1
Exhibit 99.3
CNG GUARANTEE AND CASH COLLATERAL AGREEMENT
GUARANTEE AND CASH COLLATERAL AGREEMENT, dated as of November
15, 1996, made by XXXX NATIONAL GROUP, INC., a Delaware corporation (the
"GUARANTOR"), in favor of Canadian Imperial Bank of Commerce, as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for (i) the banks and other
financial institutions (the "LENDERS") from time to time parties to the Credit
Agreement, dated as of November 15, 1996 (as amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among Xxxx Vision
Corporation, Things Remembered, Inc., Xxxx Gift Centers, Inc., Pearle, Inc. and
Pearle Service Corporation (collectively, the "BORROWERS"), the Lenders and the
Administrative Agent and (ii) the other Secured Parties (as defined below)
parties hereto.
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Borrowers are members of an affiliated group of
companies that includes the Guarantor;
WHEREAS, the proceeds of the extensions of credit will be used
in part to enable the Borrowers to make valuable transfers to the Guarantor in
connection with the operation of their respective businesses;
WHEREAS, the Guarantor will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement that the Guarantor shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the Secured
Parties;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, the Guarantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Secured Parties, as follows:
SECTION 1. DEFINED TERMS
2
2
1.1 DEFINITIONS. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
(b) The following terms shall have the following meanings:
"AGREEMENT": this CNG Guarantee and Cash Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"BANK ACKNOWLEDGMENT LETTER": the Bank Acknowledgment Letter to be
executed and delivered by CoreStates Bank N.A., the Guarantor and the
Administrative Agent, substantially in the form of Exhibit A, as the same
may be amended, supplemented or otherwise modified from time to time.
"CASH COLLATERAL": the collective reference to:
(a) all cash, instruments, securities and funds deposited from time to
time in the Cash Collateral Account, including, without limitation, all
cash or other money proceeds of any collateral subject to a security
interest for the benefit of the Administrative Agent under any Loan
Document;
(b) all investments of funds in the Cash Collateral Account and all
instruments and securities evidencing such investments; and
(c) all interest, dividends, cash, instruments, securities and other
property received in respect of, or as proceeds of, or in substitution or
exchange for, any of the foregoing.
"CASH COLLATERAL ACCOUNT": account no. 141-387-1466 established at the
office of CoreStates Bank N.A. located at 0000 Xxxxxxxx Xx., X.X. Xxx 0000,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 19101-7618..
"CODE": the Uniform Commercial Code as from time to time in effect in
the State of New York.
"COLLATERAL": the collective reference to the Cash Collateral and the
Cash Collateral Account.
"GUARANTOR": as defined in the preamble hereto.
"HEDGE AGREEMENTS": as to any Person, all interest rate swaps, caps or
collar agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates or currency
exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies, including, without limitation,
all Interest Rate Protection
3
3
Agreements and Permitted Hedging Arrangements with respect to currency
exchange rates.
"OBLIGATIONS": the collective reference to the unpaid principal of and
interest on the Revolving Credit Loans and Reimbursement Obligations and
all other obligations and liabilities of the Borrowers (including, without
limitation, interest accruing at the then applicable rate provided in the
Credit Agreement after the maturity of the Revolving Credit Loans and
Reimbursement Obligations and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrowers, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to the
Administrative Agent or any Lender (or, in the case of any Hedge Agreement
referred to below, any Affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
the Credit Agreement, this Agreement, the other Loan Documents, any Letter
of Credit or any Hedge Agreement entered into by any Borrower with any
Lender (or, in the case of any Hedge Agreement, any Affiliate of any
Lender) or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to
the Administrative Agent or to the Lenders that are required to be paid by
any Borrower pursuant to the terms of any of the foregoing agreements).
"SECURED OBLIGATIONS": the collective reference to the Obligations and
all obligations and liabilities of the Guarantor which may arise under or
in connection with this Agreement or any other Loan Document to which the
Guarantor is a party, whether on account of reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by the Guarantor
pursuant to the terms of this Agreement or any other Loan Document to which
the Guarantor is a party).
