Common use of Special Provisions Re: Receivables Clause in Contracts

Special Provisions Re: Receivables. (a) So long as no Event of Default shall have occurred and be continuing, any merchandise or other goods which are returned by a customer or account debtor to any Debtor or are otherwise recovered by such Debtor, may be resold by such Debtor in the ordinary course of its business in accordance with Section 3(c) hereof; and after the occurrence and during the continuance of any Event of Default, at the request of the Agent, such merchandise and other goods shall be set aside and held by such Debtor as trustee for the Agent and the Secured Creditors and shall remain part of the Collateral. So long as no Event of Default shall have occurred and be continuing, each Debtor may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries and grant discounts, credits and allowances, in each case in the ordinary course of its business and otherwise for amounts and on terms which such Debtor considers advisable. However, after the occurrence and during the continuance of any Event of Default, at the request of the Agent, each Debtor shall notify the Agent promptly of all returns and recoveries and shall deliver the merchandise or other returned goods to the Agent. After the occurrence and during the continuance of any Event of Default, at the request of the Agent each Debtor shall also notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent or the Secured Creditors, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business shall be granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times after the occurrence and during the continuance of any Event of Default, settle or adjust disputes and claims directly with customers or account debtors for amounts and upon terms which the Agent considers advisable. (b) If any Receivable arises out of a contract with the United States of America or any of its departments, agencies or instrumentalities, upon the Agent’s request after the occurrence and during the continuance of an Event of Default, each Debtor agrees to so notify the Agent and execute whatever instruments and documents are reasonably required by the Agent in order that such Receivable shall be assigned to the Agent and that proper notice of such assignment shall be given under the federal Assignment of Claims Act (or any successor statute).

Special Provisions Re: Receivables. (a) So Except as otherwise provided in this subsection (a), each Debtor shall continue to collect, at its own expense, all amounts due or to become due such Debtor under the Receivables. In connection with such collections, a Debtor may take such action as such Debtor may deem necessary or advisable to enforce collection of the Receivables; provided, however, that the Agent shall have the right at any time, upon the occurrence and during the continuance of an Event of Default and upon written notice to the Debtors of its intention to do so, to notify (and, if requested by the Agent, the Debtors shall notify) the account debtors or obligors under any Receivables, or other obligations in which a security interest is granted hereby, of the assignment of such Receivables or obligations to the Agent and to direct such account debtors or obligors to make payment of all amounts due or to become due to such Debtor thereunder directly to the Agent and, upon such notification and at the expense of such Debtor, to enforce collection of any such Receivables or obligations through legal proceedings or otherwise, and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Debtor might have done, and to do so in the Agent's own name or in the name of others (including, without limitation, such Debtor). After receipt by a Debtor of the notice from the Agent referred to in the proviso to the preceding sentence: (i) all amounts and proceeds (including instruments) received by a Debtor in respect of the Receivables, or other obligations in which a security interest is granted hereby, shall be received in trust for the benefit of the Agent hereunder, shall be segregated from other funds of such Debtor and shall be forthwith paid over to the Agent in the same form as so received (with any necessary endorsement) to be held as collateral and either released to such Debtor so long as no Event of Default shall have occurred and be continuing, any merchandise continuing or other goods which are returned by a customer or account debtor to any Debtor or are otherwise recovered by such Debtor, may be resold by such Debtor in the ordinary course of its business in accordance with Section 3(c) hereof; and after the occurrence and during the continuance of any Event of Default, at the request of the Agent, such merchandise and other goods shall be set aside and held by such Debtor as trustee for the Agent and the Secured Creditors and shall remain part of the Collateral. So long as no if an Event of Default shall have occurred and be continuing, each Debtor may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries and grant discounts, credits and allowances, in each case applied as provided in the ordinary course of its business Credit Agreement; and otherwise for amounts and on terms which such Debtor considers advisable. However, after the occurrence and during the continuance of any Event of Default, at the request of the Agent, each (ii) neither Debtor shall notify the Agent promptly of all returns and recoveries and shall deliver the merchandise or other returned goods to the Agent. After the occurrence and during the continuance of any Event of Default, at the request of the Agent each Debtor shall also notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent or the Secured Creditors, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business shall be granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times after the occurrence and during the continuance of any Event of Defaultadjust, settle or adjust disputes and claims directly with customers compromise the amount or payment of any Receivable, or other obligations in which a security interest is granted hereby, or release wholly or partly any account debtors for amounts and upon terms which the Agent considers advisabledebtor or obligor thereof, or allow any credit or discount thereon. (b) If any Receivable arises out of a contract with the United States of America or any of its departments, agencies or instrumentalities, upon the Agent’s request after the occurrence and during the continuance of an Event of Default, each Debtor agrees to so notify the Agent and execute whatever instruments and documents are reasonably required by the Agent in order that such Receivable shall be assigned to the Agent and that proper notice of such assignment shall be given under the federal Assignment of Claims Act (or any successor statute).

