EXHIBIT 10.23
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Pledged Deposit Accounts - 5590039615
-------------------------------------------
Gentlemen/Ladies:
THIS AGREEMENT Re: Pledged Deposit Accounts (the "Agreement"), among
(a) LaSalle Bank National Association (the "Bank"), (b) Xxxxxx'x of Chicago,
Inc., an Illinois corporation (the "Account Holder"), which is a subsidiary of
Xxxxxx'x Restaurant Group, Inc., a Delaware corporation (the "Borrower") and (c)
Xxxxx Fargo Foothill, Inc. ("Foothill"), as agent (in such capacity, the
"Agent") for (i) itself as lender (together with such other financial
institutions as may from time to time become lenders, collectively, the
"Lender") under that certain Loan and Security Agreement, dated as of July 7,
2003 (as amended, restated, supplemented or otherwise modified from time to
time, the "Loan Agreement"), between the Borrower and Foothill and (ii) The Bank
of New York ("BNY"), as collateral agent (in such capacity, the "Collateral
Agent" and, together with the Lender, the "Secured Parties") under that certain
Indenture, dated as of July 7, 2003 (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture", and together with the
Loan and Security Agreement, the Loan Documents (as defined in the Loan and
Security Agreement) and the Collateral Agreements (as defined in the Indenture),
the "Debt Documents"), among the Borrower, certain of its subsidiaries
(including, among others, the Account Holder), the Collateral Agent and BNY, as
trustee (in such capacity, the "Trustee"), for the benefit of the Collateral
Agent, the Trustee and the holders of the notes issued from time to time under
the Indenture, and shall serve as instructions regarding the operation and
procedures for the bank account(s) described below.
1. ACCOUNT IDENTIFICATION. This Agreement applies to each of the
accounts that have been established at the Bank and are identified in EXHIBIT A
attached hereto (each, an "Account" and collectively, the "Accounts").
2. LIEN. The Account Holder has granted to the Secured Parties a
continuing lien on and security interest in the Accounts and all amounts from
time to time on deposit therein. The Borrower, the Agent and the Bank represent,
warrant, covenant and agree that the Collection Account is, and at all times
prior to termination of this Agreement will be, a "deposit account" within the
meaning of Article 9 of the Uniform Commercial Code as in effect in the Sate of
New York (the "UCC"). The Bank represents and warrants that the Bank is a "bank"
EXHIBIT 10.23
within the meaning of Article 9 of the UCC. The Borrower, the Agent, and the
Bank agree that, notwithstanding anything herein or in any other agreement to
the contrary, for purposes of the UCC, the "Bank's jurisdiction" with respect to
the Accounts is New York.
3. DUTIES. Bank agrees to take such action with respect to the
Accounts as shall from time to time be specified in any writing purportedly from
the Account Holder or Agent as provided herein. Account Holder and the Agent
agree that (a) Bank has no duty to monitor the balance of the Accounts;
(b)Account Holder shall have full rights to instruct the Bank with respect to
the Accounts and take any and all actions with respect to the Accounts
(including, without limitation, making withdrawals therefrom (using checks,
electronic funds transfers or otherwise)) other than during any period (a "Block
Period") beginning on the date on which Agent sends Bank written notice
instructing the Bank to cease honoring the Account Holder's instructions (the
"Block Notice") and continuing until Bank has received subsequent instructions
from Agent that such Block Notice is no longer in effect (the "Block Termination
Notice"); during any Block Period, the Agent may at any time make withdrawals
from the Accounts and take any and all actions with respect to the Accounts, and
Bank is hereby authorized to honor any instructions with respect to the Accounts
(including withdrawals therefrom) which purport to be from the Agent (in each
case without notifying or obtaining the consent of Account Holder); (c) Bank
may, without further inquiry, rely on and act in accordance with any
instructions it receives from (or which purport to be from) the Agent,
notwithstanding any conflicting or contrary instructions it may receive from
Account Holder or the Collateral Agent, and Bank shall have no liability to the
Agent, Account Holder, Lender, the Collateral Agent or any other person in
relying on and acting in accordance with any such instructions; (d) Bank shall
have no responsibility to inquire as to the form, execution, sufficiency or
validity of any notice or instructions delivered to it hereunder, nor to inquire
as to the identity, authority or rights of the person or persons executing or
delivering the same, and (e) Bank shall have a reasonable period of time within
which to act in accordance with any notice or instructions from Agent with
respect to the Accounts. Notwithstanding the preceding terms of this SECTION 3,
it is expressly understood and agreed that any direction or request by the Agent
with respect to the Accounts will apply only to final and collected funds on
deposit in the Accounts and the Agent shall make withdrawals from the Accounts
only via fedwire or by electronic transfer to another account maintained with
the Bank or another financial institution.
