PURPOSES OF CALCULATING AND ENSURING COMPLIANCE BY
ESTABLISHED FRANCHISEE BORROWERS WITH THE ESTABLISHED FRANCHISEE BORROWING BASE
FOR EACH ESTABLISHED FRANCHISEE LOAN.
EACH OF THE PARTICIPANTS ACKNOWLEDGES AND AGREES THAT ANY PAYMENTS OF DELINQUENT
PAYMENT FEES RECEIVED FROM THE BORROWERS PURSUANT TO THE LOAN AGREEMENTS SHALL
BE FOR THE SOLE ACCOUNT OF THE SPONSOR AND THAT THE PARTICIPANTS SHALL HAVE NO
RIGHT TO RECEIVE SUCH PAYMENTS UNLESS A CREDIT EVENT HAS OCCURRED AND IS
CONTINUING; PROVIDED THAT, WITH RESPECT TO ANY PAYMENTS RECEIVED FROM A
BORROWER, SUCH PAYMENTS SHALL BE FIRST APPLIED TO PAY ALL ACCRUED BUT UNPAID
INTEREST AND PRINCIPAL AND OTHER FEES DUE AND OWING FROM SUCH BORROWER BEFORE
APPLICATION OF SUCH PAYMENT TO ANY DELINQUENT PAYMENT FEES.
EACH PARTICIPANT HEREBY ACKNOWLEDGES AND AGREES THAT THE SERVICER HAS NO ABILITY
TO HALT AN ACH TRANSFER UPON THE INPUTTING OF SUCH TRANSFER REQUEST BY SPONSOR
FROM THE AARON'S PROPRIETARY SYSTEM INTO THE ACH SYSTEM (OTHER THAN THE ABILITY
TO RETRIEVE ACH TRANSFERS WHICH ARE SENT TO THE WRONG PARTY OR OTHERWISE
MANIFESTLY ERRONEOUS AS PROVIDED IN THE ACH AGREEMENT WITH SPONSOR), AND SPONSOR
HEREBY ACCEPTS FULL RESPONSIBILITY FOR ANY OVERADVANCE CREATED BY SUCH INPUTTING
OF INFORMATION AND SHALL INDEMNIFY THE SERVICER AND THE PARTICIPANTS THEREFOR AS
PROVIDED HEREIN.
APPLICATION OF PAYMENTS.
THE SERVICER AND THE SPONSOR SHALL INSTRUCT EACH BORROWER TO MAKE PAYMENTS WITH
RESPECT TO LOANS AND THE LOAN COMMITMENTS DIRECTLY TO THE SERVICER, EITHER BY
MAIL, WIRE TRANSFER OR DEBIT PURSUANT TO AN ACH AUTHORIZATION.
ON EACH QUARTERLY DATE, ALL PAYMENTS OF COMMITMENT FEES SHALL BE DISTRIBUTED BY
THE SERVICER TO THE PARTICIPANTS PRO RATA IN ACCORDANCE WITH SECTION 2.4, WITH
ANY REMAINDER TO BE APPLIED AS SET FORTH IN THE SERVICING AGREEMENT.
ON EACH PAYMENT DATE, ALL PAYMENTS OF INTEREST RECEIVED BY THE SERVICER FROM THE
BORROWERS UNDER EACH FACILITY AND FROM THE SPONSOR PURSUANT TO ITS GUARANTY OF
EACH FACILITY CONTAINED HEREIN WITH RESPECT TO THE LOANS AND NOT PREVIOUSLY
DISTRIBUTED BY THE SERVICER, SHALL BE APPLIED TO PAY ALL ACCRUED BUT UNPAID
INTEREST ON THE FUNDED PARTICIPANT'S INTEREST UNDER THE APPLICABLE FACILITY
PURSUANT TO THIS AGREEMENT, THEN TO PAY ALL ACCRUED BUT UNPAID SERVICING FEES
AND THEN TO PAY THE SPONSOR'S FEE, IN ACCORDANCE WITH THE TERMS OF THE SERVICING
AGREEMENT AND FEE LETTER.
ON ANY BUSINESS DAY ON WHICH THE SERVICER SHALL RECEIVE ANY PAYMENT IN RESPECT
OF THE PRINCIPAL AMOUNT OF ANY LOAN, WHETHER FROM A BORROWER, THE SPONSOR
PURSUANT TO ITS GUARANTY CONTAINED HEREIN, OR ANY OTHER OBLIGOR WITH RESPECT
THERETO, THE SERVICER MAY ELECT, IN ITS SOLE DISCRETION TO (I) APPLY SUCH
PRINCIPAL PAYMENT TO FUND ANY REQUESTED ADVANCES, (II) APPLY SUCH AMOUNT TO
REPAY ANY OUTSTANDING SWING LINE ADVANCES, OR (III) TO EITHER (X) DISTRIBUTE
SUCH AMOUNT TO THE PARTICIPANTS TO REDUCE EACH PARTICIPANT'S FUNDED
PARTICIPANT'S INTEREST UNDER SUCH FACILITY OR (Y) APPLY SUCH AMOUNT TO
SUNTRUST'S FUNDED PARTICIPANT'S INTEREST UNDER SUCH FACILITY ONLY (WITH THE
UNDERSTANDING THAT THE FUNDED PARTICIPANT'S INTEREST OF EACH PARTICIPANT SHALL
NOT BE DEEMED