Special Provisions Re: Receivables. (a) So long As of the time any Receivable becomes subject to the security interest provided for hereby, the Company shall be deemed to have warranted as to each and all of such Receivables that each Receivable and all papers and documents relating thereto are genuine and in all respects what they purport to be; that each Receivable is valid and subsisting and, if such Receivable is an account receivable, arises out of a bona fide sale, lease or rental of goods by the Company to, or in the process of being delivered to, or out of and for services theretofore actually rendered by the Company to, the account debtor named therein; that no such Receivable is evidenced by any instrument or chattel paper unless such instrument or chattel paper is promptly endorsed by the Company and delivered to the Collateral Agent (other than chattel paper consisting of rental agreements and other ordinary course agreements relating to the lease, rental or sale of goods which shall only be delivered to the Collateral Agent after the occurrence of an Event of Default hereunder and upon the request of the Collateral Agent); that no surety bond was required or given in connection with said Receivable or the contracts or purchase orders out of which the same arose; and that if said Receivable is scheduled, listed or referred to on any Borrowing Base Certificate as an Eligible Receivable, that said Receivable qualifies as an Eligible Receivable as of the date covered by such Borrowing Base Certificate. (b) The Company shall have occurred keep all of its books and be continuingrecords relating to the Receivables only at its chief executive office and places of business as specified pursuant to (S)3(a). (c) Unless and until an Event of Default hereunder occurs and is continuing and the Collateral Agent notifies the Company otherwise, any merchandise or other goods sold by the Company which are returned by a customer or account debtor to any Debtor or are otherwise recovered by such Debtor, may be resold by such Debtor the Company in the ordinary course of its business in accordance with Section 3(c(S)6(b) hereof; and after upon the occurrence and during the continuance continuation of any Event of Default, at Default hereunder if the request of Company is so instructed by the Collateral Agent, such merchandise and other goods shall be set aside and held by such Debtor the Company as trustee for the Agent Collateral Agent, the Agent, the Banks and the Secured Creditors Noteholders and shall remain part of the Collateral Agent's Collateral. So long as no Unless and until an Event of Default shall have occurred hereunder occurs and be continuingis continuing and the Collateral Agent notifies the Company otherwise, each Debtor the Company may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries and grant discounts, credits and allowances, in each case allowances in the ordinary course of its business and otherwise for amounts and on terms which such Debtor the Company in good faith considers advisable. However, after upon the occurrence and during the continuance continuation of any Event of Default, at Default hereunder and if so instructed by the request of the Collateral Agent, each Debtor the Company shall notify the Collateral Agent promptly of all returns and recoveries and shall on request deliver the merchandise or other returned goods to the Collateral Agent. After Upon the occurrence and during the continuance continuation of any Event of DefaultDefault hereunder and if so instructed by the Collateral Agent, at the request of the Agent each Debtor Company shall also notify the Collateral Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent Collateral Agent, the Agent, the Banks or the Secured CreditorsNoteholders, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business shall be granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor the Company without the Collateral Agent’s 's consent. The Collateral Agent may, at all times after upon the occurrence and during the continuance continuation of any Event of DefaultDefault hereunder, settle or adjust disputes and claims directly with customers or account debtors for amounts and upon terms which the Collateral Agent considers advisable. (b) If any Receivable arises out of a contract with the United States of America or any of its departments, agencies or instrumentalities, upon the Agent’s request after the occurrence and during the continuance of an Event of Default, each Debtor agrees to so notify the Agent and execute whatever instruments and documents are reasonably required by the Agent in order that such Receivable shall be assigned to the Agent and that proper notice of such assignment shall be given under the federal Assignment of Claims Act (or any successor statute).