"SECURED PARTIES": the collective reference to the Administrative
Agent, the Lenders (including, without limitation, the Issuing Lender) and
any Affiliate of any Lender which has entered into a Hedge Agreement with
any Borrower or any Subsidiary.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
4
4
(b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
SECTION 2. GUARANTEE
2.1 GUARANTEE. (a) The Guarantor hereby unconditionally and irrevocably
guarantees to the Administrative Agent, for the ratable benefit of the Secured
Parties and their respective successors, indorsees, transferees and assigns, the
prompt and complete payment and performance by the Borrowers when due (whether
at the stated maturity, by acceleration or otherwise) of the Secured
Obligations; PROVIDED that the Guarantor's liability hereunder at any time shall
be limited to amounts on deposit in the Cash Collateral Account.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of the Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by the Guarantor under applicable federal and state laws relating to the
insolvency of debtors.
(c) The Guarantor agrees that the Obligations may at any time and from time
to time exceed the amount of the liability of the Guarantor hereunder without
impairing the guarantee contained in this Section 2 or affecting the rights and
remedies of the Administrative Agent or any other Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in full force
and effect until the first date on which all the Obligations and the obligations
of the Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrowers may be free from any Obligations.
(e) No payment made by any Borrower, the Guarantor, any other guarantor or
any other Person or received or collected by the Administrative Agent or any
other Secured Party from any Borrower, the Guarantor, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by the Guarantor
in respect of the Obligations or any payment received or collected from the
Guarantor in respect of the Obligations), remain liable for the Obligations up
to the maximum liability of the Guarantor hereunder until the first date on
which the Obligations are paid in full, no Letter of Credit shall be outstanding
and the Commitments are terminated.
5
5
2.2 NO SUBROGATION. Notwithstanding any payment made by the Guarantor
hereunder or any set-off or application of funds of the Guarantor by the
Administrative Agent or any other Secured Party, the Guarantor shall not be
entitled to be subrogated to any of the rights of the Administrative Agent or
any other Secured Party against any Borrower or any collateral security or
guarantee or right of offset held by the Administrative Agent or any other
Secured Party for the payment of the Obligations, nor shall the Guarantor seek
or be entitled to seek any contribution or reimbursement from any Borrower in
respect of payments made by the Guarantor hereunder, until all amounts owing to
the Administrative Agent and the other Secured Parties by the Borrowers on
account of the Obligations are paid in full, no Letter of Credit shall be
outstanding and the Commitments are terminated. If any amount shall be paid to
the Guarantor on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by the
Guarantor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of the Guarantor, and shall, forthwith upon receipt
by the Guarantor, be turned over to the Administrative Agent in the exact form
received by the Guarantor (duly indorsed by the Guarantor to the Administrative
Agent, if required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.
2.3 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS. The Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against the Guarantor and without notice to or further assent by the
Guarantor, any demand for payment of any of the Obligations made by the
Administrative Agent or any other Secured Party may be rescinded by the
Administrative Agent or such other Secured Party and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any other Secured Party,
and the Credit Agreement and the other Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Majority Lenders, as the case may be) may deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
the Administrative Agent or any other Secured Party for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any other Secured Party shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
2.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by the Administrative Agent or any other
Secured Party upon the guarantee contained in this Section 2 or acceptance of
the guarantee contained
6
6
in this Section 2; the Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Section 2;
and all dealings between any Borrower and the Guarantor, on the one hand, and
the Administrative Agent and the other Secured Parties, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrowers or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment. The Guarantor hereby waives, to the extent it may legally
do so, any and all defenses that it may have arising out of or in connection
with any and all of the following: (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
other Secured Party, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by any Borrower against the Administrative Agent or any other Secured
Party, (c) any change in the time, place, manner or place of payment, amendment,
or waiver or increase in the Obligations, (d) any exchange, taking, or release
of Collateral, (e) any change in the corporate structure or existence of any
Borrower, (f) any application of Collateral to Obligations or (g) any other
circumstance whatsoever (with or without notice to or knowledge of such Borrower
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of any Borrower for the Obligations, or of the
Guarantor under the guarantee contained in this Section 2, in bankruptcy or in
any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against the Guarantor, the Administrative Agent or
any other Secured Party may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
any Borrower or any other Person or against any collateral security or guarantee
for the Obligations or any right of offset with respect thereto, and any failure
by the Administrative Agent or any other Secured Party to make any such demand,
to pursue such other rights or remedies or to collect any payments from any
Borrower or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of any
Borrower or any other Person or any such collateral security, guarantee or right
of offset, shall not relieve the Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or
any other Secured Party against the Guarantor. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
2.5 REINSTATEMENT. The guarantee contained in this Section 2 shall continue
to be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any other Secured Party upon
the insolvency,
7
7
bankruptcy, dissolution, liquidation or reorganization of any Borrower or the
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, any Borrower or the
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
2.6 PAYMENTS. The Guarantor hereby guarantees that payments hereunder will
be paid to the Administrative Agent without set-off or counterclaim in Dollars
at the office of the Administrative Agent located at 000 Xxxxxxxxx Xxxxxx, 0xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 3. GRANT OF SECURITY INTEREST
3.1 GRANT OF SECURITY INTEREST. As collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations, the Guarantor hereby
grants to the Administrative Agent, for the ratable benefit of the Lenders, a
security interest in the Collateral.
