Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accounts: (i) Accounts which remain unpaid ninety (90) days after the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i); (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; (iii) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereof.
Appears in 1 contract
Sources: Loan and Security Agreement (Action Performance Companies Inc)
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible (the An "Eligible Accounts")Account" is an Account that, when scheduled to Lender and at all times thereafter, does not violate the negative covenants and other provisions of this Section 5 and does satisfy the positive covenants and other provisions of this Section 5. Without limiting Agent's discretion, the The following Accounts, Accounts are not and shall not be considered Eligible Accounts: :
(iA) Accounts which remain unpaid for more than ninety (90) days after the earlier of the original date of the applicable their invoice or the shipment date, and Accounts which remain unpaid sixty ;
(60B) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i); (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five fifty percent (2550%) or more of the balance owing by such said Account Debtor to any Borrower is ineligible remains unpaid more than ninety (90) days after the invoice date;
(C) Accounts which are not due to the criteria in clause and payable within at least thirty (30) days after their invoice dates, provided, however that (i) abovethe following Accounts may be due and payable within forty-five (45) days after their invoice dates: Accounts in which the Account Debtor is Sam's Club, Wal-Mart or CostCo Alaska; (ii) if the Account Debtor is Sam's Mexico, Accounts may be due and payable within sixty (60) days after their invoice dates; and (iii) if the Account Debtor is Houston Harvest, Accounts may be due and payable within ninety (90) days after their invoice dates;
(D) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employeeemployee or agent of any Borrower or is a Parent, a Subsidiary or an Affiliate of any Loan Party; Borrower;
(ivE) Except with respect to normal warranty claims in an amount not to exceed $200,000.00, Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is becomes conditional upon the Account Debtor's approval of the Goods or services, or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold▇-and-hold, guaranteed sale, sale-or-returnsale on approval, sale on approval or return or consignment basis; ;
(xiF) Accounts with respect to which the Account Debtor (1) is not a resident, a citizen of or otherwise located in the United States of America; or (2) is not subject to service of process in the United States of America, unless, in each case, such Accounts are supported by foreign credit insurance in form and substance acceptable to Lender, provided however, foreign credit insurance shall not be required for the following foreign Account Debtors: Kraft Canada, Sam's Mexico and Technologias;
(G) Accounts with respect to which the Account Debtor is (1) the United States of America or any department, agency or instrumentality thereof, unless Borrowers assign their right to payment of such Accounts to Lender in accordance with the Assignment of Claims Act of 1940, as amended, or (2) any country other than the United States of America or any department, agency or instrumentality thereof;
(H) The face amount of any Accounts with respect to which any Borrower is or may become liable to the Account Debtor for Goods sold or services rendered by such Account Debtor to such Borrower, but only to the extent that of the maximum aggregate amount of Borrowers' liability to such Account Debtor;
(I) Accounts with respect to which (1) the Goods giving rise thereto have not been shipped and delivered to and accepted as satisfactory by the Account Debtor's indebtedness , or (2) the services performed have not been completed and accepted as satisfactory by the Account Debtor;
(J) Accounts which are not invoiced, dated as of such date and sent to the Obligors exceeds Account Debtor concurrently with the shipment and delivery to and acceptance by said Account Debtor of the goods or the performance of the services giving rise thereto;
(K) Accounts with respect to which possession or control of the goods sold is held, maintained or retained by any Borrower, or by any agent or custodian of any Borrower, for the account of or subject to further or future direction from the Account Debtor;
(L) Accounts which are owing by any Account Debtor involved as a credit limit determined debtor in any bankruptcy or insolvency proceeding, whether voluntary or involuntary;
(M) Accounts as to which Lender, at any time or times hereafter, determines in good faith that the prospect of payment or performance by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; the Account Debtor is or will be impaired;
(xiiN) Accounts with respect to which the Account Debtor is located in a state which requires any state denying creditors access Borrower, as a precondition to its courts commencing or maintaining an action in the absence courts of that state, either to (1) receive a certificate of authority to do business and be in good standing in such state, or (2) file a notice of business activities report or similar filingreport with such state' s taxing authority, unless (a) such Borrower has taken one of the actions described in clauses (1) or (2), (b) the failure to take one of the actions described in either clause (1) or (2) may be cured retroactively by such Borrower at its election, or (c) such Borrower has proven, to Lender's satisfaction, that it is exempt from any such requirements under any such state's laws;
(O) All or any portion of an Account to the extent there exists or the Account Debtor has asserted a counterclaim or dispute; provided, however, if the amount of such counterclaim or dispute is equal to or greater than ten percent (10%) of the total Account owing from such Account Debtor to the applicable Borrower has either qualified as a foreign corporation Borrower, then the full amount of such Account shall be deemed an ineligible Account; for purposes of this Section 5.1(O), the term "dispute" shall not include deductions taken by Account Debtors in the ordinary course of Borrowers' businesses which Borrowers have not challenged and do not intend to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; challenge.
(xiiiP) Accounts representing progress bill▇▇▇▇for any Account Debtor which exceed a credit limit established by Lender for such Account Debtor, but only to the extent of such excess; and
(▇ivQ) Accounts as to which any covenant, representation or warranty with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor such Account has obtained knowledge thereofbeen breached.
Appears in 1 contract
Sources: Loan and Security Agreement (Vita Food Products Inc)
Eligible Accounts. Agent Eligible Accounts" shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which mean all Accounts of each of the Borrowers are eligible (other than the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accountsfollowing: (i) except as provided in SUBSECTION 3.2(VI), Accounts which remain unpaid as of ninety (90) days after the earlier date of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)with respect thereto; (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five fifty percent (2550%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to by reason of the criteria criterion set forth in clause (i) aboveof this subsection 3.2; (iii) Accounts with respect to which the Account Debtor is a Loan Party an Affiliate of any Borrower or a director, officer, employee, Subsidiary officer or Affiliate employee of any Loan PartyBorrower or its Affiliates; (iv) Accounts with respect to which the Account Debtor is the United States of America a Governmental Authority or any department, agency or instrumentality thereof, prime contractor thereof unless with respect to any such Account, the applicable Borrower has complied in a manner satisfactory to Agent's satisfaction the Agent with the provisions of the Federal Assignment of Claims Act of 1940, includingas amended, without limitationor similar law or statute of the relevant state, executing province, municipality or other jurisdiction and delivering any amendments thereto, relative to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States unless the Account is payable in United States dollars and (A) the Account Debtor has supplied such Borrower with an irrevocable letter of credit, issued by a financial institution satisfactory to the Required Lenders in an amount sufficient to cover such Account and in form and substance satisfactory to the Required Lenders and without right of setoff or Canada (excluding any Maritime Province or Quebec)B) the Agent in its reasonable discretion has approved in writing such Account Debtor; (vi) Prebilled Accounts and other Accounts arising with respect to goods which have not been shipped and delivered to and accepted as satisfactory by the Account Debtor has asserted a counterclaim or has a right of setoff, arising with respect to services which have not been fully performed and accepted as satisfactory by the extent of such counterclaim or right of setoffAccount Debtor; (vii) Accounts for which the prospect of payment in full or performance in a timely manner by the Account Debtor is or may be is likely to become impaired as determined by the Agent in the reasonable exercise of its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (viii) Accounts which are not invoiced (and dated as of the date of such invoice) and sent to the Account Debtor within thirty (30) days after delivery of the underlying goods to or performance of the underlying services for the Account Debtor; (ix) Accounts with respect to which the Agent, on behalf of the Lenders, does not have a first and valid fully perfected LienLien free and clear of any other Lien whatsoever; (ixx) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (xxi) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, demonstration, sale on approval or other terms by reason of which the payment by the Account Debtor is or may be conditional (except with respect to Accounts in connection with which Account Debtors are entitled to return Inventory solely on the basis of the quality of such Inventory) or consignment basis; (xixii) Accounts to the extent that the Account Debtor's indebtedness to the Obligors Borrowers exceeds a credit limit determined by the Agent in the Agent's sole reasonable discretion exercised following prior written notice of such credit limit from the Agent to the Borrower Representative; (xiii) Accounts with respect to which any disclosure is required in accordance with its customary business practicesSUBSECTION 3.3; (xiixiv) contra Accounts to the extent of the amount of the accounts payable owed by the Borrowers to the Account Debtor; (xv) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice Notice of business activities report Business Activities Report or other similar filing, filing unless the applicable such Borrower has either qualified as a foreign corporation authorized to do transact business in such state or has filed such notice a Notice of business activities report Business Activities Report or similar filing with the applicable Governmental Authority in such state agency for the then current year; (xiiixvi) Accounts representing progress bill▇▇▇▇evidenced by Chattel Paper or any Instrument of any kind, to the extent possession of such Chattel Paper or Instrument is not granted to the Agent, for the benefit of the Lenders; and (▇ivxvii) Accounts with respect which the Agent determines in good faith to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrowerbe unacceptable. In the event that a previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease Account ceases to be an Eligible Accounts Account under the above described criteriacriteria (other than any determination made by the Agent), the Borrower Representative shall notify the Agent thereof promptly after any Obligor has obtained knowledge thereofas soon as practicable.
Appears in 1 contract
Eligible Accounts. Agent ELIGIBLE ACCOUNTS" shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which mean all Accounts of Borrowers are eligible (Borrower and each Guarantor other than the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accountsfollowing: (i) Accounts which remain unpaid as of the earlier to occur of ninety (90) days after the earlier of due date specified in the original date of the applicable invoice with respect thereto or the shipment date, and Accounts which remain unpaid sixty one hundred twenty (60120) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)original invoice with respect thereto; (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to by reason of the criteria criterion set forth in clause (i) aboveof this Section 9.1; (iii) Accounts with respect to which the Account Debtor is an Affiliate of either Borrower or a Loan Party Guarantor or a director, officerofficer or employee of Borrower, employee, Subsidiary any Guarantor or Affiliate of any Loan Partyits Affiliates; (iv) Accounts with respect to which the Account Debtor is the United States of America a Governmental Authority or prime contractor thereof unless Borrower or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower Guarantor has complied in a manner satisfactory to Agent's satisfaction Agent with the provisions of the Federal Assignment of Claims Act of 1940, includingas amended, without limitationor similar law or statute of the relevant state, executing province, municipality or other jurisdiction and delivering any amendments thereto, relative to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding other than the provinces of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island, Newfoundland and Nova Scotia and the Northwest Territories) unless such Account is payable in United States Dollars and the Account Debtor has supplied Borrower or any Maritime Province or Quebec)Guarantor with an irrevocable letter of credit, issued by a financial institution satisfactory to the Required Lenders, in an amount sufficient to cover such Account and in form and substance satisfactory to the Required Lenders and without right of setoff; (vi) Accounts arising with respect to goods which have not been shipped and delivered to and accepted as satisfactory by the Account Debtor has asserted a counterclaim or has a right of setoff, arising with respect to services which have not been fully performed and accepted as satisfactory by the extent of such counterclaim or right of setoffAccount Debtor; (vii) Accounts for which the prospect of payment in full or performance in a timely manner by the Account Debtor is or may be is likely to become impaired as determined by Agent in the exercise of its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (viii) Accounts which are not invoiced (and dated as of the date of such invoice) and sent to the Account Debtor within five (5) days after delivery of the underlying goods to or performance of the underlying services for the Account Debtor; (ix) Accounts with respect to which Agent, on behalf of the Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof Lien free and (xv) Accounts clear of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereof.Lien;
Appears in 1 contract
Sources: Secured Credit Agreement (Gibraltar Packaging Group Inc)
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible (the "“Eligible Accounts"). Without limiting Agent's discretion” include all of Borrowers’ Accounts other than the following, the following Accounts, shall not be Eligible Accountsunless approved in writing by Administrative Agent in each case: (i) Accounts any Account with respect to which remain Administrative Agent does not have a valid and enforceable, perfected first priority Security Interest; (ii) any Account which remains unpaid ninety (90) as of 90 days after the earlier of the original date of the applicable invoice or invoice, provided, however, (1) if the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from is a Governmental Authority or an Account Debtor whose primary purpose is to provide educational services, then the criteria set forth in this clause foregoing number of days shall be 120; and (i); 2) if the Account Debtor’s primary purpose is to provide health care services, then, at Administrative Agent’s sole discretion, the number of days shall be 120, (iiiii) all Accounts owing by any Account of a single Account Debtor, including a currently scheduled Account, Debtor if twenty-five percent (25%) 50% or more of the balance owing by balances due on all Accounts of such Account Debtor to any Borrower is are ineligible due to the criteria in under clause (i) aboveor (ii); (iiiiv) Accounts any Account with respect to which the Account Debtor is a Loan Party Borrower, a Subsidiary or a director, officer, employee, an Affiliate thereof or an employee or officer of Borrower or any Subsidiary or Affiliate thereof, provided, however, that the foregoing shall not be applicable to arm’s-length transactions with portfolio companies of any Loan Partythe Borrowers’ Major Shareholders; (ivv) Accounts any Account with respect to which the Account Debtor does not maintain its chief executive office within the United States or any Account with respect to which the Account Debtor is the United States government of America any foreign country or any municipality or other political subdivision thereof, or any department, agency agency, public corporation or other instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to any Account which is created from the Account Debtor has asserted a counterclaim rental or has a right lease of setoff, to the extent of such counterclaim or right of setoffany Inventory not owned by Borrower; (vii) Accounts for which the prospect of payment any Account with respect to goods or services whose delivery or performance has been rejected by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practiceswhose earlier acceptance has been revoked; (viii) Accounts with respect any Account arising from the delivery of goods for which an invoice has not been sent to the Account Debtor within 10 days after such delivery or any Account arising from the performance of services for which Agent, on behalf of Lenders, does an invoice has not have a first and valid fully perfected Lienbeen sent to the Account Debtor within thirty (30) days after such performance; (ix) Accounts with respect to which the any Account owing by an Account Debtor that is the subject of a bankruptcy or a similar insolvency proceeding or proceeding, has made an assignment of for the benefit of creditors creditors, has acknowledged that it is unable to pay its debts as they mature, or whose assets have been conveyed transferred to a receiver or trustee, or who has ceased business as a going concern; (x) Accounts any Account with respect to which the Account Debtor's ’s obligation to pay the Account is conditional upon the Account Debtor's ’s approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold▇-and-hold, guaranteed guarantied sale, sale-orand-return, sale on approval (except with respect to Accounts in connection with which Account Debtors are entitled to return Inventory solely on the basis of the quality of such Inventory) or consignment basis; , provided, however, that ▇▇▇▇-and-hold Accounts shall be considered eligible (subject to all other eligibility criteria contained herein) for that portion of the related Accounts which have been performed, earned and invoiced and for which title to the Inventory has passed to the Account Debtor, and which the applicable Account Debtor is unconditionally obligated to pay without offset, defense or counterclaim under the terms of the specific customer agreements, subject to the Administrative Agent’s review and satisfaction with the underlying contract and/or purchase order associated therewith and as specifically agreed to in writing by the Administrative Agent, (xi) Accounts any Account owing by an Account Debtor that has disputed liability or made any claim with respect to any other Account due from such Account Debtor, or that has any right of set-off against such Account, or to which Borrower is indebted in any way, but only to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practicesof such indebtedness, set-off, dispute or claim; (xii) any Account subject to a chargeback from a volume discount or an advertising discount, but only to the extent of such chargeback or discount; (xiii) [Intentionally Omitted]; (xiv) any Account of an Account Debtor with respect to particular goods still in the possession of the creditor on the Account or included in Inventory of such creditor and against which the Account Debtor has filed a financing statement under the UCC or has obtained or purported to have obtained a Security Interest; (xv) any Account with respect to which the delivery of goods or performance of services is bonded in favor of Borrower; (xvi) any Account as to which Administrative Agent does not have the right or ability to obtain direct payment to Administrative Agent; (xvii) any Account with respect to which any of the covenants and agreements contained in any of the Loan Documents or any of the Representations and Warranties are not or have ceased to be complete and correct or have been breached and not cured within any applicable grace period under this Agreement; (xviii) any Account which is evidenced by a promissory note or other instrument or by chattel paper or which has been reduced to judgment; (xix) any Account which arises out of a sale or lease not made in the ordinary course of Borrower’s business; (xx) any Account for which payment terms greater than net 45 days from the date of invoice are provided or permitted; (xxi) Accounts arising from payment made by credit card, debit card, or similar instrument; (xxii) any Account owing from any supplier or Vendor of any Borrower, including, without limitation under or in connection with any rebate, subsidy, incentive or similar program, (xxiii) any Account owing to any Person other than Borrower, (xxiv) any Account arising from the leasing of Inventory, (xxv) with regards to any Accounts arising from the provision of services, any such Accounts which are invoiced prior to the performance of the applicable services provided, however, that deferred revenue ▇▇▇▇▇▇▇▇ and progress ▇▇▇▇▇▇▇▇ shall be considered eligible (subject to all other eligibility criteria contained herein) for that portion of the related Accounts which have been performed, earned and invoiced and which the applicable Account Debtor is unconditionally obligated to pay without offset, defense or counterclaim under the terms of the specific customer agreements, subject to the Administrative Agent’s review and satisfaction with the underlying contract and/or purchase order associated therewith and as specifically agreed to in writing by the Administrative Agent, (xxvi) any Account as to which the perfection of Administrative Agent’s Security Interest is governed by any federal, state or local statutory requirements other than those of the UCC or the Claims Act; (xxvii) subject to all other eligibility criteria, if Administrative Agent requests filings and acknowledgements in accordance with the Claims Act and any other steps necessary to perfect Administrative Agent’s Security Interest to be complied with to Administrative Agent’s satisfaction with respect to any Account with respect to which the Account Debtor is located in the United States of America or any state denying creditors access or any department, agency, public corporation or other instrumentality thereof, and such Borrower does not promptly upon such request begin the process to its courts in the absence obtain such filings and acknowledgements or such filings and acknowledgments are not obtained within 120 days (or such longer period of a notice time as Administrative Agent may consent to) of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current yearrequest; (xiiixxviii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect any Account as to which any disclosure Administrative Agent has determined in its reasonable discretion that the prospect of payment or collection on a timely basis is required impaired or that Administrative Agent otherwise deems in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease its reasonable discretion to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofuncreditworthy.
Appears in 1 contract
Sources: Credit Facilities Agreement (MTM Technologies, Inc.)
