Common use of SALES OF ACCOUNTS RECEIVABLE Clause in Contracts

SALES OF ACCOUNTS RECEIVABLE. The Company may, and any of its Restricted Subsidiaries may, sell, at any time and from time to time, all of their respective accounts receivable to an Accounts Receivable Subsidiary; provided that (i) the cash received in each sale is not less than 90% of the aggregate face value of the receivables sold and the remainder of the consideration received in each such sale is a promissory note (a "Promissory Note") which is subordinated to no Indebtedness --------------- or obligation other than that due to the financial institution or other entity providing the financing to the Accounts Receivable Subsidiary with respect to such accounts receivable (a "Financier"); provided further that the Initial Sale --------- shall include all eligible accounts receivable of the Company and/or its Restricted Subsidiaries that shall be party to such arrangements in existence on the date of the Initial Sale, (ii) the cash proceeds received from the Initial Sale less reasonable and customary transaction costs will be deemed to be Net Cash Proceeds and shall be applied in accordance with Section 4.16; and (iii) the Company and its Restricted Subsidiaries shall sell their accounts receivable to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company or any of its Restricted Subsidiaries to any other person except on an arm's-length basis and solely for consideration in the form of cash or Cash Equivalents, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any business or transaction other than the purchase, financing and sale of accounts receivable of the Company and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the book value of such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company, or the relevant Restricted Subsidiary, as the case may be, as payment on the Promissory Notes, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall not, and shall not permit any of its Restricted Subsidiaries to, sell accounts receivable to any Accounts Receivable Subsidiary upon (1) the occurrence of a Default with respect to the Company and its Restricted Subsidiaries and (2) the occurrence of any of the events specified in Section 6.1(6) with respect to such Accounts Receivable Subsidiary.

SALES OF ACCOUNTS RECEIVABLE. The Company Borrower may, and may permit its Subsidiaries to: (a) in any of its Restricted Subsidiaries maycalendar year, sell, at any time and from time to timewithout recourse, all of their respective accounts receivable arising in the ordinary course of business in an aggregate face amount not exceeding $25,000,000, (b) in any calendar year, sell, with recourse, accounts receivable arising in the ordinary course of business in an amount not exceeding 10% of Consolidated Tangible Net Worth as at the beginning of such calendar year and (c) enter into one or more transactions or programs (each such transaction or program being referred to an Accounts Receivable Subsidiary; provided that herein as a "Receivables Program") involving (i) the sale or other financing by Borrower or any of its Subsidiaries, without recourse based solely upon a default by one or more account debtors in the payment of any accounts receivable included in the applicable Receivables Program, of accounts receivable arising in the ordinary course of business of Borrower or any of its Subsidiaries or (ii) the incurrence by Borrower or any of its Subsidiaries of Non- Recourse Debt secured by Liens on accounts receivable arising in the ordinary course of business of Borrower or any of its Subsidiaries if Borrower shall have delivered to each Bank, at least 15 Business Days prior to the consummation of any Receivables Program, a copy of the proposed terms and conditions of such Receivables Program and, if within the 15 Business Day period the Requisite Banks shall not have objected; provided that in the case of clauses (a) and (b) above, such sale of accounts receivable shall be for a net cash received in each sale is not sales price of no less than 9070% of the face amount thereof; and provided, further, that Borrower and its Subsidiaries shall not sell or otherwise finance any accounts receivable pursuant to a Receivables Program if the aggregate amount of the Receivables Programs at the time of any such sale or financing would exceed 50% of the aggregate face value amount of the receivables sold and the remainder of the consideration received in each such sale is a promissory note (a "Promissory Note") which is subordinated to no Indebtedness --------------- or obligation other than that due to the financial institution or other entity providing the financing to the Accounts Receivable Subsidiary with respect to such accounts receivable (a "Financier"); provided further that the Initial Sale --------- shall include all eligible accounts receivable of the Company and/or Borrower and its Restricted Subsidiaries that shall be party at such time (after giving effect to such arrangements in existence on the date of the Initial Sale, any sales permitted by clauses (iia) the cash proceeds received from the Initial Sale less reasonable and customary transaction costs will be deemed to be Net Cash Proceeds and shall be applied in accordance with Section 4.16; and (iiib) the Company and its Restricted Subsidiaries shall sell their accounts receivable but without giving effect to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company or any of its Restricted Subsidiaries to any other person except on an arm's-length basis and solely for consideration in the form of cash or Cash Equivalents, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any business or transaction other than the purchase, financing and sale of accounts receivable of the Company and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the book value of sales made under such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company, or the relevant Restricted Subsidiary, as the case may be, as payment on the Promissory Notes, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall not, and shall not permit any of its Restricted Subsidiaries to, sell accounts receivable to any Accounts Receivable Subsidiary upon (1) the occurrence of a Default with respect to the Company and its Restricted Subsidiaries and (2) the occurrence of any of the events specified in Section 6.1(6) with respect to such Accounts Receivable SubsidiaryReceivables Programs).