Special Provisions Re: Receivables. (a) So long as no Event As of Default shall have occurred and be continuing, the time any merchandise or other goods which are returned Receivable owned by a customer or account debtor Debtor becomes subject to any Debtor or are otherwise recovered by such Debtorthe security interest provided for hereby, may be resold by and at all times thereafter, such Debtor in the ordinary course of its business in accordance with Section 3(c) hereof; and after the occurrence and during the continuance of any Event of Default, at the request of the Agent, such merchandise and other goods shall be set aside and held by deemed to have warranted as to each such Receivable that all warranties of such Debtor set forth in this Agreement are true and correct with respect to such Receivable in all material respects; that such Receivable and all papers and documents relating thereto are genuine and in all respects what they purport to be; that such Receivable is valid and subsisting; that the amount of such Receivable represented as trustee owing is the correct amount actually and unconditionally owing, except for the Agent and the Secured Creditors and shall remain part of the Collateral. So long as no Event of Default shall have occurred and be continuing, each Debtor may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries and grant discounts, credits and allowances, in each case in the ordinary course of its business and otherwise for amounts and on terms which such Debtor considers advisable. However, after the occurrence and during the continuance of any Event of Default, at the request of the Agent, each Debtor shall notify the Agent promptly of all returns and recoveries and shall deliver the merchandise or other returned goods to the Agent. After the occurrence and during the continuance of any Event of Default, at the request of the Agent each Debtor shall also notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent or the Secured Creditors, but no discount, credit or allowance other than normal cash discounts on normal trade terms in the ordinary course of business shall be granted business; and, except as disclosed to any customer the Agent in writing at or account debtor and prior to the time such Receivable is created, that no returns surety bond was required or given in connection with such Receivable or the contracts or purchase orders out of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times after the occurrence and during the continuance of any Event of Default, settle or adjust disputes and claims directly with customers or account debtors for amounts and upon terms which the Agent considers advisablesame arose. (b) If any Receivable arises out of a contract with the United States of America America, or any state or political subdivision thereof, or any department, agency or instrumentality of its departments, agencies or instrumentalities, upon any of the Agent’s request after the occurrence and during the continuance of an Event of Defaultforegoing, each Debtor agrees to promptly so notify the Agent and and, at the request of the Agent or the Secured Creditors, execute whatever instruments and documents are reasonably required by the Agent in order that such Receivable shall be assigned to the Agent and that proper notice of such assignment shall be given under the federal Assignment of Claims Act (or any successor statute) or any similar state or local statute, as the case may be. (c) Any merchandise or other goods which are returned by a customer or account debtor or otherwise recovered may be resold by a Debtor in the ordinary course of its business as presently conducted in accordance with Section 7(b) hereof; provided that during the existence and continuation of any Event of Default, such merchandise and other goods shall be set aside at the request of the Agent and held by the relevant Debtor as trustee for the Secured Creditors and shall remain part of the Secured Creditors’ Collateral. The Debtors may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries, and grant discounts, credits, and allowances in the ordinary course of its business as presently conducted for amounts and on terms which the relevant Debtor in good faith considers advisable; provided that during the existence and continuation of any Event of Default, at the Agent’s request, the Debtors shall notify the Agent promptly of all returns and recoveries and, on the Agent’s request, deliver any such merchandise or other goods to the Agent. During the existence of any Event of Default, at the Agent’s request, the Debtors shall also notify the Agent promptly of all material disputes and claims and settle or adjust them at no expense to the Agent, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business as presently conducted shall be granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times during the existence of any Event of Default, settle or adjust disputes and claims directly with customers or account debtors for amounts and upon terms which the Agent considers advisable. (d) To the extent any Receivable or other item of Collateral is evidenced by an Instrument or tangible Chattel Paper, each Debtor shall cause such Instrument or tangible Chattel Paper to be pledged and delivered to the Agent; provided, however, that, prior to the existence of an Event of Default (and thereafter until otherwise required by the Agent), the Debtors shall not be required to deliver any such Instruments or tangible Chattel Paper unless the aggregate unpaid principal balance of all such Instruments and tangible Chattel Paper held by the Debtors and not delivered to the Agent hereunder is greater than $1,000,000 at any one time outstanding.