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion" include all of Borrowers' Accounts other than the following, the following Accounts, shall not be Eligible Accountsunless approved in writing by Administrative Agent in each case: (i) Accounts any Account with respect to which remain Administrative Agent does not have a valid and enforceable, perfected first priority Security Interest; (ii) any Account which remains unpaid ninety (90) as of 90 days after the earlier of the original date of the applicable invoice or the shipment dateinvoice, and Accounts which remain unpaid sixty (60) days after the due date of such Accountsincluding, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)without limitation any Lease-in-Process Inventory; (iiiii) all Accounts owing by any Account of a single Account Debtor, including a currently scheduled Account, Debtor if twenty-five percent (25%) 50% or more of the balance owing by balances due on all Accounts of such Account Debtor to any Borrower is are ineligible due to the criteria in under clause (i) aboveor (ii); (iiiiv) Accounts any Account with respect to which the Account Debtor is a Loan Party Borrower, a Subsidiary or a director, officer, employee, an Affiliate thereof or an employee or officer of Borrower or any Subsidiary or Affiliate of any Loan Partythereof; (ivv) Accounts any Account with respect to which the Account Debtor does not maintain its chief executive office within the United States and any Account with respect to which the Account Debtor is the United States government of America any foreign country or any municipality or other political subdivision thereof, or any department, agency agency, public corporation or other instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to any Account which is created from the Account Debtor has asserted a counterclaim rental or has a right lease of setoff, to the extent of such counterclaim or right of setoffany Inventory not owned by Borrower; (vii) Accounts for which the prospect of payment any Account with respect to goods or services whose delivery or performance has been rejected by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practiceswhose earlier acceptance has been revoked; (viii) Accounts with respect any Account arising from the delivery of goods or performance of services for which an invoice has not been sent to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lienthe Account Debtor within ten days after such delivery or performance; (ix) Accounts with respect to which the any Account owing by an Account Debtor that is the subject of a bankruptcy or a similar insolvency proceeding or proceeding, has made an assignment of for the benefit of creditors creditors, has acknowledged that it is unable to pay its debts as they mature, or whose assets have been conveyed transferred to a receiver or trustee, or who has ceased business as a going concern; (x) Accounts except Lease-in-Process Inventory, any Account with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-bill-and-hold, guarantied ▇▇▇-hold, guaranteed salee, sale-orand-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereof.approval
Appears in 1 contract
Sources: Credit Facilities Agreement (Pomeroy Computer Resources Inc)
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, " shall mean all Accounts other than the following Accounts, shall not be Eligible Accountsfollowing: (i) Accounts for which no due date is specified which remain unpaid as of ninety (90) days after the earlier original date of the applicable invoice or, if a due date is specified, which remains unpaid as of thirty (30) days after the due date but in no event more than one-hundred twenty (120) days following the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)invoice; (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (more than 25%) or more % of the balance owing by such Account Debtor to any Borrower is ineligible due to by reason of the criteria set forth in clause (i) above; (iii) Accounts with respect to which the Account Debtor is a Loan Party an Affiliate of the Company or a director, officer, employee, Subsidiary officer or Affiliate employee of any Loan PartyBorrower or its Affiliates (PROVIDED, HOWEVER, that for purposes of this subsection 3.2 "Affiliate" shall not be deemed to include any Person controlled by Primus, Morgenthaler, Foundation Partners Fund, Mesirow Capital Partners VI, Tampsco Enterprises, Inc., Adle▇ ▇▇▇agement or Will▇▇▇ ▇▇▇▇▇ ▇▇▇tners); (iv) Accounts with respect to which the Account Debtor is the United States of America America, Canada, or any department, agency or instrumentality thereof, thereof unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction filings in accordance with the provisions of the Federal Assignment of Claims Act, the Financial Administration Act of 1940Canada, includingor other applicable statutes governing security interests thereon have been completed and filed in a manner satisfactory to the Agent, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada unless (excluding any Maritime Province A) the Account Debtor has supplied the applicable Borrower with an irrevocable letter of credit, issued by a financial institution satisfactory to the Agent, sufficient to cover such Account in form and substance acceptable to the Agent and without right of setoff or Quebec)(B) such Account Debtor is deemed to be an acceptable credit risk by the Agent in its reasonable discretion; (vi) Accounts arising with respect to goods which have not been shipped and delivered to and accepted as satisfactory by the Account Debtor has asserted a counterclaim or has a right of setoff, arising with respect to services which have not been fully performed and accepted as satisfactory by the extent of such counterclaim or right of setoffAccount Debtor; (vii) Accounts for which the prospect of payment in full or performance in a timely manner by the Account Debtor is or may be is likely to become impaired as determined by the Agent in the reasonable exercise of its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (viii) Accounts which are not invoiced (and dated as of the date of such invoice) and sent to the Account Debtor within five (5) days after delivery of the underlying goods to or performance of the underlying services for the Account Debtor; (ix) Accounts with respect to which Agent, on behalf of Lenders, the Agent does not have a first and valid fully perfected Liensecurity interest; (ixx) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (xxi) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-orand-return, sale on approval (except with respect to Accounts in connection with which Account Debtors are entitled to return Inventory solely on the basis of the quality of such Inventory) or consignment basis; (xixii) Accounts to the extent that the Account Debtor's indebtedness to the Obligors applicable Borrower exceeds a credit limit determined by the Agent in the Agent's sole reasonable discretion exercised in accordance with its customary business practicesfollowing reasonable prior written notice to such Borrower; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; and (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and below; PROVIDED, HOWEVER, that with respect to Accounts excluded by virtue of subsection 3.3(v) below, if the disputed portion of such Account is less than ten percent (xv10%) Accounts of any Person other than a Borrowerthe total amount due under such Account, then such Account shall be excluded only to the extent of the amount of the setoff, counterclaim or dispute. In the event that a previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease Account ceases to be an Eligible Accounts Account under the above described criteria, Borrower Representative the Borrowers shall notify the Agent thereof promptly after any Obligor has obtained knowledge thereof.
Appears in 1 contract
Eligible Accounts. Agent Eligible Accounts shall have mean all Accounts other than the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible following:
(the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accounts: (iA) Accounts which remain unpaid ninety due one hundred and fifty (90150) days after past the earlier of the original date of the applicable invoice or the shipment date, and ;
(B) International Accounts (except those International Accounts which remain unpaid sixty Lender deems to be eligible, in Lenders role and absolute discretion);
(60C) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i); (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five fifty percent (2550%) or more of the balance owing owning by such Account Debtor to any Borrower is ineligible due to by reason of the criteria criterion set forth in clause (iA) or (B) above; ;
(iiiD) Accounts with respect to which the Account Debtor is a Loan Party an Affiliate of Borrower or a director, officer, employee, Subsidiary officer or Affiliate employee of any Loan Party; Borrower or its Affiliates;
(ivE) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, thereof unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; as amended;
(vF) Accounts arising with respect to goods which have not been shipped and delivered to the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts arising with respect to services which the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance have not been fully performed and accepted by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; Debtor;
(viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ixG) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; ;
(xH) Accounts with respect to which the Account Debtor's obligation obligations to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-orand-return, sale on approval approval, or consignment basis; basis (xiexcept with respect to Accounts in connection with which Account Debtors are entitled to return Inventory solely on the basis of the quality of such Inventory);
(I) Accounts which are not evidenced by chattel paper or an instrument of any kind;
(J) Accounts where the Account Debtor has an outstanding credit for the prior account period or has asserted any offset, counterclaim or defense denying liability thereunder; provided, however, that if such credit, offset, counterclaim or defense has been asserted, such Account shall be ineligible only to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; of such asserted credit, offset, counterclaim or defense;
(xiiK) Accounts with respect which are not subject to and covered by Lender's first priority perfected security interest and which are subject to any other lien, claim, encumbrance or security interest;
(L) Accounts which are not evidenced by an invoice or other documentation in form acceptable to Lender;
(M) If the Account Debtor is located in any state denying creditors access to its courts the State of New Jersey, all Accounts of such Account Debtor unless Borrower has filed a Notice of Business Activities Report with the New Jersey Division of Taxation for the then current year;
(N) If the Account Debtor is located in the absence State of a notice Minnesota, all Accounts of business activities report or similar filing, such Account Debtor unless the applicable Borrower has either qualified as filed a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing Business Activity Report with the applicable state agency for Minnesota Department of Revenue;
(O) Any Account unless each of the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts warranties and representations set forth in Section 9.2 has been reaffirmed with respect to which any disclosure is required in such individual Account at the applicable time that the most recent Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and was delivered to Lender;
(xvP) Accounts against which Lender is not legally permitted to make loans and advances; and
(Q) Accounts which are not a valid, legally enforceable obligation of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofrelevant Account Debtor.
Appears in 1 contract
Sources: Revolving Loan and Security Agreement (Tro Learning Inc)
Eligible Accounts. Agent Eligible Accounts" shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which mean all Accounts of each of the Borrowers are eligible (other than the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accountsfollowing: (i) except as provided in subsection 3.2(vi), Accounts which remain unpaid as of ninety (90) days after the earlier date of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)with respect thereto; (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five fifty percent (2550%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to by reason of the criteria criterion set forth in clause (i) aboveof this subsection 3.2; (iii) Accounts with respect to which the Account Debtor is a Loan Party an Affiliate of any Borrower or a director, officer, employee, Subsidiary officer or Affiliate employee of any Loan PartyBorrower or its Affiliates; (iv) Accounts with respect to which the Account Debtor is the United States of America a Governmental Authority or any department, agency or instrumentality thereof, prime contractor thereof unless with respect to any such Account, the applicable Borrower has complied in a manner satisfactory to Agent's satisfaction the Agent with the provisions of the Federal Assignment of Claims Act of 1940, includingas amended, without limitationor similar law or statute of the relevant state, executing province, municipality or other jurisdiction and delivering any amendments thereto, relative to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States unless the Account is payable in United States dollars and (A) the Account Debtor has supplied such Borrower with an irrevocable letter of credit, issued by a financial institution satisfactory to the Required Lenders in an amount sufficient to cover such Account and in form and substance satisfactory to the Required Lenders and without right of setoff or Canada (excluding any Maritime Province or Quebec)B) the Agent in its reasonable discretion has approved in writing such Account Debtor; (vi) Prebilled Accounts and other Accounts arising with respect to goods which have not been shipped and delivered to and accepted as satisfactory by the Account Debtor has asserted a counterclaim or has a right of setoff, arising with respect to services which have not been fully performed and accepted as satisfactory by the extent of such counterclaim or right of setoffAccount Debtor; (vii) Accounts for which the prospect of payment in full or performance in a timely manner by the Account Debtor is or may be is likely to become impaired as determined by the Agent in the reasonable exercise of its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (viii) Accounts which are not invoiced (and dated as of the date of such invoice) and sent to the Account Debtor within thirty (30) days after delivery of the underlying goods to or performance of the underlying services for the Account Debtor; (ix) Accounts with respect to which the Agent, on behalf of the Lenders, does not have a first and valid fully perfected LienLien free and clear of any other Lien whatsoever; (ixx) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (xxi) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, demonstration, sale on approval or other terms by reason of which the payment by the Account Debtor is or may be conditional (except with respect to Accounts in connection with which Account Debtors are entitled to return Inventory solely on the basis of the quality of such Inventory) or consignment basis; (xixii) Accounts to the extent that the Account Debtor's indebtedness to the Obligors Borrowers exceeds a credit limit determined by the Agent in the Agent's sole reasonable discretion exercised following prior written notice of such credit limit from the Agent to the Borrower Representative; (xiii) Accounts with respect to which any disclosure is required in accordance with its customary business practicessubsection 3.3; (xiixiv) contra Accounts to the extent of the amount of the accounts payable owed by the Borrowers to the Account Debtor; (xv) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice Notice of business activities report Business Activities Report or other similar filing, filing unless the applicable such Borrower has either qualified as a foreign corporation authorized to do transact business in such state or has filed such notice a Notice of business activities report Business Activities Report or similar filing with the applicable Governmental Authority in such state agency for the then current year; (xiiixvi) Accounts representing progress bill▇▇▇▇evidenced by Chattel Paper or any Instrument of any kind, to the extent possession of such Chattel Paper or Instrument is not granted to the Agent, for the benefit of the Lenders; and (▇ivxvii) Accounts with respect which the Agent determines in good faith to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrowerbe unacceptable. In the event that a previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease Account ceases to be an Eligible Accounts Account under the above described criteriacriteria (other than any determination made by the Agent), the Borrower Representative shall notify the Agent thereof promptly after any Obligor has obtained knowledge thereofas soon as practicable.
Appears in 1 contract
Eligible Accounts. The Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without In addition, without limiting the Agent's discretion, unless otherwise agreed by the Agent in writing, the following Accounts, shall Accounts are not be Eligible Accounts: (ia) Accounts which remain unpaid more than ninety (90) days after the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)invoice date based upon the end-of-the-month aging; (iib) all Accounts owing by a single Account Debtor, including a currently scheduled AccountAccounts, if twenty-five fifty percent (2550%) or more of the balance owing by such Account Debtor to any the Borrower is ineligible due to the criteria in clause (i) abovefor any reason; (iiic) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Partythe Borrower; (ivd) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect the Borrower assigns its right to any payment of such AccountAccounts to the Agent pursuant to, and in full compliance with, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accountsas amended; (ve) Accounts with respect to which the Account Debtor is not a resident of the United States [or Canada (excluding any Maritime Province or Quebec)its territories]; (vif) Accounts in dispute or with respect to which the Account Debtor has asserted in writing or either the Borrower or the Agent has reason to believe the Account Debtor is entitled to assert a counterclaim or has asserted in writing or either the Borrower or the Agent has reason to believe the Account Debtor is entitled to assert a right of setoff, to the extent of such counterclaim or right of setoff; (viig) Accounts for with respect to which the prospect of payment or performance by the Account Debtor is or may will be impaired impaired, as determined by the Agent in the exercise of its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (viiih) Accounts with respect to which Agent, on behalf of Lenders, the Agent does not have a first and valid fully perfected Liensecurity interest; (ixi) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (xj) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold▇-and-hold, guaranteed sale, sale-orand-return, sale on approval or consignment basis; (xik) Accounts to the extent that the Account Debtor's indebtedness to the Obligors Borrower exceeds a credit limit determined by the Agent in the Agent's sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (xii1) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report New Jersey, Minnesota, Tennessee or similar filing, Indiana unless the applicable Borrower (i) has either qualified as received a foreign corporation certificate of authority to do business business, and is in good standing, in such state state, or (ii) has filed such notice a Notice of business activities report Business Activities Report (or similar filing other comparable required report) with the applicable proper authorities of such state agency for the then current year; (xiiim) Accounts representing progress bill▇▇▇▇which arise out of sales not made in the ordinary course of the Borrower's business; (▇ivn) Accounts with respect to which the Account Debtor has returned to the Borrower all or any portion of the Inventory the sale of which gave rise to such Accounts; and (o) Accounts with respect to which any disclosure document or agreement executed or delivered in connection therewith, or any procedure used in connection with any such document or agreement, fails in any material respect to comply with the requirements of applicable law, or with respect to which any representation or warranty contained in this Agreement is required in untrue. If the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than Borrower determines that a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease Account ceases to be an Eligible Accounts Account under any of the above described criteria, the Borrower Representative shall notify the Agent thereof promptly after any Obligor has obtained knowledge thereofat the earliest reasonable opportunity.
Appears in 1 contract
Sources: Loan and Security Agreement (American Builders & Contractors Supply Co Inc)
Eligible Accounts. On any date of determination of the Borrowing Base, all of the Accounts owned by each Borrowing Base Party and reflected in the most recent Borrowing Base Certificate delivered by the Borrower to the First Lien Administrative Agent shall have be "Eligible Accounts" for the sole purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies. In addition, the First Lien Administrative Agent reserves the right, at any time and from time to time after the Restatement Effective Date, to adjust any of the criteria set forth below, to establish new criteria and to adjust the percentage of Eligible Accounts included in the Borrowing Base, in its sole reasonable discretion exercised credit judgment, subject to the approval of the Required First Lien Lenders in accordance with its customary business practicesthe case of adjustments, new criteria or changes in the percentage of Eligible Accounts included in the Borrowing Base which have the effect of increasing the Borrowing Base from that which would have been applicable if the standards in effect on the Restatement Effective Date had continued to determine which be in effect. Eligible Accounts shall not include any of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accounts: :
(i) Accounts any Account on which remain unpaid ninety the First Lien Administrative Agent, on behalf of itself and the First Lien Lenders, does not have a first priority and exclusive (90except with respect to any second priority Liens securing the Second Lien Obligations) days after perfected Lien;
(ii) any Account due from an Account Debtor that is not domiciled in the earlier United States or Canada and (if not a natural person) organized under the laws of the original date United States or any political subdivision thereof or the laws of Canada or any political subdivision thereof unless such Account is fully backed by an irrevocable letter of credit issued on terms and by a financial institution reasonably acceptable to the First Lien Administrative Agent;
(iii) any Account that is payable in any currency other than Dollars;
(iv) any Account that does not arise from the sale, lease, license, assignment or other disposition of goods or services rendered by such Borrowing Base Party in the ordinary course of its business;
(v) any Account that does not comply with all applicable legal requirements, including all laws, rules, regulations and orders of any Governmental Authority (including any Account due from an Account Debtor located in any State, unless the applicable Borrowing Base Party (at the time the Account was created and at all times thereafter)
(i) had filed and has maintained effective a current notice of business activities report with the appropriate office or agency of such State, as applicable, or (ii) was and has continued to be exempt from filing such report);
(vi) any Account that is not a true and correct statement of bona fide indebtedness or obligations incurred in the amount of the Account for the sale, lease, license, assignment or other disposition of goods or services rendered and accepted by the applicable invoice Account Debtor;
(vii) any Account that arises from a sale to, or services rendered to, any Group Member or any director, officer or other employee of any Group Member;
(viii) any Account that is in default; provided that, without limiting the shipment dategenerality of the foregoing, and Accounts which remain unpaid sixty an Account shall be deemed in default if it is more than 90 days past due according to its original terms;
(60ix) days after any Account that is the due date obligation of such Accounts, unless in either case Agent has made specific an Account Debtor exceptions from if 50% or more of the dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this clause Section 2.26(a);
(i); x) any Account as to which any of the representations or warranties in the Loan Documents is untrue;
(iixi) all Accounts owing to the extent such Account is evidenced by a single judgment, Instrument or Chattel Paper;
(xii) with respect to Accounts of any Account DebtorDebtor other than SBC, including a currently scheduled Accountany such Accounts that exceed, if twenty-five percent in the aggregate, 10% of all Eligible Accounts;
(25%xiii) that portion of any Account which an Account Debtor has indicated (or more any Loan Party otherwise has knowledge) is subject to any right of the balance owing by recession, setoff, recoupment, counterclaim or defense that such Account Debtor to intends to, or will, utilize or assert; or
(xiv) any Borrower is ineligible due to the criteria in clause (i) above; (iii) Accounts with respect to Account on which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereofGovernmental Authority, unless with respect such Borrowing Base Party has assigned its rights to any payment of such Account, Account to the applicable Borrower has complied First Lien Administrative Agent pursuant to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, includingas amended, without limitation, executing and delivering to Agent all statements in the case of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding Federal Governmental Authority, and pursuant to applicable law, if any, in the case of any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor other Governmental Authority, and such assignment has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance been accepted and acknowledged by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofappropriate government officers.