SALES OF ACCOUNTS RECEIVABLE. The Company maySell, and transfer or dispose of ---------------------------- (with or without recourse) or otherwise finance, or permit any of its Restricted Subsidiaries may, to sell, at any time and from time to timetransfer or dispose of (with or without recourse) or otherwise finance, all of their respective accounts receivable to an Accounts Receivable Subsidiary; provided that except (i) the cash received in each sale is not less than 90% of the aggregate face value of the receivables sold and the remainder of the consideration received in each such sale is a promissory note (a "Promissory Note") which is subordinated to no Indebtedness --------------- Merisel Canada or obligation other than that due Merisel ------ Americas may sell accounts receivable pursuant to the financial institution or other entity providing securitization programs identified on Schedule III hereto (the financing to the Accounts Receivable Subsidiary with respect to such accounts receivable (a "FinancierExisting Receivables Programs"); ----------------------------- provided further that the Initial Sale --------- shall include all eligible accounts receivable any renewal, amendment, replacement or refinancing of the Company and/or its Restricted Subsidiaries that shall be party to such arrangements in existence on the date of the Initial Sale, (ii) the cash proceeds received from the Initial Sale less reasonable and customary transaction costs will be deemed to be Net Cash Proceeds and shall be applied in accordance with Section 4.16; and (iii) the Company and its Restricted Subsidiaries shall sell their accounts receivable to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company (i) any Existing -------- Receivables Program shall not permit any Accounts Receivable Subsidiary be on terms more adverse to sell any accounts receivable purchased from the Company Merisel Canada or any of its Restricted Subsidiaries to any other person except on an arm's-length basis and solely for consideration in the form of cash or Cash Equivalents, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any business or transaction other than the purchase, financing and sale of accounts receivable of the Company and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the book value of such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company, or the relevant Restricted SubsidiaryMerisel Americas, as the case may be, as payment on than the Promissory Notes, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses terms of the Accounts Receivable Subsidiary Existing Receivables Program being so renewed, amended, replaced or refinanced (it being agreed that an increase in the interest rate is not an adverse change); (ii) Merisel Americas and its wholly- owned Subsidiaries may sell or transfer accounts receivable to satisfy reasonable minimum operating capital requirements Merisel Americas and its wholly-owned Subsidiaries; provided that the aggregate value of such -------- accounts receivable sold or transferred by Merisel Americas and its wholly-owned Subsidiaries under this Section 5.02(j)(ii) to Persons other than Merisel Americas and its wholly-owned Subsidiaries shall not exceed $0; and (viii) shall notMerisel Parent may, and shall not may permit any of its Restricted Subsidiaries to, sell enter into one or more transactions occurring after January 31, 1998 (other than those referred to in clause (ii) above, each such transaction being referred to herein as a "Receivables Program") involving the sale or other financing by Merisel Parent ------------------- or its Subsidiaries of accounts receivable arising in the ordinary course of business of Merisel Parent or its Subsidiaries; and provided further that 60% of -------- ------- the proceeds of all such Receivables Programs shall be applied to repay any Accounts Receivable Subsidiary upon (1) the occurrence of a Default with respect to the Company and its Restricted Subsidiaries and (2) the occurrence of outstanding amount under any of the events specified in revolving credit facility permitted under Section 6.1(6) with respect to such Accounts Receivable Subsidiary5.02(b)(i).