3.2 MAINTENANCE OF CASH COLLATERAL ACCOUNT. (a) The Cash Collateral Account
shall be maintained until the Secured Obligations have been paid and performed
in full.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrowers thereunder, the Guarantor hereby represents and warrants
to the Administrative Agent and each other Secured Party that:
4.1 REPRESENTATIONS IN CREDIT AGREEMENT. (a) The representations and
warranties set forth in Section 5 of the Credit Agreement as they relate to the
Guarantor or to the Loan Documents to which the Guarantor is a party or to the
Transaction Documents to which the Guarantor is a party, each of which is hereby
incorporated herein by reference, are true and correct, and the Administrative
Agent and each other Secured Party shall be entitled to rely on each of them as
if they were fully set forth herein; PROVIDED that each reference in each such
representation and warranty to any Borrower's knowledge shall, for the purposes
of this Section 4.1(a), be deemed to be a reference to the Guarantor's
knowledge.
4.2 TITLE; NO OTHER LIENS. Except for the security interest granted to the
Administrative Agent, for the ratable benefit of the Secured Parties, pursuant
to this Agreement, the Guarantor owns each item of the Collateral free and clear
of any and all Liens or claims of others. No financing statement or other public
notice with respect to
8
8
all or any part of the Collateral is on file or of record in any public office,
except such as have been filed in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, pursuant to this Agreement or as are
permitted by the Credit Agreement or for which termination statements will be
delivered on the Closing Date.
4.3 PERFECTED FIRST PRIORITY LIENS. The security interests granted pursuant
to this Agreement (a) upon completion of the filings and other actions specified
on SCHEDULE 1 (which, in the case of all filings and other documents referred to
on said Schedule, have been delivered to the Administrative Agent in completed
and duly executed form) and upon the execution and delivery of the Bank
Acknowledgement Letter by the parties thereto, will constitute valid perfected
security interests in all of the Collateral in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, as collateral security
for the Secured Obligations of the Guarantor, enforceable in accordance with the
terms hereof against all creditors of the Guarantor and (b) are prior to all
other Liens on the Collateral in existence on the date hereof.
4.4 CHIEF EXECUTIVE OFFICE. On the date hereof, the Guarantor's
jurisdiction of organization is Delaware and the location of the Guarantor's
chief executive office is 0000 Xxxxxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxx 00000.
SECTION 5. COVENANTS
The Guarantor covenants and agrees with the Administrative Agent and the
other Secured Parties that, from and after the date of this Agreement until the
Secured Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 COVENANTS IN CREDIT AGREEMENT. The Guarantor shall take, or shall
refrain from taking, as the case may be, each action that is necessary to be
taken or not taken, as the case may be, so that no Default or Event of Default
is caused by the failure to take such action or to refrain from taking such
action by the Guarantor or any of its Subsidiaries.
5.2 PAYMENT OF OBLIGATIONS. The Guarantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of the Guarantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
9
9
5.3 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION. (a)
The Guarantor shall maintain the security interest created by this Agreement as
a perfected security interest having at least the priority described in Section
4.3 and shall defend such security interest against the claims and demands of
all Persons whomsoever.
