Assignment of manufacturing revenues as security for loan.
1. Assignment. Seller, for and in consideration of $_____ paid by buyer, receipt of which is acknowledged, sells, transfers, assigns and sets over to buyer _____% of all manufacturing revenues [from its _________ and _________ divisions] that accrue to seller after the effective date; subject, however, to the terms, provisions and limitations set forth.
2. Duration of manufacturing revenue payment. This assignment shall remain in force until buyer shall have received and realized from assigned manufacturing revenues actually received by buyer after the effective date the aggregate sum of the following amounts:
(a). The sum of $_____; plus
(b). An amount computed (on the basis of a 365-day year) from the date of this agreement on the unliquidated balance of the primary sum at the rate of _____% per annum, the first computations to be made on _________[date], and subsequent computations to be made on each application date following.
3. Application of assigned manufacturing revenues. All assigned manufacturing revenues in the hands of buyer on the day preceding any application date shall on the application date be applied, first, to the amount provided for in section 2(b) above to the extent accrued to the application date, and, second, to the reduction of the unliquidated balance of the primary sum.
4. Covenants of seller. Seller covenants and agrees with buyer that until the manufacturing revenue payment has been fully liquidated and discharged,
(a). Seller will cause its business to be continuously operated and maintained in good and workmanlike manner and in accordance with all generally approved practices in the industry and in strict conformity with all applicable federal, state and local laws, rules and regulations and will use its best efforts not only to maintain manufacturing revenues at their present level but to increase manufacturing revenues in the future;
(b). Seller will cause its facilities to be continuously maintained in a good state of repair and to be kept in good and effective operating condition and all repairs, removals, replacements, additions and improvements needful to this end to be promptly made and any required easements or rights-of-way to be obtained, whether by purchase, condemnation or otherwise;
(c). Seller will not assign, encumber or otherwise commit any manufacturing revenues or take any action or incur any obligation which will impair the ability of seller to maintain and carry on its business and timely pay and discharge its obligations and liabilities out of manufacturing revenues not included in assigned manufacturing revenues.
5. Liability for discharge. Buyer shall look solely to assigned manufacturing revenues for liquidation and discharge of the manufacturing revenue payment and seller shall not be personally liable for the payment; provided, however, nothing contained in this document shall relieve seller of its obligation to respond in damages for any breach of any representation, warranty, covenant, agreement or obligation contained in or arising under this agreement.
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