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WACHOVIA
BANK, NATIONAL ASSOCIATION
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LOAN AND SECURITY AGREEMENT
This
LOAN AND SECURITY AGREEMENT (“Agreement”) is entered
into as of the 29 th day of November, 2005, by and among
BANK OF AMERICA, N.A., WACHOVIA BANK, NATIONAL ASSOCIATION, and
PORTFOLIO RECOVERY ASSOCIATES, INC., a Delaware corporation
(“Borrower”).
RECITALS
Borrower wishes to obtain credit from time to
time from the Banks, and the Banks desire to extend credit to
Borrower for use by Borrower in its business. This Agreement sets
forth the terms and conditions on which the Banks will advance
credit to Borrower.
AGREEMENT
The
parties agree as follows:
1. DEFINITIONS AND INTERPRETATION
.
1.1
Definitions . Capitalized terms used herein and not defined
in the specific section in which they are used shall have the
meanings assigned to such terms in Exhibit A . Terms
not defined in a specific section or in Exhibit A which
are defined in the Code shall have the meanings assigned to such
terms in the Code.
1.2
Accounting Terms . All accounting terms not specifically
defined in Exhibit A shall be construed in accordance with
GAAP and all calculations shall be made in accordance with GAAP.
The term “financial statements” shall include the
accompanying notes and schedules.
1.3
Use and Application of Terms . To the end of achieving the
full realization by the Banks of their rights and remedies under
this Agreement, including payment in full of the Obligations, in
using and applying the various terms, provisions and conditions in
this Agreement, the following shall apply: (i) the terms
“hereby”, “hereof”, “herein”,
“hereunder” and any similar words refer to this
Agreement; (ii) words in the masculine gender mean and include
correlative words of the feminine and neuter genders and words
importing the singular numbered meaning include the plural number,
and vice versa; (iii) words importing persons include firms,
companies, associations, general partnerships, limited
partnerships, limited liability partnerships, limited liability
limited partnerships, limited liability companies, trusts, business
trusts, corporations and other registered or legal organizations,
including public and quasi-public bodies, as well as individuals;
(iv) the use of the terms “including” or
“included in”, or the use of examples generally, are
not intended to be limiting, but shall mean, without limitation,
the examples provided and others that are not listed, whether
similar or dissimilar; (v) the phrase “costs and
expenses”, or variations thereof, shall include, without
limitation, the reasonable fees of the following persons:
attorneys, legal assistants, accountants, engineers, surveyors,
appraisers and other professionals and service providers;
(vi) as the context requires, the word “and” may
have a joint meaning or a several meaning and the word
“or” may have an inclusive meaning or an exclusive
meaning; (vii) this Agreement shall not be applied,
interpreted and construed more strictly against a person because
that person or that person’s attorney drafted this Agreement;
and (viii) wherever possible each provision of this Agreement
and the other Loan Documents shall be interpreted and applied in
such manner as to be effective and valid under applicable
Requirements of Law, but if any provision of this Agreement or any
of the other Loan Documents shall be prohibited or invalid under
such law, or the application thereof shall be prohibited or invalid
under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions, or the
application thereof shall be in a manner and to an extent
permissible under applicable Requirements of Law.
2. CREDIT EXTENSIONS .
2.1
(a) Credit Extensions . Subject to and upon the terms and
conditions of this Agreement and provided that no Event of Default
has occurred and is continuing, the Banks shall make available to
Borrower the Revolving Facility and Credit Extensions thereunder
generally described as follows: a revolving line of credit in an
amount equal to the lesser of: (i) Seventy-Five Million Dollars
($75,000,000) and (ii) twenty percent (20%) of
Borrower’s and Portfolio Recovery Associates, LLC’s
Estimated Remaining Collections of all Eligible Asset Pools (the
“Revolving Facility”). The Revolving Facility and
related Credit Extensions which are to be made available to
Borrower are more fully described below in this Section 2.1
and unless otherwise provided in this Agreement, the Revolving
Facility and related Credit Extensions shall be evidenced by one or
more Promissory Notes from Borrower to the Banks and the Credit
Extensions shall bear interest, and the Credit Extensions, the
interest and the fees, charges, premiums and costs and expenses
associated therewith, shall be repayable in accordance with the
terms of such Promissory Notes and this Agreement.
