(Continued...)
EXHIBIT 10.6
EXECUTION COPY
BLOCKED ACCOUNT AGREEMENT
With Activation
THIS BLOCKED ACCOUNT AGREEMENT ("Agreement") is made and entered into as of this 28th day of October, 2003, by
and among BANK OF AMERICA, N.A., a National Bank, ("Bank"), X'Xxxxxxxx Industries, Inc., a Delaware corporation
("Company"), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as agent ("Agent") for the lenders
(collectively, "Lenders") from time to time party to the Credit Agreement described below.
A. Pursuant to that certain Credit Agreement, dated as of September 29, 2003 among Company, the
other credit parties signatory thereto from time to time, Lenders and Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), Lenders have agreed to make loans and extend other
financial accommodations to Company.
B. Company has established deposit account numbers 580100094951 and 003481045018 at Bank (the
"Blocked Accounts").
C. The parties hereto desire to enter into this Agreement in order to set forth their relative
rights and duties with respect to the Blocked Accounts and all funds on deposit therein from time to time.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth,
the parties hereto agree as follows:
1. Effectiveness. This Agreement shall take effect immediately upon its execution by all parties hereto
and shall supersede any blocked account or similar agreement in effect with respect to the Blocked
Accounts.
2. Security Interest; Agency. As collateral security for Company's obligations to Agent and Lenders under
the Credit Agreement and the other loan documents described therein, Company hereby grants to Agent, for
its own benefit and the ratable benefit of Lenders, a present and continuing security interest in: (a)
the Blocked Accounts; (b) all contract rights, claims and privileges in respect of the Blocked Accounts
and (c) all cash, checks, money orders and other items of value of Company now or hereafter paid,
deposited, credited or held (whether for collection, provisionally or otherwise) to or in the Blocked
Accounts or otherwise in the possession or under the control of, or in transit to, Bank or any agent,
bailee or custodian thereof for deposit in or credit to the Blocked Accounts (collectively, "Receipts"),
and all proceeds of the foregoing. Bank acknowledges Agent's security interest in such collateral and
that this Agreement constitutes notice of such security interest and Bank further acknowledges and
agrees that is does not and shall not object to or contest Agent's security interest in such
collateral. The parties hereto agree that Bank shall comply with the instructions originated by Agent
directing disposition of the Receipts in the Blocked Accounts, without further consent of the Company.
3. Control of Blocked Accounts. During the Activation Period (as defined below), the Blocked Accounts and
any and all funds on deposit from time to time therein shall be under the sole dominion and control of
Agent and neither Company, nor any other person or entity, through or under the Company, shall have any
control over the use of, or any right to withdraw any amount from the Blocked Accounts. Prior to the
Activation Period, Company may operate and transact business through the Blocked Accounts in the
ordinary course of business, consistent with Company's past practice, including making withdrawals from
the Blocked Accounts, but covenants to Agent it will not close the Blocked Accounts. Bank shall have no
liability in the event Company breaches this covenant to Agent. A reasonable period of time following
the commencement of the Activation Period, and continuing on each Business Day thereafter, Bank shall
transfer all collected and available balances in the Blocked Accounts to Agent at its account (the
"Collection Account") at:
ABA No. 000-000-000
Account Number 000-000-00
Deutsche Bank Trust Company Americas
New York, New York
ACCOUNT NAME: GECC/CAF DEPOSITORY
Reference: GE Capital re X'Xxxxxxxx Industries, Inc. - CFN 5264
The "Activation Period" means the period which commences as soon as possible but in any event within a
reasonable period of time (not to exceed two Business Days) after Bank's receipt of a written notice from Agent
in the form of Exhibit A (the "Notice"). Bank hereby agrees to use its commercially reasonable efforts to
commence the Activation Period as soon as possible as time is of the essence. A "Business Day" is each day
except Saturdays, Sundays and Bank holidays. Funds are not available if, in the reasonable determination of
Bank, they are subject to a hold, dispute or legal process preventing their withdrawal.
4. Statements and Other Information. On each Business Day, Bank will send any applicable Receipts not
processed plus information regarding the deposit for the day to the address specified below for Company
(except for during an Activation Period, where such items will be sent to the Agent), and will send a
copy of the deposit advice to the address specified below for Agent. In addition to the original Bank
statement provided to Company, Bank will provide Agent with a duplicate of such statement together with
copies of all notices and statements sent to Company with respect to the Blocked Accounts.
5. Offset Rights.
(a) Bank agrees not to exercise or claim any right of offset, banker's lien or other like right against the
Blocked Accounts for so long as this Agreement is in effect except with respect to (i) returned
or charged-back items, (ii) reversals or cancellations of payment orders and other electronic
fund transfers, (iii) overdrafts resulting from adjustments or corrections of previous credits
or other postings (together with clauses (i) and (ii), collectively, "Returned Items") or (iv)
Bank's charges, fees and expenses with respect to the Blocked Accounts or the services provided
in connection therewith or hereunder (collectively, "Charges"); and
(b) Company hereby authorizes Bank, without prior notice, from time to time to debit any other account
Company may have with Bank to the extent not already pledged to Agent for Returned Items and
Charges due Bank under subsection 5(a).
