ACCEPT AND RECEIVE, PAYMENTS ON ACCOUNT OF THE SUBORDINATED DEBT IN
THE ORDINARY COURSE OF BUSINESS.
NOTWITHSTANDING THE FOREGOING, AND WITHOUT IN
ANY WAY LIMITING THE GENERALITY OF ANY PROVISION OF THIS AGREEMENT, NEVADA
FACTORING HEREBY ACKNOWLEDGES THAT IT HAS NO RIGHT TO CHARGEBACK AGAINST ANY
AMOUNTS OWING TO OR SEEK RECAPTURE OF ANY PAYMENTS OR OTHER REMITTANCES AT ANY
TIME MADE TO LERNER.
(B)
NO PAYMENT UPON SENIOR DEBT DEFAULTS.
EXCEPT AS OTHERWISE
PERMITTED UNDER THE TERMS OF THE LOAN AGREEMENT, UPON THE OCCURRENCE OF ANY
EVENT OF DEFAULT, AND UNTIL SUCH EVENT OF DEFAULT IS CURED OR WAIVED, NO OBLIGOR
SHALL MAKE, AND NO OTHER OBLIGOR SHALL ACCEPT OR RECEIVE, ANY SUBORDINATED DEBT
PAYMENT; PROVIDED, HOWEVER, OBLIGORS MAY CONTINUE TO MAKE ANY PAYMENTS DUE TO
ANY BORROWER.
SECTION 5.
SUBORDINATION OF REMEDIES.
AS LONG AS ANY SENIOR DEBT
SHALL REMAIN OUTSTANDING AND UNPAID, FOLLOWING THE OCCURRENCE OF ANY EVENT OF
DEFAULT AND UNTIL SUCH EVENT OF DEFAULT IS CURED OR WAIVED, EACH OBLIGOR OTHER
THAN ANY BORROWER SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF AGENT:
(A)
ACCELERATE, MAKE DEMAND, OR OTHERWISE MAKE DUE AND PAYABLE PRIOR
TO THE ORIGINAL DUE DATE THEREOF ANY SUBORDINATED DEBT OR BRING SUIT OR
INSTITUTE ANY OTHER ACTIONS OR PROCEEDINGS TO ENFORCE ITS RIGHTS OR INTERESTS IN
RESPECT OF THE OBLIGATIONS OF ANY OTHER OBLIGOR OWING TO SUCH OBLIGOR;
(B)
EXERCISE ANY RIGHTS UNDER OR WITH RESPECT TO GUARANTIES OF THE
SUBORDINATED DEBT, IF ANY;
(C)
EXERCISE ANY RIGHTS TO SET-OFFS AND COUNTERCLAIMS IN RESPECT OF
ANY INDEBTEDNESS, LIABILITIES, OR OBLIGATIONS OF SUCH OBLIGOR TO ANY OTHER
OBLIGOR AGAINST ANY OF THE SUBORDINATED DEBT; OR
(D)
COMMENCE, OR CAUSE TO BE COMMENCED, OR JOIN WITH ANY CREDITOR
OTHER THAN AGENT AND THE LENDERS IN COMMENCING, ANY BANKRUPTCY, INSOLVENCY, OR
RECEIVERSHIP PROCEEDING AGAINST THE OTHER OBLIGORS.
SECTION 6.
PAYMENT OVER TO AGENT.
IN THE EVENT THAT, NOTWITHSTANDING
THE PROVISIONS OF SECTION 3, SECTION 4, AND SECTION 5, ANY SUBORDINATED DEBT
PAYMENTS SHALL BE RECEIVED IN CONTRAVENTION OF SECTION 3, SECTION 4, OR SECTION
5 BY ANY OBLIGOR BEFORE ALL SENIOR DEBT IS PAID, IN FULL, IN CASH OR CASH
EQUIVALENTS, SUCH SUBORDINATED DEBT PAYMENTS SHALL BE HELD IN TRUST FOR THE
BENEFIT OF AGENT, THE LENDERS AND BANK PRODUCT PROVIDERS (AS DEFINED IN THE LOAN
AGREEMENT) AND SHALL BE PAID OVER OR DELIVERED TO AGENT FOR APPLICATION TO THE
PAYMENT, IN FULL, IN CASH OR CASH EQUIVALENTS OF ALL SENIOR DEBT REMAINING
UNPAID TO THE EXTENT NECESSARY TO GIVE EFFECT TO SECTION 3, SECTION 4, AND
SECTION 5, AFTER GIVING EFFECT TO ANY CONCURRENT PAYMENTS OR DISTRIBUTIONS TO
AGENT OR ANY LENDER IN RESPECT OF THE SENIOR DEBT.
SECTION 7.
AUTHORIZATION TO AGENT.
IF, WHILE ANY SUBORDINATED DEBT IS
OUTSTANDING, ANY INSOLVENCY EVENT SHALL OCCUR AND BE CONTINUING WITH RESPECT TO
ANY OTHER OBLIGOR OR ITS PROPERTY:
(I) AGENT HEREBY IS IRREVOCABLY AUTHORIZED
AND EMPOWERED (IN THE NAME OF EACH
4
OBLIGOR OR OTHERWISE), BUT SHALL HAVE NO OBLIGATION, TO DEMAND, SUE