Appears in 1 contract
Sources: Credit and Guaranty Agreement (Leucadia National Corp)
Eligible Accounts. Based on the most recent Borrowing Base Certificate delivered by Borrower to Agent and on other information available to Agent, Agent shall have the sole right, in its sole [EXECUTION VERSION] reasonable discretion exercised in accordance with its customary business practices, to credit judgment determine which Accounts of Borrowers are eligible (Borrower and ▇▇▇▇▇▇ shall be "ELIGIBLE ACCOUNTS" for purposes of this Agreement. In determining whether a particular Account constitutes an Eligible Account, Agent shall not include any such Account to which any of the "exclusionary criteria set forth below applies. Agent reserves the right, at any time and from time to time after the Effective Date, to adjust any such criteria, to establish new criteria and to adjust advance rates with respect to Eligible Accounts"), in its reasonable credit judgment, subject to the approval of Supermajority Revolving Lenders in the case of adjustments, new criteria or changes in advance rates which have the effect of making more credit available. Without limiting Agent's discretion, the following Accounts, Eligible Accounts shall not be Eligible Accounts: include any Account of Borrower or ▇▇▇▇▇▇:
(ia) Accounts which remain unpaid the Account Debtor has failed to pay within ninety (90) days after the earlier invoice date;
(b) with selling terms of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid more than sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause days;
(i); (iic) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; (iii) Accounts with respect to which the Account Debtor is a Loan Party or a director, an officer, employee, Subsidiary Affiliate or Affiliate agent of any Loan such Credit Party; ;
(ivd) Accounts with respect to which goods are placed on consignment, guaranteed sale, sale or return, sale on approval, ▇▇▇▇ and hold, or other terms by reason of which the payment by the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; may be conditional;
(ve) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada States, and which are not either (excluding any Maritime Province or Quebec); (vii) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoffcovered by credit insurance in form and amount, and by an insurer, satisfactory to the extent Agent, or (ii) supported by one or more letters of such counterclaim or right of setoff; (vii) Accounts for which credit that are assignable and have been delivered to the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; form, substance, amount and of a tenor, and issued by a financial institution, acceptable to the Agent;
(viiif) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject United States or any department, agency or instrumentality of bankruptcy the United States, any state of the United States, or a similar insolvency proceeding any city, town, municipality, or division thereof unless such Account has made an assignment of been assigned to the Agent for the benefit of creditors the Lenders in accordance with (A) the Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 203 ET Seq.) with respect to the United States or whose assets have been conveyed any department, agency or instrumentality of the United States or (B) any similar statute in effect in any state of the United States, or any city, town, municipality, or division thereof with respect to a receiver such state, city, town, municipality or trustee; division;
(xg) Accounts with respect to which the Account Debtor's obligation Debtor is a subsidiary of, related to, has common shareholders, officers or directors with, or otherwise controls, is controlled by or is under common control with, such Credit Party;
(h) with respect to pay which such Credit Party is or may become liable to the Account Debtor for goods sold or services rendered by the Account Debtor to such Credit Party [EXECUTION VERSION] to the extent of the amount by which such Credit Party is conditional upon or may be liable to the Account Debtor for goods sold or services rendered by the Account Debtor;
(i) with respect to an Account Debtor whose total obligations to such Credit Party exceed ten percent (10%) of the aggregate amount of all Eligible Accounts of such Credit Party (other than an Account Debtor whose unsecured debt is rated as investment grade by Standard & Poor's approval or is otherwise Corporation and ▇▇▇▇▇'▇ Investors Service) to the extent of the obligations of such Account Debtor in excess of such percentage;
(j) which are subject to any repurchase obligation or return rightunapplied debits, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) of such unapplied debits, and Accounts with respect to which the Account Debtor otherwise disputes liability or makes any claim with respect thereto, or is located in subject to any state denying creditors access insolvency proceeding, or becomes insolvent, or goes out of business;
(k) the collection of which the Agent believes to be doubtful by reason of the Account Debtor's financial condition;
(l) owed by an Account Debtor that has failed to pay fifty percent (50%) or more of the aggregate amount of its courts in accounts owed to such Credit Party within ninety (90) days after the absence date of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation invoices; or
(m) which are unacceptable to do business Agent in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofits reasonable credit judgment.
Appears in 1 contract
Eligible Accounts. On any date of determination of the Borrowing Base, all of the Accounts owned by ▇▇▇▇▇▇▇▇▇ and reflected in the most recent Borrowing Base Certificate delivered by the Borrowers to the Administrative Agent and Collateral Agent shall be “Eligible Accounts” for the purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies. In addition, the Collateral Agent shall have the sole rightright from time to time to establish, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible modify or eliminate Reserves and Hedging Reserves (the "without duplication) against Eligible Accounts"). Without limiting Agent's discretion, Eligible Accounts shall not include any of the following Accounts, shall not be Eligible Accounts: :
(i) Accounts any Account in which remain unpaid ninety (90) days after the earlier Administrative Agent, on behalf of the original date Secured Parties does not have a perfected, first priority Lien (subject to Permitted Liens);
(ii) any Account that is not owned by a Borrower;
(iii) [Reserved];
(iv) [Reserved];
(v) any Account due from an Account Debtor that is not domiciled in the United States or any political subdivision thereof or Canada or any province or territory thereof and (if not a natural Person) organized under the laws of the United States or any political subdivision thereof or Canada or any province or territory thereof unless supported by an irrevocable letter of credit (up to the face amount of such letter of credit); provided, that notwithstanding the foregoing, this clause (v) shall not exclude (a) Account Debtors specified on Part A of Annex II attached hereto so long as the relevant Account Debtor set forth on Part A of Annex II remains Investment Grade (or the relevant obligations of such Account Debtor are guaranteed on terms reasonably acceptable to the Collateral Agent from a Person that is Investment Grade) and (b) Account Debtors specified on Part B of Annex II or otherwise agreed to by the Collateral Agent which are not domiciled or organized in the United States or any political subdivision thereof or Canada or any province or territory thereof to the extent such Account Debtor’s parent entity is domiciled or organized in the United States or any political subdivision thereof or Canada or any province or territory thereof;
(vi) any Account that is payable in any currency other than in dollars or Canadian dollars; provided, that notwithstanding the foregoing, this clause (vi) shall not exclude any Account that is payable in any currency other than dollars or Canadian dollars to the extent such Account is directly or indirectly subject to a foreign currency or foreign exchange hedge protecting the Borrowers from foreign currency or exchange risk;
(vii) any Account that does not arise from the sale of goods or the performance of services by the Borrowers in the ordinary course of their business;
(viii) any Account that does not comply in all material respects with all applicable legal requirements, including, without limitation, all laws, rules, regulations and orders of any Governmental Authority;
(ix) any Account (a) to the extent that the applicable Borrower’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever unless such condition is satisfied or (b) as to which a Borrower is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial or administrative process or (c) that represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to such ▇▇▇▇▇▇▇▇’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer; in each case set forth in (a), (b) or (c), to the extent such Account is subject to such condition, inability to bring suit or subject to progress billing or lien;
(x) to the extent that any defense, counterclaim, setoff or dispute is asserted as to such Account, it being understood that the remaining balance of the Account shall be eligible;
(xi) any Account that is not bona fide indebtedness incurred in the amount of the Account for merchandise sold to or services rendered and accepted by the applicable Account Debtor;
(xii) any Account with respect to which an invoice or other electronic transmission (reasonably acceptable to the Collateral Agent in form and substance) constituting a request for payment, has not been sent on a timely basis to the applicable Account Debtor according to the normal invoicing and timing procedures of the applicable invoice Borrower;
(xiii) any Account that arises from a sale to any director, officer or Affiliate of a Loan Party;
(xiv) to the shipment dateextent a Borrower is liable for goods sold or services rendered by the applicable Account Debtor to a Borrower but only to the extent of the potential offset, except to the extent any waivers of offset rights, which are in form and substance reasonably satisfactory to the Collateral Agent, are in effect in respect of such Account; provided, that notwithstanding the foregoing, this clause (xiv) shall not result in the ineligibility of any Accounts that are the obligation of any Account Debtor specified on Part C of Annex II (including ExxonMobil) or any other Investment Grade entity or Person which remain unpaid sixty (60) days after is identified as such on the due date Borrowing Base Certificate, or any of their respective Affiliates, so long as the relevant Account Debtor remains Investment Grade in an amount not to exceed, in the aggregate for all such Accounts, unless in either case Agent has made specific the greater of (A) $50,000,000 or (B) the least of (x) 20% of Accounts Availability, (y) 10% of Borrowing Availability and (z) $100,000,000;
(xv) any Account that arises with respect to goods that are delivered on a bill-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale or other terms by reason of which the payment by the Account Debtor exceptions from is or may be conditional;
(xvi) any Account that is in default; provided that, without limiting the generality of the foregoing, an Account shall be deemed in default upon the occurrence of any of the following:
(A) any Account not paid within 90 days following its original invoice date; or
(B) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or
(C) in respect of which a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(xvii) any Account that is the obligation of an Account Debtor if 50% or more of the dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this clause Section 2.21(a) (other than clauses (i); , (iiv) all and (vi));
(xviii) any Account as to which any of the representations or warranties in the Loan Documents in respect of Accounts owing are untrue;
(xix) to the extent such Account is evidenced by a single Account Debtorjudgment, including a currently scheduled Account, if twenty-five percent Instrument or Chattel Paper;
(25%xx) or more of to the balance owing by extent such Account Debtor to exceeds any Borrower is ineligible due to credit limit established by the criteria Collateral Agent, in clause its reasonable credit judgment exercised in good faith; or
(ixxi) above; (iii) Accounts with respect to any Account on which the Account Debtor is a Loan Party or a directorGovernmental Authority, officer, employee, Subsidiary or Affiliate of any Loan Party; unless (iva) Accounts with respect to which if the Account Debtor is the United States of America America, any State or political subdivision thereof or any department, agency or instrumentality of the United States of America or any State or political subdivision thereof, unless with respect to any such Account, the applicable Borrower has complied assigned its rights to Agent's satisfaction with payment of such Account to the provisions of Administrative Agent pursuant to the Federal Assignment of Claims Act of 1940, includingas amended, without limitationin the case of any such federal Governmental Authority, executing and delivering pursuant to Agent all statements any requirements of assignment and/or notification which are applicable law, if any, in form the case of any such other Governmental Authority, and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (vb) Accounts with respect to which if the Account Debtor is not a resident any other Governmental Authority, the applicable Borrower has, if required by any applicable law, assigned its rights to payment of such Account to the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect Administrative Agent pursuant to which applicable law, if any, and, in each such case where such acceptance and acknowledgment is required by applicable law, such assignment has been accepted and acknowledged by the Account Debtor has asserted a counterclaim or has a right of setoff, appropriate government officers to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofso required.
Appears in 1 contract
Sources: Senior Secured Revolving Credit Agreement (PBF Holding Co LLC)
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practicesGood Faith, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, Accounts shall not be Eligible Accounts: (i) Accounts which remain unpaid ninety one hundred twenty (90120) days after the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)invoice; (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five fifty percent (2550%) or more of the balance owing by such Account Debtor to any a Borrower is ineligible due to are not, or would not be, Eligible Accounts as a result of the criteria in application of the provisions of the preceding clause (i) above); (iii) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan PartyBorrower; (iv) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province the Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Ottawa or Quebec)Saskatchewan Provinces of Canada, unless the Account Debtor has supplied the applicable Borrower with an irrevocable letter of credit, issued by a financial institution satisfactory to Agent, sufficient to cover such Account in form and substance reasonably satisfactory to Agent; (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, setoff (but only to the extent of such asserted counterclaim or right setoff unless the Account Debtor is refusing to pay the remaining amount of setoffsuch Account or Accounts); (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practicesGood Faith; (viii) Accounts with respect to which Agent, on behalf of Lenders, Agent does not have a first and valid fully perfected Liensecurity interest; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereof.Account
Appears in 1 contract
Sources: Loan and Security Agreement (Abc Rail Products Corp)
Eligible Accounts. Agent ELIGIBLE ACCOUNTS" shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which mean all Accounts of Borrowers are eligible (Borrower other than the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accountsfollowing: (ia) Accounts which remain unpaid as of ninety (90) days (provided that such period shall be 120 days as to those Accounts from Account Debtors listed on annexed SCHEDULE 9.1A, if any, as amended from time to time with the prior written consent of Agent) after the earlier date of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)with respect thereto; (iib) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to by reason of the criteria criterion set forth in clause CLAUSE (ia) aboveof this SECTION 9.1; (iiic) Accounts with respect to which the Account Debtor is an Affiliate of Borrower or a director, officer or employee of Borrower or its Affiliates; (d) Accounts with respect to which the Account Debtor is a Loan Party Governmental Authority or a director, officer, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, prime contractor thereof unless with respect to any such Account, the applicable Borrower has complied in a manner satisfactory to Agent's satisfaction Agent with the provisions of the Federal Assignment of Claims Act of 1940, includingas amended, without limitationor similar law or statute, executing if any, of the relevant state, province, municipality or other jurisdiction and delivering any amendments thereto, relative to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (ve) except as to Accounts from Account Debtors listed on annexed SCHEDULE 9.1B, as amended from time to time with the prior written consent of Agent, Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (viother than the provinces of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island, Newfoundland and Nova Scotia and the Northwest Territories) Accounts with respect to which unless such Account is payable in United States Dollars and the Account Debtor has asserted supplied Borrower with (i) an irrevocable letter of credit, issued by a counterclaim or has a financial institution satisfactory to Agent, in an amount sufficient to cover such Account and in form and substance satisfactory to Agent and without right of setoffsetoff or (ii) foreign credit insurance from an issuer, and in form and substance, satisfactory to Agent in an amount sufficient to cover such Account, and provided Agent has been made the extent of loss payee with respect to such counterclaim or right of setoffinsurance pursuant to an endorsement satisfactory in form and substance to Agent; (viif) Accounts arising with respect to goods which have not been shipped and delivered to and accepted as satisfactory by the Account Debtor or arising with respect to services which have not been fully performed and accepted as satisfactory by the Account Debtor; (g) Accounts for which the prospect of payment in full or performance in a timely manner by the Account Debtor is or may be is likely to become impaired as determined by Agent in the reasonable exercise of its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (viiih) Accounts which are not invoiced (and dated as of the date of such invoice) and sent to the Account Debtor within five (5) days after delivery of the underlying goods to or performance of the underlying services for the Account Debtor; (i) Accounts with respect to which Agent, on behalf of Lenders, Agent does not have a first and valid fully perfected Lien free and clear of any other Lien; (ixj) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (xk) Accounts with respect to which the Account Debtor's obligation to pay the Account is contractually conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return rightright (other than reurn rights arising in the ordinary business practice of the Account Debtor), as with sales made on a bill-guaranteed sale, ▇▇▇-hold, guaranteed sale▇-and-hold, sale-or-return, demonstration, sale on approval or other terms by reason of which the payment by the Account Debtor is or may be conditional (except with respect to Accounts in connection with which Account Debtors are entitled to return Inventory solely on the basis of the quality of such Inventory) or consignment basis; (xil) Accounts to the extent that the Account Debtor's indebtedness to Borrower exceeds fifteen percent (15%) (provided that such percentage shall be thirty percent (30%) in the Obligors exceeds a credit limit determined by Agent case of General Nutrition Center or WalMart) of the lesser of (i) the Revolving Commitment then in Agent's sole reasonable discretion exercised in accordance with its customary business practiceseffect or (ii) the aggregate Accounts then owing to Borrower; (xiim) contra Accounts to the extent of the amount of the accounts payable owed by Borrower to the Account Debtor; (n) Accounts with respect to which the Account Debtor is located in New Jersey, Minnesota, Indiana, or any other state denying as to which Agent hereafter give Borrower notice that such state denies creditors access to its courts in the absence of a notice Notice of business activities report Business Activities Report or other similar filing, unless the applicable Borrower has either qualified as a foreign corporation authorized to do transact business in such state or has filed such notice a Notice of business activities report Business Activities Report or similar filing with the applicable Governmental Authority in such state agency for the then current year; (xiiio) Accounts representing progress bill▇▇▇▇; evidenced by Chattel Paper or any Instrument of any kind, to the extent possession of such Chattel Paper or Instrument is not granted to Agent and (▇ivp) Accounts with respect to which any disclosure is required Agent determines in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease good faith to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofunacceptable.