(b) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Guarantor, the Guarantor
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code (or other similar laws) in effect in any
jurisdiction with respect to the security interests created hereby.
5.4 CHANGES IN LOCATIONS, NAME, ETC. The Guarantor will not, except upon 30
days' prior written notice to the Administrative Agent and delivery to the
Administrative Agent of all additional executed financing statements and other
documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein:
(i) change the location of its chief executive office from that
referred to in Section 4.4; or
(ii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become misleading.
5.5 NOTICES. The Guarantor will advise the Administrative Agent promptly,
in reasonable detail, of any Lien of which the Guarantor obtains actual
knowledge (other than security interests created hereby or Liens permitted under
the Credit Agreement) on any of the Collateral which would adversely affect the
ability of the Administrative Agent to exercise any of its remedies hereunder;
and of the occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the Collateral or on
the security interests created hereby.
SECTION 6. REMEDIAL PROVISIONS
6.1 CODE AND OTHER REMEDIES. At any time and from time to time after the
occurrence and during the continuance of an Event of Default, the Administrative
Agent may, without notice of any kind, except for notices required by law which
may not be waived, apply the Collateral, after deducting all reasonable costs
and expenses of every kind incurred in respect thereof or incidental to the care
or safekeeping of any of the Collateral or in any way relating to the Collateral
or the rights of the Administrative
10
10
Agent and the Secured Parties hereunder, including, without limitation,
reasonable attorneys' fees and disbursements of counsel to the Administrative
Agent, to the payment in whole or in part of the Secured Obligations, in such
order as the Administrative Agent in its sole discretion may elect, and only
after such application and after the payment by the Administrative Agent of any
other amount required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the Code, need the Administrative Agent account for the
surplus, if any, to the Guarantor. In addition to the rights, powers and
remedies granted to it under this Agreement and in any other agreement securing,
evidencing or relating to the Secured Obligations, the Administrative Agent
shall have all the rights, powers and remedies available at law, including,
without limitation, the rights and remedies of a secured party under the Code.
To the extent permitted by law, the Guarantor waives presentment, demand,
protest and all notices of any kind and all claims, damages and demands it may
acquire against the Administrative Agent or any Secured Party arising out of the
exercise by them of any rights hereunder.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC. (a) The
Guarantor hereby irrevocably constitutes and appoints the Administrative Agent
and any officer or agent of the Administrative Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Guarantor and in the name of
the Guarantor or in the Administrative Agent's own name, from time to time in
the Administrative Agent's discretion, for the purpose of carrying out the terms
of this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer. Anything
in this Section 7.1(a) to the contrary notwithstanding, the Administrative Agent
agrees that it will not exercise any rights under the power of attorney provided
for in this Section 7.1(a) unless an Event of Default shall have occurred and be
continuing.
(b) The expenses of the Administrative Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due ABR Loans under the Credit Agreement, from the date
of payment by the Administrative Agent to the date reimbursed by the relevant
Guarantor, shall be payable by the Guarantor to the Administrative Agent on
demand.
(c) The Guarantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
7.2 DUTY OF ADMINISTRATIVE AGENT. The Administrative Agent's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its
11
11
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
it in the same manner as the Administrative Agent deals with similar property
for its own account. Neither the Administrative Agent, any other Secured Party
nor any of their respective officers, directors, employees or agents shall be
liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of the Guarantor or any other Person
or to take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Administrative Agent and the other Secured
Parties hereunder are solely to protect the Administrative Agent's and the other
Secured Parties' interests in the Collateral and shall not impose any duty upon
the Administrative Agent or any other Secured Party to exercise any such powers.
The Administrative Agent and the other Secured Parties shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to the Guarantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
7.3 EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of the
Code and any other applicable law, the Guarantor authorizes the Administrative
Agent to file or record financing statements and other filing or recording
documents or instruments with respect to the Collateral without the signature of
the Guarantor in such form and in such offices as the Administrative Agent
reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
7.4 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement or any amendment, supplement or other modification of this
Agreement shall, as between the Administrative Agent and the Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Guarantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 8. MISCELLANEOUS
8.1 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
12
12
written instrument executed by the Guarantor and the Administrative Agent,
PROVIDED that any provision of this Agreement imposing obligations on the
Guarantor may be waived by the Administrative Agent in a written instrument
executed by the Administrative Agent.