(b) Revolving Facility . At any
time from the date hereof through the Maturity Date, Borrower may
request and the Banks agree to make advances (“Advance”
or “Advances”) to Borrower to finance working capital
needs for its business and to finance acquisitions permitted by
Section 7.3 – and not for any other purpose. The
aggregate amount of outstanding Advances shall not exceed at any
time the Committed Revolving Line. If no Event of Default has
occurred and is continuing, amounts borrowed under the Revolving
Facility may be repaid and reborrowed at any time prior to the
Maturity Date.
2.2
Credit Extensions – Disbursements . (a) Whenever
Borrower desires an Advance, Borrower shall notify each Bank by
facsimile transmission or telephone no later than 10:00 a.m.
eastern time, on the Business Day on which Borrower desires the
Advance to be made. Each notification by facsimile transmission
shall include the information requested on the form attached as
Exhibit B , shall be submitted substantially in the
form of Exhibit B and shall be signed by a Responsible
Officer or a designee thereof. Each notification by telephone shall
include the information requested on the form attached as
Exhibit B and each notification by telephone shall be
followed within one Business Day by a facsimile transmission which
meets the criteria regarding a facsimile transmission. Each Bank
shall be entitled to rely on any telephonic notice given by a
person who such Bank reasonably believes to be a Responsible
Officer or a designee thereof. No Bank shall have any liability to
Borrower or any other person for its failure to make an Advance on
the date requested by Borrower, unless such failure is the result
of willful misconduct or gross negligence of such Bank; and if such
Bank’s failure is a result of willful misconduct or gross
negligence, its liability shall be limited to actual damages only
– no Bank shall be liable for indirect, speculative,
consequential or punitive damages and losses. Where Borrower
maintains its operating deposit account with a Bank, such Bank will
credit the amount of the Advances made by such Bank to such
account.
(b) Borrower shall use its best efforts to
ensure that each request for an Advance is made of all Banks, in
accordance with each Bank’s Borrowing Percentage, and all
payments and pre-payments to the Banks shall be made Pro Rata, it
being understood that the parties intend that Credit Extensions
hereunder, and outstanding balances to each Bank, shall approximate
each Bank’s Borrowing Percentage as closely as
practicable.
2.3
Overadvances . If, at any time, the aggregate amount of the
outstanding principal under any Credit Extension exceeds the
Committed Revolving Line, the Borrower shall immediately pay to
each Bank, in cash, its Pro Rata portion of such excess.
2.4
Charging of Payments . A Bank may, after the occurrence of
an Event of Default, at its option, set-off and apply to the
Obligations and otherwise exercise its rights of recoupment as to
any and all (i) balances and deposits of Borrower held by such
Bank, (ii) indebtedness and other obligations at any time
owing to or for the credit or the account of Borrower by such Bank
and by any of such Bank’s Affiliates. A Bank may, after
notice to Borrower at its option, also charge all payments required
to be made on any of the Obligations against the Committed
Revolving Line. If a Bank charges the aforementioned payments
against the Committed Revolving Line, the same shall be deemed an
Advance thereunder and the amount of the Advance shall thereafter
accrue interest at the interest rate applicable from time to time
to Advances; and if a Bank charges payments as aforesaid, such Bank
may, in its discretion, limit, declare a moratorium on and
terminate Borrower’s right under this Agreement to receive
additional Advances, after notice to Borrower and each other Bank,
and a Bank’s decision to do one of the foregoing does not
prevent it from later doing any one or more of the
others.
2.5
Fees . In addition to the other fees, charges, costs and
expenses required to be paid by Borrower under this Agreement and
the other Loan Documents, Borrower shall pay to the Banks the fees,
charges, costs and expenses set forth in this
Section 2.5.
(a) Unused Facility Fee . Borrower
shall pay to each Bank an annualized three-tenths of one percent
(0.30%) Unused Facility Fee, which shall be payable monthly on the
first day of each month, and which shall be based upon the average
amount of the Unused Revolving Facility for the preceding calendar
month for each Bank relative to each such Bank’s Commitment.
The average amount of the Unused Revolving Facility for any partial
month shall be calculated based on the unused amounts in such
partial month.