Appears in 1 contract
Eligible Accounts. On any date of determination of the Borrowing Base, all of the Accounts owned by any Borrower, as applicable, and reflected in the most recent Borrowing Base Certificate delivered by the Borrower Representative to the Collateral Agent and the Administrative Agent, shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible (the "be “Eligible Accounts")” for the purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies. Without limiting Agent's discretion, Eligible Accounts shall not include any of the following Accounts, shall not be Eligible Accounts: :
(i) Accounts any Account in which remain unpaid ninety (90) days after the earlier Collateral Agent, on behalf of the original date of the applicable invoice or the shipment dateSecured Parties, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i); does not have a valid perfected First Priority Lien;
(ii) all Accounts owing any Account that is not owned by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; Credit Party;
(iii) Accounts with respect to which the any Account due from an Account Debtor that is not domiciled in the United States or Canada and (if not a Loan Party natural person) organized under the laws of the United States or a director, officer, employee, Subsidiary Canada or Affiliate of any Loan Party; political subdivision thereof;
(iv) Accounts any Account that is payable in any currency other than Dollars;
(v) any Account that does not arise from the sale of goods or the performance of services by such Credit Party in the ordinary course of its business;
(vi) any Account that does not comply with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the all applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940legal requirements, including, without limitation, executing all laws, rules, regulations and delivering orders of any Governmental Authority;
(vii) any Account which is owed by an Account Debtor located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit the applicable Borrower to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Borrower (at the time the Account was created and at all times thereafter) (i) has qualified to do business in such jurisdiction and such qualification enables Borrower to seek judicial recourse in such jurisdiction, (ii) had filed and has filed and maintained effective such report with the appropriate office or agency of in such jurisdictions, as applicable, or (iii) was and has continued to be exempt from filing such report and has provided the Collateral Agent all statements with satisfactory evidence thereof;
(viii) any Account (a) upon which the right of assignment and/or notification a Borrower, as applicable, to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever unless such condition is satisfied or (b) as to which are in form and substance acceptable such Borrower is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial or administrative process or (c) that represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to a Borrower’s or any Guarantor’s, as applicable, completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer;
(ix) to the extent that any defense, counterclaim, setoff or dispute is asserted as to such Account, it being understood that the amount of any such defense, counterclaim, setoff or dispute shall be disclosed to the Collateral Agent and which are deemed necessary by Agent to effectuate that the assignment to Agent remaining balance of such Accounts; the Account shall be eligible;
(vx) Accounts [RESERVED]
(xi) any Account with respect to which an invoice or other electronic transmission constituting a request for payment, reasonably acceptable to the Collateral Agent in form and substance, has not been sent on a timely basis to the applicable Account Debtor according to the normal invoicing and timing procedures of a Borrower, as applicable;
(xii) any Account that arises from a sale to any director, officer, other employee or Affiliate of any Credit Party, or to any entity that has any common officer or director with any Credit Party;
(xiii) to the extent Holdings or any Subsidiary is not a resident of liable for goods sold or services rendered by the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the applicable Account Debtor has asserted to any Credit Party or any Subsidiary of a counterclaim or has a right of setoff, Credit Party but only to the extent of such counterclaim the potential offset;
(xiv) any Account that arises with respect to goods that are delivered on a b▇▇▇-and-hold, cash-on-delivery basis or right placed on consignment, guaranteed sale or other terms by reason of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired conditional;
(xv) any Account that is in default; provided, that, without limiting the generality of the foregoing, an Account shall be deemed in default upon the occurrence of any of the following:
(1) that portion of any Account that is more than sixty (60) days past due according to its original terms of sale or which has been written off or designated as determined uncollectible by such Borrower (and, for the avoidance of doubt, the remainder of any such Account shall not be in default for purposes hereof unless all Accounts of the applicable Account Debtor are ineligible pursuant to clause (xvi) below); or
(2) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors, has become insolvent, admits in writing its inability to pay its bills as they become due or fails to pay its debts generally as they come due; or
(3) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors; or
(4) the payment terms (at inception or as modified from time to time) of any Account are not reasonably satisfactory to the Administrative Agent or Collateral Agent (it being understood that Borrowers’ customary terms as of the Closing Date are satisfactory to the Administrative Agent and the Collateral Agent);
(xvi) any Account that is the obligation of an Account Debtor (other than an individual) if 50% or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in clause (xv) above;
(xvii) any Account as to which any of the representations or warranties in the Loan Documents are untrue;
(xviii) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper;
(xix) to the extent (A) the Accounts owing from such Account Debtor and its sole Affiliates to the Borrowers exceeds 20% of the aggregate of all Eligible Accounts or (B) exceeds any credit limit established by the Collateral Agent, in good faith and in the exercise of reasonable discretion exercised (from the perspective of a secured asset-based lender) business judgment, following prior notice of such limit by the Collateral Agent to the Borrower Representative;
(xx) that portion of any Account (1) in accordance with its customary business practices; (viii) Accounts respect of which there has been, or should have been, established by a Borrower or any Guarantor a contra account, whether in respect of contractual allowances with respect to such Account, audit adjustment, anticipated discounts or otherwise or (2) which Agentis due from an Account Debtor to whom any Credit Party owes a trade payable, but only to the extent of such trade payable;
(xxi) any Account on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is a Governmental Authority, unless a Credit Party, as applicable, has assigned its rights to payment of such Account to the subject Administrative Agent pursuant to the Assignment of bankruptcy or Claims Act of 1940, as amended, in the case of a similar insolvency proceeding federal Governmental Authority, and pursuant to applicable law, if any, in the case of any other Governmental Authority, and such assignment has been accepted and acknowledged by the appropriate government officers; or
(xxii) any Account which is due from an Account Debtor that has been structured as note payable or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified restructured as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofnote payable.
Appears in 1 contract
Eligible Accounts. Agent Accounts of the U.S. Borrower and the other U.S. Domiciled Loan Parties subject to the Lien of the Agent, the value of which shall have the sole rightbe determined by taking into consideration, in its sole reasonable discretion exercised among other factors, their book value determined in accordance with its customary business practicesGAAP; provided, however, that none of the following classes of Accounts shall be deemed to determine which Accounts of Borrowers are eligible (the "be U.S. Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accounts: :
(iaa) Accounts which remain unpaid that do not arise out of sales of goods or rendering of services in the ordinary course of the U.S. Borrower’s or the relevant U.S. Domiciled Loan Party’s business;
(bb) Accounts payable other than in Dollars or that are otherwise on terms other than those normal or customary in the U.S. Borrower’s or the relevant U.S. Domiciled Loan Party’s business;
(cc) Accounts more than ninety (90) days after past original invoice date;
(dd) Accounts owing from any Person that is an Affiliate of a Loan Party;
(ee) Accounts arising out of sales to Account Debtors outside the earlier United States and Canada, unless the Account is supported by a letter of credit (the original date of which is delivered to and directly drawable by the applicable invoice Agent) or credit insurance satisfactory in all respects to the shipment date, and Accounts which remain unpaid sixty Agent;
(60ff) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i); (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five from any Person from which an aggregate amount of fifty percent (2550%) or more of the balance Accounts owing therefrom are otherwise ineligible;
(gg) Accounts in respect of Contra Accounts;
(hh) Accounts owing by a Government Authority (other than Municipal Government Accounts that, but for this clause (h), are U.S. Eligible Accounts), unless such Account Debtor Accounts are Federal Government Accounts that have been assigned to any Borrower is ineligible due to Agent in compliance with the criteria Assignment of Claims Act; provided that Accounts that are not compliant with the Assignment of Claims Act may be included in the U.S. Borrowing Base as provided in clause (b) of the definition of U.S. Borrowing Base;
(ii) Accounts in excess of twenty (20%) of all U.S. Eligible Accounts owing to any Account Debtor or Affiliate of such account debtor whose total Accounts comprise greater than twenty (20%) of all U.S. Eligible Accounts.
(jj) Accounts owing from any Person that (i) abovehas disputed liability for any Accounts owing from such Person or (ii) has otherwise asserted any claim, demand or liability against any Loan Party or any Subsidiary thereof, whether by action, suit, counterclaim or otherwise; provided, that for purposes of subclause (iiij)(i), such Accounts shall be excluded only to the extent of the amounts being disputed by such Person at any date of determination;
(kk) Accounts with respect owing from any Person that is or becomes the subject of any action or proceeding of a type described in Section 11.1(f), or admits in writing an inability, or fails generally to which pay, its debts as they become due, or is not Solvent, or is subject to any country sanctions program or specially designated nationals list maintained by the Account Debtor Office of Foreign Assets Control of the U.S. Treasury Department;
(ll) Accounts (i) owing from any Person that is also a supplier to or creditor of a Loan Party or any Subsidiary thereof unless such Person has waived any right of setoff in a directormanner acceptable to the Agent or (ii) representing any manufacturer’s or supplier’s credits, officerdiscounts, employee, Subsidiary incentive plans or Affiliate of similar arrangements entitling any Loan Party; Party or any Subsidiary thereof to discounts on future purchase therefrom;
(ivmm) Accounts with respect to which the Account Debtor is the United States arising out of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold▇-and-hold, progress billing, guaranteed sale, sale-or-return, sale on approval or consignment basis; basis or subject to any right of return, setoff or charge back;
(xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xiinn) Accounts with respect to which the Account Debtor representations and warranties set forth in Section 3 of the U.S. Security Agreement applicable to Accounts are not correct;
(oo) Accounts in respect of which the U.S. Security Agreement, after giving effect to the related filings of financing statements that have then been made, if any, does not or has ceased to create a valid and perfected first priority lien or security interest in favor of the Agent, on behalf of the U.S. Facility Secured Parties, securing the U.S. Facility Obligations; and
(pp) Accounts owing from any Person that is located in any a state denying creditors access to its courts in that requires the absence filing of a notice of business activities activity report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts and with respect to which any disclosure is required in the applicable Accounts Trial Balance U.S. Borrower or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than U.S. Domiciled Loan Party, as applicable, has not actually filed such a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofreport.
Appears in 1 contract
Sources: Credit Agreement (Clean Harbors Inc)
Eligible Accounts. Agent shall have The Eligible Accounts are bona fide existing payment obligations of Account Debtors created by the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts sale and delivery of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accounts: (i) Accounts which remain unpaid ninety (90) days after the earlier of the original date of the applicable invoice Inventory or the shipment daterendition of services to such Account Debtors in the ordinary course of Borrower's (or Canadian Subsidiary's, and Accounts which remain unpaid sixty where applicable) business, owed to Borrower (60or Canadian Subsidiary, where applicable) days after the due date without defenses, disputes, offsets, counterclaims, or rights of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i); (ii) all Accounts owing by a single Account Debtor, including a currently scheduled return or cancellation. As to each Eligible Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor is not:
(a) owed by an employee, Affiliate, or agent of Borrower (or Canadian Subsidiary, where applicable),
(b) on account of a transaction wherein goods were placed on consignment or were sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill ▇▇▇ hold, or on any Borrower is ineligible due to other terms by reason of which the criteria in clause (i) above; (iii) Accounts with respect to which payment by the Account Debtor is may be conditional,
(c) payable in a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Party; currency other than Dollars,
(ivd) Accounts with respect to which the owed by an Account Debtor is the United States of America that has or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim has disputed its liability, or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts has made any claim with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's its obligation to pay the Account,
(e) owed by an Account Debtor that is conditional upon subject to any Insolvency Proceeding or is not Solvent or as to which Borrower (or Canadian Subsidiary, where applicable) has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor,
(f) on account of a transaction as to which the goods giving rise to such Account have not been shipped and billed to the Account Debtor or the services giving rise to such Account have not been performed and accepted by the Account Debtor's approval ,
(g) a right to receive progress payments or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress other advance bill▇▇▇▇ ▇; ▇▇t are due prior to the completion of performance by Borrower (▇ivor Canadian Subsidiary, where applicable) Accounts with respect of the subject contract for goods or services, and
(h) an Account that has not been billed to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofcustomer.
Appears in 1 contract
Eligible Accounts. Agent All of the Accounts owned by Borrower reflected in the most recent Borrowing Base Certificate delivered by Borrower to Lender shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible (the "be “Eligible Accounts")” for purposes of this Agreement. Without limiting Agent's discretion, the following Accounts, Eligible Accounts shall not be Eligible Accounts: include any Account of Borrower:
(a) that does not arise from the sale of goods or the performance of services by Borrower in the ordinary course of its business;
(i) Accounts upon which remain unpaid ninety (90) days after Borrower’s right to receive payment is not absolute or is contingent upon the earlier fulfillment of the original date of the applicable invoice any condition whatsoever, or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i); (ii) all Accounts owing by as to which Borrower is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process, or (iii) if the Account represents a single progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to Borrower’s completion of further performance under such contract;
(c) to the extent that any defense, including counterclaim, contra, setoff or dispute is asserted as to such Account (but only to such extent);
(d) that is not a currently scheduled Account, if twenty-five percent (25%) or more true and correct statement of bona fide indebtedness incurred in the amount of the balance owing Account for merchandise sold to or services rendered and accepted by such the applicable Account Debtor to any Borrower is ineligible due to the criteria in clause Debtor;
(e) that (i) above; is not owned by Borrower, or (iiiii) Accounts with respect is subject to which any lien of any other person, other than liens in favor of Lender and Permitted Liens;
(f) that is the obligation of an Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which the Account Debtor that is the United States of America government or a political subdivision thereof, or any state, county or municipality or department, agency or instrumentality thereofthereof unless Lender, unless in its sole discretion, has agreed to the contrary in writing and Borrower, if necessary or desirable, has complied with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction obligation with the provisions of the Federal Assignment of Claims Act of 1940, includingor any applicable state, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate county or municipal law restricting the assignment to Agent of such Accounts; (v) Accounts thereof with respect to which such obligation;
(g) that is the obligation of an Account Debtor located in a foreign country unless payment thereof is not assured by a resident letter of credit assigned and delivered to Lender, satisfactory to Lender as to form, amount and issuer;
(h) to the United States extent Borrower is liable for goods sold or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which services rendered by the applicable Account Debtor has asserted a counterclaim or has a right of setoff, to Borrower but only to the extent of such counterclaim the potential offset;
(i) that arises with respect to goods that are delivered on a cash-on-delivery basis or right placed on consignment, guaranteed sale or other terms by reason of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent conditional;
(j) that is in default; provided, that, without limiting the generality of the foregoing, an Account shall be deemed in default upon the occurrence of any of the following:
(k) the Account is not paid within sixty (60) days following its sole reasonable discretion exercised in accordance with its customary business practices; original invoice date;
(viiil) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or obligated upon such Account suspends business, makes a similar insolvency proceeding or has made an general assignment of for the benefit of creditors or whose assets have been conveyed fails to pay its debts generally as they come due; or
(m) a receiver petition is filed by or trustee; against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (xincluding any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(n) that is the obligation of an Account Debtor for which fifty percent (50%) or more of the Dollar amount of all Accounts with respect owing by that Account Debtor are ineligible under the other criteria set forth in this Section;
(o) as to which Lender’s lien thereon is not a first priority perfected lien;
(p) as to which any of the Account Debtor's obligation representations or warranties in the Loan Documents are untrue in any material respect;
(q) to pay the extent such Account is conditional upon the Account Debtor's approval evidenced by a judgment, Instrument or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; Chattel Paper;
(xir) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined such Account, together with all other Accounts owing by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the such Account Debtor and its Affiliates as of any date of determination exceed 20% of all Eligible Accounts;
(s) that is located payable in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person currency other than a Borrower. In the event Dollars; or
(t) that previously scheduled Eligible Accounts is an obligation of an account debtor whose credit is not acceptable to Bank in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofits reasonable discretion.
Appears in 1 contract
Sources: Revolving and Non Revolving Credit Loan Agreement (ArborGen Inc.)
Eligible Accounts. Agent shall have As to each Account represented by the sole rightBorrower to be an "Eligible Account" on a Borrowing Base Certificate, as of the date of each such Borrowing Base Certificate:
(a) Such Account arose in its sole reasonable discretion exercised the ordinary course of the business of Borrower out of either (i) a bona fide sale of Inventory by the Borrower, and in such case such Inventory has in fact been shipped to, and accepted and retained by, the appropriate account debtor or the sale has otherwise been consummated in accordance with its customary business practicessuch order, or (ii) services performed by the Borrower, under an enforceable contract, and in such case such services have in fact been performed for the appropriate account debtor in accordance with such contract.
(b) Such Account represents a legally valid and enforceable claim which is due and owing to the Borrower, by such account debtor and for such amount as is represented by the Borrower, to determine which Accounts the Bank on such Borrowing Base Certificate, such Account is due and payable not more than thirty (30) days from the delivery of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretionrelated Inventory, or the following Accountsperformance of the related services, shall giving rise to such Account and such Account has not be Eligible Accounts: (i) Accounts which remain unpaid been due for more than ninety (90) days after (from the earlier date of invoice).
(c) The unpaid balance of such Account is as represented by the Borrower, and not subject to any defense, counterclaim, setoff, credit, allowance or adjustment by the account debtor because of returned, inferior or damaged Inventory or services, or for any other reason, except for customary discounts allowed by Borrower, in the ordinary course of business for prompt payment, and there is no agreement between Borrower, the related account debtor and any other person for any rebate, discount, concession or release of liability, in whole or in part.
(d) The transactions leading to the creation of such Account comply with all applicable state and federal laws and regulations.
(e) The Borrower has granted to the Bank a perfected security interest in such Account (as an item of the original date Collateral) prior in right to all other persons (other than Permitted Liens), and such Account has not been sold, transferred or otherwise assigned by the Borrower, to any person, other than the Bank.
(f) Such Account is not represented by any note, trade acceptance, draft or other negotiable instrument or by any chattel paper, except any such as have been endorsed and delivered by the Borrower, to the Bank on or prior to such Account's inclusion on such Borrowing Base Certificate.
(g) The Borrower has not received, with respect to such Account, any notice of the applicable invoice death of the related account debtor or any partner thereof, nor of the dissolution, liquidation, termination of existence, insolvency, business failure, appointment of a receiver for any part of the property of, assignment for the benefit of creditors by, or the shipment datefiling of a petition in bankruptcy or the commencement of any proceeding under any bankruptcy or insolvency laws by or against, and Accounts which remain unpaid sixty such account debtor.
(60h) days after the due date of The account debtor on such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause is not:
(i); ) an affiliate of the Borrower;
(ii) all Accounts owing by a single Account Debtorthe United States of America or any department, including a currently scheduled Account, if twenty-five percent (25%) agency or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; instrumentality thereof;
(iii) Accounts with respect a citizen or resident of any jurisdiction other than one of the United States (unless such Foreign Account is subject to a guaranty of payment in the form of a letter of credit issued by a Bank which is acceptable to the Bank); or
(iv) an account debtor whom the Bank has, in the exercise of such Bank's sole discretion, determined to be (based on such factors as the Bank deems appropriate) an ineligible account debtor and as to which the Bank has notified the Borrower, PROVIDED, HOWEVER, that any such notice shall not apply as to any Account Debtor is of such account debtor which has been included on a Loan Party or a directorBorrowing Base Certificate by the Borrower prior to the giving of such notice by the Bank and which meets each and every other requirement under this Agreement for the denomination of such Account as an "Eligible Account." NOTWITHSTANDING the foregoing, officerthe Borrower may include in Eligible Accounts, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which provided the Account Debtor is otherwise eligible hereunder, up to $100,000.00 of Accounts where the account debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions .
(i) Such Account is not payable by an account debtor for whom Ten percent (10%) or more of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, total amount then owed to the extent of such counterclaim Borrower and/or its Subsidiaries by that account debtor is ninety (90) days or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofmore from invoice date.