From and after Bank has received and has had a reasonable time (not to
exceed two (2) Business Days (as hereinafter defined)) to act on a Block Notice,
each business day during a Block Period on which Bank is neither required nor
permitted to close ("Business Day"), Bank will wire transfer to the Agent all of
the prior Business Day's deposits into the Accounts which are (i) reasonably
believed by Bank to be finally and unconditionally collected, or (ii) collected
funds initially deposited in the Accounts by ACH which are no longer subject to
reversal under the operating rules of the National Automated Clearing House
Association, as follows:
Agent's Bank: JPMorgan Chase Bank
Agent's Bank's Address: 0 Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx,
XX 00000
ABA No.: 000000000
Credit to: Xxxxx Fargo Foothill, Inc.
Account No.: 323-266193
Re: Xxxxxx'x Restaurant Group, Inc.
Notwithstanding anything to the contrary contained in this Agreement,
Bank shall immediately cease all transfers of funds pursuant to this SECTION 3
upon the commencement of any bankruptcy, receivership, insolvency,
reorganization, dissolution or liquidation proceedings by or against the Account
Holder (a "Bankruptcy Filing"), provided, however, that such termination shall
in no way effect the rights of Bank to debit the Accounts for amounts due under
this Agreement. From and after the date on which Bank receives notice of such
Bankruptcy Filing, Bank shall hold all funds deposited in the Accounts. Upon
receipt by Bank of an appropriate order from a court of competent jurisdiction,
Bank shall thereafter resume any transfer of funds pursuant to this SECTION 3.
4. INFORMATION. Bank shall provide the Agent with such information
with respect to the Accounts and all items (and proceeds thereof) deposited in
the Accounts as the Agent may from time to time reasonably request, and Account
Holder hereby consents to such information being provided to the Agent and
agrees to pay all expenses in connection therewith.
5. EXCULPATION; INDEMNITY. Bank undertakes to perform only such
duties as are expressly set forth herein. Notwithstanding any other provisions
of this Agreement, the parties hereby agree that Bank shall not be liable for
any action taken by it or any of its directors, officers, agents or employees in
accordance with this Agreement, including, without limitation, any action so
taken at Agent's request, except direct damages attributable to the Bank's or
such person's own gross negligence or willful misconduct. In no event shall Bank
be liable for any (i) losses or delays resulting from acts of God, war, computer
malfunction, interruption of communication facilities, labor difficulties or
other causes beyond Bank's reasonable control, or (ii) for any other damages,
including, without limitation, indirect, special, punitive or consequential
damages. Account Holder and the Agent agree, jointly and severally, to indemnify
and hold Bank harmless from and against all costs, damages, claims, judgments,
attorneys' fees (whether such attorneys shall be regularly retained or specialty
employed), expenses, obligations and liabilities of every kind and nature which
Bank may incur, sustain or be required to pay (other than solely, as a result of
Bank's gross negligence or willful misconduct or the gross negligence or willful
misconduct of any of Bank's directors, officers, agents or employees) in
connection with or arising out of this Agreement, the Accounts or any Block
Notice or Block Termination Notice (including without limitation, the amount of
any overdraft created in any of the Accounts resulting from a Chargeback being
charged to the related Account or from debiting any of the Accounts for fees
owed to the Bank described in SECTION 7 hereof), and to pay to Bank on demand
the amount of all such costs, damages, judgments, attorneys' fees, expenses,
obligations and liabilities. Nothing in this SECTION 5, and no indemnification
of Bank hereunder, shall affect in any way the indemnification obligations of
Account Holder to the Agent under any Debt Document to which such Agent is a
party. The provisions of this SECTION 5 shall survive termination of this
Agreement.