6. Limits of Bank's Liability.
(a) Bank will not be liable to Company or Agent for any expense, claim, loss, damage or cost ("Damages")
arising out of or relating to its performance under this Agreement other than those Damages
which result directly from its acts or omissions constituting negligence or intentional
misconduct.
(b) In no event will Bank be liable for any special, indirect, exemplary or consequential damages, including
but not limited to lost profits.
(c) Bank will be excused from failing to act or delay in acting, and no such failure or delay shall
constitute a breach of this Agreement or otherwise give rise to any liability of Bank, if (i)
such failure or delay is caused by circumstances beyond Bank's reasonable control, including
but not limited to legal constraint, emergency conditions, action or inaction of governmental,
civil or military authority, fire, strike, lockout or other labor dispute, war, riot, theft,
flood, earthquake or other natural disaster, breakdown of public or private or common carrier
communications or transmission facilities, equipment failure, or gross negligence or willful
misconduct of Company or Agent or (ii) such failure or delay resulted from Bank's reasonable
belief based upon the advice of its counsel that the action would have violated any guideline,
rule or regulation of any governmental authority.
(d) Bank shall have no duty to inquire or determine whether Company's obligations to Agent are in default or
whether Agent is entitled to provide the Notice to Bank. Neither Bank nor Agent shall have any
duty to inquire or determine whether either such party is authorized to execute this
Agreement. Each of Bank and Agent may rely on notices and communications it believes in good
faith to be genuine and given by the appropriate party.
(e) Notwithstanding any of the other provisions in this Agreement, in the event of the commencement of a
case pursuant to Xxxxx 00, Xxxxxx Xxxxxx Code, filed by or against Company, or in the event of
the commencement of any similar case under then applicable federal or state law providing for
the relief of debtors or the protection of creditors by or against Company, Bank may act as
Bank deems necessary to comply with all applicable provisions of governing statutes (and shall
use commercially reasonable efforts to inform Agent of such acts if allowed by law) and shall
not be in violation of this Agreement as a result.
(f) Bank shall be permitted to comply with any writ, levy order or other similar judicial or regulatory
order or process concerning the Blocked Accounts or any Check and shall not be in violation of
this Agreement for so doing.
7. Indemnity.
(a) Company hereby agrees to indemnify, defend and save harmless Bank against any loss, liability or expense
incurred in connection with this Agreement or the Blocked Accounts (except to the extent due to
Bank's willful misconduct or gross negligence) or incurred at Company's direction or
instruction, including without limitation any Returned Items or Charges.
(b) Company agrees to pay to Bank, upon receipt of Bank's invoice, all costs, expenses and attorneys' fees
(including allocated costs for in-house legal services) incurred by Bank in connection with the
enforcement of this Agreement and any instrument or agreement required hereunder, including but
not limited to any such costs, expenses and fees arising out of the resolution of any conflict,
dispute, motion regarding entitlement to rights or rights of action, or other action to enforce
Bank's rights in a case arising under Xxxxx 00, Xxxxxx Xxxxxx Code. Company agrees to pay
Bank, upon receipt of Bank's invoice, all costs, expenses and attorneys' fees (including
allocated costs for in-house legal services) incurred by Bank in the preparation and
administration of this Agreement (including any amendments hereto or instruments or agreements
required hereunder).
(c) During the term hereof, there shall remain at all times a minimum balance of $50,000 in the Blocked
Account for the benefit of Bank to pay amounts owed, if any, to Bank under Sections 5, 7, 8 and
9.
(d) Company agrees to provide Bank with monthly unaudited and annual audited financial statements within a
reasonable period of time after the end of each month or year-end, as applicable, to the
following address:
Bank of America, N.A.
Attn: Xxxxx Xxxxxxxxx
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xx. Xxxxx, XX 00000
8. Returned Items. If any Returned Items are not paid by the Company within five (5) Business Days after
written demand therefor by Bank to Company, and if there is not a sufficient amount in the Blocked
Account as provided in Section 7(c) above to cover such Returned Item, then Agent shall pay to Bank
within five (5) Business Days after receipt of written demand therefor from Bank the amount of such
Returned Items; provided that the Agent shall have received such demand within one hundred (100) days
after the funds attributable to such Returned Item have been wire transferred to the Collection Account
as provided in Section 3 above.
9. Charges. If the balances in the Blocked Accounts are not sufficient to compensate Bank for any Charges,
Company agrees to pay Bank within five (5) Business Days after written demand therefor from Bank the
amount of such Charges. Company acknowledges that failure to so pay Bank any such amount shall
constitute a breach of this Agreement.