Appears in 1 contract
Sources: Commercial Loan Agreement (Neutral Posture Ergonomics Inc)
Eligible Accounts. Agent Upon Borrowers' delivery to Lender of an Accounts Report, Lender shall have the sole rightdetermine, in its sole reasonable discretion exercised in accordance with its customary business practicesjudgment, to determine which Accounts of Borrowers listed thereon are eligible (the "Eligible Accounts"). Without limiting Agent's discretionIn making this determination, Lender will consider the following Accountsrequirements:
(A) If the Account arises because of the sale of goods, shall such goods have been shipped or delivered on open account and on an absolute sale basis and not be Eligible Accounts: on consignment, on approval or on a sale-or-return basis or subject to any other repurchase or return agreement (other than agreements to repurchase and return any Inventory whose code dating has expired or which is deemed "unwholesome" by the Account Debtor, and for which Borrowers have established reserves satisfactory to Lender) and no material part of such goods has been returned (other than returns described in Section 7.4 of this Agreement), repossessed, rejected, lost or damaged;
(B) The Account is not evidenced by chattel paper or an instrument of any kind;
(C) The Account Debtor obligated on such Account is not insolvent or the subject of any bankruptcy or insolvency proceeding of any kind and Lender is satisfied with the creditworthiness of such Account Debtor, in Lender's reasonable discretion;
(i) Accounts The Account is owing from an Account Debtor located within the United States or Canada, or (ii) if the Account is owing from an Account Debtor located outside the United States or Canada, such Account Debtor has furnished Borrowers with an irrevocable letter of credit which remain has been issued or confirmed by a financial institution acceptable to Lender (or such Account is covered by foreign credit insurance), and said letter of credit (or credit insurance) is in form and substance acceptable to Lender, has been pledged to Lender, and is payable in United States dollars in an amount not less than the face value of the Account;
(E) The Account is a valid, legally enforceable obligation of the relevant Account Debtor and such Account Debtor has not asserted any offset, counterclaim or defense denying liability thereunder; provided, however, that if such offset, counterclaim or defense has been asserted, such Account shall be ineligible only to the extent of such asserted offset, counterclaim or defense;
(F) The Account is subject to and covered by Lender's perfected security interest and is not subject to any other lien, claim, encumbrance or security interest other than Permitted Liens;
(G) The Account is evidenced by an invoice or other documentation in form acceptable to Lender;
(H) The Account has not remained unpaid for a period exceeding ninety (90) days after the earlier date of invoice and not more than fifty percent (50%) of the original date balance of all Accounts owing from the applicable invoice or the shipment date, and Accounts which remain Account Debtor obligated under such Account has remained unpaid sixty for more than ninety (6090) days after the due date of such Accounts, unless in either case Agent has made specific invoice date;
(I) the Account Debtor exceptions is not owing from the criteria set forth in this clause an (i); ) employee, officer, agent, director or Affiliate of the Borrowers or (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; (iii) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which the Account Debtor is from the United States of America or Canada or any department, agency or instrumentality thereof unless, with respect to an Account Debtor which is the United States or any department, agency or instrumentality thereof, unless with respect such Account has been validly assigned by Borrowers to any such Account, the applicable Borrower has complied to Agent's satisfaction Lender in full compliance with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing as amended;
(J) Each of the warranties and delivering to Agent all statements representations set forth in Section 9.2 of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts this Agreement has been reaffirmed with respect to which such Account at the Account Debtor is not a resident of time the United States or Canada most recent Accounts Report was delivered to Lender; and
(excluding any Maritime Province or Quebec); (viK) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the The Account is conditional upon the Account Debtor's approval one against which Lender is legally permitted to make loans and advances. Nothing contained in this Agreement or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report Ancillary Agreements shall require Lender to advance funds or similar filing, unless the applicable Borrower has either qualified as a foreign corporation otherwise extend credit to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Borrowers against Accounts representing "progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofbilling" for work not yet completed.
Appears in 1 contract
Sources: Loan and Security Agreement (Vita Food Products Inc)
Eligible Accounts. Agent ELIGIBLE ACCOUNTS" shall have mean all Accounts other than the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accountsfollowing: (i) Accounts which remain unpaid as of the earlier to occur of ninety (90) days after the earlier of due date specified in the original date of the applicable invoice with respect thereto or the shipment date, and Accounts which remain unpaid sixty one hundred twenty (60120) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)original invoice with respect thereto; (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to by reason of the criteria criterion set forth in clause (i) aboveof this Section 9.1; (iii) Accounts with respect to which the Account Debtor is an Affiliate of either Borrower or a Loan Party Guarantor or a director, officerofficer or employee of Borrower, employee, Subsidiary any Guarantor or Affiliate of any Loan Partyits Affiliates; (iv) Accounts with respect to which the Account Debtor is the United States of America a Governmental Authority or prime contractor thereof unless Borrower or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower Guarantor has complied in a manner satisfactory to Agent's satisfaction Agent with the provisions of the Federal Assignment of Claims Act of 1940, includingas amended, without limitationor similar law or statute of the relevant state, executing province, municipality or other jurisdiction and delivering any amendments thereto, relative to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding other than the provinces of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island, Newfoundland and Nova Scotia and the Northwest Territories) unless such Account is payable in United States Dollars and the Account Debtor has supplied Borrower or any Maritime Province or Quebec)Guarantor with an irrevocable letter of credit, issued by a financial institution satisfactory to the Required Lenders, in an amount sufficient to cover such Account and in form and substance satisfactory to the Required Lenders and without right of setoff; (vi) Accounts arising with respect to goods which have not been shipped and delivered to and accepted as satisfactory by the Account 50 Debtor has asserted a counterclaim or has a right of setoff, arising with respect to services which have not been fully performed and accepted as satisfactory by the extent of such counterclaim or right of setoffAccount Debtor; (vii) Accounts for which the prospect of payment in full or performance in a timely manner by the Account Debtor is or may be is likely to become impaired as determined by Agent in the exercise of its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (viii) Accounts which are not invoiced (and dated as of the date of such invoice) and sent to the Account Debtor within five (5) days after delivery of the underlying goods to or performance of the underlying services for the Account Debtor; (ix) Accounts with respect to which Agent, on behalf of the Lenders, does not have a first and valid fully perfected Lien free and clear of any other Lien; (ixx) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (xxi) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-guaranteed sale, ▇▇▇-hold, guaranteed sale▇-and-hold, sale-or-return, demonstration, sale on approval or other terms by reason of which the payment by the Account Debtor is or may be conditional (except with respect to Accounts in connection with which Account Debtors are entitled to return Inventory solely on the basis of the quality of such Inventory) or consignment basis; (xixii) Accounts to the extent that the Account Debtor's indebtedness to the Obligors Borrower or any Guarantor exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised following prior written notice of such credit limit from Agent to Borrower or such Guarantor; (xiii) Accounts with respect to which any disclosure is required in accordance with its customary business practicesSection 9.2; (xiixiv) contra Accounts to the extent of the amount of the accounts payable owed by Borrower or any Guarantor to the Account Debtor; (xv) Accounts with respect to which the Account Debtor is located in Minnesota or any other state denying creditors access to its courts in the absence of a notice Notice of business activities report Business Activities Report or other similar filing, filing unless the applicable Borrower or any Guarantor has either qualified as a foreign corporation authorized to do transact business in such state or has filed such notice a Notice of business activities report Business Activities Report or similar filing with the applicable Governmental Authority in such state agency for the then current year; (xiiixvi) Accounts representing progress bill▇▇▇▇evidenced by Chattel Paper or any Instrument of any kind, to the extent possession of such Chattel Paper or Instrument is not granted to Agent, for the benefit of the Lenders; (▇ivxvii) Accounts with respect which Agent determines in good faith to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof be unacceptable and (xvxviii) the Accounts do not arise from the sale of any Person other than a BorrowerInventory produced in violation of the Fair Labor Standards Act so as to be subject to the so-called "hot goods" provision contained in Title 19 U.S.C., Section 215(a)(1). In the event that an Eligible Account previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease a Borrowing Base Certificate ceases to be an Eligible Accounts under the above described criteriaAccount, Borrower Representative shall notify notify, or shall cause the applicable Guarantor to notify, Agent thereof promptly after any Obligor has obtained knowledge thereofimmediately.
Appears in 1 contract
Sources: Secured Credit Agreement (Gibraltar Packaging Group Inc)
Eligible Accounts. Agent Upon Borrowers' delivery to Lender of an Accounts Report, Lender shall have the sole rightdetermine, in its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion, to determine which Accounts of Borrowers listed thereon are eligible (the "Eligible Accounts"). Without limiting Agent's discretionIn making this determination, Lender will consider the following Accountsrequirements:
(a) If the Account arises because of the sale of goods, shall such goods have been shipped or delivered on open account and on an absolute sale basis and not be Eligible Accounts: on consignment, on approval or on a sale-or-return basis or subject to any other repurchase or return agreement and no material part of such goods has been returned (other than returns described in Section 7.4 of this Agreement), repossessed, rejected, lost or damaged;
(b) The Account is not evidenced by chattel paper or an instrument of any kind;
(c) The Account Debtor obligated on such Account, to the knowledge of Borrowers, is not insolvent or the subject of any bankruptcy or insolvency proceeding of any kind and Lender is satisfied with the creditworthiness of such Account Debtor;
(i) Accounts which remain The Account is owing from an Account Debtor located within the United States or, (ii) if the Account is owing from an Account Debtor located outside the United States,
(A) such Account Debtor is set forth on Exhibit N hereto or Lender has approved in writing of the Account Debtor obligated under such Account and (B) notwithstanding Section 3.1(h) hereof, such Account has not remained unpaid for a period exceeding ninety (90) days after the earlier due date of invoice;
(e) The Account is a valid, legally enforceable obligation of the original date relevant Account Debtor and it shall not be an Eligible Account to the extent of the applicable any setoff, counterclaim, credit, allowance or adjustment asserted by such Account Debtor;
(f) The Account is subject to and covered by Lender's perfected security interest and is not subject to any other lien, claim, encumbrance or security interest;
(g) The Account is evidenced by an invoice or the shipment date, other documentation in form acceptable to Lender;
(h) The Account is due and Accounts which remain unpaid payable within sixty (60) days after the date of the invoice and has not remained unpaid for a period exceeding ninety (90) days after the due date of invoice (except with respect to certain "tooling" Accounts as determined by Lender in its sole discretion, such Accounts, unless in either case Agent Account has made specific Account Debtor exceptions from not remained unpaid for a period exceeding one hundred fifty (150) days after the criteria set forth in this clause due date of invoice) and not more than fifty percent (i); (ii50%) of the balance of all Accounts owing by a single from the Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by Debtor obligated under such Account Debtor to any Borrower is ineligible has remained unpaid for more than ninety (90) days after the invoice due to the criteria in clause date;
(i) above; (iii) Accounts with respect to which the The Account Debtor is a Loan Party or a directornot owing from an employee, officer, employeeagent, Subsidiary director, stockholder or Affiliate of any Loan Party; (iv) Accounts with respect to which the Account Debtor is or from the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; ;
(vj) Accounts with respect to which the The Account Debtor is not one in which, when added to a resident particular Account Debtor's other indebtedness to Borrowers, exceeds fifty percent (50%) of the United States or Canada all Accounts of Borrowers (excluding any Maritime Province or Quebec); (viexcept that Accounts excluded from Eligible Accounts solely by reason of this Section 3.1(j) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, shall be included to the extent of such counterclaim or right concentration limit);
(k) Each of setoff; (vii) Accounts for which the prospect warranties and representations set forth in Section 9.2 of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts this Agreement has been reaffirmed with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Liensuch Account at the time the most recent Accounts Report was delivered to Lender; and
(ixl) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the The Account is conditional upon the Account Debtor's approval or one against which Lender is otherwise subject legally permitted to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof make loans and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofadvances.
Appears in 1 contract
Eligible Accounts. The Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without In addition, without limiting the Agent's discretion, unless otherwise agreed by the Agent in writing, the following Accounts, shall Accounts are not be Eligible Accounts: (ia) Accounts which remain unpaid more than ninety (90) days after the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)invoice date based upon the end-of-the-month aging; (iib) all Accounts owing by a single Account Debtor, including a currently scheduled AccountAccounts, if twenty-five fifty percent (2550%) or more of the balance owing by such Account Debtor to any the Borrower is ineligible due to the criteria in clause (i) abovefor any reason; (iiic) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Partythe Borrower; (ivd) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect the Borrower assigns its right to any payment of such AccountAccounts to the Agent pursuant to, and in full compliance with, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accountsas amended; (ve) Accounts with respect to which the Account Debtor is not a resident of the continental United States or Canada (excluding any Maritime Province or Quebec)States; (vif) Accounts in dispute or with respect to which the Account Debtor has asserted in writing or either the Borrower or the Agent has reason to believe the Account Debtor is entitled to assert a counterclaim or has asserted in writing or either the Borrower or the Agent has reason to believe the Account Debtor is entitled to assert a right of setoff, to the extent of such counterclaim or right of setoff; (viig) Accounts for with respect to which the prospect of payment or performance by the Account Debtor is or may will be impaired impaired, as determined by the Agent in the exercise of its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (viiih) Accounts with respect to which Agent, on behalf of Lenders, the Agent does not have a first and valid fully perfected Liensecurity interest; (ixi) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (xj) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold▇-and-hold, guaranteed sale, sale-orsale- and-return, sale on approval or consignment basis; (xik) Accounts to the extent that the Account Debtor's indebtedness to the Obligors Borrower exceeds a credit limit determined by the Agent in the Agent's sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (xii1) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report New Jersey, Minnesota, Tennessee or similar filing, Indiana unless the applicable Borrower (i) has either qualified as received a foreign corporation certificate of authority to do business business, and is in good standing, in such state state, or (ii) has filed such notice a Notice of business activities report Business Activities Report (or similar filing other comparable required report) with the applicable proper authorities of such state agency for the then current year; (xiiim) Accounts representing progress bill▇▇▇▇which arise out of sales not made in the ordinary course of the Borrower's business; (▇ivn) Accounts with respect to which the Account Debtor has returned to the Borrower all or any portion of the Inventory the sale of which gave rise to such Accounts; and (o) Accounts with respect to which any disclosure document or agreement executed or delivered in connection therewith, or any procedure used in connection with any such document or agreement, fails in any material respect to comply with the requirements of applicable law, or with respect to which any representation or warranty contained in this Agreement is required in untrue. If the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than Borrower determines that a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease Account ceases to be an Eligible Accounts Account under any of the above described criteria, the Borrower Representative shall notify the Agent thereof promptly after any Obligor has obtained knowledge thereofat the earliest reasonable opportunity.
Appears in 1 contract
Sources: Loan and Security Agreement (Amcraft Building Products Co Inc)
Eligible Accounts. Agent shall have An “Eligible Account” is an Account that, when scheduled to Lender and at all times thereafter, does not violate the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which negative covenants and other provisions of this Section 5 and does satisfy the positive covenants and other provisions of this Section 5. The following Accounts of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, not and shall not be considered Eligible Accounts: :
(A) (i) With respect to Accounts invoiced upon terms of thirty (30) days or less, all such Accounts which remain unpaid for more than ninety (90) days after the earlier of the original date of the applicable their invoice or the shipment date, and (ii) with respect to Accounts which are invoiced upon terms greater than thirty (30) days, but less than or equal to sixty (60) days, all such Accounts which remain unpaid more than thirty (30) days after their due date, and (iii) all Accounts which are not due and payable within at least sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause their invoice dates;
(i); (iiB) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such said Account Debtor to any Borrower is ineligible due to the criteria in clause (ias a result of Section 5.1(A) above; ;
(iiiC) Accounts which are owing by any Account Debtor involved as a debtor in any bankruptcy or insolvency proceeding, whether voluntary or involuntary;
(D) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employeeemployee or agent of Borrower or is a Parent, a Subsidiary or an Affiliate of any Loan Party; Borrower;
(ivE) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is becomes conditional upon the Account Debtor's ’s approval of the Goods or services, or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold▇-and-hold, guaranteed sale, sale-or-returnsale on approval, sale on approval or return or consignment basis; ;
(xiF) Accounts with respect to which the Account Debtor (1) is not a resident, a citizen of or otherwise located in the United States of America or Canada; or (2) is not subject to service of process in the United States of America or Canada, unless, in either case, such Account is either backed by a letter of credit acceptable to Lender in its sole discretion which is in the possession of, has been assigned to and is directly drawable by Lender, or is insured by credit insurance which has been assigned to Lender and is acceptable to Lender in its sole discretion;
(G) Accounts with respect to which the Account Debtor is (1) the United States of America or any department, agency or instrumentality thereof, unless Borrower assigns its right to payment of such Accounts to Lender in accordance with the Assignment of Claims Act of 1940, as amended, or (2) any country other than the United States of America or any department, agency or instrumentality thereof;
(H) The face amount of any Accounts with respect to which Borrower is or may become liable to the Account Debtor for Goods sold or services rendered by such Account Debtor to Borrower, but only to the extent that of the maximum aggregate amount of Borrower’s liability to such Account Debtor;
(I) Accounts with respect to which (1) the Goods giving rise thereto have not been shipped and delivered to and accepted as satisfactory by the Account Debtor's indebtedness , or (2) the services performed have not been completed and accepted as satisfactory by the Account Debtor;
(J) Accounts which are not invoiced, dated as of such date and sent to the Obligors exceeds a credit limit determined Account Debtor concurrently with the shipment and delivery to and acceptance by Agent in Agent's sole reasonable discretion exercised in accordance said Account Debtor of the goods or the performance of the services giving rise thereto;
(K) Accounts with its customary business practices; respect to which possession or control of the goods sold is held, maintained or retained by Borrower, or by any agent or custodian of Borrower, for the account of or subject to further or future direction from the Account Debtor;
(xiiL) Accounts with respect to which the Account Debtor is located in any a state denying creditors access which requires Borrower, as a precondition to its courts commencing or maintaining an action in the absence courts of that state, either to (1) receive a certificate of authority to do business and be in good standing in such state, or (2) file a notice of business activities report or similar filingreport with such state’ s taxing authority, unless (a) Borrower has taken one of the actions described in clauses (1) or (2), (b) the failure to take one of the actions described in either clause (1) or (2) may be cured retroactively by Borrower at its election, or (c) Borrower has proven, to Lender’s satisfaction, that it is exempt from any such requirements under any such state’s laws;
(M) All or any portion of an Account to the extent there exists or the Account Debtor has asserted a counterclaim or dispute; provided, however, if the amount of such counterclaim or dispute is equal to or greater than ten percent (10%) of the total Account owing from such Account Debtor to the applicable Borrower has either qualified as a foreign corporation to do business in Borrower, then the full amount of such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; Account shall be deemed an ineligible Account;
(xiiiN) Accounts representing progress bill▇▇▇▇; for any Account Debtor which exceed a credit limit established by Lender for such Account Debtor;
(▇ivO) Accounts as to which any covenant, representation or warranty with respect to such Account has been breached;
(P) Accounts which arise in any disclosure is required manner other than (1) the performance of services by Borrower in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof ordinary course of Borrower’s business, and (xv) Accounts of any Person other than a Borrower. In such services have been fully performed and acknowledged and accepted by the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereof.Account Debtor thereunder; or
Appears in 1 contract
Sources: Loan and Security Agreement (United American Healthcare Corp)
Eligible Accounts. Agent shall have As to each Account represented by the sole rightBorrower to be an "Eligible Account" on a Borrowing Base Certificate, as of the date of each such Borrowing Base Certificate:
(a) Such Account arose in its sole reasonable discretion exercised the ordinary course of the business of the Borrower or a Guarantor out of either (i) a bona fide sale of Inventory by the Borrower or such Guarantor, and in such case such Inventory has in fact been shipped to, and accepted and retained by, the appropriate account debtor or the sale has otherwise been consummated in accordance with its customary business practicessuch order, or (ii) services performed by the Borrower or such Guarantor under an enforceable contract, and in such case such services have in fact been performed for the appropriate account debtor in accordance with such contract.
