Covenant Regarding New Deposit Accounts; Lock Boxes. Before opening or replacing any Collateral Deposit Account, other Deposit Account (other than (i) each Deposit Account, the funds in which are used, in the ordinary course of business, solely for the payment of salaries and wages, workers’ compensation, pension benefits and similar expenses or taxes related thereto, (ii) each Deposit Account used, in the ordinary course of business, solely for daily accounts payable and that has an ending daily balance of zero; provided that the aggregate balance excluded in this clause (ii) shall not exceed $1,000,000 and (iii) each Deposit Account used in the ordinary course of business for local store accounts (which shall comply with the provisions of Section 6.4 below)) or establishing a new Lock Box, each Grantor shall (a) obtain the consent of the Administrative Agent in writing to the opening of such Collateral Deposit Account, other Deposit Account or Lock Box and (b) cause each bank or financial institution in which it seeks to open (i) such Deposit Account, to enter into a Deposit Account Control Agreement with the Administrative Agent in order to give the Administrative Agent Control of such Collateral Deposit Account, or (ii) such Lock Box, to enter into a Lock Box Agreement with the Administrative Agent in order to give the Administrative Agent Control of the Lock Box. In the case of Deposit Accounts or Lock Boxes maintained with Lenders, the terms of such agreement shall be subject to the provisions of the Credit Agreement regarding setoffs.
Appears in 3 contracts
Sources: Guarantee and Collateral Agreement (NBC Acquisition Corp), Guarantee and Collateral Agreement (Nebraska Book Co), Guarantee and Collateral Agreement (NBC Acquisition Corp)