Common use of Recoupment and Set Clause in Contracts

Recoupment and Set. Off. Bank and Company have the right of recoupment and set-off. Specifically, Bank and Company may offset or recoup any outstanding and uncollected amounts owed by Merchant from: (i) any amounts Bank would otherwise be obligated to deposit into the Designated Account; (ii) any other amounts Bank or Company may owe Merchant under this Agreement or any other agreement; and (iii) any funds in the Designated Account or Reserve Account. Merchant acknowledges that in the event of a bankruptcy proceeding, in order for Merchant to provide adequate protection under the Bankruptcy Code to Bank or Company, Merchant must create or maintain the Reserve Account as required by Bank or Company, and Bank and Company must have the right to offset against the Reserve Account any and all obligations Merchant may owe to Bank or Company, without regard to whether the obligations relate to Sales Drafts initiated or created before or after the filing of the bankruptcy petition.