(b) Unless otherwise approved in writing by the Lender on a case-by-case basis, such Account represents a legally valid and enforceable claim which is due and owing to determine which Accounts the Borrower or such Guarantor by such account debtor in at least such amount as is represented by the Borrower to the Bank on such Borrowing Base Certificate, such Account is due and payable not more than sixty (60) days from the delivery of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretionrelated Inventory, or the following Accountsperformance of the related services, shall giving rise to such Account and, unless the Bank otherwise allows, such Account has not be Eligible Accounts: (i) Accounts which remain unpaid been due for more than ninety (90) days after (from the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain invoice).
(c) The unpaid sixty (60) days after the due date balance of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from as represented by the criteria set forth in this clause (i); (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; (iii) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any Lender on such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor Borrowing Base Certificate is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation defense, counterclaim, set-off, credit, allowance or return rightadjustment by the account debtor because of returned, inferior or damaged Inventory or services, or for any other reason, except for customary discounts allowed by Borrower or such Guarantor in the ordinary course of business for prompt payment or as with sales made on a bill-▇▇▇-holdotherwise indicated by credit memos disclosed in such Borrowing Base Certificate, guaranteed saleand there is no agreement between Borrower or such Guarantor, sale-or-returnthe related account debtor and any other person for any rebate, sale on approval discount, concession or consignment basis; release of liability, in whole or in part.
(xid) Accounts The transactions leading to the extent that the creation of such Account Debtor's indebtedness comply with all applicable state and federal laws and regulations.
(e) The Borrower or such Guarantor has granted to the Obligors exceeds Bank a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business perfected security interest in such state or has filed such notice Account (as an item of business activities report or similar filing with the applicable state agency for the current year; Collateral) prior in right to all other persons (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In Permitted Liens), and such Account has not been sold, transferred or otherwise assigned by the event that previously scheduled Eligible Accounts in excess of $100,000 individually Borrower or $250,000 in such Guarantor to any Person, other than the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofBank.
Appears in 1 contract
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accounts: :
(i) Accounts which remain unpaid ninety (90) days after the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i); (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if (1) Accounts owing by such Account Debtor would, if included as Eligible Accounts, exceed five percent (5%) of all Eligible Accounts and (2) twenty-five percent (25%) or more of the aggregate balance owing by such Account Debtor to any Borrower Borrowers is ineligible due to the criteria in clause (i) aboveset forth herein; (iii) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province the Northwest Territories, Nunavit or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-holdbill-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇billings; (▇ivxiv) Accounts with respect to which any disclosure is required re▇▇▇▇▇▇ in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereof.
(p) Subsection 3.3 of the Loan Agreement is hereby amended to delete any reference therein to the term "Collateral Report" and to amend clause (iv) thereof to read as follows:
Appears in 1 contract
Sources: Loan and Security Agreement (Action Performance Companies Inc)
Eligible Accounts. Agent Upon Borrower's delivery to Bank of a Borrowing Base Report, Bank shall have the sole rightdetermine, in its sole reasonable discretion exercised and in accordance with its customary business practicesthe exercise of good faith, to determine which individual Accounts of Borrowers listed thereon are eligible (the "Eligible Accounts"). Without limiting Agent's discretionIn making such determination, it is acknowledged by Borrower that the following Accounts, shall Accounts will not be deemed to be Eligible Accounts: ; provided that nothing contained herein shall be deemed to limit Bank's discretion to consideration of the following factors:
(ia) Accounts with a due date of thirty (30) days from the invoice date and which remain unpaid more than ninety (90) days after the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty ;
(60b) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i); (ii) all Accounts owing by a single Account Debtor or its Affiliate (if such Affiliate is known by Borrower to be an affiliate of such Account Debtor), including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such said Account Debtor to any Borrower is ineligible due to the criteria in clause or its Affiliate upon Accounts remains unpaid more than ninety (i90) above; days after invoice date;
(iiic) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employeeemployee or agent of Borrower or is a Parent, a Subsidiary or Affiliate an Affiliate;
(d) Accounts with respect to which payment by the Account Debtor is or may be conditional and Accounts commonly known as ▇▇▇▇ and hold or Accounts of any Loan Party; a similar or like arrangement;
(ive) Accounts with respect to which the Account Debtor is not a resident or citizen of or otherwise located in the continental United States of America or Canada (other than Quebec), or with respect to which the Account Debtor is not subject to service of process in the continental United States of America unless payment of such Account is secured by a letter of credit reasonably acceptable and assigned to Bank;
(f) Accounts with respect to which the Account Debtor is the United States of America America, any state, county, city, municipal and/or other governmental body, or any department, agency or instrumentality thereof, thereof unless with respect Borrower assigns its right to any payment of such Account, Accounts to Bank pursuant to the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, includingas amended (31 U.S.C. (S)203, without limitation41 U.S.C. (S)15, executing 41 C.F.R. (S)(S)1- 30, 700 et seq.), or any similar law or regulation relating to the assignment or pledge of such Accounts;
(g) Accounts with respect to which Borrower is or may become liable to the Account Debtor for goods sold or services rendered by such Account Debtor to Borrower unless the Account Debtor executes and delivering to Agent all statements of assignment and/or notification which are delivers a "no-offset" letter in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; Bank;
(vh) Accounts with respect to which the goods giving rise thereto have not been shipped and delivered to or have been affirmatively rejected as unsatisfactory by the Account Debtor is thereof or with respect to which the services performed giving rise thereto have not a resident of been completed and accepted as satisfactory by the United States or Canada Account Debtor thereof;
(excluding any Maritime Province or Quebec); (vii) Accounts with respect to which possession and/or control of the goods sold giving rise thereto is held, maintained or retained by Borrower (or by any agent or custodian of Borrower) for the account of or subject to further and/or future direction from the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; thereof;
(viij) Accounts for arising from a "sale on approval" or a "sale or return";
(k) Accounts as to which Bank, at any time or times hereafter, determines, in good faith, that the prospect of payment or performance by the Account Debtor is or may will be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; impaired;
(viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ixl) Accounts with respect to which the Account Debtor thereof is located in the subject State of bankruptcy New Jersey or the State of Minnesota, unless Borrower has filed, as applicable, a Notice of Business Activities Report with the New Jersey Division of Taxation for the then current year, or is qualified to transact business and in good standing for the then current year, or a similar insolvency proceeding Business Activity Report with the Minnesota Department of Revenue for the then current year, or has made an assignment is otherwise exempt from such reporting requirements under the laws of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; such state;
(xm) Accounts with respect to which the Account DebtorBank's obligation security interest is not entitled to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basisfirst priority; and
(xin) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the owing from any Account Debtor which is located in any state denying creditors access to its courts in insolvent or the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts subject of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually insolvency or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofbankruptcy proceedings.
Appears in 1 contract
Eligible Accounts. Agent Eligible Accounts" shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which mean all Accounts of each of the Borrowers are eligible (other than the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accountsfollowing: (i) Accounts which remain unpaid as of ninety (90) days after the earlier date of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)with respect thereto; (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five fifty percent (2550%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to by reason of the criteria criterion set forth in clause this SUBSECTION 3.2, except CLAUSES (iXII) aboveand (XVIII); (iii) Accounts with respect to which the Account Debtor is a Loan Party an Affiliate of any Borrower or a director, officer, employee, Subsidiary officer or Affiliate employee of any Loan PartyBorrower or its Affiliates; (iv) Accounts with respect to which the Account Debtor is the United States of America a Governmental Authority or any department, agency or instrumentality thereof, prime contractor thereof unless with respect to any such Account, the applicable Borrower has complied in a manner satisfactory to Agent's satisfaction the Agent with the provisions of the Federal Assignment of Claims Act of 1940, includingas amended, without limitationor similar law or statute of the relevant state, executing province, municipality or other jurisdiction and delivering any amendments thereto, relative to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States unless the Account is payable in United States dollars and (A) the Account Debtor has supplied such Borrower with an irrevocable letter of credit, issued by a financial institution satisfactory to the Required Lenders in an amount sufficient to cover such Account and in form and substance satisfactory to the Required Lenders and without right of setoff or Canada (excluding any Maritime Province or Quebec)B) the Agent in its reasonable discretion has approved in writing such Account Debtor; (vi) Prebilled Accounts and other Accounts arising with respect to goods which have not been shipped and delivered to and accepted as satisfactory by the Account Debtor has asserted a counterclaim or has a right of setoff, arising with respect to services which have not been fully performed and accepted as satisfactory by the extent of such counterclaim or right of setoffAccount Debtor; (vii) Accounts for which the prospect of payment in full or performance of services in a timely manner by the Account Debtor any Borrower or third party service provider is or may be is likely to become impaired as determined by the Agent in the reasonable exercise of its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (viii) Accounts which are not invoiced (and dated as of the date of such invoice) and sent to the Account Debtor within thirty (30) days after delivery of the underlying goods to or performance of the underlying services for the Account Debtor; (ix) Accounts with respect to which the Agent, on behalf of the Lenders, does not have a first and valid fully perfected LienLien free and clear of any other Lien whatsoever; (ixx) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (xxi) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return credit or offset right, as with sales made services performed on a bill-▇▇▇-holdguaranteed service, guaranteed sale, saleservice-or-return, sale demonstration, service performed on approval or other terms by reason of which the payment by the Account Debtor is or may be conditional or consignment basis; (xixii) Accounts to the extent that the Account Debtor's indebtedness to the Obligors Borrowers exceeds a credit limit determined by the Agent in the Agent's sole reasonable discretion exercised following prior written notice of such credit limit from the Agent to the Borrower Representative; (xiii Accounts with respect to which any disclosure is required in accordance with its customary business practicesSUBSECTION 3.3; (xiixiv) contra Accounts to the extent of the amount of the accounts payable owed by the Borrowers to the Account Debtor; (xv) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice Notice of business activities report Business Activities Report or other similar filing, filing unless the applicable such Borrower has either qualified as a foreign corporation authorized to do transact business in such state or has filed such notice a Notice of business activities report Business Activities Report or similar filing with the applicable Governmental Authority in such state agency for the then current year; (xiiixvi) Accounts representing progress bill▇▇▇▇evidenced by Chattel Paper or any Instrument of any kind, to the extent possession of such Chattel Paper or Instrument is not granted to the Agent, for the benefit of the Lenders; (▇ivxvii) Accounts with respect which the Agent determines in good faith to which be unacceptable; (xviii) the amount of any disclosure is required Accounts that exceed thirty-five percent (35%) of any individual Borrowing Base or twenty percent (20%) of the combined total Borrowing Base; and (xix) an amount equal to 3.1% of the Chicago Borrowing Base and 1.0% of the FKP Borrowing Base to account for such Borrower's lag in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof processing and (xv) Accounts issuing of any Person other than a Borrowercredit memos to Account Debtors, such percentage to be subject to adjustment from time to time. In the event that a previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease Account ceases to be an Eligible Accounts Account under the above described criteriacriteria (other than any determination made by the Agent), the Borrower Representative shall notify the Agent thereof promptly after any Obligor has obtained knowledge thereofas soon as practicable.
Appears in 1 contract
Eligible Accounts. All of the Accounts owned by each Borrower Party and reflected in the most recent Borrowing Base Certificate delivered by Borrower Representative, on behalf of itself and each other Borrower Party, to Agent shall be “Eligible Accounts” for purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies. Agent (i) shall have the sole right to establish, modify or eliminate Reserves against Eligible Accounts from time to time in its Permitted Discretion and (ii) reserves the right, at any time and from time to time after the Closing Date, to adjust any of the criteria set LEGAL_US_E # 82813718.8 forth below and to establish new criteria under this clause (ii) in its sole reasonable discretion exercised Permitted Discretion, reflecting changes in accordance with its customary business practices, the collectibility or realization values of such Accounts arising or discovered by Agent after the Closing Date subject to determine the approval of Requisite Lenders in the case of adjustments or new criteria under this clause (ii) which Accounts have the effect of Borrowers are eligible making more credit available (unless such adjustment restores the "Eligible Accounts"amount of credit available to a previously obtained amount). Without limiting Agent's discretion, the following Accounts, Eligible Accounts shall not be Eligible Accounts: include any Account of any Borrower Party:
(a) that does not arise from the sale of goods or the performance of services by such Borrower Party in the ordinary course of its business;
(i) Accounts upon which remain unpaid ninety such Borrower Party’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever or (90ii) days after that is the earlier obligation of an Account Debtor located in a state or jurisdiction (e.g., New Jersey, Minnesota and West Virginia) that requires, as a condition to access to the original date courts of such jurisdiction, that a creditor qualify to transact business, file a business activities report or other report or form, or take one or more other actions, unless the applicable invoice Borrower Party has so qualified, filed such reports or forms, or taken such actions (and, in each case, paid any required fees or other charges), except to the shipment dateextent that such Borrower Party may qualify subsequently as a foreign entity authorized to transact business in such state or jurisdiction and gain access to such courts, without incurring any cost or penalty reasonably viewed by Agent to be material in amount, and Accounts which remain unpaid sixty (60) days after the due date such later qualification cures any access to such courts to enforce payment of such AccountsAccount or (iii) if the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to such Borrower Party’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer;
(c) in the event that any defense, unless in either case Agent has made specific counterclaim, setoff or dispute is asserted as to such Account; provided that the portion of such Account Debtor exceptions from the criteria set forth in not subject to such defense, counterclaim, setoff or dispute will not be excluded solely because of this clause (ic); ;
(iid) all Accounts owing that is not a true and correct statement of a bona fide obligation incurred in the amount of the Account for merchandise sold to or services rendered and accepted by a single the applicable Account Debtor, including a currently scheduled Account, if twenty-five percent ;
(25%e) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; (iii) Accounts with respect to which an invoice (in form and substance consistent with current practices or in such other form and with such other terms as are reasonably acceptable to Agent) has not been sent to the applicable Account Debtor Debtor;
(f) that (i) is a Loan not owned by such Borrower Party or (ii) is subject to any Lien of any other Person, other than Liens in favor of Agent, on behalf of itself and Lenders, and Liens permitted under the Loan Documents;
(g) that arises from a directorsale to any director (other than in the case of a director that serves on the board of the applicable Borrower Party and the applicable Account Debtor), officer, employee, Subsidiary other employee or Affiliate controlled affiliate of any Loan Credit Party; ;
(ivh) Accounts with respect to which that is the obligation of an Account Debtor that is the United States of America government or any a political subdivision thereof, or department, agency or instrumentality thereof, thereof LEGAL_US_E # 82813718.8 unless with respect to any such Account, the applicable Borrower Party has complied to Agent's satisfaction with the provisions steps reasonably requested by Agent, including notice to the United States government under the Federal Assignment of Claims Act of 1940 or any action under any state statute comparable to the Federal Assignment of Claims Act of 1940; provided, includinghowever, without limitation, executing and delivering to Agent the aggregate amount of all statements such governmental Accounts included in Eligible Accounts shall not exceed $5,000,000;
(i) that is the obligation of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the an Account Debtor is not located in a resident of country other than the United States or Canada (excluding a “Foreign Account Debtor”) unless payment thereof is assured by a letter of credit , export insurance or other similar coverage on terms and conditions reasonably satisfactory to Agent; provided, however, the aggregate amount of all Accounts owing from Foreign Account Debtors supported by letters of credit, export insurance or other similar coverage included in Eligible Accounts shall not exceed $5,000,000 at any Maritime Province or Quebectime (such Dollar amount may be increased after the Closing Date by Agent, but any such increase shall be in Agent’s sole discretion); provided, further, no Accounts of any Blocked Person as determined by Agent in its sole discretion shall be included in Eligible Accounts;
(vij) Accounts with respect to which the extent such Borrower Party or any Subsidiary thereof is liable for goods sold or services rendered by the applicable Account Debtor to such Borrower Party or any Subsidiary thereof (unless such Account Debtor has asserted executed a counterclaim or has a right of setoff, no-offset letter satisfactory to Agent in its Permitted Discretion) but only to the extent of such counterclaim the potential offset;
(k) that arises with respect to goods that are delivered on a ▇▇▇▇ and hold, cash on delivery basis or right placed on consignment, guaranteed sale or other terms by reason of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired conditional, except as determined to ▇▇▇▇ and hold invoices with respect to the sale of finished goods in the ordinary course of business, if (i) Agent shall have received an agreement in writing from the Account Debtor, in form and substance reasonably satisfactory to Agent, confirming the unconditional obligation of the Account Debtor to take the goods related thereto and pay such invoice, (ii) the finished goods that are the subject of such ▇▇▇▇ and hold invoices are not included in the Borrowing Base as Eligible Inventory, (iii) such ▇▇▇▇ and hold Accounts were originated in compliance with the Borrower Parties’ “▇▇▇▇ and hold policy” dated as of July 31, 2006 (in the form attached hereto as Exhibit 1.6), as may be subsequently amended on terms that would provide no more availability under the Borrowing Base than in existence immediately prior to such amendment and as approved by Agent in its sole reasonable discretion exercised Permitted Discretion, (iv) the duration of the ▇▇▇▇ and hold period for such invoice shall not exceed forty-five (45) days, (v) the amount of any such ▇▇▇▇ and hold invoice included in accordance Eligible Accounts shall be net of any customer deposit received by the applicable Borrower Party in connection with such ▇▇▇▇ and hold arrangement and (vi) the aggregate amount of all ▇▇▇▇ and hold invoices included in Eligible Accounts shall not exceed $3,000,000;
(i) that is not paid within the earlier of: sixty (60) days following its customary business practicesdue date or one hundred and fifty (150) days following its original invoice date; (viiiii) Accounts with respect to which Agent, on behalf that is the obligation of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the an Account Debtor is the subject of bankruptcy or that suspends business, makes a similar insolvency proceeding or has made an general assignment of for the benefit of creditors or whose assets have been conveyed fails to pay its debts generally as they come due; or (iii) that is the obligation of an Account Debtor that has filed or had filed against it a receiver petition under any bankruptcy law or trustee; any other federal, state or foreign (xincluding any provincial) Accounts receivership, insolvency relief or other law or laws for the relief of Debtors , except with respect to post- LEGAL_US_E # 82813718.8 petition Accounts owing by creditworthy Account Debtors which have filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code, as Agent may approve in writing from time to time in its Permitted Discretion;
(m) that is the obligation of an Account Debtor's obligation Debtor if more than fifty percent (50%) of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth herein;
(n) as to pay which Agent’s lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien;
(o) that fails to conform in all material respects (to the extent such representation or warranty does not contain a materiality qualifier) with any of the representations or warranties pertaining to Accounts in the Loan Documents;
(p) to the extent such Account is conditional upon the Account Debtor's approval evidenced by a judgment, instrument or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; chattel paper;
(xiq) Accounts to the extent that such Account, together with all other Accounts owing by such Account Debtor and its controlled Affiliates as of any date of determination exceed ten percent (10%) of all Eligible Accounts; or
(r) that is payable in any currency other than U.S. Dollars, Canadian Dollars or Japanese Yen (provided that (i) Eligible Accounts attributable to Accounts payable in Canadian Dollars shall not exceed the Account Debtor's indebtedness U.S. Dollar equivalent of $10,000,000 and (ii) Eligible Accounts attributable to Accounts payable in Japanese Yen shall be included up to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess U.S.-Dollar equivalent of $100,000 individually or $250,000 in the aggregate cease 5,000,000 subject to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofdocumentation and operational mechanics reasonably acceptable to Agent).