Special Provisions Re: Receivables. (a) So Except as otherwise provided in this subsection (a), each Debtor shall continue to collect, at its own expense, all amounts due or to become due such Debtor under the Receivables. In connection with such collections, a Debtor may take such action as such Debtor may deem necessary or advisable to enforce collection of the Receivables; provided, however, that the Agent shall have the right at any time, upon the occurrence and during the continuance of an Event of Default and upon written notice to the Debtors of its intention to do so, to notify (and, if requested by the Agent, the Debtors shall notify) the account debtors or obligors under any Receivables, or other obligations in which a security interest is granted hereby, of the assignment of such Receivables or obligations to the Agent and to direct such account debtors or obligors to make payment of all amounts due or to become due to such Debtor thereunder directly to the Agent and, upon such notification and at the expense of such Debtor, to enforce collection of any such Receivables or obligations through legal proceedings or otherwise, and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Debtor might have done, and to do so in the Agent's own name or in the name of others (including, without limitation, such Debtor). After receipt by a Debtor of the notice from the Agent referred to in the proviso to the preceding sentence: (i) all amounts and proceeds (including instruments) received by a Debtor in respect of the Receivables, or other obligations in which a security interest is granted hereby, shall be received in trust for the benefit of the Agent hereunder, shall be segregated from other funds of such Debtor and shall be forthwith paid over to the Agent in the same form as so received (with any necessary endorsement) to be held as collateral and either released to such Debtor so long as no Event of Default shall have occurred and be continuing, any merchandise continuing or other goods which are returned by a customer or account debtor to any Debtor or are otherwise recovered by such Debtor, may be resold by such Debtor in the ordinary course of its business in accordance with Section 3(c) hereof; and after the occurrence and during the continuance of any Event of Default, at the request of the Agent, such merchandise and other goods shall be set aside and held by such Debtor as trustee for the Agent and the Secured Creditors and shall remain part of the Collateral. So long as no if an Event of Default shall have occurred and be continuing, each Debtor may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries and grant discounts, credits and allowances, in each case applied as provided in the ordinary course of its business Credit Agreement; and otherwise for amounts and on terms which such Debtor considers advisable. However, after the occurrence and during the continuance of any Event of Default, at the request of the Agent, each (ii) no Debtor shall notify the Agent promptly of all returns and recoveries and shall deliver the merchandise or other returned goods to the Agent. After the occurrence and during the continuance of any Event of Default, at the request of the Agent each Debtor shall also notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent or the Secured Creditors, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business shall be granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times after the occurrence and during the continuance of any Event of Defaultadjust, settle or adjust disputes and claims directly with customers compromise the amount or payment of any Receivable, or other obligations in which a security interest is granted hereby, or release wholly or partly any account debtors for amounts and upon terms which the Agent considers advisabledebtor or obligor thereof, or allow any credit or discount thereon. (b) If any Receivable arises out of a contract with the United States of America or any of its departments, agencies or instrumentalities, upon the Agent’s request after the occurrence and during the continuance of an Event of Default, each Debtor agrees to so notify the Agent and execute whatever instruments and documents are reasonably required by the Agent in order that such Receivable shall be assigned to the Agent and that proper notice of such assignment shall be given under the federal Assignment of Claims Act (or any successor statute).