6. CHARGEBACKS. All items deposited in, and electronic funds
transfers credited to, the Accounts and then returned unpaid or returned (or not
finally settled) for any reason (collectively, "Chargebacks") will be handled in
the following manner: (a) any item which is returned because of insufficient or
uncollected funds or otherwise dishonored for any reason will be charged back to
the Account in which it was originally deposited, and (b) any returns, reversals
or Chargebacks relating to electronic funds transfers or deposits into an
Account, or merchant card, debit card or credit card transactions involving such
Account will be charged back to such Account.
-3-
The Bank will notify the Account Holder of any and all Chargebacks
which have been charged back to the applicable Accounts by reporting the return
of such items (or electronic funds transfers) to the persons specified in
SECTION 12 hereof. The returned item will be sent to the Account Holder along
with a debit advice. The Agent will also receive a copy of each such returned
item and the debit advice, provided, however, that after receipt of written
notice from the Agent, Bank will send the returned item directly to the Agent.
In the event there are insufficient funds in the Accounts to cover
such Chargebacks, upon receipt of notice from Bank of the occurrence of such
Chargebacks and the failure of the Account Holder to pay Bank such Chargebacks,
the Agent agrees to pay the amount of the Chargebacks to Bank, in immediately
available funds, within one Business Day after receipt of such notice, provided
that (a) the Agent shall have no obligation to pay the amount of any Chargeback
incurred at any time other than during a Block Period, and (b) any such
liability of the Agent to Bank shall in no way release the Account Holder from
liability to the Agent and shall not impair the Agent's rights and remedies
against the Account Holder, by way of subrogation or otherwise, to collect all
such Chargebacks.
7. CHARGES. In consideration of the services of Bank in
establishing, maintaining, and conducting transactions through the Accounts,
Bank has established, and the Account Holder hereby agrees to pay the Bank's
standard fees and other charges in connection with the Accounts or services
provided hereunder (collectively, the "Account Charges"), together with any and
all other expenses incurred by Bank in connection with this Agreement, the
Accounts, including, but not limited to, the reasonable legal fees of Bank,
including the fees of Bank's internal counsel, of every kind and nature, paid or
incurred by Bank in enforcing its rights and remedies under this Agreement, or
in connection with defending against any defense, cause of action, claim,
counterclaim, setoff or crossclaim based on any act of commission or omission by
Bank with respect to this Agreement, the Accounts or the Block Notice, other
than any expenses resulting from the gross negligence or willful misconduct of
the Bank or any of its directors, officers, employees or agents (collectively
with the Account Charges, the "Charges").
In connection with the payment of the Charges in any month, Bank will
debit the Accounts. In the event that the Accounts do not contain sufficient
available funds to pay the Charges and the Account Holder maintains no other
accounts with Bank or such other accounts do not contain sufficient available
funds to pay the Charges, Bank will xxxx the Account Holder directly, and the
Account Holder agrees to pay Bank, via wire transfer or other immediately
available funds, the amount of such Charges. If the Account Holder fails to pay
the amount of the Charges within five (5) Business Days of receipt of a billing
statement detailing such Charges, the Agent agrees to pay Bank, via wire
transfer or other immediately available funds, the amount of such Charges within
two (2) Business Days after receipt of a billing statement detailing such
Charges, provided, however, that (a) the Agent shall not be obligated to pay any
Charges incurred at any time other than during a Block Period, and (b) any such
liability of the Agent to Bank shall in no way release the Account Holder from
liability to the Agent and shall in no way impair the Agent's rights and
remedies against the Account Holder, by way of subrogation or otherwise, to
collect all such fees and expenses.