Appears in 1 contract
Sources: Senior Secured, Super Priority Debtor in Possession Credit Agreement (Milacron Inc)
Eligible Accounts. Agent shall have As to each Account represented by Borrowers to be an "Eligible Account" on a Borrowing Base Certificate, as of the sole rightdate of each such Borrowing Base Certificate:
(a) Such Account arose in the ordinary course of the business of Borrowers or Guarantors out of either (i) a bona fide sale of Inventory by Borrowers or Guarantors, and in its sole reasonable discretion exercised such case such Inventory has in fact been shipped to, and accepted and retained by, the appropriate account debtor or the sale has otherwise been consummated in accordance with its customary business practicessuch account debtor's order therefor, or (ii) services performed by Borrowers or Guarantors under an enforceable contract, and in such case such services have in fact been performed for the appropriate account debtor in accordance with such contract.
(b) Such Account represents a legally valid and enforceable claim which is due and owing to determine which Accounts Borrowers or Guarantors by such account debtor and for such amount as is represented by Borrowers or Guarantors to Bank on such Borrowing Base Certificate, such Account is due and payable not more than sixty (60) days from the delivery of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, related Inventory or the following Accounts, shall performance of the related services giving rise to such Account and not be Eligible Accounts: (i) Accounts which remain unpaid more than ninety (90) days after have passed since the earlier invoice date corresponding to such Account.
(c) The unpaid balance of such Account as represented by Borrowers or Guarantors to Bank on such Borrowing Base Certificate is not subject to any defense, counterclaim, set off, contra account, credit, allowance or adjustment by the account debtor because of returned, inferior or damaged Inventory or services, or to each Borrower's knowledge for any other reason, except for customary discounts allowed by Borrowers or Guarantors in the ordinary course of business for prompt payment, and there is no agreement between Borrowers or Guarantors, the related account debtor and any other person for any rebate, discount, concession or release of liability, in whole or in part.
(d) The transactions leading to the creation of such Account comply with all applicable local, state and federal laws and regulations.
(e) Borrowers or Guarantors have granted to Bank a perfected security interest in such Account (as an item of the original date Collateral) prior in right to all other Persons (other than Permitted Liens), and such Account has not been sold, transferred or otherwise assigned by any Borrower or any Guarantor to any Person, other than Bank.
(f) Such Account is not represented by any note, trade acceptance, draft or other negotiable instrument or by any chattel paper, except any such as have been endorsed and delivered by Borrowers or Guarantors to Bank on or prior to such Account's inclusion on such Borrowing Base Certificate.
(g) No Borrower or Guarantor has received, with respect to such Account, any notice of the applicable invoice death (with respect to an individual account debtor) of the related account debtor or any partner thereof, nor of the dissolution, liquidation, termination of existence, insolvency, business failure, appointment of a receiver for any part of the property of, assignment for the benefit of creditors by, or the shipment datefiling of a petition in bankruptcy or the commencement of any proceeding under any bankruptcy or insolvency laws by or against, and Accounts which remain unpaid sixty such account debtor.
(60h) days after the due date of The account debtor on such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause is not:
(i); ) an Affiliate of Borrowers or Guarantors;
(ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; (iii) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which the Account Debtor is the United States of America or any department, agency agency, or instrumentality thereof, unless with respect to ,
(iii) a citizen or resident of any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; jurisdiction other than (vA) Accounts with respect to which the Account Debtor is not a resident one of the United States or of America (B) Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which Accounts of Canadian account debtors not exceeding $200000 in the Account Debtor has asserted a counterclaim aggregate outstanding at any time and (C) Germany, Italy, Spain, Great Britain, France, Greece, Switzerland, Netherland, Denmark, or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts Mexico with respect to which Agent, on behalf of Lenders, does Accounts not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of exceeding $100,000 individually or $250,000 500000 in the aggregate cease outstanding at any time, which the account debtor thereunder is Ford Motor Company; or
(iv) an account debtor whom Bank has, in the exercise of such Bank's reasonable discretion, determined to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor (based on such facts as Bank deems appropriate) an ineligible account debtor and as to which Bank has obtained knowledge thereofnotified Borrower.
Appears in 1 contract
Eligible Accounts. Agent Upon delivery to Bank of a report of Accounts (as provided in Section 5.6), Bank shall have the sole rightmake a determination, in its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion, as to determine which Accounts of Borrowers are eligible (the listed thereon shall be deemed an "Eligible Account". In determining which Accounts will be "Eligible Accounts"). Without limiting Agent's discretion, Bank may, INTER ALIA, consider the following Accountsrequirements: The Account is subject to a perfected first priority Lien in favor of Bank and is due no more than thirty (30) days from the date of invoice under the original terms of shipment or service, shall arises from the delivery of goods or performance of services by Borrower in the ordinary course of its business, conforms to the warranties and representations set forth in Section 6.2 and:
(A) is an Account upon which Borrower's right to receive payment is absolute and not be Eligible Accounts: contingent upon any further performance or delivery or the fulfillment of any condition whatsoever (ie.g., consignment or guaranteed sale) Accounts which remain and does not include any sales or other taxes, and Borrower has possession of, or has delivered or will deliver as required hereunder to Bank, copies of invoices, shipping and delivery receipts evidencing such performance or shipment;
(B) is unpaid for not more than ninety (90) days after following the earlier date of invoice;
(C) does not arise from a sale or sales to an Affiliate or from a consumer transaction (being one for primarily personal, family or household purposes);
(D) is not the obligation of an Account Debtor located in a foreign country other than Canada, except those foreign Accounts supported by a letter of credit acceptable to Bank which letter of credit is confirmed or issued by a United States bank or other bank acceptable to Bank or is an Eligible Account insured by the Foreign Credit Insurance Association, provided that the letter of credit or insurance in respect of such foreign Accounts is assigned to Bank by assignments in form and substance satisfactory to Bank;
(E) does not arise from a contract containing a prohibition against the assignment or grant of a security interest therein;
(F) is not an Account from the United States of America or any agency thereof, unless Bank is satisfied that its security interest in such Account has been perfected pursuant to the Federal Assignment of Claims Act;
(G) is not an Account of an Account Debtor who has suspended business, made a general assignment for the benefit of creditors, committed any act of insolvency, filed or has had filed against it any petition under any bankruptcy law or any other law or laws for the relief of debtors;
(H) is not evidenced by an instrument, chattel paper or other written agreement (other than invoices), unless the Instrument or Chattel Paper evidencing the Account has been delivered to and endorsed in favor of Bank;
(I) does not, when added to any and all other Accounts of the original date Account Debtor with Borrower, produce an aggregate indebtedness from the Account Debtor of more than (i) as to Home Depot, thirty percent (30%) of the applicable invoice or the shipment datetotal of all of Borrower's Eligible Accounts (subject to Borrower's obtaining and maintaining credit insurance in respect of Accounts owing by Home Depot satisfactory to Bank), and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i); (ii) as to all other Account Debtors, that percentage of the total of all of Borrower's Eligible Accounts owing by a single as Bank may determine from time to time as to each such Account Debtor, including a currently scheduled ;
(J) is not an Account of an Account Debtor who shall have objected to paying such Account, if or any portion thereof, as a result of an objection to the quality or quantity of goods or services provided by Borrower, or shall have rejected, returned or refused to accept such goods or services;
(K) is not an Account of an Account Debtor which has twenty-five percent (25%) or more of its Accounts to Borrower unpaid more than ninety (90) days following the balance owing by such invoice date; and
(L) is not an Account Debtor to any Borrower is ineligible due to the criteria which is, in clause Bank's good faith judgment, (i) above; (iii) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which the an Account Debtor which is the United States of America an undue credit risk or any department, agency or instrumentality thereof, unless with respect (ii) otherwise unacceptable to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofBank.
Appears in 1 contract
Sources: Credit and Security Agreement (Technical Consumer Products Inc)
Eligible Accounts. On any date of determination of the Borrowing Base, all of the Accounts owned by any of the Borrowers and reflected in the most recent Borrowing Base Certificate delivered by the Borrower Representative to the Administrative Agent and the Co-Collateral Agents shall be “Eligible Accounts” for the purposes of this Agreement, except any Account to which any of the exclusionary criteria set forth below applies. In addition, the Administrative Agent and the Co-Collateral Agents shall have the sole rightright from time to time in their Permitted Discretion to establish, in its sole reasonable discretion exercised in accordance with its customary business practicesmodify or eliminate Reserves against Eligible Accounts, to determine which Accounts adjust any of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, shall not be Eligible Accounts: (i) Accounts which remain unpaid ninety (90) days after the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause below and to establish new criteria with respect to Eligible Accounts. Eligible Accounts shall not include any of the following Accounts:
(i); ) any Account in which the Administrative Agent, on behalf of the Secured Parties, does not have a perfected, first priority Lien, subject to (a) Permitted Liens that do not have priority over the Lien in favor of the Administrative Agent and (b) Liens created by applicable law which rank or are capable of ranking prior to or pari passu with the Lien in favor of the Administrative Agent that secure amounts that are not yet due and payable;
(ii) all Accounts owing any Account that is not owned by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; Borrower;
(iii) Accounts with respect to which the any Account due from an Account Debtor that is not domiciled in the United States and (if not a Loan Party natural person) organized under the laws of the United States or any political subdivision thereof unless such Account is backed by a director, officer, employee, Subsidiary or Affiliate letter of any Loan Party; credit satisfactory in form and substance to the Administrative Agent and Co-Collateral Agents;
(iv) Accounts any Account that is payable in any currency other than dollars;
(v) any Account that does not arise from the sale of goods or the performance of services by a Borrower in the ordinary course of its business;
(vi) any Account that does not comply in all material respects with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the all applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940legal requirements, including, without limitation, executing all laws, rules, regulations and delivering orders of any Governmental Authority;
(vii) any Account (a) to Agent all statements the extent that the applicable Borrower’s right to receive payment is not absolute or is contingent upon the fulfillment of assignment and/or notification any condition whatsoever unless such condition is satisfied or (b) as to which are a Borrower is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial or administrative process or (c) that represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to such Borrower’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer;
(viii) to the extent that any defense, counterclaim, setoff or dispute is asserted as to such Account, it being understood that the remaining balance of the Account shall be eligible;
(ix) any Account that is not a true and correct statement of bona fide indebtedness incurred in form the amount of the Account for merchandise sold to or services rendered and substance acceptable to Agent and which are deemed necessary accepted by Agent to effectuate the assignment to Agent of such Accounts; applicable Account Debtor;
(vx) Accounts any Account with respect to which an invoice or other electronic transmission constituting a request for payment, reasonably acceptable to the Administrative Agent and the Co-Collateral Agents in form and substance, has not been sent on a timely basis to the applicable Account Debtor is not a resident according to the normal invoicing and timing procedures of the United States applicable Borrower;
(xi) any Account that arises from a sale to any director, officer, other employee or Canada Affiliate of a Borrower, or to any entity that has any common officer or director with a Borrower other than Accounts, not to exceed $5,000,000 in the aggregate, that arise from sales to CHS, Inc. or its Subsidiaries or Affiliates, so long as such sale is made in accordance with Section 6.09;
(excluding xii) to the extent a Borrower or any Maritime Province Subsidiary is liable for goods sold or Quebec); (vi) Accounts with respect to which services rendered by the applicable Account Debtor has asserted to a counterclaim Borrower or has a right of setoff, any Subsidiary but only to the extent of such counterclaim the potential offset;
(xiii) any Account that arises with respect to goods that are delivered on a ▇▇▇▇-and-hold, cash-on-delivery basis or right placed on consignment, guaranteed sale or other terms by reason of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired conditional;
(xiv) any individual Account that is in default; provided that, without limiting the generality of the foregoing, an Account shall be deemed in default upon the occurrence of any of the following:
(a) any Account that has not been paid within 120 days following its original invoice date or that is more than 60 days past due according to its original terms of sale; or
(b) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as determined they come due; or
(c) a petition is filed by Agent or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;
(xv) any Account that is the obligation of an Account Debtor if 50% or more of the dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in its sole reasonable discretion exercised in accordance with its customary business practices; this Section 2.18(a);
(viiixvi) Accounts with respect any Account as to which any of the representations or warranties in the Loan Documents are untrue in any material respect;
(xvii) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper;
(xviii) to the extent such Account exceeds any credit limit established by the Administrative Agent and the Co-Collateral Agents, in their Permitted Discretion;
(xix) any Account on which the Account Debtor is a Governmental Authority, unless a Borrower has assigned its rights to payment of such Account to the Administrative Agent, on behalf of Lendersthe Secured Parties, does not have a first and valid fully perfected Lien; (ix) Accounts with respect pursuant to which the Account Debtor is the subject Assignment of bankruptcy or a similar insolvency proceeding or has made an assignment Claims Act of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right1940, as with sales made on a bill-▇▇▇-holdamended, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence case of a notice of business activities report or similar filingfederal Governmental Authority, unless the and pursuant to applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required law, if any, in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts case of any Person other than a Borrower. In Governmental Authority, and such assignment has been accepted and acknowledged by the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofappropriate government officers.
Appears in 1 contract
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which The Eligible Accounts of Borrowers each Obligor are eligible bona fide existing payment obligations of Account Debtors created by the sale and delivery of Inventory or the rendition of services to such Obligor's customers in the ordinary course of such Obligor's business, owed to such Obligor without defenses, disputes, offsets, counterclaims, or rights of return or cancellation. Any goods giving rise to such Eligible Accounts have been delivered to the customer, or to the customer's agent for immediate shipment to and unconditional acceptance by the customer, and any services giving rise to such Eligible Accounts have been fully performed. As to each Eligible Account (the "Eligible Accounts"which term includes that portion of an Account deemed eligible). Without limiting Agent's discretion, such right to payment is not, unless an exception to any of the following Accountshas been consented to in writing by Agent:
(a) owed by an employee, shall not be Eligible Accounts: Affiliate, or agent of an Obligor,
(ib) Accounts on account of a transaction wherein goods were placed on consignment or were sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a ▇▇▇▇ and hold, or on any other terms by reason of which remain unpaid ninety (90) days after the earlier of payment by the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause may be conditional,
(i); (iic) all Accounts owing by a single Account Debtorpayable, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; (iii) Accounts with respect to which the Account Debtor is Eligible Borrower Accounts, in a Loan Party or a directorcurrency other than Dollars, officerand, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which the Eligible UK Sub Accounts, in a currency other than in an Agreed Currency,
(d) owed by an Account Debtor is the United States of America that has or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, has disputed its liability, or has made any claim with respect to its obligation to honor the applicable Obligor's right to payment, to the extent of such counterclaim or claim, right of setoff; (vii) Accounts for which the prospect of payment offset, assertion, or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereof.dispute,
Appears in 1 contract
Sources: Loan and Security Agreement (3do Co)
Eligible Accounts. The Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices----------------- discretion, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without In ----------------- addition, without limiting the Agent's discretion, unless otherwise agreed by the Agent in writing, the following Accounts, shall Accounts are not be Eligible Accounts: :
(ia) Accounts which remain unpaid ninety (90) days after the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid more than sixty (60) days after from the stated due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions or more than 120 days from the criteria set forth invoice date, in this clause (i)each case based upon the end-of-the-month aging; (iib) all Accounts owing by a single Account Debtor, including a currently scheduled AccountAccounts, if twenty-five fifty percent (2550%) or more of the balance owing by such Account Debtor to any the Borrower is ineligible due to the criteria in clause (i) abovefor any reason; (iiic) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan Partythe Borrower; (ivd) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect the Borrower assigns its right to any payment of such AccountAccounts to the Agent pursuant to, and in full compliance with, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accountsas amended; (ve) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec)States; (vif) Accounts in dispute or with respect to which the Account Debtor has asserted in writing or either the Borrower or the Agent has reason to believe the Account Debtor is entitled to assert a counterclaim or has asserted in writing or either the Borrower or the Agent has reason to believe the Account Debtor is entitled to assert a right of setoff, to the extent of such counterclaim or right of setoff; (viig) Accounts for with respect to which the prospect of payment or performance by the Account Debtor is or may will be impaired impaired, as determined by the Agent in the exercise of its sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (viiih) Accounts with respect to which Agent, on behalf of Lenders, the Agent does not have a first and valid fully perfected Liensecurity interest; (ixi) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (xj) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold▇-and-hold, guaranteed sale, sale-orand-return, sale on approval or consignment basis; (xik) Accounts to the extent that the Account Debtor's indebtedness to the Obligors Borrower exceeds a credit limit determined by the Agent in the Agent's sole reasonable discretion exercised in accordance with its customary business practicesdiscretion; (xii1) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report New Jersey, Minnesota, Tennessee or similar filing, Indiana unless the applicable Borrower (i) has either qualified as received a foreign corporation certificate of authority to do business business, and is in good standing, in such state state, or (ii) has filed such notice a Notice of business activities report Business Activities Report (or similar filing other comparable required report) with the applicable proper authorities of such state agency for the then current year; (xiiim) Accounts representing progress bill▇▇▇▇which arise out of sales not made in the ordinary course of the Borrower's business; (▇ivn) Accounts with respect to which the Account Debtor has returned to the Borrower all or any portion of the Inventory the sale of which gave rise to such Accounts; and (o) Accounts with respect to which any disclosure document or agreement executed or delivered in connection therewith, or any procedure used in connection with any such document or agreement, fails in any material respect to comply with the requirements of applicable law, or with respect to which any representation or warranty contained in this Agreement is required in untrue. If the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than Borrower determines that a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease Account ceases to be an Eligible Accounts Account under any of the above described criteria, the Borrower Representative shall notify the Agent thereof promptly after any Obligor has obtained knowledge thereofat the earliest reasonable opportunity.
