Common use of Permitted Applications Clause in Contracts

Permitted Applications. (a) The Financial Institution and the Depositor authorize the NYS DOS to withdraw funds from the Account and to apply such funds toward (i) payment of any claim arising by reason of any failure by the Depositor to comply with any applicable provision of Article 21-B or Part 1210; (ii) payment of any penalty levied or assessed under Article 21-B or Part 1210 against the Depositor; (iii) payment for repairs or other corrective actions directed to be made or taken by any “Article 21-B order” (as that term is defined in Part 1210) made against the Depositor, or payment of such sums as may be required otherwise to satisfy any such Article 21-B order; (iv) payment for repairs or other corrective actions directed to be made or taken by any “Article 21-B judgment” (as that term is defined in Part 1210) entered against the Depositor, or payment of such sums as may be required otherwise to satisfy any such Article 21-B judgment; (v) payment of any claim arising by reason of any failure by any employee of the Depositor holding a “limited certificate” (as that term is defined in Part 1210) to comply with any applicable provision of Article 21-B or Part 1210 while acting as an employee of the Depositor; (vi) payment of any penalty levied or assessed under Article 21-B or Part 1210 against any employee of the Depositor holding a limited certificate in connection with any act or omission of such employee while acting as an employee of the Depositor; (vii) payment for repairs or other corrective actions directed to be made or taken by any Article 21-B order made against any employee of the Depositor holding a limited certificate in connection with any act or omission of such employee while acting as an employee of the Depositor or principal, or payment of such sums as may be required otherwise to satisfy any such Article 21-B order, and (viii) payment for repairs or other corrective actions directed to be made or taken by any Article 21-B judgment entered against any employee of the Depositor holding a limited certificate in connection with any act or omission of such employee while acting as an employee of the Depositor, or such sums as may be required otherwise to satisfy any such Article 21-B judgment (the foregoing applications being hereinafter referred to collectively as the “permitted applications” and individually as a “permitted application”). The Financial Institution and the Depositor agree that funds in the Account will be paid to the NYS DOS, upon written demand by the NYS DOS, to apply toward any such permitted application. NYS DOS is entitled to withdraw all or any part of the funds from the Account at any time without any notice to the Depositor and notwithstanding any instructions to the contrary which may be given at any time by the Depositor or by any other person or entity. (b) Depositor acknowledges and agrees that Depositor’s obligations under Article 21-B and Part 1210 include, without limitation, the obligation to see that the balance in the Account never falls below the applicable minimum balance at any time, for any reason. Without limiting the provisions of subparagraph 3(a) above or paragraph 7 below, the Financial Institution and the Depositor agree that if the balance in the Account falls below the applicable minimum balance at any time, the entire balance in the Account will be paid to the NYS DOS, upon written demand by the NYS DOS, and the Financial Institution and the Depositor agree that in such event, NYS DOS shall be entitled to withdraw all of the funds from the Account without any notice to the Depositor and notwithstanding any instructions to the contrary which may be given at any time by the Depositor or by any other person or entity. The “applicable minimum balance” is: $50,000 if the Manufacturer category is checked; $25,000 if the Retailer category is checked and the Manufacturer category is not checked; $10,000 if the Installer category is checked and neither the Manufacturer nor the Retailer category is checked; and $5,000 if only the Mechanic category is checked.