Common use of Operation of Loan Arrangement Clause in Contracts

Operation of Loan Arrangement. (i) Except as otherwise permitted by Bank, Credit Extensions hereunder shall be requested solely by the Agent as agent for each Borrower. (ii) Any Credit Extension which may be made by Bank under this Agreement and which is directed to the Agent is received by the Agent in trust for that Borrower who is intended to receive such Credit Extension. The Agent shall distribute the proceeds of any such Credit Extension solely to that Borrower. Each Borrower shall be directly indebted to Bank for each Credit Extension distributed to any Borrower by the Agent, together with all accrued interest thereon, as if that amount had been advanced directly by Bank to a Borrower (whether or not the subject Credit Extension was based upon the accounts and/or inventory or other assets of the Borrower which actually received such distribution), in addition to which each Borrower shall be liable to Bank for all Obligations under this Agreement, whether or not the proceeds of the Credit Extension are distributed to any particular Borrower. (iii) Bank shall have no responsibility to inquire as to the distribution of Credit Extensions made by Bank through the Agent as described herein.