SALES OF ACCOUNTS RECEIVABLE. The Company may, and any of its Restricted Subsidiaries may, sell, sell at any time and from time to time, all of their respective accounts receivable to an Accounts Receivable Subsidiary; provided PROVIDED that (i) the cash received in each such sale is not less than 90% of the aggregate face value of the receivables sold and the remainder of the consideration received in each such sale is a promissory note (a "Promissory Note") which is subordinated to no Indebtedness --------------- or obligation other than that due to the financial institution or other entity providing the financing to the Accounts Receivable Subsidiary with respect to such accounts receivable (a "Financier"); provided further PROVIDED FURTHER that the Initial Sale --------- shall will include all eligible accounts receivable of the Company and/or its Restricted Subsidiaries that shall will be party to such arrangements in existence on the date of the Initial Sale, (ii) the cash proceeds received from the Initial Sale less reasonable and customary transaction costs will be deemed to be Net Cash Proceeds and shall will be applied in accordance with the second paragraph of Section 4.164.10 hereof; and (iii) the Company and its Restricted Subsidiaries shall will sell their accounts receivable to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company or any of its Restricted Subsidiaries to any other person except on an arm'sarms-length basis and solely for consideration in the form of cash or Cash EquivalentsMarketable Securities, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any business or transaction other than the purchase, financing and sale of accounts receivable of the Company and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the book value of such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company, or the relevant Restricted Subsidiary, as the case may be, Company as payment on the Promissory Notes, all available cash or Cash Equivalents Marketable Securities not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall not, and shall not permit any of its Restricted Subsidiaries to, sell accounts receivable to any Accounts Receivable Subsidiary upon (1) the occurrence of a Default with respect to the Company and its Restricted Subsidiaries and (2) the occurrence of any of the events event specified in Section 6.1(66.01(vii) or (viii) (without giving effect to any grace periods specified therein) with respect to such Accounts Receivable Subsidiary.

SALES OF ACCOUNTS RECEIVABLE. The Company Grove Investors may, and any of its Restricted Subsidiaries may, sell, sell at any time and from time to time, all of their respective accounts receivable and or Debentures receivables and related assets to an Accounts Receivable Subsidiary; provided PROVIDED that (i) the cash aggregate consideration received in each such sale is not less than 90% of a least equal to the aggregate face fair market value of the receivables sold and sold, as determined by the remainder Management Committee in good faith, (ii) no less than 80% of the consideration received in each such sale is consists of either cash or a promissory note (a "Promissory NotePROMISSORY NOTE") which is subordinated to no Indebtedness --------------- or obligation other than that due to the financial institution or other entity providing the financing to the Accounts Receivable Subsidiary with respect to such accounts receivable (a the "FinancierFINANCIER")) or an Equity Interest in such Accounts Receivable Subsidiary; provided further PROVIDED FURTHER that the Initial Sale --------- initial sale shall include all eligible accounts receivable of the Company Grove Investors and/or its Restricted Subsidiaries that shall be are party to such arrangements in existence on the date of the Initial Salethat constitute eligible receivables under such arrangements, (ii) the cash proceeds received from the Initial Sale less reasonable and customary transaction costs will be deemed to be Net Cash Proceeds and shall be applied in accordance with Section 4.16; and (iii) the Company Grove Investors and its Restricted Subsidiaries shall sell their all accounts receivable receivables that constitute eligible receivables under such arrangements to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company Grove Investors (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company Grove Investors or any of its Restricted Subsidiaries to any other person except on an arm'sarms-length basis and solely for consideration in the form of cash or Cash Equivalents, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any business or transaction other than the purchase, financing and sale of accounts receivable of the Company Grove Investors and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the book value of such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company, or the relevant Restricted Subsidiary, as the case may be, Grove Investors as payment on the Promissory NotesNotes or a dividend, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall not, and shall not permit any of its Restricted Subsidiaries to, sell accounts receivable to any Accounts Receivable Subsidiary upon (1) the occurrence of a Default with respect to the Company Grove Investors and its Restricted Subsidiaries and (2) the occurrence of any certain events of the events specified in Section 6.1(6) bankruptcy or insolvency with respect to such Accounts Receivable Subsidiary.

