. Silicon may, in its good faith business judgment, require that all proceeds of Collateral be deposited by Borrower into a lockbox account, or such other “blocked account” as Silicon may specify, pursuant to a blocked account agreement in such form as Silicon may specify in its good faith business judgment.
Collection of Accounts. Borrower shall direct Account Debtors to deliver or transmit all proceeds of Accounts into a lockbox account, or such other “blocked account” as specified by Bank (either such account, the “Cash Collateral Account”). Whether or not an Event of Default has occurred and is continuing, Borrower shall immediately deliver all payments on and proceeds of Accounts to the Cash Collateral Account. Subject to Bank’s right to maintain a reserve pursuant to Section 6.3(d), all amounts received in the Cash Collateral Account shall be (i) when a Streamline Period is not in effect, applied to immediately reduce the Obligations under the Revolving Line (unless Bank, in its sole discretion, at times when an Event of Default exists, elects not to so apply such amounts), or (ii) when a Streamline Period is in effect, transferred on a daily basis to Borrower’s operating account with Bank. Borrower hereby authorizes Bank to transfer to the Cash Collateral Account any amounts that Bank reasonably determines are proceeds of the Accounts (provided that Bank is under no obligation to do so and this allowance shall in no event relieve Borrower of its obligations hereunder).