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. 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) Borrowers shall establish and maintain, at its expense, blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”), as Administrative and Collateral Agent may specify, with such banks as are reasonably acceptable to Administrative and Collateral Agent into which Borrowers shall promptly deposit and direct their respective account debtors to directly remit all payments on Receivables 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. Borrowers shall deliver, or cause to be delivered to Administrative and Collateral Agent, a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account is maintained as provided in Section 5.2 hereof or at any time and from time to time Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, may become bank’s customer with respect to the Blocked Accounts and promptly upon Administrative and Collateral Agent’s request, Borrowers shall execute and deliver such agreements or documents as Administrative and Collateral Agent may require in connection therewith. Notwithstanding anything to the contrary contained herein or in any Deposit Account Control Agreement relating to a Blocked Account, Administrative and Collateral Agent shall not issue to any bank at which a Blocked Account is maintained a notice of sole control or other such instruction providing that the funds in such deposit accounts are to be automatically on each Business Day be remitted directly to the Payment Account and that Borrowers are not permitted to access or otherwise direct such funds unless either (i) an Event of Default or a Default with respect to non-payment of the Obligations has occurred or (ii) Excess Availability is less than $40,000,000; provided, that, if either (x) such Event of Default is subsequently waived in accordance with the terms of this Agreement or such Default did not mature into an Event of Default or (y) Modified Adjusted Excess Availability is greater than $40,000,000 at all times thereafter for a period of 60 consecutive days and no Event of Default or Default with respect to non-payment of the Obligations has occurred, Administrative and Collateral Agent shall promptly rescind such notice of sole control or other such instructions (any such period during which the Blo...
Collection of Accounts. 43 5.4 Payments ............................................................................. 44 5.5 Authorization to Make Loans .......................................................... 44 5.6
Collection of Accounts. 26 2.8 Crediting Payments; Application of Collections...........................................26 2.9
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 continue to collect its Accounts in the ordinary course of business.
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. Upon the occurrence and pendancy of an Event of Default, Agent may require Borrower to maintain lockboxes (the "Lockboxes") and instruct all Account Debtors to remit all amounts owed by them to one of such Lockboxes. Borrower, Agent, 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 the applicable Lockbox Bank. Notwithstanding the Borrower's cure of any Events of Default, Agent may continue to require Borrower to comply with the provisions of this section. Borrower agrees that all Collections received by Borrower while the provisions of this section are in effect from any Account Debtor or any other source immediately upon receipt shall be deposited into a Lockbox Account or into deposit accounts that are not the subject of a Lockbox Agreement and from which Borrower shall remit all funds contained therein to one of the Lockbox Accounts (any such deposit account, a "Qualified Local Deposit Account"); PROVIDED, HOWEVER, Borrower shall maintain no more than 50 Qualified Local Deposit Accounts; PROVIDED FURTHER, HOWEVER, that all Collections received into such Qualified Local Deposit Accounts shall be wired directly or indirectly no less frequently than weekly to the Concentration Account. No Lockbox Agreement or other arrangement contemplated thereby shall be modified by Borrower without the prior written consent of Agent. Upon the terms and subject to the conditions set forth in the Lockbox Agreements, all amounts received in each Lockbox Account shall be wired directly or indirectly each Business Day into the Concentration Account. All amounts received in the Concentration Account shall be wired each Business Day into an account (the "Agent's Account") maintained by Agent at a depository selected by Agent.
Collection of Accounts. (a) Borrowers shall establish and maintain, at their expense, blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”), with such banks as are reasonably acceptable to Agent into which, Borrowers shall promptly deposit and direct their respective account debtors to directly remit all payments on Receivables 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. Borrowers shall deliver, or cause to be delivered to Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account is maintained as provided in Section 5.2 hereof. Prior to the occurrence of a Cash Management Event, Borrowers shall be permitted to transfer cash from the Blocked Accounts and to use funds therein for working capital and general corporate purposes to the extent permitted herein. Upon the occurrence of a Cash Management Event, (i) each Borrower and Guarantor agrees that all payments made to such Blocked Accounts or other funds received and collected by Agent or any Lender, whether in respect of the Receivables, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Agent and Lenders in respect of the outstanding Obligations and therefore shall constitute the property of Agent and Lenders to the extent of the then outstanding Obligations, and (ii) Agent may disregard Borrowers’ instructions with respect to the Blocked Accounts and exercise exclusive dominion and control over the Blocked Accounts and apply funds deposited therein as provided herein. Agent’s right to exercise exclusive dominion and control over the Blocked Accounts shall continue in effect only until the occurrence of a Cash Management Reinstatement Event, unless a subsequent Cash Management Event shall occur, whereupon Agent shall have the rights of exclusive dominion and control as described herein.
(b) For purposes of calculating the amount of the Loans available to each Borrower, such payments will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Agent of immediately available funds in the Agent Payment Account provided such payments and notice thereof are received in accordance with Agent’s usual and customary practices as in effect from time to time and within sufficient time to credit such Borrower’s loan account on such day, a...