Special Provisions Re: Receivables. (a) So long as no Event As of Default shall have occurred and be continuing, the time any merchandise or other goods which are returned Receivable owned by a customer or account debtor Debtor becomes subject to any Debtor or are otherwise recovered by such Debtorthe security interest provided for hereby, may be resold by and at all times thereafter, such Debtor in the ordinary course of its business in accordance with Section 3(c) hereof; and after the occurrence and during the continuance of any Event of Default, at the request of the Agent, such merchandise and other goods shall be set aside and held by deemed to have warranted as to each such Receivable that all warranties of such Debtor set forth in this Agreement are true and correct with respect to such Receivable in all material respects; that such Receivable and all papers and documents relating thereto are genuine and in all respects what they purport to be; that such Receivable is valid and subsisting; that the amount of such Receivable represented as trustee owing is the correct amount actually and unconditionally owing, except for the Agent and the Secured Creditors and shall remain part of the Collateral. So long as no Event of Default shall have occurred and be continuing, each Debtor may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries and grant discounts, credits and allowances, in each case in the ordinary course of its business and otherwise for amounts and on terms which such Debtor considers advisable. However, after the occurrence and during the continuance of any Event of Default, at the request of the Agent, each Debtor shall notify the Agent promptly of all returns and recoveries and shall deliver the merchandise or other returned goods to the Agent. After the occurrence and during the continuance of any Event of Default, at the request of the Agent each Debtor shall also notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent or the Secured Creditors, but no discount, credit or allowance other than normal cash discounts on normal trade terms in the ordinary course of business shall be granted business; and, except as disclosed to any customer the Agent in writing at or account debtor and prior to the time such Receivable is created, that no returns surety bond was required or given in connection with such Receivable or the contracts or purchase orders out of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times after the occurrence and during the continuance of any Event of Default, settle or adjust disputes and claims directly with customers or account debtors for amounts and upon terms which the Agent considers advisablesame arose. (b) If any Receivable arises out of a contract with the United States of America America, or any state or political subdivision thereof, or any department, agency or instrumentality of its departmentsany of the foregoing, agencies each Debtor agrees to promptly so notify the Agent and, at the request of the Agent or instrumentalities, upon the Agent’s request after the occurrence and Secured Creditors during the continuance existence of an Event of Default, each Debtor agrees to so notify the Agent and execute whatever instruments and documents are reasonably required by the Agent in order that such Receivable shall be assigned to the Agent and that proper notice of such assignment shall be given under the federal Assignment of Claims Act (or any successor statute) or any similar state or local statute, as the case may be. (c) Any merchandise or other goods which are returned by a customer or account debtor or otherwise recovered may be resold by a Debtor in the ordinary course of its business as presently conducted in accordance with Section 7(b) hereof; provided that during the existence and continuation of any Event of Default, such merchandise and other goods shall be set aside at the request of the Agent and held by the relevant Debtor as trustee for the Secured Creditors and shall remain part of the Secured Creditors’ Collateral. The Debtors may settle and adjust disputes and claims with their customers and account debtors, handle returns and recoveries, and grant discounts, credits, and allowances in the ordinary course of its business as presently conducted for amounts and on terms which the relevant Debtor in good faith considers advisable; provided that during the existence and continuation of any Event of Default, at the Agent’s request, the Debtors shall notify the Agent promptly of all returns and recoveries and, on the Agent’s request, deliver any such merchandise or other goods to the Agent. During the existence of any Event of Default, at the Agent’s request, the Debtors shall also notify the Agent promptly of all material disputes and claims and settle or adjust them at no expense to the Agent, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business as presently conducted shall be granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times during the existence of any Event of Default, settle or adjust disputes and claims directly with customers or account debtors for amounts and upon terms which the Agent considers advisable. (d) To the extent any Receivable or other item of Collateral is evidenced by an Instrument or tangible Chattel Paper, each Debtor shall cause such Instrument or tangible Chattel Paper to be pledged and delivered to the Agent; provided, however, that, prior to the existence of an Event of Default (and thereafter until otherwise required by the Agent), the Debtors shall not be required to deliver any such Instruments or tangible Chattel Paper unless the aggregate unpaid principal balance of all such Instruments and tangible Chattel Paper held by the Debtors and not delivered to the Agent hereunder is greater than $5,000,000 at any one time outstanding.