(b) Bank Expenses . On the Closing
Date, Borrower shall pay to the Banks all reasonable Bank Expenses
incurred through the Closing Date and shall pay, as and when demand
is so made by a Bank to Borrower, all reasonable Bank Expenses
incurred relating to completion, after the Closing Date, of matters
related to closing of this Agreement. Borrower shall be responsible
for its own fees and expenses, including its legal fees.
2.6
Documentary and Intangible Taxes; Additional Costs. To the
extent not prohibited by law and notwithstanding who is liable for
payment of the taxes and fees, Borrower shall pay, on a
Bank’s demand, all intangible personal property taxes,
documentary stamp taxes, excise taxes and other similar taxes
assessed, charged and required to be paid in connection with the
Credit Extensions and any extension, renewal and modification
thereof, or assessed, charged and required to be paid in connection
with this Agreement, any of the other Loan Documents and any
extension, renewal and modification of any of the foregoing. If,
with respect to this Agreement or the transactions hereunder, any
Requirement of Law (i) subjects a Bank to any tax (except
federal, state and local income taxes on the overall net income of
a Bank), (ii) imposes, modifies and deems applicable any
deposit insurance, reserve, special deposit or similar requirement
against assets held by, or deposits in, or loans by a Bank, or
(iii) imposes upon a Bank any other condition, and the result
of any of the foregoing is to increase the cost to such Bank,
reduce the income receivable by such Bank or impose any expense
upon such Bank with respect to the Obligations, Borrower agrees to
pay to such Bank the amount of such increase in cost, reduction in
income or additional expense within thirty (30) days following
presentation by such Bank of a statement of the amount and setting
forth such Bank’s calculation thereof, all in reasonable
detail, which statement shall be deemed true and correct absent
manifest error.
2.7
Term of Agreement . This Agreement shall become effective on
the Closing Date and shall continue in full force and effect until
the last to occur of (i) payment in full of all of the
Obligations or (ii) termination of the Banks’
obligations to make Credit Extensions under this Agreement.
Notwithstanding the foregoing, each Bank shall have the right to
limit, declare a moratorium on and terminate its obligation to make
Credit Extensions under this Agreement immediately and without
notice to Borrower (but with immediate written notice to each other
Bank) upon the occurrence and during the continuance of an Event of
Default; and such action by a Bank shall not constitute a
termination of this Agreement, shall not constitute a termination
of Borrower’s obligations under this Agreement or the other
Loan Documents and shall not adversely affect or impair any
Bank’s security interests in the Collateral. A Bank’s
decision to do any one of the foregoing (i.e., limit, declare a
moratorium and terminate its obligations to make Credit Extensions)
shall not prevent it from exercising any one or more of the other
options available to it at any other time. The Banks shall review
the Maturity Date annually, and shall notify Borrower (pursuant to
a notice substantially in the form of the Notice of Extension
attached hereto) not less than sixty (60) days before each
anniversary of this Agreement only if they intend to extend the
Maturity Date to a date which is one year beyond the then current
Maturity Date.
3. CONDITIONS OF CREDIT EXTENSIONS
.
3.1
Conditions Precedent to Initial Credit Extension . The
obligation of any Bank to make the initial Credit Extension is
subject to the condition precedent that all of the conditions and
requirements set forth in this Section 3.1 and
Section 3.2 have been satisfied and completed, or the
satisfaction and completion thereof waived by the Banks. If all of
the conditions are not met to all Banks’ satisfaction, or the
completion thereof waived by each Bank, each Bank may, at its
option, (i) withhold disbursement until the same are met,
(ii) close and require that any unsatisfied conditions be
satisfied as a condition subsequent to closing within such period
of time as may be designated by such Bank or (iii) terminate
its obligation to make any Credit Extension and recover from
Borrower all Bank Expenses incurred by such Bank in connection with
its preparations for making the Credit Extensions, together with
the fees and other costs and expenses required to be paid by
Borrower under the Commitment. A waiver by the Banks of a condition
must be in writing to be effective and a waiver as to one or more
conditions shall not constitute a waiver as to other conditions and
shall not establish a “course of dealing or practice”
that would require a waiver of the same or a similar condition at
some later time. A waiver shall not be deemed effective against the
rights of a Bank unless expressly given by such Bank.
