Permitted Security Interests. Notwithstanding any other provisions hereof regarding the creation of Liens, but subject to the provisions of Section 6.1, the Borrower may (A) grant priority purchase money security interests in newly acquired items of tangible personal property, (B) lease tangible personal property from equipment lessors, and (C) grant a priority security interest in Receivables to an institutional lender which is providing a working capital line of credit for the exclusive use of the Facilities, as long as in each instance: (I) the secured party or equipment lessor enters into an intercreditor agreement with, and satisfactory to, the Lender, pursuant to which, without limiting the foregoing, (X) the Lender shall be afforded the option of curing defaults and the option of succeeding to the rights of the Borrower and (Y) the Lender's security interest in tangible personal property and/or Receivables as applicable, shall be subordinated to the security interest granted to such secured party, (II) all the terms, conditions and provisions of the financing, security interest or lease are reasonably acceptable to the Lender, (III) the Borrower provides a true and complete copy, as executed, of each such purchase money security agreement, financing document and equipment lease and all amendments thereto and (IV) no such security interest, financing agreement or lease is cross-defaulted or cross-collateralized with any other obligation. Notwithstanding the foregoing, the Borrower may lease, or grant purchase money security interests in, new items of tangible personal property having an aggregate cost during the Term in an amount not to exceed TWO HUNDRED THOUSAND DOLLARS ($200,000) without complying with the foregoing requirements, provided that the Borrower shall provide the Lender with a true and complete copy, as executed, of each purchase money security agreement, related financing document and equipment lease, and all amendments thereto. Security interests granted by the Borrower in full compliance with the provisions of this Section are referred to as "Permitted Prior Security Interests".
Appears in 1 contract
Sources: Loan Agreement (Balanced Care Corp)
Permitted Security Interests. Notwithstanding any other provisions hereof regarding the creation of Liens, but subject to the provisions of Section 6.1, the Borrower may (Aa) grant priority purchase money security interests in newly acquired items of tangible personal property, property and (Bb) lease tangible personal property from equipment lessors, and (C) grant a priority security interest in Receivables to an institutional lender which is providing a working capital line of credit for the exclusive use of the Facilities, as long as in each instance: (Ii) the aggregate value of such tangible personal property shall not exceed TWO HITNDRED THOUSAND DOLLARS ($200,000) or (ii) (A) the secured party or equipment lessor enters into an intercreditor agreement with, and satisfactory to, the Lender, pursuant to which, without limiting limiting-the foregoing, (X1) the Lender shall be afforded the option of curing defaults and the option of succeeding to the rights of the Borrower and (Y2) the Lender's security interest in tangible personal property and/or Receivables as applicable, shall be subordinated to the security interest granted to such secured party, (IIB) all of the terms, conditions and provisions of the financing, security interest or lease are reasonably acceptable to the Lender, (IIIC) the Borrower provides a true and complete copy, as executed, of each such purchase money security agreement, financing document and equipment lease and all amendments thereto and (IVD) no such security interest, financing agreement or lease is cross-defaulted or cross-collateralized with any other obligation. Notwithstanding In addition, notwithstanding any other provision hereof regarding the creation of Liens, Borrower shall also be permitted to grant a prior security interest in Receivables (with the Lender retaining a junior security interest therein) to an institutional lender which is providing a working capital line of credit (a "Working Capital Loan") for the exclusive use of Guarantor, Borrower and Affiliates of Borrower as long as such Lender enters into an intercreditor agreement with, and satisfactory to, Lender pursuant to which, without limiting the foregoing, (1) Lender shall be provided with notice with respect to defaults under the Borrower may lease, or grant purchase money security interests in, new items of tangible personal property having an aggregate cost during the Term in an amount not to exceed TWO HUNDRED THOUSAND DOLLARS ($200,000) without complying Working Capital Loan simultaneously with the foregoing requirementsdelivery of such notice to Borrower and shall be afforded the option of curing defaults thereunder, provided that (2) such lender's use of Instruments, Documents, General Intangibles and Chattel Paper shall be limited to a license only for the Borrower purpose of collecting Receivables and (3) the subordination of Lender's interest in the Receivables shall provide be of no force and effect and Lender's first priority security interest shall be reinstated from and after the occurrence of an Event of Default if, upon or following such Event of Default, Lender with a true and complete copy, as executed, either exercises any of each purchase money its remedies set forth in Section 11 or Lender notifies in writing such lender of Lender's intention to invoke its right to reinstate its first priority security agreement, related financing document and equipment lease, and all amendments thereto. Security interests granted by interest in the Borrower in full compliance with the provisions of this Section are referred to as "Permitted Prior Security Interests"Receivables.
Appears in 1 contract
Sources: Loan Agreement (Emeritus Corp\wa\)