Special Provisions Re: Receivables. (a) So long as no Event As of Default shall have occurred and be continuing, the time any merchandise or other goods which are returned Receivable owned by a customer or account debtor to any Debtor or are otherwise recovered by such Debtor, may be resold by such Debtor in the ordinary course of its business in accordance with Section 3(c) hereof; and after the occurrence and during the continuance of any Event of Default, at the request of the Agent, such merchandise and other goods shall be set aside and held by such Debtor as trustee for the Agent and the Secured Creditors and shall remain part of the Collateral. So long as no Event of Default shall have occurred and be continuing, each Debtor may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries and grant discounts, credits and allowances, in each case in the ordinary course of its business and otherwise for amounts and on terms which such Debtor considers advisable. However, after the occurrence and during the continuance of any Event of Default, at the request of the Agent, each Debtor shall notify the Agent promptly of all returns and recoveries and shall deliver the merchandise or other returned goods becomes subject to the Agent. After the occurrence security interest provided for hereby, and during the continuance of any Event of Default, at the request of the Agent each Debtor shall also notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent or the Secured Creditors, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business shall be granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times after the occurrence thereafter, such Debtor shall be deemed to have warranted as to each such Receivable that each such Receivable and during the continuance of any Event of Default, settle or adjust disputes all papers and claims directly with customers or account debtors for amounts documents relating thereto are genuine and upon terms which the Agent considers advisablein all respects what they purport to be; and that such Receivable is valid and subsisting. (b) If any Receivable arises out of a contract with the United States of America America, or any state or political subdivision thereof, or any department, agency or instrumentality of its departments, agencies or instrumentalities, upon any of the Agent’s request after the occurrence and during the continuance of an Event of Defaultforegoing, each Debtor agrees to so notify agrees, at the request of the Agent and or the Secured Creditors, to execute whatever instruments and documents are reasonably required by the Agent in order that such Receivable shall be assigned to the Agent and that proper notice of such assignment shall be given under the federal Assignment of Claims Act (or any successor statute)) or any similar state or local statute, as the case may be. (c) During the existence of any Event of Default, any merchandise or other goods which are returned by a customer or account debtor or otherwise recovered shall be set aside at the request of the Agent and held by the relevant Debtor as trustee for the Secured Creditors and shall remain part of the Collateral. During the existence of any Event of Default, at the Agent’s request, the Debtors shall also notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business as presently conducted shall be granted to any customer or account debtor. The Agent may, at all times during the existence of any Event of Default, settle or adjust disputes and claims directly with customers or account debtors for amounts and upon terms which the Agent considers advisable. (d) To the extent any Receivable or other item of Collateral is evidenced by an Instrument or tangible Chattel Paper, each Debtor shall cause such Instrument or tangible Chattel Paper to be pledged and delivered to the Agent; provided, however, that, unless an Event of Default has occurred and is continuing, a debtor shall not be required to deliver any such Instrument or tangible Chattel Paper if and only so long as the aggregate unpaid principal balance of all such Instruments and tangible Chattel paper held by the Debtors and not delivered to the Agent hereunder is less than $100,000 at any one time outstanding; provided that instruments representing loans to employees and/or their spouses in the ordinary course of business shall not be required to be delivered and shall not be included in calculating the $100,000 threshold. Unless delivered to the Agent or its agent, all tangible Chattel Paper and Instruments shall contain a legend acceptable to the Agent indicating that such Chattel Paper or Instrument is subject to the security interest of the Agent contemplated by this Agreement. The Instruments delivered to the Agent on the Closing Date are set forth on Schedule D hereto.