(a) Loan Documents, etc . Each Bank
shall have received an original of this Agreement, duly executed by
Borrower and any other persons who are parties hereto, and all of
the information, certifications, certificates, authorizations,
consents, approvals, title and other insurance policies and
commitments, financial statements, financing statements,
agreements, documents and records as the Banks and their counsel
may deem reasonably necessary or appropriate.
(b) Payment of Fees . Each Bank
shall have received payment of the fees and Bank Expenses then due,
as specified in Section 2.
(c) No Event of Default . No Event
of Default shall have occurred and be continuing as of the Closing
Date, or after giving effect to the initial Credit Extension to be
made at or immediately after closing.
(d) Additional Matters . All other
legal and non-legal matters as any Bank or its counsel deems
reasonably necessary or appropriate to be satisfied, completed and
received prior to the initial Credit Extension shall be satisfied,
completed and received in form and substance satisfactory to such
Bank and its counsel; and the Bank’s counsel shall have
received duly executed counterpart originals, or certified or other
such copies of all records as such counsel may reasonably
request.
3.2
Conditions Precedent to All Credit Extensions . The
obligation of any Bank to make each Credit Extension, including the
initial Credit Extension, is further subject to all of the
conditions and requirements set forth in this Section 3.2
being satisfied and completed, or the satisfaction and completion
thereof waived by each Bank.
(a) Loan Payment/Advance Request
Form . Each Bank shall have received, as and when required, a
completed Loan Payment/Advance Request Form in the form of
Exhibit B attached hereto.
(b) Representations and Warranties; No
Event of Default . The representations and warranties
referenced in Section 5 and in the other Loan Documents shall
be true and correct on and as of the date of such Loan
Payment/Advance Request Form and on the effective date of each
Credit Extension as though made at and as of each such date, and no
Event of Default shall have occurred and be continuing, or would
exist after giving effect to such Credit Extension (provided,
however, that those representations and warranties expressly
referring to another date shall be true, correct and complete as of
such date). The making of each Credit Extension shall be deemed to
be a representation and warranty by Borrower on the date of such
Credit Extension as to the accuracy of the facts referred to in
this subsection.
(c) Audit of Collateral . At any
Bank’s election, such Bank shall have received from Borrower
an internally prepared report of the Collateral (including, without
limitation, Borrower’s and Portfolio Recovery Associates,
LLC’s Asset Pools), in a format consistent with the form
included in Borrower’s quarterly and annual public filings.
In the event Borrower’s accountants make material corrections
or modifications to the report presented to them for review,
Borrower shall immediately inform each Bank of such corrections or
modifications.
4. CREATION OF SECURITY INTEREST
.
4.1
Grant of Security Interest . Borrower grants and pledges to
the Banks a continuing security interest in all presently existing
and hereafter acquired or arising Collateral to secure the prompt
repayment of any and all Obligations and to secure the prompt
performance by Borrower of each of its covenants, duties and
obligations under the Loan Documents. Except as set forth in the
Schedule, such security interest constitutes a valid, first
priority security interest in the presently existing Collateral,
and will constitute a valid, first priority security interest in
Collateral acquired or arising after the date hereof.
Notwithstanding any limitation of, moratorium on or termination of
any Bank’s obligation to make Credit Extensions under this
Agreement, the Banks’ security interest on the Collateral
shall remain in full force and effect for so long as any
Obligations are outstanding.
4.2
Delivery of Additional Documentation Required . (a) To
the extent that such documentation is physically available to
Borrower; Borrower shall from time to time execute and deliver to
any Bank, at the request of such Bank, all Negotiable Collateral,
all Financing Statements and other documents and records that such
Bank may request, in form and substance satisfactory to such Bank
and its counsel, to perfect and continue perfected such
Bank’s security interests in the Collateral and in order to
fully consummate all of the transactions contemplated under the
Loan Documents. Borrower hereby consents to the filing by any Bank
of Financing Statements and such other instruments and documents in
any jurisdictions or locations deemed advisable or necessary in
such Bank’s discretion to preserve, protect and perfect such
Bank’s security interest and rights in the Collateral.