10. Termination. This Agreement may be terminated by Company only upon delivery to Bank of a written
notification thereof jointly executed by Company and Agent. This Agreement may be terminated by Agent
at any time, with or without cause, seven (7) days following its delivery of written notice thereof to
each of Company and Bank. This Agreement may be terminated by Bank at any time on not less than 30 days
prior written notice delivered to each of Company and Agent. Notwithstanding the foregoing, Bank may
terminate this Agreement at any time upon 10 days' prior written notice to Company and Agent if either
Company or Agent breaches any of the terms of this Agreement, or any other agreement with Bank involving
the borrowing of money or extension of credit. All rights of Bank under Sections 6, 7, 8 and 9 shall
survive any termination of this Agreement. Upon termination of this Agreement by Bank, any collected and
available balances in the Blocked Accounts will be transferred in accordance with Agent's instructions
and the Blocked Accounts will be closed.
11. Irrevocable Agreements. Company acknowledges that the agreements made by it and the authorizations
granted by it in Sections 2 and 3 hereof are irrevocable and that the authorizations granted in Sections
2 and 3 hereof are powers coupled with an interest.
12. Notices. All notices, requests or other communications given to Company, Agent or Bank shall be given in
writing (including by facsimile) at the address specified below:
If to Agent:
GENERAL ELECTRIC CORPORATION
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: X'Xxxxxxxx Account Officer
Fax: (000) 000-0000
With a copy (which shall not constitute notice) to:
GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
ATTN: Corporate Counsel
Corporate Financial Services - Global Sponsor Finance
Fax: (000) 000-0000
and
GENERAL ELECTRIC CAPITAL CORPORATION
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
ATTN: Corporate Counsel
Corporate Financial Services - Global Sponsor Finance
Fax: (000) 000-0000
If to Bank:
Bank of America, N. A.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xx. Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Fax: (000) 000-0000
If to Company:
X'XXXXXXXX INDUSTRIES, INC.
0000 Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
ATTN: President, Chief Financial Officer and General Counsel
Fax: (000) 000-0000
With a copy (which shall not constitute notice) to:
XXXXXXXX & XXXXX LLP
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
ATTN: Xxxxxx X. Xxxxx, Xxxxxxxx X. Xxxxxx
Fax: (000) 000-0000
Any party may change its address for notices hereunder by notice to each other party hereunder given in
accordance with this Section 12. Each notice, request or other communication shall be effective when given in
accordance with this Section 12. Each notice, request or other communication shall be effective (a) if given by
facsimile, when such facsimile is transmitted to the facsimile number specified in this Section 12 and
confirmation of receipt is made by the appropriate party, and (b) if given by any other means, including
overnight courier, when received at the address specified in this Section 12.
13. Miscellaneous.
(a) This Agreement may be amended only by a written instrument executed by the parties hereto acting by
their respective duly authorized representatives, except that Bank's Charges are subject to
change by Bank on 30 days' prior written notice to Company.
(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns, but neither Company nor Bank shall be entitled to assign or
delegate any of its rights or duties hereunder without first obtaining the express prior
written consent of Agent.
(c) This Agreement may be executed in any number of several counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
(d) THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS
CONFLICTS OF LAW RULES).
(e) Nothing contained in the Agreement shall create any agency, fiduciary, joint venture or partnership
relationship between Bank and Company or Lender.
(f) Company represents and warrants to the other parties that (A) this Agreement constitutes its duly
authorized, legal, valid, binding and enforceable obligation; (B) the performance of its
obligations under this Agreement and the consummation of the transactions contemplated
hereunder will not (i) constitute or result in a breach of its certificate or articles of
incorporation, by-laws or partnership agreement, as applicable, or the provisions of any
material contract to which it is a party or by which it is bound or (ii) result in the
violation of any law, regulation, judgment, decree or governmental order applicable to it; and
(C) all approvals and authorizations required to permit the execution, delivery, performance
and consummation of this Agreement and the transactions contemplated hereunder have been
obtained. Company agrees that it shall be deemed to make and renew each such representation
and warranty on and as of each day on which Company uses the services set forth in this
Agreement.
IN WITNESS WHEREOF, each of the parties has executed and delivered this Blocked Account Agreement as of the day
and year first above set forth.
"Bank"
BANK OF AMERICA, N.A.
By:
Name: ______________________________
Title:
"Company"
X'XXXXXXXX INDUSTRIES, INC.
By:
Name: ______________________________
Title:
"Agent"
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Name: _______________________
Title: Duly Authorized Signatory
EXHIBIT A
BLOCKED ACCOUNT AGREEMENT
[Letterhead of Agent]
To: Bank of America, N.A.
__________________
Re: Account Nos.
Ladies and Gentlemen:
Reference is made to the Blocked Account Agreement dated _____________, 200_ (the "Agreement") among
_________, us and you regarding the above-described accounts (the "Blocked Accounts"). In accordance with
Section 3 of the Agreement, we hereby give you notice of our exercise of control of the Blocked Accounts and we
hereby instruct you to immediately transfer funds to our account [insert account number and wire information] as
reflected in the Agreement.
Very truly yours,
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent
By:
Name:
Duly Authorized Signatory