Bank reserves the right to change any or all of the fees and charges
according to annual review, upon not less than ten (10) days written notice to
the Account Holder and the Agent.
-4-
8. IRREVOCABLE AGREEMENT. Account Holder acknowledges that the
agreements made by it and the authorizations granted by it herein are
irrevocable and that the authorizations granted in SECTIONS 2 AND 3 are powers
coupled with an interest.
9. SET-OFF. Bank waives all of its existing and future rights of
set-off and banker's liens against the Accounts and all items (and proceeds
thereof) that come into possession of Bank in connection with the Accounts,
except those rights of set-off and banker's liens arising in connection with (a)
Chargebacks, (b) Charges, and (c) amounts owed to Bank pursuant to SECTIONS 4
AND 5 hereof.
10. MISCELLANEOUS. This Agreement is binding upon the parties hereto
and their respective successors and assigns (including any trustee of Account
Holder appointed or elected in any action under the Bankruptcy Code) and shall
inure to their benefit. Neither the Account Holder nor the Agent may assign
their respective rights hereunder unless the prior written consent of the Bank
is obtained; PROVIDED, that no such consent (or the consent of the Account
Holder) shall be required for the Agent to assign all of its rights and
obligations hereunder to the Collateral Agent, and from and after the date that
the Bank is provided with a copy of such assignment, the Collateral Agent shall
be deemed to be the Agent hereunder. Neither this Agreement nor any provision
hereof may be changed, amended, modified or waived, except by an instrument in
writing signed by the parties hereto (other than any change to the account
information relating to the account of the Agent specified in SECTION 3
(including, without limitation, any change thereto following its assignment of
all of its rights and obligations hereunder to the Collateral Agent)). Any
provision of this Agreement that may prove unenforceable under any law or
regulation shall not affect the validity of any other provision hereof. This
Agreement shall be governed by, and interpreted in accordance with, the laws of
the State of Illinois without regard to conflict of laws provisions. This
Agreement may be executed in any number of counterparts which together shall
constitute one and the same instrument.
11. TERMINATION AND RESIGNATION. This Agreement may be terminated by
the Agent upon fifteen (15) days' prior written notice to Bank. Bank may, at any
time upon fifteen (15) days' prior written notice to the Agent and Account
Holder, terminate this Agreement and close the Accounts.
12. NOTICES. Unless otherwise specifically provided herein, any
notice or other communication required or permitted to be given shall be in
writing addressed to the respective party as set forth below and may be
personally served, telecopied or sent by overnight courier service and shall be
deemed to have been given: (a) if delivered in person, when delivered; (b) if
delivered by telecopy, on the date of transmission if transmitted on a business
day before 4:00 P.M. (Chicago, Illinois time) (but only if such telecopied
document is also delivered by another method permitted by this Agreement by the
next banking business day), or, if not, on the next succeeding banking business
day; or (c) if delivered by reputable overnight courier, the banking business
day on which such delivery is made by such courier.
Notices shall be addressed as follows:
Agent: Xxxxx Fargo Foothill, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000X
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
-5-
Attn: Business Finance Division Manager
Telecopy: (000) 000-0000
Bank: LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Telecopy: 000-000-0000
Account
Holder: Xxxxxx'x of Chicago, Inc.
0000 Xxx Xxxx Xxxx Xxxx
Xxxxx 000
New Hyde Park, New York 11042
Attn: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
or in any case, to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this SECTION 12.
-6-
This Agreement has been executed and delivered by each of the parties
hereto by a duly authorized officer of each such party on the date first set
forth above.
XXXXXX'X OF CHICAGO, INC.
(Account Holder)
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
XXXXX FARGO FOOTHILL, INC.
(Agent)
By: /s/ Xxxxx Xxxxxxxx
----------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
ACCEPTED AND AGREED TO as of this
_____ day of September, 2003.
LaSalle Bank National Association
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