Appears in 1 contract
Sources: Loan and Security Agreement (American Builders & Contractors Supply Co Inc)
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, " shall mean all Accounts other than the following Accounts, shall not be Eligible Accountsfollowing: (i) Accounts which remain unpaid more than ninety (90) days after the earlier date of the original date of the applicable invoice with respect thereto or the shipment date, and Accounts which remain unpaid more than sixty (60) days after past the due date of such Accounts, unless specified in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)original invoice with respect thereto; (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more of the balance owing by such Account Debtor to any Borrower is ineligible due to by reason of either of the criteria set forth in clause (i) aboveof this subsection 3.2; (iii) Accounts with respect to which the Account Debtor is a Loan Party an Affiliate of the Borrower or a director, officerofficer or employee of the Borrower or its Affiliates; provided that any Account owing from the Simp▇▇▇ ▇▇▇er Company which but for the operation of this clause (iii) would constitute an Eligible Account, employeeshall nevertheless constitute an "Eligible Account" to the extent, Subsidiary and only to the extent, the amount of such Eligible Account plus all other Eligible Accounts owing by Simp▇▇▇ ▇▇▇er Company exceeds all amounts owing from the Borrower or Affiliate of any Loan PartyGuarantor to the Simp▇▇▇ ▇▇▇er Company (other than long-term obligations with respect to the preferred stock owned by the Seller); (iv) Accounts with respect to which the Account Debtor is a Governmental Authority or prime contractor thereof unless the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied in a manner satisfactory to Agent's satisfaction the Agent with the provisions of the Federal Assignment of Claims Act of 1940, includingas amended, without limitationor similar law or statute of the relevant state, executing province, municipality or other jurisdiction and delivering any amendments thereto, relative to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States unless (A) the Account Debtor has supplied the Borrower with an irrevocable letter of credit, issued by a financial institution satisfactory to the Required Lenders (with financial institutions meeting the criteria set forth in clause (i) of the definition of "Cash Equivalents" contained herein being deemed acceptable for purposes of providing such a letter of credit), sufficient to cover such Account in form and substance satisfactory to the Required Lenders and without right of setoff and the Account is payable in full in United States dollars or Canada (excluding any Maritime Province or Quebec)B) deemed acceptable by the Agent in its sole discretion; (vi) Accounts arising with respect to goods which have not been shipped and delivered to and accepted as satisfactory by the Account Debtor has asserted a counterclaim or has a right of setoff, arising with respect to services which have not been fully performed and accepted as satisfactory by the extent of such counterclaim or right of setoffAccount Debtor; (vii) Accounts for which the prospect of payment in full or performance in a timely manner by the Account Debtor is or may be is likely to become impaired as determined by Agent in its sole the reasonable discretion exercised in accordance with its customary business practicescredit judgment of the Agent; (viii) Accounts which are not invoiced (and dated as of the date of such invoice) and sent to the Account Debtor within five (5) days after delivery of the underlying goods to or performance of the underlying services for the Account Debtor; (ix) Accounts with respect to which the Agent, on behalf of the Lenders, does not have a first and valid fully perfected LienLien free and clear of any other Lien whatsoever; (ixx) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (xxi) Accounts with respect to which the Account Debtor's obligation to pay the Account 50 59 is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a guaranteed sale, bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or other terms by reason of which the payment by the Account Debtor is or may be conditional (except with respect to Accounts in connection with which Account Debtors are entitled to return Inventory solely on the basis of the quality of such Inventory) or consignment basis; (xixii) Accounts to the extent that the Account Debtor's indebtedness to the Obligors Borrower exceeds a credit limit determined by the Agent in Agent's sole the reasonable discretion exercised credit judgment of the Agent following prior written notice of such credit limit from the Agent to the Borrower; (xiii) Accounts with respect to which any disclosure is required in accordance with its customary business practicessubsection 3.3; (xiixv) contra Accounts to the extent of the amount of the accounts payable owed by the Borrower to the Account Debtor; (xvi) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice Notice of business activities report Business Activities Report or other similar filing, filing unless the applicable Borrower has either qualified as a foreign corporation authorized to do transact business in such state or has filed such notice a Notice of business activities report Business Activities Report or similar filing with the applicable state agency in such state for the then current year; (xiiixvii) Accounts representing progress bill▇▇▇▇evidenced by Chattel Paper or any Instrument of any kind, to the extent possession of such Chattel Paper or Instrument is not delivered to the Agent, for the benefit of the Lenders; and (▇ivxviii) Accounts with respect which the Agent determines in good faith to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrowerbe unacceptable. In the event that a previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease Account ceases to be an Eligible Accounts Account under the above described criteria, the Borrower Representative shall notify the Agent thereof promptly after any Obligor has obtained knowledge thereof.
Appears in 1 contract
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which All Accounts of Borrowers are eligible (any Borrower meeting all of the "Eligible Accounts"). Without limiting Agent's discretion, the ----------------- following Accounts, shall not be Eligible Accountsspecifications: (i) Accounts which remain unpaid ninety (90) days after the earlier Account is lawfully and exclusively owned by such Borrower and subject to no Lien other than Liens of the original date of the applicable invoice or the shipment dateLender, and Accounts which remain unpaid sixty (60) days after such Borrower has the due date right of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from assignment thereof and the criteria set forth in this clause (i)power to grant a security interest therein; (ii) all Accounts owing by a single the Account Debtor, including a currently scheduled Account, if twenty-five percent (25%) or more is valid and enforceable representing the indebtedness of the balance owing by such an Account Debtor to any Borrower is ineligible due to not more than 90 days past the criteria in clause (i) aboveoriginal invoice date; (iii) Accounts with respect to which the Account Debtor is a Loan Party not subject to any defense, set-off, counterclaim, dispute, deduction, discount, credit, chargeback, freight claim, allowance or a director, officer, employee, Subsidiary or Affiliate adjustment of any Loan Partykind; (iv) Accounts with respect no part of any goods, the sale or lease of which has given rise to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940been returned, includingrejected, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accountslost or damaged; (v) Accounts with respect if the Account arises from the sale of goods by such Borrower, such sale was an absolute sale and not on consignment or on approval or on a sale-or-return basis or subject to which any other repurchase or return agreement, and such goods have been shipped to the Account Debtor or its designee; (vi) if the Account arises from the performance of services, such services have actually been performed; (vii) the Account arose in the ordinary course of such Borrower's business; (viii) no notice of the bankruptcy, receivership, reorganization, liquidation, dissolution, or insolvency of the Account Debtor has been received by Lender or Borrower; (ix) the Account Debtor is not a resident Subsidiary, Affiliate or employee of any Borrower and does not control any Borrower and is not under the control of or under common control with any Borrower; (x) it is not an Account of an Account Debtor having its principal place of business or executive office outside of the United States unless such Account is guaranteed in full by an irrevocable letter of credit satisfactory to Lender and assigned and delivered to Lender; (xi) the Account does not represent a sale to the government of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor subdivision thereof unless such Borrower has asserted a counterclaim or has a right of setoffcomplied, to the extent of such counterclaim or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts Lender, with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practicesFederal Assignment of Claims Act; (xii) the Account, together with all other Accounts with respect to which owing from the same Account Debtor is located in any state denying creditors access to its courts in Debtor, represents no more than fifteen percent (15%) of all of the absence Accounts of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current yearBorrowers; (xiii) not more than fifty percent (50%) of the aggregate balance of all Accounts representing progress bill▇▇▇▇owing from the Account Debtor obligated on the Account are outstanding more than ninety (90) days past their invoice date; (▇ivxiv) Accounts with respect to which any disclosure the Account is required payable in lawful money of the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof United States; and (xv) Accounts of any Person the Account meets such other than a Borrowerspecifications and requirements which may from time to time be established by Lender. In the event that previously scheduled Eligible Accounts in excess shall not include that portion of $100,000 individually an Account representing interest or $250,000 in the aggregate cease late charges for past due balances or debit memos. Lender is willing, however, upon Borrowers' request, to consider including (such consideration to be given in Lender's sole discretion under such guidelines as Lender may apply concerning the validity, enforceability, lien priority, performance, or collectibility of or other criteria applicable to the Account) an Account of a foreign Account Debtor as an Eligible Accounts under Account where such Account would not otherwise meet the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofrequirements of clause (x) above.
Appears in 1 contract
Sources: Loan and Security Agreement (Telespectrum Worldwide Inc)
Eligible Accounts. Agent shall have As to each Account represented by the sole rightBorrower to be an "Eligible Account" on a Borrowing Base Certificate, as of the date of each such Borrowing Base Certificate:
(a) Such Account arose in its sole reasonable discretion exercised the ordinary course of the business of Borrower out of either (i) a bona fide sale of Inventory by the Borrower, and in such case such Inventory has in fact been shipped to, and accepted and retained by, the appropriate account debtor or the sale has otherwise been consummated in accordance with its customary business practicessuch order, or (ii) services performed by the Borrower, under an enforceable contract, and in such case such services have in fact been performed for the appropriate account debtor in accordance with such contract.
(b) Such Account represents a legally valid and enforceable claim which is due and owing to the Borrower, by such account debtor and for such amount as is represented by the Borrower, to determine which Accounts the Bank on such Borrowing Base Certificate, such Account is due and payable not more than thirty (30) days from the delivery of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretionrelated Inventory, or the following Accountsperformance of the related services, shall giving rise to such Account and such Account has not be Eligible Accounts: (i) Accounts which remain unpaid been due for more than ninety (90) days after (from the earlier date of invoice).
(c) The unpaid balance of such Account is as represented by the Borrower, and not subject to any defense, counterclaim, setoff, credit, allowance or adjustment by the account debtor because of returned, inferior or damaged Inventory or services, or for any other reason, except for customary discounts allowed by Borrower, in the ordinary course of business for prompt payment, and there is no agreement between Borrower, the related account debtor and any other person for any rebate, discount, concession or release of liability, in whole or in part.
(d) The transactions leading to the creation of such Account comply with all applicable state and federal laws and regulations.
(e) The Borrower has granted to the Bank a perfected security interest in such Account (as an item of the original date Collateral) prior in right to all other persons (other than Permitted Liens), and such Account has not been sold, transferred or otherwise assigned by the Borrower, to any person, other than the Bank.
(f) Such Account is not represented by any note, trade acceptance, draft or other negotiable instrument or by any chattel paper, except any such as have been endorsed and delivered by the Borrower, to the Bank on or prior to such Account's inclusion on such Borrowing Base Certificate.
(g) The Borrower has not received, with respect to such Account, any notice of the applicable invoice death of the related account debtor or any partner thereof, nor of the dissolution, liquidation, termination of existence, insolvency, business failure, appointment of a receiver for any part of the property of, assignment for the benefit of creditors by, or the shipment datefiling of a petition in bankruptcy or the commencement of any proceeding under any bankruptcy or insolvency laws by or against, and Accounts which remain unpaid sixty such account debtor.
(60h) days after the due date of The account debtor on such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause is not:
(i); ) an affiliate of the Borrower,
(ii) all Accounts owing by a single Account Debtorthe United States of America or any department, including a currently scheduled Account, if twenty-five percent (25%) agency or more of the balance owing by such Account Debtor to any Borrower is ineligible due to the criteria in clause (i) above; instrumentality thereof,
(iii) Accounts with respect a citizen or resident of any jurisdiction other than one of the United States (unless such Foreign Account is subject to a guaranty of payment in the form of a letter of credit issued by a Bank which is acceptable to the Bank) or
(iv) an account debtor whom the Bank has, in the exercise of such Bank's sole discretion, determined to be (based on such factors as the Bank deems appropriate) an ineligible account debtor and as to which the Bank has notified the Borrower, provided, however, that any such notice shall not apply as to any Account Debtor is of such account debtor which has been included on a Loan Party or a directorBorrowing Base Certificate by the Borrower prior to the giving of such notice by the Bank and which meets each and every other requirement under this Agreement for the denomination of such Account as an "Eligible Account." NOTWITHSTANDING the foregoing, officerthe Borrower may include in Eligible Accounts, employee, Subsidiary or Affiliate of any Loan Party; (iv) Accounts with respect to which provided the Account Debtor is otherwise eligible hereunder, up to $100,000.00 of Accounts where the account debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions .
(i) Such Account is not payable by an account debtor for whom Twenty-Five percent (25%) or more of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province or Quebec); (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, total amount then owed to the extent of such counterclaim Borrower and/or its Subsidiaries by that account debtor is ninety (90) days or right of setoff; (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereofmore from invoice date.
Appears in 1 contract
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practicesGood Faith, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, Accounts shall not be Eligible Accounts: (i) Accounts which remain unpaid ninety one hundred twenty (90120) days after the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)invoice; (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five fifty percent (2550%) or more of the balance owing by such Account Debtor to any a Borrower is ineligible due to are not, or would not be, Eligible Accounts as a result of the criteria in application of the provisions of the preceding clause (i) above); (iii) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan PartyBorrower; (iv) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province the Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Ottawa or Quebec)Saskatchewan Provinces of Canada, unless the Account Debtor has supplied the applicable Borrower with an irrevocable letter of credit, issued by a financial institution satisfactory to Agent, sufficient to cover such Account in form and substance reasonably satisfactory to Agent; (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, setoff (but only to the extent of such asserted counterclaim or right setoff unless the Account Debtor is refusing to pay the remaining amount of setoffsuch Account or Accounts); (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practices; (viii) Accounts with respect to which Agent, on behalf of Lenders, does not have a first and valid fully perfected Lien; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practices; (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereof.Good Faith;
Appears in 1 contract
Sources: Loan and Security Agreement (Abc Rail Products Corp)
Eligible Accounts. Agent shall have the sole right, in its sole reasonable discretion exercised in accordance with its customary business practicesGood Faith, to determine which Accounts of Borrowers are eligible (the "Eligible Accounts"). Without limiting Agent's discretion, the following Accounts, Accounts shall not be Eligible Accounts: (i) Accounts which remain unpaid ninety one hundred twenty (90120) days after the earlier of the original date of the applicable invoice or the shipment date, and Accounts which remain unpaid sixty (60) days after the due date of such Accounts, unless in either case Agent has made specific Account Debtor exceptions from the criteria set forth in this clause (i)invoice; (ii) all Accounts owing by a single Account Debtor, including a currently scheduled Account, if twenty-five fifty percent (2550%) or more of the balance owing by such Account Debtor to any a Borrower is ineligible due to are not, or would not be, Eligible Accounts as a result of the criteria in application of the provisions of the preceding clause (i) above); (iii) Accounts with respect to which the Account Debtor is a Loan Party or a director, officer, employee, Subsidiary or Affiliate of any Loan PartyBorrower; (iv) Accounts with respect to which the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless with respect to any such Account, the applicable Borrower has complied to Agent's satisfaction with the provisions of the Federal Assignment of Claims Act of 1940, including, without limitation, executing and delivering to Agent all statements of assignment and/or notification which are in form and substance acceptable to Agent and which are deemed necessary by Agent to effectuate the assignment to Agent of such Accounts; (v) Accounts with respect to which the Account Debtor is not a resident of the United States or Canada (excluding any Maritime Province the Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Ottawa or Quebec)Saskatchewan Provinces of Canada, unless the Account Debtor has supplied the applicable Borrower with an irrevocable letter of credit, issued by a financial institution satisfactory to Agent, sufficient to cover such Account in form and substance reasonably satisfactory to Agent; (vi) Accounts with respect to which the Account Debtor has asserted a counterclaim or has a right of setoff, setoff (but only to the extent of such asserted counterclaim or right setoff unless the Account Debtor is refusing to pay the remaining amount of setoffsuch Account or Accounts); (vii) Accounts for which the prospect of payment or performance by the Account Debtor is or may be impaired as determined by Agent in its sole reasonable discretion exercised in accordance with its customary business practicesGood Faith; (viii) Accounts with respect to which Agent, on behalf of Lenders, Agent does not have a first and valid fully perfected Liensecurity interest; (ix) Accounts with respect to which the Account Debtor is the subject of bankruptcy or a similar insolvency proceeding or has made an assignment of for the benefit of creditors or whose assets have been conveyed to a receiver or trustee; (x) Accounts with respect to which the Account Debtor's obligation to pay the Account is conditional upon the Account Debtor's approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-▇▇▇-hold▇-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis; (xi) Accounts to the extent that the Account Debtor's indebtedness to the Obligors applicable Borrower exceeds a credit limit determined by Agent in Agent's sole reasonable discretion exercised in accordance with its customary business practicesGood Faith; and (xii) Accounts with respect to which the Account Debtor is located in any state denying creditors access to its courts in the absence of a notice of business activities report or similar filing, unless the applicable Borrower has either qualified as a foreign corporation to do business in such state or has filed such notice of business activities report or similar filing with the applicable state agency for the current year; (xiii) Accounts representing progress bill▇▇▇▇; (▇iv) Accounts with respect to which any disclosure is required in the applicable Accounts Trial Balance or Collateral Report in accordance with subsection 3.3 hereof and (xv) Accounts of any Person other than a Borrower. In the event that previously scheduled Eligible Accounts in excess of $100,000 individually or $250,000 in the aggregate cease to be Eligible Accounts under the above described criteria, Borrower Representative shall notify Agent thereof promptly after any Obligor has obtained knowledge thereof.)
Appears in 1 contract
Sources: Loan and Security Agreement (Abc Rail Products Corp)