Borrower further consents to and ratifies the filing of such
Financing Statements and other instruments and documents prior to
the Closing Date. If Borrower has executed and delivered to any
Bank a separate security agreement or agreements in connection with
any or all of the Obligations, that security agreement or those
security agreements and the security interests created therein
shall be in addition to and not in substitution of this Agreement
and the security interests created hereby, and this Agreement shall
be in addition to and not in substitution of the other security
agreement or agreements and the security interests created thereby,
but shall be subject at all times to the Intercreditor Agreement.
In all cases this Agreement and the aforesaid security agreement or
agreements, as well as all other evidences or records of any and
all of the Obligations and agreements of Borrower, the Banks and
other persons who may be obligated on any of the Obligations, shall
be applied and enforced in harmony with and in conjunction with
each other to the end that each Bank realizes fully upon its rights
and remedies in each and the Liens created by each; and, to the
extent conflicts exist between this Agreement and the other
security agreements and records, they shall be resolved in favor of
the Banks for the purpose of achieving the full realization of the
Banks’ collective rights and remedies thereunder and the
Liens as aforesaid.
(b) Borrower shall take reasonable steps to
provide that computer or other records representing or evidencing
an Account contain (by way of stamp, legend or other method
satisfactory to the Banks) the following language:
“Pledged to Bank of America and Wachovia Bank as
Collateral” or such other language as the Banks may from
time to time require. After an Event of Default, if requested by
any Bank, all contracts, documents, instruments and chattel paper
evidencing an Account shall contain (by way of stamp, legend or
other method satisfactory to such Bank) the above quoted language.
Failure to deliver physical possession of any instruments,
documents, or writings in respect of any Account to any Bank, or
all of them, shall not invalidate any such Bank’s security
interest therein. To the extent that possession may be required by
applicable law for perfection of a Bank’s security interest,
the original chattel paper and instruments representing the
Accounts (to the extent available) shall be deemed to be held by
such Bank, although kept by Borrower or Guarantor as the custodial
agent of such Bank(s). Borrower or Guarantor (as the case may be)
shall, at any reasonable time and at Borrower’s or
Guarantor’s own expense, upon any Bank’s reasonable
request, physically deliver to such Bank on computer disk or other
electronic data storage means which shall be machine readable in
Microsoft Access or such other form as mutually agreed upon by the
parties hereto, copies of all Accounts (including any instruments,
documents or writings in respect of any Account together with all
other instruments, documents or writings in respect of any
collateral securing each Account, then in Borrower’s or
Guarantor’s control) assigned to a Bank to any reasonable
place or places designated by such Bank. All Accounts shall,
regardless of their location, be deemed to be under the
Banks’ dominion and control (with both paper and computer
files so labeled) and deemed to be in the Bank or Banks’, as
applicable, possession.).
(c) A copy of any notice or request by any
Bank pursuant to this Section 4.2, and any response or
information provided by Borrower to any Bank pursuant to this
Section 4.2, shall be delivered to all other Banks
simultaneously.
4.3
Power of Attorney . Borrower does hereby irrevocably
constitute and appoint each Bank, or any of them, its true and
lawful attorney with full power of substitution, for it and in its
name, place and stead, to execute, deliver and file such
agreements, documents, notices, statements and records, to include,
without limitation, Financing Statements, and to do or undertake
such other acts as any such Bank, after notice to Borrower and each
other Bank, and after providing a copy of any such item to Borrower
in its sole discretion, deems necessary or advisable to effect the
terms and conditions of this Agreement, the other Loan Documents
and to otherwise preserve, protect and perfect the security of the
security interest in the Collateral. The foregoing appointment is
and the same shall be coupled with an interest in favor of the
Banks. Notwithstanding the foregoing present grant of a power of
attorney by Borrower to the Banks, except as otherwise provided in
this Agreement and except with respect to filing of Financing
Statements and other actions any Bank deems necessary or
appropriate to preserve, protect, and perfect or continue the
perfection of its security interests in the Collateral, no Bank
shall exercise the rights granted to it under this Section 4.3
until after the occurrence of an Event of Default, or the
occurrence of an event which, upon the giving of any required
notice or the lapse of any required period of time, would be an
Event of Default.
