Exhibit 10.4 (iii)
8
ACCLAIM ENTERTAINMENT
BNY - BLOCKED ACCOUNT
[Letterhead of Otterbourg, Xxxxxxxxx, Xxxxxxx & Xxxxx, P.C.]
November 22, 1996
Xxxxxxx Xxxxxxxx, Esq.
Xxxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Acclaim Entertainment, Inc., et al.
Dear Xxxxx:
As requested, enclosed is a photocopy of the fully executed Blocked
Account Agreement dated November 14, 1996. A copy of the fully executed November
15, 1996 Amendment to Credit Agreement will be forwarded to you under separate
cover.
Very truly yours,
/s/ Xxxx Xxxxxx
--------------------------
Xxxx Xxxxxx
Attachment
BLOCKED ACCOUNT AGREEMENT
THIS BLOCKED ACCOUNT AGREEMENT ("Agreement") is made and entered into as
of November 14, 1996, by and among THE BANK OF NEW YORK, ("Bank"), ACCLAIM
ENTERTAINMENT, INC. ("Company"), and BNY FINANCIAL CORPORATION ("Lender").
X. Xxxxxxxx to that certain Revolving Credit and Security Agreement dated
as of January 1, 1993 among Company, certain of its subsidiaries and Lender (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), Xxxxxx has agreed to make loans and extend other financial
accommodations to Company.
B. Company has established Account No. 8900320869 with Bank (the "Blocked
Account").
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 Account 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.
2. Security Interest; Agency. As collateral security for Company's
"Obligations" to Lender under and as defined in the Credit Agreement, Company
hereby grants to Lender a present and continuing security interest in (a) the
Blocked Account, (b) all contract rights and privileges in respect of the
Blocked Account, and (c) all cash, checks, money orders and other items of value
of Company constituting payment of any tax refund from any federal, state or
local taxing authority, including without limitation, payment of any such tax
refund for Company's fiscal year ending August 31, 1996, now or hereafter paid,
deposited, credited, held (whether for collection, provisionally or otherwise)
or otherwise in the possession or under the control of, or in transit to, Bank
or any agent, bailee or custodian thereof (collectively, "Receipts"), and all
proceeds of the foregoing. Lender hereby appoints Bank as Xxxxxx's bailee and
pledgee-in-possession for Blocked Account and all Receipts, and Bank hereby
accepts such appointment and agrees to be bound by the terms of this Agreement.
Company xxxxxx agrees to such appointment and further agrees that Bank, on
behalf of Xxxxxx, shall be entitled to exercise, upon the written instructions
of Xxxxxx, any and all rights which Lender may have under the Credit Agreement,
"Other Documents", as defined in the Credit Agreement, or under applicable law
with respect to the Blocked Account, all Receipts.
3. Control of Blocked Account. The Blocked Account shall be under the sole
dominion and control of Lender and neither Company nor any other person or
entity, through or under Company, shall have any control over the use of, or any
right to withdraw andy amount from, the Blocked Account.
4. Procedures for Blocked Account. Bank shall follow the following
procedures with respect to the Blocked Account and, except as provided in this
Agreement, shall take no other action in respect thereof:
(a) Apply and credit for deposit to the Blocked Account all Receipts
from time to time tendered by or on behalf of Company for deposit therein,
including without limitation all wire transfers and other payments directed to
the Blocked Account.
(b) Bank shall determine, on each business day, the balance of all
available funds on deposit in the Blocked Account and automatically transfer all
such funds not later than 10:00 a.m. (New York Time) on such business day to the
account designated below, or to such other account as may be agreed upon in
writing from time to time by Lender and Company, for application to the
Company's Obligations to Lender pursuant to the Credit Agreement (the "Lender
Collateral Account"):
BNY Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA No. 000000000
Account No. 8090653114
Name: Acclaim Entertainment, Inc. Collateral Account
Lender shall apply such funds as follows: first, to the payment of $15,00,000 of
Company's Obligations to Lender then outstanding, second, to the payment of
Overformula Amount, as defined in the Credit Agreement, then outstanding, third,
to the establishment of a reserve for Company's Obligations to Lender in an
amount equal to ten percent (10%) of the aggregate amount of Receivables, as
defined in the Credit Agreement, then outstanding, and the balances of such
funds, if any, shall, provided there is no Event of Default, as defined in the
Credit Agreement, then existing, be paid by Lender to Company.
5. Statements and Other Information. Bank shall send to Lender copies of
all returned and dishonored Receipts promptly upon Bank's receipt thereof, and
upon Xxxxxx's request Bank shall provide Lender with copies of the regular
monthly bank statements provided to Company and such other information relating
to the Blocked Account as shall reasonably be requested by Xxxxxx. Bank shall
also deliver a copy of all notices and statements required to be sent to Company
pursuant to any agreement governing or related to the Blocked Account to Lender
at such times as provided therein.
