Common use of RIGHTS TO SET OFF Clause in Contracts

RIGHTS TO SET OFF. (a) The Holder hereby agrees that the Maker shall have the right to a set-off and shall receive a credit against the principal and interest payable under this Note in the amount of any damage, loss, liability, cost or expense for which the Maker is then entitled to indemnification pursuant to the terms and conditions of Article 9 of the Purchase Agreement. This right of set-off shall be exercisable in the manner set forth in and shall be subject to the terms and conditions of the Purchase Agreement. Any exercise of the set-off right provided for in this Section 7(a) or Article 9 of the Purchase Agreement shall for all purposes be treated as a prepayment under Section 4 of this Note, and in no event shall such exercise be considered an Event of Default under this Note. (b) With respect to any right of set-off described in Section 7(a) which is disputed as to liability or amount at a time when any payment of principal or interest is required under this Note, the amount by which the Maker has reduced the amount due under the Note shall be placed into an interest-bearing escrow account no later than the date upon which such payment under the Note is due, pursuant to an escrow agreement reasonably acceptable to the Holder and the Maker.