SALES OF ACCOUNTS RECEIVABLE. The Company may, and any of its Restricted Subsidiaries may, sell, sell at any time and from time to time, all of their respective accounts receivable and or notes receivables and related assets to an Accounts Receivable Subsidiary; provided that (i) the cash aggregate consideration received in each such sale is not less than 90% of a least equal to the aggregate face fair market value of the receivables sold and sold, as determined by the remainder Management Committee in good faith, (ii) no less than 80% of the consideration received in each such sale is consists of either cash or a promissory note (a "Promissory Note") which is subordinated to no Indebtedness --------------- or obligation other than that due to the financial institution or other entity providing the financing to the Accounts Receivable Subsidiary with respect to such accounts receivable (a the "Financier")) or an Equity Interest in such Accounts Receivable Subsidiary; provided further that the Initial Sale --------- shall initial sale will include all eligible accounts receivable of the Company and/or its Restricted Subsidiaries that shall be are party to such arrangements in existence on the date of the Initial Salethat constitute eligible receivables under such arrangements, (iiiii) the cash proceeds received from the Initial Sale initial sale less reasonable and customary transaction costs will be deemed to be Net Cash Proceeds and shall will be applied in accordance with the second paragraph of Section 4.16; 4.10 hereof, and (iiiiv) the Company and its Restricted Subsidiaries shall will sell their all accounts receivable receivables that constitute eligible receivables under such arrangements to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company or any of its Restricted Subsidiaries to any other person except on an arm'sarms-length basis and solely for consideration in the form of cash or Cash Equivalents, (ii) shall will not permit the Accounts Receivable Subsidiary to engage in any business or transaction other than the purchase, financing and sale of accounts receivable of the Company and its Restricted Subsidiaries and activities incidental thereto, (iii) shall will not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the book value of such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shallwill, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company, or the relevant Restricted Subsidiary, as the case may be, Company as payment on the Promissory NotesNotes or a dividend, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall will not, and shall will not permit any of its Restricted Subsidiaries to, sell accounts receivable to any Accounts Receivable Subsidiary upon (1) the occurrence of a Default with respect to the Company and its Restricted Subsidiaries and (2) the occurrence of any certain events of the events specified in Section 6.1(6) bankruptcy or insolvency with respect to such Accounts Receivable Subsidiary.