Special Provisions Re: Receivables. (a) So long as no Event of Default shall have occurred and be continuing, any merchandise or other goods which are returned by a customer or account debtor to any Debtor or are otherwise recovered by such Debtor, may be resold by such Debtor in the ordinary course of its business in accordance with Section 3(c) hereof; and after the occurrence and during the continuance of any Event of Default, at the request of the Agent, such merchandise and other goods shall be set aside and held by such Debtor as trustee for the Agent and the Secured Creditors and shall remain part of the Collateral. So long as no Event of Default shall have occurred and be continuing, each Debtor may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries and grant discounts, credits and allowances, in each case in the ordinary course of its business and otherwise for amounts and on terms which such Debtor considers advisable. However, after the occurrence and during the continuance of any Event of Default, at the request of the Agent, each Debtor shall notify the Agent promptly of all returns and recoveries and shall deliver the merchandise or other returned goods to the Agent. After the occurrence and during the continuance of any Event of Default, at the request of the Agent each Debtor shall also notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent or the Secured Creditors, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business shall be granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times after the occurrence and during the continuance of any Event of Default, settle or adjust disputes and claims directly with customers or account debtors for amounts and upon terms which the Agent considers advisable. (b) If any Receivable arises out of a contract with the United States of America America, or any state or political subdivision thereof, or any department, agency or instrumentality of its departmentsany of the foregoing, agencies each Debtor agrees to promptly so notify the Agent and, at the request of the Agent or instrumentalities, upon the Agent’s request Secured Creditors after the occurrence and during the continuance continuation of an Event of Default, each Debtor agrees to so notify the Agent and execute whatever instruments and documents are reasonably required by the Agent in order that such Receivable shall be assigned to the Agent and that proper notice of such assignment shall be given under the federal Assignment of Claims Act (or any successor statute)) or any similar state or local statute, as the case may be; PROVIDED, HOWEVER, that such procedures shall not be required with respect to any one contract generating Receivables of less than $100,000. (b) Unless and until an Event of Default has occurred and is continuing any merchandise or other goods which are returned by a customer or account debtor or otherwise recovered may be resold by a Debtor in the ordinary course of its business as presently conducted in accordance with Section 7(b) hereof; and, during the existence of any Event of Default, such merchandise and other goods shall be set aside at the request of the Agent and held by the relevant Debtor as trustee for the Secured Creditors and shall remain part of the Secured Creditors' Collateral. Unless and until an Event of Default has occurred and is continuing, each Debtor may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries, and grant discounts, credits, and allowances in the ordinary course of its business as presently conducted for amounts and on terms which such Debtor in good faith considers advisable; and, during the existence of any Event of Default, at the Agent's request, the Debtors shall notify the Agent promptly of all returns and recoveries and, on the Agent's request, deliver any such merchandise or other goods to the Agent. During the existence of any Event of Default, at the Agent's request, the Debtors shall also notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business as presently conducted shall be granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor without the Agent's consent. The Agent may, at all times during the existence of any Event of Default, settle or adjust disputes and claims directly with customers or account debtors for amounts and upon terms which the Agent considers advisable. (c) To the extent any Receivable or other item of Collateral is evidenced by an Instrument (other than a check, draft, money order or similar item which is to be deposited in a Deposit Account) or tangible Chattel Paper, each Debtor shall cause such Instrument or tangible Chattel Paper to be pledged and delivered to the Agent; PROVIDED, HOWEVER, that, prior to the existence of a Default or Event of Default and thereafter until otherwise required by the Agent, a Debtor shall not be required to deliver any such Instrument or tangible Chattel Paper if and only so long as the unpaid principal balance of any such Instrument or tangible Chattel Paper held by such Debtor and not delivered to the Agent hereunder is less than $100,000 in each instance and the aggregate unpaid principal balance of all such Instruments and tangible Chattel Paper held by all Debtors and not delivered to the Agent hereunder is less than $250,000 at any one time outstanding. Unless delivered to the Agent or its agent, all tangible Chattel Paper and Instruments (other than a check, draft, money order or similar item which is to be deposited in a Deposit Account) shall contain a legend acceptable to the Agent indicating that such Chattel Paper or Instrument is subject to the security interest of the Agent contemplated by this Agreement.