Common use of The Collateral Accounts Clause in Contracts

The Collateral Accounts. (a) The Borrowers will deposit, or cause to be deposited, all Items of Payment into bank accounts designated or approved by the Administrative Agent (collectively, the "Collateral Accounts; " each a "Collateral Account"). The Borrowers agree that following an Event of Default and/or if the Borrowers at any time fail to maintain the availability required by the Section 2.1.12(b), the Administrative Agent, at its option, shall have sole power of access to and withdrawal from the Collateral Accounts. Each depository bank of a Collateral Account shall confirm in a writing that, following notice from the Administrative Agent, the depository bank will honor only the Administrative Agent's instructions with respect to the Collateral Account for which it is the depository. (b) Each deposit to the Collateral Accounts shall be made not later than the next Business Day after the date of receipt of the Items of Payment. The Items of Payment shall be deposited in precisely the form received, except for the endorsements of the Borrowers where necessary to permit the collection of any such Items of Payment, which endorsement the Borrowers hereby agree to make. In the event the Borrowers fail to do so, the Borrowers hereby authorize the Administrative Agent to make the endorsement in the name of any or all of the Borrowers. Prior to such a deposit, the Borrowers will not commingle any Items of Payment with any of the Borrowers' other funds or property, but will hold them separate and apart in trust and for the account of the Administrative Agent for the benefit of the Lenders ratably and the Agents. (c) Notwithstanding the provisions of subsections (a) and (b) above, prior to an Event of Default and/or the Borrowers' failure to maintain the availability required by the Section 2.1.12(b), (i) the Parent may continue to use its demand deposit account with Thumb National Bank consistent with past practices and with balances consistent with the Parent's immediate cash needs and (ii) the Local Currency Borrowers may continue to use their demand deposit account with local banks consistent with past practices and with balances consistent with their immediate cash needs. (d) In addition, if so directed by the Administrative Agent following an Event of Default and/or if the Borrowers at any time fail to maintain the availability required by the Section 2.1.12(b), the Borrowers shall direct the mailing of all Items of Payment from their Account Debtors to one or more post-office boxes designated by the Administrative Agent, or to such other additional or replacement post-office boxes pursuant to the request of the Administrative Agent from time to time (collectively, the "Lockbox"). The Administrative Agent shall have unrestricted and exclusive access to the Lockbox. (e) The Borrowers hereby authorize the Administrative Agent, from and after the occurrence and during the continuation of an Event of Default, and/or for so long as the Borrowers fail to maintain the availability required by Section 2.1.12(b), to inspect all Items of Payment, endorse all Items of Payment in the name of any or all of the Borrowers, and deposit such Items of Payment in the Collateral Accounts. The Administrative Agent reserves the right, exercised in its sole and absolute discretion, from and after the occurrence and during the continuation of an Event of Default, and/or for so long as the Borrowers fail to maintain the availability required by Section 2.1.12(b), to provide to the Collateral Accounts credit prior to final collection of an Item of Payment and to disallow credit for any Item of Payment which is unsatisfactory to the Administrative Agent. In the event Items of Payment are returned to the Administrative Agent for any reason whatsoever, the Administrative Agent may, in the exercise of its discretion from time to time, forward such Items of Payment a second time. Any returned Items of Payment shall be charged back to the Collateral Accounts, the Revolving Loan Account, or other account, as appropriate. (f) Unless the Administrative Agent has notified the Borrowers otherwise following an Event of Default and/or if the Borrowers at any time fail to maintain the availability required by the Section 2.1.12(b), the Borrowers may use the amounts deposited in the Collateral Accounts for those uses which are Permitted Uses for the Revolving Loan after the Closing Date. (g) In the event the Administrative Agent determines the application of proceeds of the Collateral Accounts pursuant to this Section 2.1.8, the Administrative Agent will apply the whole or any part of the collected funds received by the Administrative Agent from the Collateral Accounts against the Revolving Loan (or with respect to Items of Payment which are not proceeds of Accounts or Inventory or after an Event of Default, against any of the Obligations).