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6. Fees. Company agrees to pay on demand all usual and customary service
charges, transfer fees and account maintenance fees (collectively, "Fees") of
Bank in connection with the Blocked Account. In the event Company fails to
timely make a payment to Bank of any Fees, Bank may thereafter exercise its
right of set-off against the Blocked Account for such amounts. Lender shall not
have any responsibility or liability for the payment of any Fees.
7. Uncollected Funds. If any Receipts deposited in the Blocked Account are
returned unpaid or otherwise dishonored Bank shall have the right to charge any
and all such returned or dishonored items against the Blocked Account or to
demand reimbursement therefor directly from Company.
8. Set-off. Bank hereby agrees that, prior to the effective date of a
termination of this Agreement, Bank will not exercise or claim any right of
set-off or banker's lien against the Blocked Account or any Receipts on deposit
therein, and Bank hereby further waives until such date any such right or lien
which it may have against any Receipts deposited in the Blocked Account, except
to the extent expressly set forth in paragraphs 6 and 7 above.
9. Exculpation of Bank; Indemnification by Company. Company and Lender
agree that Bank shall have no liability to either of them for any loss or damage
that either or both may claim to have suffered or incurred, either directly or
indirectly, by reason of this Agreement or any transaction or service
contemplated by the provisions hereof, unless occasioned by the gross negligence
or willful misconduct of Bank. In no event shall Bank be liable for losses or
delays resulting from computer malfunction, interruption of communication
facilities, labor difficulties or other causes beyond Bank's reasonable control
or, unless occasioned by the gross negligence or willful misconduct of the Bank,
for indirect, special or consequential damages. Company agrees to indemnify Bank
and hold it harmless from and against any and all claims, other than those
caused by the gross negligence or willful misconduct of Bank, and from and
against any damages, penalties, judgments, liabilities, losses or expenses
(including reasonable attorney's fees and disbursements) incurred as a result of
the assertion of any claim, by any person or entity, arising out of, or
otherwise related to, any transaction conducted or service provided by Bank
through the use of any account at Bank pursuant to the procedures provided for
or contemplated by 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 Lender. This Agreement may be terminated by Lender at any time, with or
without cause, upon 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 Lender. Upon
delivery or receipt of such notice of termination to or by Bank, Bank will: (a)
immediately transmit to the Lender Collateral Account (i) all funds, if any,
then on deposit in, or otherwise to the credit of, the Blocked Account, and (ii)
upon receipt, all funds
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received after such notice for deposit in, or otherwise to the credit of, the
Blocked Account; and (b) deliver directly to Lender all Receipts consisting of
checks, money orders, drafts and other instruments or items of value, whether
then in the possession of Bank or received by Bank after such notice, without
depositing such Receipts in the Blocked Account or any other account. The
provisions of paragraphs 2, 3 and 8 shall survive termination of this Agreement
unless and until specifically released by Xxxxxx in writing. All rights of Bank
under paragraphs 6, 7 and 9 shall survive any termination of this Agreement.
11. Irrevocable Agreements. Company acknowledges that the agreements made
by it and the authorizations granted by it in paragraph 2, 3, and 4 hereof are
irrevocable and that the authorizations granted in paragraphs 2, 3 and 4 hereof
are powers coupled with an interest.
12. Notices. All notices, requests or other communications given to
Company, Lender or Bank shall be given in writing (including by facsimile) at
the address specified below:
Lender: BNY Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Bank: The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Company: Acclaim Entertainment Inc.
One Acclaim Plaza
Glen Cove, New York
Attention: Xxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change its address for notices hereunder by notice to each other
party hereunder given in accordance with this paragraph 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 paragraph 12
and confirmation of receipt is made by the appropriate party, (b) if given by
overnight courier, 24 hours after such communication is deposited with the
overnight courier for delivery,
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addressed as aforesaid, or (c) if given by any other means, when delivered at
the address specified in this paragraph 12.
13. Miscellaneous.
(a) This Agreement may be amended only by a written instrument
executed by Xxxxxx, Bank, and Company acting by their respective duly authorized
representatives.
(b) This Agreement shall be binding upon and shall issue 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 Xxxxxx. This Agreement may be assigned by Xxxxxx only in connection
with the assignment by Xxxxxx of the Credit Agreement.
(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).
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.
ACCLAIM ENTERTAINMENT, INC.
By: /s/ X. Xxxx Xxxxxxxxxx
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Title: EXEC V.P. & CFO
THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxx (2754)
--------------------------
Title: Vice President
BNY FINANCIAL CORPORATION
By: /s/ Xxxxxx Xxxxx
--------------------------
Title: SVP
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