8.2 NOTICES. All notices, requests and demands to or upon the
Administrative Agent or the Guarantor hereunder shall be effected in the manner
provided for in subsection 11.2 of the Credit Agreement; PROVIDED that any such
notice, request or demand to or upon the Guarantor shall be addressed to the
Guarantor at:
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Fax: (000) 000-0000.
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. Neither the
Administrative Agent nor any other Secured Party shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any other
Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any other Secured Party of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Administrative
Agent or such other Secured Party would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.
8.4 ENFORCEMENT EXPENSES; INDEMNIFICATION. (a) The Guarantor agrees to pay
or reimburse each Secured Party and the Administrative Agent for all their
respective costs and expenses incurred in collecting against the Guarantor under
the guarantee contained in Section 2 or otherwise enforcing any rights under
this Agreement and the other Loan Documents to which the Guarantor is a party,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and
13
13
expenses of in-house counsel) to each Secured Party and of counsel to the
Administrative Agent.
(b) The Guarantor agrees to pay, and to save the Administrative Agent and
the Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) The Guarantor agrees to pay, and to save the Administrative Agent and
the Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement (collectively, the
"INDEMNIFIED LIABILITIES") to the extent the Borrowers would be required to do
so pursuant to Section 11.5 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of the
Secured Obligations and all other amounts payable under the Credit Agreement and
the other Loan Documents.
8.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of the Guarantor and shall inure to the benefit of the
Administrative Agent and the Secured Parties and their successors and assigns;
PROVIDED that no Guarantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 SET-OFF. The Guarantor hereby irrevocably authorizes the Administrative
Agent and each other Secured Party at any time and from time to time without
notice to the Guarantor or any Borrower, any such notice being expressly waived
by the Guarantor and by the Borrowers, upon any amount remaining unpaid after it
becomes due and payable by the Guarantor hereunder to set-off and appropriate
and apply against any such amount any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such other Secured Party to or for the
credit or the account of the Guarantor, or any part thereof in such amounts as
the Administrative Agent or such other Secured Party may elect. The
Administrative Agent and each other Secured Party shall notify the Guarantor
promptly of any such set-off and the application made by the Administrative
Agent or such other Secured Party of the proceeds thereof; PROVIDED that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Administrative Agent and each other Secured Party
under this Section 8.6 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Administrative Agent or
such other Secured Party may have.
14
14
8.7 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
8.8 SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.9 SECTION HEADINGS. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
8.10 INTEGRATION. This Agreement and the other Loan Documents represent the
agreement of the Guarantor, the Administrative Agent and the other Secured
Parties with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
other Secured Party relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 SUBMISSION TO JURISDICTION; WAIVERS. The Guarantor hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Guarantor at its address referred to in Section 8.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;
15
15
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any exemplary, punitive or consequential damages.
8.13 ACKNOWLEDGEMENTS. The Guarantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) neither the Administrative Agent nor any other Secured Party has
any fiduciary relationship with or duty to the Guarantor arising out of or
in connection with this Agreement or any of the other Loan Documents, and
the relationship between the Guarantor, on the one hand, and the
Administrative Agent and the Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Secured Parties or among the Guarantor and the Secured Parties.
8.14 WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.15 RELEASES. At such time as the Revolving Credit Loans, the
Reimbursement Obligations and the other Secured Obligations shall have been paid
in full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Administrative Agent and the Guarantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Guarantor. At
the request and sole expense of the Guarantor following any such termination,
the Administrative Agent shall deliver to the Guarantor any Collateral held by
the Administrative Agent hereunder, and execute and deliver to the Guarantor
such documents as the Guarantor shall reasonably request to evidence such
termination.
16
16
IN WITNESS WHEREOF, the undersigned has caused this CNG Guarantee and Cash
Collateral Agreement to be duly executed and delivered as of the date first
above written.
XXXX NATIONAL GROUP, INC.