SALES OF ACCOUNTS RECEIVABLE. The Company Holdings may, and any of its Restricted Subsidiaries may, sell, sell at any time and from time to time, all of their respective accounts receivable and or notes receivables and related assets to an Accounts Receivable Subsidiary; provided that (i) the cash aggregate consideration received in each such sale is not less than 90% of a least equal to the aggregate face fair market value of the receivables sold and sold, as determined by the remainder Management Committee in good faith, (ii) no less than 80% of the consideration received in each such sale is consists of either cash or a promissory note (a "Promissory Note") which is subordinated to no Indebtedness --------------- or obligation other than that due to the financial institution or other entity providing the financing to the Accounts Receivable Subsidiary with respect to such accounts receivable (a the "Financier")) or an Equity Interest in such Accounts Receivable Subsidiary; provided further that the Initial Sale --------- shall initial sale will include all eligible accounts receivable of the Company Holdings and/or its Restricted Subsidiaries that shall be are party to such arrangements in existence on the date of the Initial Salethat constitute eligible receivables under such arrangements, (iiiii) the cash proceeds received from the Initial Sale initial sale less reasonable and customary transaction costs will shall be deemed to be Net Cash Proceeds and shall be applied in accordance with the second paragraph of Section 4.16; 4.10 hereof, and (iiiiv) the Company Holdings and its Restricted Subsidiaries shall sell their all accounts receivable that constitute eligible receivables under such arrangements to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company Holdings (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company Holdings or any of its Restricted Subsidiaries to any other person except on an arm'sarms-length basis and solely for consideration in the form of cash or Cash Equivalents, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any business or transaction other than the purchase, financing and sale of accounts receivable of the Company Holdings and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the book value of such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company, Holdings or the relevant any of its Restricted Subsidiary, as the case may beSubsidiaries, as payment on the Promissory NotesNotes or a dividend, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall not, and shall not permit any of its Restricted Subsidiaries to, sell accounts receivable to any Accounts Receivable Subsidiary upon (1) the occurrence of a Default with respect to the Company Holdings and its Restricted Subsidiaries and (2) the occurrence of any certain events of the events specified in Section 6.1(6) bankruptcy or insolvency with respect to such Accounts Receivable Subsidiary.

SALES OF ACCOUNTS RECEIVABLE. The Company may, and any of its Restricted Subsidiaries may, sell, at any time and from time to time, all of their respective accounts receivable (and related general intangibles) to an Accounts Receivable Subsidiary; provided that (i) the cash received in each sale is not less than 90% of the aggregate face value of the receivables sold and the remainder of the consideration received in each such sale is a promissory note (a "Promissory Note") which is subordinated --------------- to no Indebtedness --------------- or obligation other than that due to the financial institution or other entity providing the financing to the Accounts Receivable Subsidiary with respect to such accounts receivable (a "Financier"); provided --------- further that the Initial Sale --------- shall include all eligible accounts receivable of the Company and/or its Restricted Subsidiaries that shall be party to such arrangements in existence on the date of the Initial Sale, (ii) the cash proceeds received from the Initial Sale less reasonable and customary transaction costs will be deemed to be Net Cash Proceeds and shall be applied in accordance with Section 4.16; and (iii) the Company and its Restricted Subsidiaries shall sell their accounts receivable to the Accounts Receivable Subsidiary no less frequently than on a weekly basis. The Company (i) shall not permit any Accounts Receivable Subsidiary to sell any accounts receivable purchased from the Company or any of its Restricted Subsidiaries to any other person except on an arm's-length basis and solely for consideration in the form of cash or Cash Equivalents, (ii) shall not permit the Accounts Receivable Subsidiary to engage in any business or transaction other than the purchase, financing and sale of accounts receivable of the Company and its Restricted Subsidiaries and activities incidental thereto, (iii) shall not permit any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of the book value of such Accounts Receivable Subsidiary's total assets, as determined in accordance with GAAP, (iv) shall, at least as frequently as monthly, cause the Accounts Receivable Subsidiary to remit to the Company, or the relevant Restricted Subsidiary, as the case may be, Company as payment on the Promissory Notes, all available cash or Cash Equivalents not held in a collection account pledged to a Financier, to the extent not applied to pay or maintain reserves for reasonable operating expenses of the Accounts Receivable Subsidiary or to satisfy reasonable minimum operating capital requirements and (v) shall not, and shall not permit any of its Restricted Subsidiaries to, sell accounts receivable to any Accounts Receivable Subsidiary upon (1) the occurrence of a Default with respect to the Company and its Restricted Subsidiaries and (2) the occurrence of any of the events specified in Section 6.1(6) with respect to such Accounts Receivable Subsidiary.