4.4
Right to Inspect and Audit . Any Bank (through any of its
officers, employees, agents or other persons designated by such
Bank) shall have the right, at its own expense (except after the
occurrence of an Event of Default at Borrower’s expense and
without notice) upon reasonable prior notice, from time to time
during Borrower’s usual business hours, to inspect
Borrower’s Books and to make copies thereof and to inspect,
check, test, audit and appraise the Collateral and Borrower’s
business affairs in order to verify Borrower’s financial
condition or the amount, condition of, or any other matter relating
to the Collateral and Borrower’s compliance with the terms
and conditions of this Agreement and the other Loan Documents. A
Bank shall make reasonable efforts to minimize disruption of
Borrower’s operations when conducting such work. Borrower
shall permit representatives of the Banks to discuss the business,
operations, properties and financial and other conditions of
Borrower with its officers, board members, executives, managers,
members, partners, employees, agents, independent certified public
accountants and others, as applicable. The representatives of the
Banks will maintain the confidentiality of non-public information
obtained from such discussions or otherwise and will not trade the
Borrower’s stock based upon material, non-public information
concerning the Company that the representatives of the Banks may
obtain. Notwithstanding the foregoing provisions of this Section
4.4, the Banks shall not be required to give prior notice or limit
their inspections to normal business hours if they, or any of them,
deem an emergency or other extraordinary situation to exist with
respect to the Collateral, Borrower’s Books and their other
rights hereunder.
4.5
Collection of Accounts . In addition to its other rights and
remedies in this Agreement, the Banks shall have the rights and
remedies set forth in this Section 4.5, all of which may be
exercised by the Banks, or any of them, upon the occurrence of an
Event of Default, or the occurrence of an event which, upon the
giving of any required notice or the lapse of any required period
of time, would be an Event of Default.
(a) After the occurrence of an Event of
Default, but subject to the terms of the Intercreditor Agreement,
or the occurrence of an event or condition which, after the giving
of any required notice and the lapse of any required period of
time, would be an Event of Default, each Bank is authorized and
empowered at any time in its sole discretion (i) to demand,
collect, settle, compromise for, recover payment of, to hold as
additional security for the Obligations and to apply against the
Obligations any and all sums which are now owing and which may
hereafter arise and become due and owing upon any of said Accounts
and upon any other obligation to Borrower (to include making,
settling, adjusting, collecting and recovering payment of all
claims under and decisions with respect to Borrower’s
policies of insurance); (ii) to enforce payment of any Account
and any other obligation of any person to Borrower either in its
own name or in the name of Borrower; (iii) to endorse in the
name of Borrower and to collect any instrument or other medium of
payment, whether tangible or electronic, tendered or received in
payment of the Accounts that constitute Collateral and any other
obligation to Borrower; (iv) to sign Borrower’s name on
any invoice or bill of lading relating to any Account, drafts
against account debtors, schedules and assignments of Accounts,
verifications of Accounts and notices to account debtors; and
(v) dispose of any Collateral constituting Accounts and to
convert any Collateral constituting Accounts into other forms of
Collateral. But, under no circumstances shall any Bank be under any
duty to act in regard to any of the foregoing matters. Without
limiting the provisions of Section 4.3 hereof, but in addition
thereto, Borrower hereby appoints each Bank and any employee or
representative of each Bank as such Bank may from time to time
designate, as attorneys-in-fact for Borrower, to sign and endorse
in the name of Borrower, to give notices in the name of Borrower
and to perform all other actions necessary or desirable in the
reasonable discretion of such Bank to effect these provisions and
carry out the intent hereof. Borrower hereby ratifies and approves
all lawful acts of such attorneys-in-fact and except as otherwise
provided for herein, neither any Bank nor any other such
attorneys-in-fact will be liable for any lawful acts of commission
or omission nor for any error of judgment or mistake of fact or
law. The foregoing power, being coupled with an interest, is
irrevocable so long as any Account pledged and assigned to such
Bank remains unpaid and this Agreement or any other Loan Document
is in force. The costs and expenses of such collection and
enforcement shall be borne solely by Borrower whether the same are
incurred by a Bank or on behalf of a Bank or Borrower and, if paid
or incurred by a Bank, the same shall be an Obligation owing by
Borrower to such Bank, payable on demand with interest at the
Default Rate, and secured by this Agreement and the other Loan
Documents. Borrower hereby irrevocably authorizes and consents to
all account debtors and other persons communicating after an Event
of Default with any Bank, or its agent, with respect to
Borrower’s property, business and affairs and to all of the
foregoing persons acting after an Event of Default upon and in
accordance with a Bank’s, or its representative’s,
instructions, directions and demands, including, without
limitation, such Bank’s request and demand to pay money and
deliver other property to such Bank or Bank’s
representatives, all without liability to Borrower for so doing,
except as otherwise provided herein.
