Collection of Accounts and Proceeds of Collateral Clause Samples
The "Collection of Accounts and Proceeds of Collateral" clause establishes the lender's rights to collect payments or proceeds generated from the borrower's accounts receivable or other collateral. In practice, this clause typically allows the lender to step in and directly collect money owed to the borrower by third parties if the borrower defaults or under certain specified conditions. For example, the lender may require that all payments on accounts be directed to a special account under its control. The core function of this clause is to protect the lender's interest in the collateral by ensuring it can recover funds directly, thereby reducing the risk of non-payment or misappropriation by the borrower.
Collection of Accounts and Proceeds of Collateral. To expedite collection, Borrowers shall endeavor in the first instance to make collection of Borrowers’ Accounts for Agent and Lenders. All Payment Items received by any Borrower in respect of its Accounts, together with the proceeds of any other Collateral, shall be held by such Borrower as trustee of an express trust for Agent’s benefit and shall immediately deposit same in kind in the Dominion Account. Agent retains the right at all times after the occurrence of an Event of Default to notify Account Debtors of each Borrower that Accounts have been assigned to Agent and to collect Accounts directly in its own name and to charge to Borrowers the collection costs and expenses, incurred by Agent or Lenders, including reasonable attorneys’ fees.
Collection of Accounts and Proceeds of Collateral. To expedite collection of Accounts, each Borrower shall endeavor in the first instance to make collection of such Borrower's Accounts for Agent and Lenders. Borrowers shall request in writing and otherwise take such reasonable steps to ensure that all Account Debtors forward payment directly to such Dominion Account (or lockboxes related to the Dominion Account), and (ii) deposit and cause its Subsidiaries to deposit or cause to be deposited promptly, and in any event no later than the first Business Day after the date of receipt thereof, all cash, checks, drafts or other similar items of payment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a lockbox) into the Dominion Account. Borrowers shall issue to each such lockbox bank an irrevocable letter of instruction directing such bank to deposit all payments or other remittances received in the lockbox to the Dominion Account. All Payment Items received by any Borrower in respect of its Accounts, together with the proceeds of any other Collateral, shall be held by such Borrower as trustee of an express trust for Agent's and Lenders' benefit; Borrowers shall immediately deposit same in kind in the Dominion Account. Agent retains the right at all times that an Event of Default exists to notify Account Debtors of any Borrower that Accounts have been assigned to Agent, to collect Accounts directly in its own name (and, in connection therewith, to settle or adjust all disputes and claims directly with the Account Debtor and to compromise the amount or extend the time for payment of any Accounts upon such terms and conditions as Agent may deem advisable in its reasonable credit judgment and to charge to Borrowers the collection costs and expenses incurred by Agent, including reasonable attorneys' fees).
Collection of Accounts and Proceeds of Collateral. All Payment Items received by any Borrower or any Canadian Subsidiary Guarantor, as applicable, in respect of its Accounts, together with the proceeds of any other Collateral, shall be held by such Borrower or Canadian Subsidiary Guarantor, as applicable, as trustee of an express trust for the applicable Agent’s benefit; such Borrower or such Canadian Subsidiary Guarantor, as applicable, shall immediately deposit same in kind in a Dominion Account for application to the applicable Obligations in accordance with the terms of this Agreement. Each Agent retains the right at all times that a Default or an Event of Default exists to notify Account Debtors of any Borrower or Canadian Subsidiary Guarantor that Accounts have been assigned to Agents and to collect Accounts directly in its own name and to charge to Borrowers or the Canadian Subsidiary Guarantors, as applicable, the collection costs and expenses incurred by the applicable Agent or Lenders, including reasonable attorneys’ fees. Upon the occurrence and during the continuation of a Cash Dominion Event, all monies properly deposited in the U.S. Payment Account shall be deemed to be voluntary prepayments of U.S. Revolver Loans and applied in accordance with Section 5.6 to reduce outstanding U.S. Revolver Loans and all monies properly deposited in the Canadian Payment Account shall be deemed to be voluntary prepayments of Canadian Revolver Loans and applied in accordance with Section 5.6 to reduce outstanding Canadian Revolver Loans.
Collection of Accounts and Proceeds of Collateral. To expedite collection, Borrower shall endeavor in the first instance to make collection of Borrower's
Collection of Accounts and Proceeds of Collateral. To expedite collection, each Borrower shall endeavor in the first instance to make collection of such Borrower’s Accounts for the Administrative Agent and Lenders. Borrowers shall request in writing and otherwise take such reasonable steps to ensure that all Account Debtors forward payment directly to such Dominion Account (or other collection arrangements related to the Dominion Account), and deposit and cause its Subsidiaries to deposit or cause to be deposited promptly, and in any event no later than the first Business Day after the date of receipt thereof, all cash, checks, drafts or other similar items of payment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to pursuant to such collection arrangements) into the Dominion Account. Borrowers shall issue to each bank servicing such collection arrangements an irrevocable letter of instruction directing such bank to deposit all payments or other remittances received by it to the Dominion Account. All Payment Items received by any Borrower in respect of its Accounts, together with the proceeds of any other Collateral, shall be held by such Borrower as trustee of an express trust for the Administrative Agent’s and Lenders’ benefit; such Borrower shall immediately deposit same in kind in the Dominion Account.
