SETOFF IN RESPECT OF THE COVERED CLAIMS, EXCEPT THAT THE
COVERED CREDITOR MAY DEMAND, ACCEPT, RECEIVE AND COLLECT AMOUNTS OWING ON THE
COVERED CLAIMS SO LONG AS, AND ONLY IF, BOTH BEFORE AND AFTER SUCH DEMAND,
ACCEPTANCE, RECEIPT AND COLLECTION, THE PAYMENT TEST HAS BEEN SATISFIED.
NOTWITHSTANDING THE FOREGOING, AND FOR AVOIDANCE OF DOUBT, "COVERED CLAIMS"
SHALL EXCLUDE ANY (A) LOAN OR ADVANCE MADE BY ANY COVERED CREDITOR TO BORROWER
PRIOR TO THE DATE HEREOF, PROVIDED THAT ALL SUCH LOANS ARE REPAID AT THE TIME OF
THE FIRST ADVANCE ON THE LOAN, AND (B) ORDINARY COURSE OF BUSINESS ACCOUNTS
PAYABLE AND ACCRUED EXPENSES OF THE TYPE EXCLUDED FROM INDEBTEDNESS (AS SUCH
TERM IS USED IN THE LOAN AGREEMENT).
2.3
CLAIMS IN BANKRUPTCY. IN THE EVENT OF A
BANKRUPTCY EVENT INVOLVING BORROWER, ADMINISTRATIVE AGENT, ON BEHALF OF THE
COVERED CREDITORS, SHALL HAVE THE RIGHT TO PROVE THEIR CLAIM IN ANY PROCEEDING
SO AS TO ESTABLISH THEIR RIGHTS HEREUNDER AND RECEIVE DIRECTLY FROM THE
RECEIVER, TRUSTEE OR OTHER COURT CUSTODIAN, PAYMENTS WHICH WOULD OTHERWISE BE
PAYABLE UPON COVERED CLAIMS. EACH COVERED CREDITOR HEREBY ASSIGNS SUCH PAYMENTS
TO THE ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE ADMINISTRATIVE AGENT AND THE
LENDERS, FOR APPLICATION AGAINST THE OBLIGATIONS AS PROVIDED IN THE LOAN
AGREEMENT. SHOULD THE ADMINISTRATIVE AGENT OR ANY LENDER RECEIVE, FOR
APPLICATION UPON THE OBLIGATIONS, ANY SUCH PAYMENT WHICH IS OTHERWISE PAYABLE TO
ANY COVERED CREDITOR, AND WHICH, AS BETWEEN BORROWER AND SUCH COVERED CREDITOR,
SHALL CONSTITUTE A CREDIT UPON THE COVERED CLAIMS, THEN UPON PAYMENT IN FULL OF
THE OBLIGATIONS AND THE TERMINATION OF ALL OF THE COMMITMENTS UNDER THE LOAN
AGREEMENT, THE INTENDED RECIPIENT SHALL BECOME SUBROGATED TO THE RIGHTS OF THE
ADMINISTRATIVE AGENT AND THE LENDERS TO THE EXTENT THAT SUCH PAYMENTS TO THE
ADMINISTRATIVE AGENT AND THE LENDERS ON THE COVERED CLAIMS HAVE CONTRIBUTED
TOWARD THE LIQUIDATION OF THE OBLIGATIONS, AND SUCH SUBROGATION SHALL BE WITH
RESPECT TO THAT PROPORTION OF THE OBLIGATIONS WHICH WOULD HAVE BEEN UNPAID IF
THE ADMINISTRATIVE AGENT AND THE LENDERS HAD NOT RECEIVED PAYMENTS UPON THE
COVERED CLAIMS.
2.4
PAYMENTS HELD IN TRUST. IN THE EVENT THAT
NOTWITHSTANDING THE PROVISIONS OF SECTIONS 2.1, 2.2 AND 2.3, ANY COVERED
CREDITOR RECEIVES ANY PAYMENTS THAT ARE PROHIBITED BY SUCH SECTIONS, THEN IT
AGREES:
(A) TO HOLD IN TRUST FOR THE ADMINISTRATIVE AGENT AND THE LENDERS AN
AMOUNT EQUAL TO THE AMOUNT OF ALL PAYMENTS SO RECEIVED, (B) THAT IT SHALL HAVE
ABSOLUTELY NO
3
DOMINION OVER THE AMOUNT OF SUCH PAYMENTS EXCEPT TO PAY THEM PROMPTLY TO THE
ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE ADMINISTRATIVE AGENT AND THE
LENDERS, AND (C) THAT IT WILL TAKE SUCH OTHER AND FURTHER ACTIONS (INCLUDING
ENDORSEMENT OF CHECKS) AND EXECUTE AND DELIVER SUCH OTHER DOCUMENTS AS
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST IN ORDER TO TURN OVER SUCH AMOUNTS
RECEIVED TO THE ADMINISTRATIVE AGENT.
2.5
NO LIENS; ETC. EACH OF BORROWER AND EACH
COVERED CREDITOR AGREES THAT, UNTIL THE OBLIGATIONS ARE PAID IN FULL AND THE
TERMINATION OF ALL