(b) After the occurrence of an Event of
Default, or the occurrence of an event or condition which after the
giving of any required notice or the lapse of any required period
of time, would be an Event of Default, at any Bank’s request,
Borrower will forthwith upon receipt of all checks, drafts, cash
and other tangible and electronic remittances in payment or on
account of Borrower’s Accounts, deposit the same in a special
bank account maintained with such Bank or its representative, over
which such Bank and its representative (as applicable) have the
sole power of withdrawal and will designate with each such deposit
the particular Account upon which the remittance was made. The
funds in said account shall be held by such Bank as security for
the Obligations (and shall be subject to the terms of the
Intercreditor Agreement). Said proceeds shall be deposited in
precisely the form received except for the endorsement of Borrower
where necessary to permit collection of items, which endorsement
Borrower agrees to make, and which endorsement the Bank and its
representative (as applicable) are also hereby authorized to make
on Borrower’s behalf. Pending such deposit, Borrower agrees
that it will not commingle any such checks, drafts, cash and other
remittances with any of Borrower’s funds or property, but
will hold them separate and apart therefrom and upon an express
trust for the Banks until deposit thereof is made in the special
account. After the occurrence of an Event of Default, or the
occurrence of an event or condition which after the giving of any
required notice or the lapse of any required period of time, would
be an Event of Default, the Bank maintaining such account may at
anytime and from time to time, in its sole discretion but subject
to the terms of the Intercreditor Agreement, apply any part of the
credit balance in the special account to the payment of all or any
of the Obligations, and to payment of any other obligations owing
to the Banks under or on account of this Agreement or any of the
other Loan Documents. On the Maturity Date and upon the full and
final payment of all of the Obligations and the other obligations
as aforesaid, together with a termination of all Bank’s
obligation to make additional Advances, each Bank will pay over to
the Borrower any excess good and collected funds received by such
Bank from Borrower, whether received as a deposit in the special
account or received as a direct payment on any of the
Obligations.
(c) After the occurrence of an Event of
Default, or the occurrence of an event or condition which after the
giving of any required notice or the lapse of any required period
of time, would be an Event of Default, each Bank shall have the
absolute and unconditional right to apply for and to obtain the
appointment of a receiver, custodian or similar official for all or
a portion of the Collateral, including, without limitation, the
Accounts, to, among other things, manage and sell the same, or any
part thereof, and to collect and apply the proceeds therefrom to
payment of the Obligations as provided in this Agreement and the
other Loan Documents. Any such receiver, custodian or similar
official, if required, shall be qualified and licensed as a
collection agency in each state or territory in which any customer
Accounts may be so collected or managed. In the event of such
application, Borrower consents to the appointment of such qualified
and licensed receiver, custodian or similar official and agrees
that such receiver, custodian or similar official may be appointed
without further notice to Borrower beyond any notice required to be
given to Borrower prior to the occurrence of an Event of Default,
if any, without regard to the adequacy of any security for the
Obligations secured hereby and without regard to the solvency of
Borrower or any other person who or which may be liable for the
payment of the Obligations or any other obligations of Borrower
hereunder. All costs and expenses related to the appointment of a
receiver, custodian or other similar official hereunder shall be
the responsibility of Borrower, but if paid by any Bank, Borrower
hereby agrees to pay to such Bank, on demand, all such costs and
expenses, together with interest thereon from the date of payment
at the Default Rate. All sums so paid by a Bank, and the interest
thereon, shall be an Obligation owing by Borrower to such Bank, and
secured by this Agreement and the other Loan Documents.
Notwithstanding the appointment of any receiver, custodian or other
similar official, each Bank shall be entitled as