Collection of Accounts and Proceeds of Collateral. Unless an Event of Default exists or Availability at any time is less than $5,000,000, Borrower shall have the option to receive all Payment Items in respect of its Accounts, provided, however, if Borrower does not deposit such Payment Items in the Dominion Account, the Loans shall bear interest at the Default Rate until such time as Borrower deposits all such amounts in the Dominion Account. Unless an Event of Default exists or Availability at any time is less than $5,000,000, Borrower may receive all Payments Items from any Permitted Asset Dispositions, provided, that, any Payment Items received from any Permitted Asset Disposition shall be applied in accordance with Section 4.3.3 hereof. Agent retains the right at all times after the occurrence of a Default or an Event of Default to notify Account Debtors of Borrower that Accounts have been assigned to Agent and to collect Accounts directly in its own name and to charge to Borrower the collection costs and expenses, incurred by Agent or Lenders, including reasonable attorneys' fees.
Collection of Accounts and Proceeds of Collateral. To expedite collection, each Borrower shall endeavor in the first instance to make collection of such Borrower’s Accounts. All Payment Items received by any Borrower in respect of its Accounts, together with the proceeds of any other Collateral, shall be held by such Borrower as trustee of an express trust for Administrative Agent’s benefit; such Borrower shall immediately deposit same in kind in the Dominion Account; and Administrative Agent may remit such proceeds to Lenders for application of such proceeds to the Obligations in the manner authorized by this Agreement. Administrative Agent retains the right at all times that an Event of Default exists to notify Account Debtors of any Borrower that Accounts have been assigned to Administrative Agent and to collect Accounts directly in its own name and to charge to Borrowers the collection costs and expenses incurred by Administrative Agent or Lenders, including reasonable attorneys’ fees.
Collection of Accounts and Proceeds of Collateral. To expedite collection of Accounts, each Obligor shall endeavor, at such Obligor's expense, in the first instance to make collection of such Obligor's Accounts for Agent and Lenders and, in connection therewith, shall use commercially reasonable efforts to keep in full force and effect any Supporting Obligation or collateral security relating to each such Account. Obligors shall (i) request in writing and otherwise take such reasonable steps to ensure that all Account Debtors forward payment directly to the Controlled Accounts (or, with respect to Obligors other than the Canadian Obligors, after the occurrence of a Trigger Event, to the Dominion Account or to Lockboxes related to the Dominion Account), and (ii) deposit and cause its Subsidiaries to deposit or cause to be deposited promptly, and in any event no later than the first Business Day after the date of receipt thereof, all cash, checks, drafts or other similar items of payment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lockbox) into a Controlled Account (or, with respect to Obligors other than the Canadian Obligors, after the occurrence of a Trigger Event, into the Dominion Account). Obligors shall issue to each Lockbox bank an irrevocable letter of instruction directing such bank to deposit all payments or other remittances received in the Lockbox to a Controlled Account (or, after the occurrence of a Trigger Event, to the Dominion Account, with respect to remittances received in a Borrower's Lockbox, or to the Borrowers' Controlled Account, with respect to remittances received in a Canadian Obligor's Lockbox). All Payment Items received by any Obligor in respect of its Accounts, together with the proceeds of any other Collateral, shall be held by such Obligor as trustee of an express trust for Agent's and Lenders' benefit; such Obligor shall immediately deposit same in kind in a Controlled Account (or, after the occurrence of a Trigger Event with respect to Payment Items received by an Obligor other than a Canadian Obligor, in the Dominion Account); and Agent may remit such proceeds received in the Dominion Account to Lenders for application to the Obligations in the manner authorized by this Agreement. Agent retains the right at all times that a Default or an Event of Default exists to notify Account Debtors of any Obligor that Accounts have been assigned to Agent and to collect Accounts directly in its own name and to...
Collection of Accounts and Proceeds of Collateral. To expedite collection, Borrowers shall endeavor in the first instance to make collection of Borrowers’ Accounts. All Payment Items received by any Borrower in respect of its Accounts, together with the proceeds of any other Collateral, shall be held by such Borrower as trustee of an express trust for the benefit of Pre-Petition ABL Agent and DIP Agent, and such Borrower shall immediately deposit same in kind in a Dominion Account. DIP Agent retains the right at all times during the continuance of a Default or an Event of Default to notify Account Debtors of any or all Borrowers that Accounts have been assigned to DIP Agent and to collect Accounts directly in its own name and to charge to Borrowers the collection costs and expenses incurred by DIP Agent or DIP Lenders, including reasonable attorneys’ fees.
Collection of Accounts and Proceeds of Collateral. (a) If any Loan Party receives any monies, checks, notes, drafts, and other payments relating to or constituting proceeds of accounts or of any other Collateral, such Loan Party shall immediately (but in any event within 3 Business Days) deposit such items in kind in the Collections Account fully-endorsed. Each Loan Party shall advise each Account Debtor that remits amounts payable on the accounts or any other Person that remits amounts to such Loan Party in respect of any of the Collateral by wire transfer or Automated Clearing House to make such remittances directly to the Collections Account.
(b) Each Loan Party and Lender shall cause all balances in any deposit account into which the proceeds of accounts or other collateral are deposited to be transmitted daily to the Collections Account by wire transfer or depository transfer check or Automated Clearing House transfer.
(c) Deposits in the Collection Account shall be credited, subject to final payment, to the payment of the Obligations after the date of actual receipt and deposit into the Collection Account in such order as Lender shall determine in its sole discretion; provided that, in the absence of any Event of Default, Lender shall apply all such funds representing collection of accounts first to the prepayment of the principal amount of the Revolving Loans.
(d) Any payments which are received by any Loan Party (including any payment evidenced by a promissory note or other instrument) shall be held in trust for Lender and shall be (i) deposited in the Collections Account, or (ii) delivered to Lender, as promptly as possible in the exact form received, together with any necessary endorsements.
(e) Borrowers shall pay all customary fees, costs and expenses in connection with opening and maintaining any Collections Account.