By: _______________________________
Title:
17
EXHIBIT A
---------
FORM OF BANK ACKNOWLEDGEMENT LETTER
November _, 1996
CoreStates Bank N.A.
[address]
Attention:
Re: Xxxx National Group, Inc. (hereinafter "CNG")
Account Number [_________________] (hereinafter the "CASH COLLATERAL
ACCOUNT")
Ladies and Gentlemen:
Please be advised that we have entered into the CNG Guarantee
and Cash Collateral Agreement, dated as of November __, 1996 (the "CNG GUARANTEE
AND CASH COLLATERAL AGREEMENT"), made by CNG in favor Canadian Imperial Bank of
Commerce, New York Agency, as Administrative Agent (in such capacity, the
"ADMINISTRATIVE AGENT"), pursuant which we have been granted a security interest
in the Cash Collateral Account and all cash, instruments, securities and funds
deposited from time to time in the Cash Collateral Account, all investments of
funds in the Cash Collateral Account and all instruments and securities
evidencing such investments and all interest, dividends, cash, instruments,
securities and other property received in respect of, or as proceeds of, or in
substitution or exchange for, any of the foregoing.
CNG hereby agrees that it will not permit the Cash Collateral
Account to become subject to any other pledge, assignment, lien, charge or
encumbrance of any kind, nature or description. CoreStates Bank, N.A. (the
"BANK") hereby agrees that it will maintain the Cash Collateral Account and hold
any checks, drafts, notes, money and acceptances, cash and other evidences of
indebtedness ("REMITTANCES") included therein, as custodian for the
Administrative Agent in accordance with the terms of this agreement. The Bank
will provide copies of the monthly bank statement with respect to the Cash
Collateral Account to the Administrative Agent at the address listed below.
Upon notification from the Administrative Agent that an Event
of Default has occurred under the Credit Agreement, dated as of November __,
1996, among Xxxx Vision Corporation, Things Remembered, Inc., Xxxx Gift Centers,
Inc., Pearle, Inc., Pearle Service Corporation, the Lenders parties thereto and
the Administrative Agent (the "CREDIT AGREEMENT"), the Bank hereby agrees that
it will not permit CNG to withdraw monies from the Cash Collateral Account and,
at the direction of the Administrative Agent from time to time, the Bank will
transfer all collected and available funds in the account at such time via
federal funds wire to the Administrative Agent at:
18
2
Canadian Imperial Bank of Commerce, New York Agency,
as Administrative Agent
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [_______________]
Account No. [________________]
The Bank shall be fully protected in acting on any order or
direction by the Administrative Agent respecting the Cash Collateral Account and
disposition of Remittances without making any inquiry whatsoever as to the
Administrative Agent's right or authority to give such order or direction or as
to the application or any payment made pursuant thereto. In the event that the
Bank is uncertain as to what action it should with respect to any instructions
relating to the Cash Collateral Account, the Bank may request instructions from
the Administrative Agent and shall be absolutely protected in following such
instructions.
The Bank agrees that it shall not set-off, deduct, or claim
against the Cash Collateral Account or the Remittances unless, and until, all of
CNG's Obligations (as defined in the CNG Guarantee and Cash Collateral
Agreement) to the Administrative Agent have been paid in full, PROVIDED,
HOWEVER, that notwithstanding the foregoing, the Bank may charge the Cash
Collateral Account for all service charges, returned items and any other charges
to which it may be entitled for maintaining the Cash Collateral Account.
Neither the Bank nor CNG will close the Cash Collateral
Account without giving the Administrative Agent at least thirty (30) days prior
written notice thereof.
No modifications or changes in any form may be made to this
agreement without the prior written consent of the Administrative Agent.
This letter agreement may be executed in one or more
counterparts, each of which shall constitute one and the same instrument.
19
3
If the foregoing conforms with your understanding, please sign
and return the duplicate enclosed copies of this letter, whereupon this letter,
when signed by all requisite parties hereto, shall be binding on all parties.
Very truly yours,
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By: ____________________________
Name:
Title:
Accepted and agreed to as of the date first written above by:
CORESTATES BANK N.A.
By: _______________________________
Name:
Title:
XXXX NATIONAL GROUP, INC.
By: _______________________________
Title:
