Exhibit - 10.72
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
THIS AGREEMENT is entered into to be effective as of the 1st
day of July, 1999, by and between GOODY'S FAMILY CLOTHING, INC., a corporation
organized and existing under the laws of the State of Tennessee (hereinafter
referred to as the "Corporation"); Xxxxxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxxxxxx
and Xxxxxx X. Xxxxxxxxx, as Trustees of the XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST, dated the 20th day of January, 1999 (hereinafter referred to
as the "Policy Owner") and XXXXXX X. XXXXXXXXXX (hereinafter referred to as the
"Employee").
W I T N E S S E T H:
WHEREAS, Employee is employed by the Corporation; and
WHEREAS, the Employee has performed his duties ably and well, and to the
satisfaction of the Corporation; and
WHEREAS, the Policy Owner wishes to obtain life insurance protection
payable on the death of the last to die of the Employee and his wife, Xxxxx X.
Xxxxxxxxxx; and
WHEREAS, the Corporation wishes to participate in the obtaining of life
insurance protection payable on the death of the second to die of the Employee
and the Employee's wife, Xxxxx X. Xxxxxxxxxx; and
WHEREAS, the parties desire to have a separate agreement setting forth
their rights and obligations with respect to such insurance.
NOW, THEREFORE, in consideration of the mutual promises and obligations set
forth hereinafter, the parties agree as follows:
ARTICLE ONE
INSURANCE POLICIES
Policy Owner is the owner of five life insurance policies on the joint
lives of the Employee and the Employee's wife as listed by policy number and
designated as policies A through E on Exhibit A, attached hereto. All references
herein to the "Policies" shall mean each and every policy listed on Exhibit A.
All references to a "Policy" shall mean any of the policies listed on Exhibit A.
Policy Owner is a validly formed irrevocable trust under the laws of the State
of Tennessee and has capacity to enter into this Agreement and to perform its
obligations hereunder.
ARTICLE TWO
POLICY OWNERSHIP
Each Policy is the exclusive property of the Policy Owner, who may exercise
all rights of ownership with respect thereto notwithstanding anything to the
contrary in the policy, or endorsement, and riders thereto, except as otherwise
provided in this Agreement.
ARTICLE THREE
ADVANCES
3.1 After the execution of this Agreement, the Corporation shall be
responsible for the remittance of all premiums due on the Policies. Each such
payment shall be referred to as an "Advance". Each such payment shall be made on
or before the date the premium is due or within the grace period allowed by the
respective Policy for the payment of premiums and, if requested, the Corporation
shall give proof of timely payment of each premium to the Policy Owner.
3.2 Within thirty (30) days after payment by the Corporation of the premium
due on the Policy, the Policy Owner shall reimburse to the Corporation the cost
of insurance coverage in the amount of the proceeds the Policy Owner is
designated to receive under the Policy. The rate used to determine such cost on
the joint lives of the Employee and the Employee's wife shall be based on the
so-called "Table 38" rates set forth in that certain Internal Revenue Service
Information Release dated August 10, 1983. The rate used to determine such cost
on the single life of the Employee or the Employee's wife (after the death of
the Employee or the Employee's wife) shall be based on the so-called "P.S. 58"
rates set forth in Revenue Ruling 55-747, as amended, or the currently published
rates of the issuer of the Policy for one year term life insurance available to
all standard risks, whichever is less. If the Policy Owner does not timely remit
to the Corporation the amount required under this Article Three, such amount
shall be treated as compensation to the Employee, or if the Employee is not
living, shall be treated as compensation of the Employee which is payable to the
Employee's wife.
3.3 The Policy Owner shall have the right to remit additional sums to the
Corporation. The Corporation shall apply such sums to reduce the amount of
outstanding Advances, in respect of such Polices as directed by the Policy
Owner.
ARTICLE FOUR
COLLATERAL ASSIGNMENT
The Policy Owner shall collaterally assign each Policy to the Corporation
pursuant to the terms of this Agreement as security for the reimbursement of its
Advances. The security interest of the Corporation shall be limited to an amount
equal to the cash surrender value of the Policy (computed as if no policy loans
had been taken by the Policy Owner), not to exceed the aggregate unreimbursed
Advances, taking into account any additional sums remitted to the Corporation
pursuant to 3.3 above, less any policy loans taken by the Corporation with
respect to such Policy (the "Net Advances").
ARTICLE FIVE
RESTRICTING EVENTS
5.1 Until the occurrence of a "Restricting Event", as defined in 5.2 below,
the Corporation is granted exclusively all rights in each Policy including, but
not limited to, the following rights:
5.1.1 The right to surrender the Policy.
5.1.2 The right to change the beneficiary of the Policy.
5.1.3 The right to select dividend options.
5.1.4 The right to select optional methods of settlement with regard to the
death benefit payable thereunder.
5.1.5 The right to assign its rights in the Policy.
5.1.6 The right to obtain a policy loan or loans on the Policy. The amount
of such loans together with the interest thereon shall at no time exceed the
cash surrender value of the Policy as of the date to which the premiums on the
Policy have been paid.
5.1.7 The right to withdraw or borrow against the cash value of the Policy.
5.1.8 All other rights contained in the Policy.
5.2 A "Restricting Event" shall mean the occurrence of any of the following
events:
5.2.1 A change of control of the Corporation, as defined in 5.3 below;
5.2.2 The death of Employee while his wife is still living if there is no
single life insurance coverage on the life of Employee then in force and owned
by Policy Owner, as described in Article Ten below; or
5.2.3 The termination of Employee's employment by the Corporation.
5.3 A change of control of the Corporation shall mean and shall be deemed
to have occurred if (i) any person or group (within the meaning of Rule 13d-3 of
the rules and regulations promulgated under the Securities Exchange Act of 1934,
as amended), other than Employee, members of his immediate family, his
affiliates, trusts or private foundations established by or on his behalf, and
the heirs, executors or administrators of Employee shall acquire in one or a
series of transactions, whether through sale of stock or merger, more than 50%
of the outstanding voting securities of Corporation or any successor entity of
Corporation, (ii) all or substantially all of Corporation's assets are sold, or
(iii) the shareholders of Corporation shall approve a complete liquidation or
dissolution of Corporation.
5.4 Upon the occurrence of a Restricting Event, all of the Corporation's
rights in the Policies under this Article Five shall cease and shall be
possessed exclusively by the Policy Owner, subject to the limitations set forth
in Article Seven.
ARTICLE SIX
OPTION UPON POLICY SURRENDER
6.1 Prior to a Restricting Event or upon the Termination Event described in
8.1.4, the Corporation shall provide Policy Owner written notice of its intent
to surrender a Policy and, for a period of fifteen days after such notice,
Policy Owner shall have the option of obtaining the release of the collateral
assignment of the Policy to the Corporation by payment in full to the
Corporation of the unreimbursed Net Advances with respect to such Policy.
6.2 Said amount shall be paid in full by cash, certified check or other
immediate funds and must be delivered to the Corporation by 5:00 pm Eastern
Standard Time on or before the fifteenth day of the option period.
6.3 Under receipt of such payment the Corporation shall release its rights
in accordance with paragraph 9.1.
ARTICLE SEVEN
LIMITATIONS ON POLICY OWNER
7.1 Prior to a Restricting Event, the Policy Owner may not borrow against
the cash surrender value of the Policies. After a Restricting Event and
notwithstanding any other provision of this Agreement, Policy Owner agrees that
it shall not transfer, pledge, hypothecate or take any other action in respect
of a Policy which shall impair the Corporation's security interest in any
Policy, including taking any loans which shall cause the cash surrender value of
any Policy to be less than the unreimbursed Net Advances in respect of such
Policy, without the consent of the Corporation.
7.2 Notwithstanding any other provision of this Agreement, Policy Owner
agrees that it shall not surrender a Policy when the cash surrender value of the
Policy is less than the unreimbursed Net Advances, without the consent of the
Corporation.
7.3 Policy Owner agrees that it shall not make distributions under its
dispositive provisions until the Corporation shall have been reimbursed in full
for all outstanding Net Advances, subject to paragraph 9.4.
7.4 Policy Owner agrees that it shall apply, with respect to a surrendered
Policy, any cash surrender value it receives in excess of the amount due the
Corporation as follows:
(A) Policy Owner may, within forty-five days, reinvest such excess cash
surrender value in the remaining Policies which are subject to this Agreement;
provided that (i) any amounts so reinvested shall not be used to purchase
additional death benefit above the aggregate amount of death benefit initially
put into place through the Policies under this Agreement and (ii) the
Corporation shall not be obligated to make premium payments on a Policy in which
such sums have been reinvested in excess of the premium payments required to
maintain the amount of death benefit initially put into place for such Policy
under this Agreement.
(B) Policy Owner shall remit any portion of any remaining sums which are
not reinvested in accordance with paragraph 7.4(A) above to the Corporation, to
be applied to reimburse the Corporation for its Advances in respect of any
remaining Policies in accordance with paragraph 3.3.
ARTICLE EIGHT
TERMINATION OF AGREEMENT
8.1 This Agreement shall be terminated upon the occurrence of any of the
following events ("Termination Events"):
8.1.1 Surrender of a Policy, in which case paragraph 8.2 below shall apply;
provided, however, this Agreement shall terminate only with respect to such
Policy;
8.1.2 The death of Employee, in which case paragraph 8.3 below shall apply;
provided, however, that if Employee shall die while his wife is still living,
the Agreement shall terminate only if the Policy Owner shall be the owner of one
or more additional life insurance policies on the life of Employee which are in
force at the time of Employee's death, as described in Article Ten;
8.1.3 The death of the second to die of Employee and his wife, in which
case paragraph 8.4 below shall apply;
8.1.4 With respect solely to the policies listed as policies A, B and C on
Exhibit A, a reduction in Employee's ownership percentage below twenty percent
(20%) of the outstanding common stock of Corporation (exclusive of dilution as a
result of any merger or consolidation), in which case paragraph 8.5 below shall
apply; or
8.1.5 Reimbursement in full by Policy Owner to the Corporation of the Net
Advances; provided, however, this Agreement shall terminate only with respect to
the Policy for which such reimbursement is made.
8.2 With respect to a surrender of a Policy pursuant to paragraph 8.1.1,
the insurance company shall pay:
(A) To the Corporation, an amount equal to the lesser of (1) the
unreimbursed Net Advances with respect to the surrendered Policy or (2) the cash
surrender value of such surrendered Policy; and
(B) To the Policy Owner, any balance of cash surrender value remaining
after payment of (A).
In the case of a surrender following a Restricting Event, if the cash
surrender value of the surrendered Policy is insufficient to reimburse the
Corporation for the full amount of its unreimbursed Net Advances with respect to
such Policy, any outstanding balance shall be paid as provided in paragraph 9.3.
Simultaneously with the receipt of the amounts described above, the Corporation
shall release its rights in accordance with paragraph 9.1.
8.3 With respect to a termination due to the death of Employee pursuant to
paragraph 8.1.2:
8.3.1 If the death benefit proceeds of the single life coverage on the life
of the Employee (the "Term Proceeds") are greater than or equal to the
unreimbursed Net Advances, then the insurance company shall pay the following:
(A) To the Corporation, an amount equal to the unreimbursed Net Advances in
respect of the Policies; and
(B) To the Policy Owner, any balance of Term Proceeds remaining after
payment of (A). Simultaneously with the receipt of the amounts described above,
the Corporation shall release its rights in accordance with paragraph 9.1.
8.3.2 If the Term Proceeds are less than the unreimbursed Net Advances,
then:
(A) the insurance company shall pay to the Corporation, an amount equal to
the Term Proceeds; and,
(B) the Policy Owner shall reimburse the Corporation for any remaining
unreimbursed Net Advances by cash, check or promissory note. Simultaneously with
the receipt of the amounts described above, the Corporation shall release its
rights in accordance with paragraph 9.1.
8.4 With respect to a termination by the death of the second to die of
Employee and his wife pursuant to paragraph 8.1.3, the insurance company shall
pay, subject to paragraph 9.4:
(A) To the Corporation, an amount equal to the unreimbursed Net Advances
with respect to the Policies then in force;
(B) To the Corporation, an amount equal to the unreimbursed Net Advances
with respect to previously surrendered Policies;
(C) To the Corporation, an amount equal to any amounts outstanding under a
promissory note; and,
(D) The balance to the remaining beneficiary or beneficiaries designated to
receive such balance in accordance with the terms of the respective Policies.
Simultaneously with the receipt of the amounts described above, the Corporation
shall release its rights in accordance with paragraph 9.1.
8.5 With respect to a termination due to a decline in the Employee's
ownership percentage pursuant to paragraph 8.1.4:
8.5.1 If the Policy Owner exercises its option under paragraph 6.1, then
the Policy Owner shall reimburse the Corporation its unreimbursed Net Advances
with respect to such Policies. Simultaneously with the receipt of the amounts
described above, the Corporation shall release its rights in accordance with
paragraph 9.1.
8.5.2 If the Policy Owner does not exercise its option under paragraph 6.1,
then the insurance company shall pay the cash surrender value of such Policies
to the Corporation; provided, however, that, following a Restricting Event, if
the cash surrender value of such Policies is insufficient to reimburse the
Corporation the full amount of its unreimbursed Net Advances with respect to
such Policies, any outstanding balance shall be paid as provided in paragraph
9.3. Simultaneously with the receipt of the amounts described above, the
Corporation shall release its rights in accordance with paragraph 9.1.
ARTICLE NINE
SETTLEMENT PROCEDURES
9.1 Simultaneously with receipt of an amount that is due and payable to the
Corporation with respect to a Policy or Policies under any paragraph of this
Agreement, the Corporation shall release the collateral assignment with respect
to such Policy or Policies and its rights in such Policy or Policies under this
Agreement. In the case of a Termination Event, within 45 days of such
Termination Event, the Corporation shall provide the insurance company with a
written statement confirming the sum to which it is entitled and, if requested
by the insurance company, a written release of all its interest with respect to
the proceeds or cash surrender value, as the case may be, in excess of such
amount. The Corporation shall pay to the Policy Owner (or its designated
beneficiary or beneficiaries) any amount received by the Corporation in excess
of the amount due it.
9.2 If, under the terms of this Agreement, the Policy Owner issues a
promissory note to the Corporation, such promissory note shall:
(A) bear interest at the applicable federal rate;
(B) be secured, up to the face amount of the note, by the cash surrender
value and death benefit proceeds of the Policies in force; and
(C) be payable as provided in paragraph 9.3.
9.3 Any unreimbursed Net Advances or promissory note outstanding after
payment to the Corporation as described in Article Eight shall be paid by the
Policy Owner to the Corporation upon the earlier of: (A) the death of the second
to die of Employee and his spouse, or (B) surrender of the last Policy in force
under this Agreement, subject to paragraph 9.4.
9.4 Notwithstanding the foregoing, however, if the amount of (A) death
benefit proceeds received by the Policy Owner upon such second death, or (B) the
cash surrender value of the last Policy surrendered shall be less than the
amount due to the Corporation under paragraph 9.3, then the Policy Owner shall
satisfy the amount due hereunder by paying to the Corporation the amount of such
death benefit proceeds it receives or the sum it receives in respect of such
surrendered Policy.
9.5 Upon a Termination Event, the Policy Owner agrees that it shall pay to
the Corporation any amount received by the Policy Owner in excess of the amount
due it under the terms of this Agreement.
ARTICLE TEN
SINGLE LIFE INSURANCE COVERAGE ON EMPLOYEE
10.1 The parties agree that they shall cooperate in the purchase of one or
more policies of single life insurance coverage on the life of Employee. The
purpose of such single life insurance coverage shall be to allow the Policy
Owner to reimburse the Corporation upon the death of Employee, while his wife is
still living, for the Net Advances.
10.2 Any such single life insurance policies on Employee purchased for the
purpose described in 10.1 above shall be owned by the Policy Owner. The
Corporation shall be responsible for the remittance of the entire premium due on
each such policy.
10.3 The Policy Owner shall assign all rights in such polices to the
Corporation. No Restricting Event shall apply to any such policies described in
this Article Ten.
10.4 The Policy Owner shall execute an irrevocable beneficiary designation
for each such single life insurance policy showing the Corporation's right to
receive from the Term Proceeds the unreimbursed Net Advances and the Policy
Owner's right to receive the balance of the Term Proceeds, if any.
10.5 Policy Owner agrees that if Employee dies while any such single life
polices are in force, it shall first apply the Term Proceeds to the
reimbursement of the amounts due to the Corporation under this Agreement, up to
the entire amount thereof. Any balance of Term Proceeds remaining after full
reimbursement to the Corporation of the amount due it under the terms of this
Agreement shall be retained by the Policy Owner.
10.6 Policy Owner shall instruct the insurance company to send premium
notices for such single life policies directly to the Corporation and to send
duplicate policy statements to the Policy Owner and the Corporation.
ARTICLE ELEVEN
ERISA PROVISIONS
11.1 For purposes of meeting the requirements of the Employee Retirement
Income Security Act of 1974 (hereinafter called "ERISA"), the Corporation is
hereby designated as the "Named Fiduciary" under this Agreement. The Named
Fiduciary shall have authority to control and manage the operation and
administration of this Agreement in compliance with ERISA, and it shall be
responsible for establishing and carrying out a policy funding method consistent
with the requirements of ERISA and the objectives of this Agreement.
11.2 The Corporation shall make all determinations concerning rights
granted under ERISA to benefits under this Agreement. Any decision by the
Corporation denying a claim by a claimant for benefits under this Agreement
shall be stated in writing and delivered or mailed to the claimant. Such
decision shall set forth specific reasons for denial, written to the best of the
Corporation's ability in a manner that may be understood without legal or
actuarial counsel. In addition, the Corporation shall afford a reasonable
opportunity to the claimant for a full and fair review of the decision denying
such claim.
ARTICLE TWELVE
MISCELLANEOUS PROVISIONS
12.1 The parties agree to execute any documents necessary or proper to
carry out the purpose and intent of this Agreement, including, but not limited
to, beneficiary designations.
12.2 This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, their heirs, legal representatives, successors, and assigns.
12.3 This Agreement embodies all agreements made with respect to the
Policy, and no change, alteration, or modification may be made except in writing
by all parties hereto.
12.4 This Agreement shall be governed by the laws of the State of New York,
notwithstanding any rule or principle of conflicts of law, including those of
the State of New York.
12.5 The Policy Owner shall promptly furnish to the Corporation and its
designees copies of all documents filed with or received from each respective
insurance company, including but not limited to beneficiary designations,
premium notices, policy statements, and any changes or revisions to such
documents.
12.6 All notices or other communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been duly given when
(i) delivered by hand, (ii) sent by facsimile (with receipt confirmed), provided
that a copy is mailed (on the same date) by certified or registered mail,
postage prepaid, return receipt requested, or (iii) received by the addressee,
if sent by Express Mail, FedEx, or other reputable express delivery service
(receipt requested), or by first class certified or registered mail, first class
postage prepaid, return receipt requested, addressed as set forth below:
12.6.1 If to Corporation:
Goody's Family Clothing, Inc.
By Delivery Service:
000 Xxxxx'x Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
By Mail:
X.X. Xxx 00000
Xxxxxxxxx, XX 00000-0000
Attention: President
With a copy to:
Xxxxx Xxxxxxxx, General Counsel
By Delivery Service:
000 Xxxxx'x Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
By Mail:
X.X. Xxx 00000
Xxxxxxxxx, XX 00000-0000
12.6.2 If to Policy Owner:
Xxxxxx X. Xxxxxxxxx, Trustee of the Xxxxxx
and Xxxxx Xxxxxxxxxx
Irrevocable Trust, dated January 20, 1999
X.X. Xxx 00000
Xxxxxxxxxx, Xxxxxxx 00000-0000
With a copy to:
Xxxxxx X. Xxxxxxxxxx
000 Xxxx Xxx Xxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Any party may change the address or addresses to which communications or copies
are to be sent by giving notice of such change of address in conformity with the
provisions of this paragraph 12.6 for the giving of notice.
12.7 All interest charges with respect to any Policy loan shall be paid by
the party taking the loan.
IN WITNESS WHEREOF, the parties hereto have set their hands
and seals effective as of the 22nd day of October, 1999.
GOODY'S FAMILY CLOTHING, INC.,
a Tennessee corporation
By:___/s/ Xxxxx X. Call____________________
Xxxxx X. Call
Its President
(CORPORATION)
ATTEST:
By:__/s/ Regis Hebbeler_________
Xxxxx Xxxxxxxx
Its Assistant Secretary to the Board
XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
dated January 20, 1999
..................................By:_____/s/ Xxxxxxx X. Goodfriend________
Xxxxxxx X. Xxxxxxxxxx
Its Trustee
..................................By:____/s/ Xxxxxx X. Goodfriend______________
Xxxxxx X. Goodfreind
Its Trustee
................................By:__/s/ Xxxxxx X. Apolinsky__________________
Xxxxxx X. Xxxxxxxxx
Its Trustee
(POLICY OWNER)
___/s/ Xxxxxx X. Goodfriend________
Xxxxxx X. Xxxxxxxxxx
(EMPLOYEE)
EXHIBIT "A"
1. Pacific Life MVP Variable Universal Life Insurance Policy No. VP60849130
B. John Xxxxxxx Life Insurance Company Majestic Variable Universal Life
Insurance Policy No. 20037032
C. John Xxxxxxx Life Insurance Company Majestic Universal Life Insurance
Policy No. 5700570
D. John Xxxxxxx Life Insurance Company Majestic Universal Life Insurance
Policy No. 5700588
E. Northwest Mutual Life Insurance Company Policy No. 15067219
COLLATERAL ASSIGNMENT
THIS ASSIGNMENT is made to be effective as of the 1st day of
July, 1999 by XXXXXXX X. XXXXXXXXXX, XXXXXX X. XXXXXXXXXX and XXXXXX X.
XXXXXXXXX, as Trustees (collectively with all successors, the "Trustees" or the
"Assignor") of the XXXXXX AND XXXXX XXXXXXXXXX IRREVOCABLE TRUST (the "Trust"),
as owner and beneficiary of a certain policy of insurance on the lives of XXXXXX
X. XXXXXXXXXX and XXXXX X. XXXXXXXXXX (the "Insureds"), and GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation (the "Assignee").
WHEREAS, the Assignor and the Assignee are contemporaneously
entering into a Split Dollar Life Insurance Agreement (the "Agreement"); and
WHEREAS, the Assignor has agreed to furnish to Assignee
collateral security for payments to be made by Assignor to Assignee under the
Agreement;
NOW, THEREFORE, the Assignor hereby assigns to the Assignee,
its successors, and assigns certain rights to the extent described in Article 3
below under Insurance Policy No. 20037032, issued by Xxxx Xxxxxxx Life Insurance
Company (hereinafter called the "Insurer"), and any supplementary contracts
issued in connection therewith (such policy and contracts hereinafter
collectively called the "Policy), under which XXXXXX X.XXXXXXXXXX and XXXXX X.
XXXXXXXXXX are the insureds, such that the Assignee shall have the rights of a
revocable creditor beneficiary of the Policy, subject to all the terms of the
Policy.
The Assignor agrees, and the Assignee, by the acceptance hereof, agrees
to the following conditions:
1. Liabilities secured. This assignment is made and the Policy is to be held as
collateral security for certain liabilities of the Assignor to the Assignee,
either now existing with respect to the Policy or that may hereafter arise with
respect to the Policy, as and to the extent set forth in the Agreement.
2. Representation of solvency. The Assignor declares that no proceedings in
bankruptcy are pending against the Assignor and that the Trust property is not
subject to any assignment for the benefit of creditors.
3. Specific rights assigned. Without detracting from the generality of the
foregoing, Assignor hereby grants the following specific rights to the Assignee
in this assignment:
a. Until the occurrence of a Restricting Event (as defined in the
Agreement), Assignee is granted exclusively the following rights: (i) the right
to surrender the Policy; (ii) the right to change the beneficiary of the Policy;
(iii) the right to select dividend options; (iv) the right to select optional
methods of settlement with regard to the death benefits payable under the
Policy; (v) the right to assign its rights in the Policy; (vi) the right to
obtain a policy loan or loans on the Policy, provided that the amount of such
loans together with the interest therein shall at no time exceed the cash
surrender value of the Policy as of the date to which the premiums on the Policy
have been paid; and (vii) the right to withdraw or borrow against the cash value
of the Policy as described in and subject to the terms of the Agreement.
b. Upon the death of the latter to die of the Insureds, whether or not a
Restricting Event (as defined in the Agreement) has occurred, the Assignee shall
have the right to receive, and the Insurer shall pay to the Assignee, an amount
equal to the aggregate unreimbursed premiums paid by Assignee in respect of the
Policy less the amounts, if any, that have been received by Assignee as a
beneficiary of the Policy, and less any outstanding Policy loans taken by
Assignee.
c. In the event the Policy is surrendered or canceled by the Trustees,
Assignee shall have the right to be repaid all unreimbursed amounts paid by the
Assignee for the premiums on the Policy, taking into account any additional sums
remitted to Assignee pursuant to Section 3.3 of the Agreement less (i) any
amounts received in respect of the Policy by Assignee from the insurance company
and (ii) less any outstanding Policy loans taken by Assignee. Any balance of any
cash surrender value received shall be retained by the Trustees.
d. The Assignee shall have no other rights, options, privileges or powers
in and to the Policy as a result of this Assignment.
4. Covenants of Assignee. The Assignee covenants as follows:
a. Any balance of sums that may be received hereunder from the Insurer
remaining after payment to the Assignee as provided in the Agreement in the
event the Agreement is terminated will be paid by the Assignee to the persons
who would be entitled thereto under the terms of the Policy had this Assignment
not been executed.
b. Following the occurrence of a Restricting Event, the Assignee will, upon
request, forward the Policy without unreasonable delay to the Insurer for
endorsement of any designation or change of beneficiary, or any election of an
optional mode of settlement.
5. Authorization to Insurer. Unless the Insurer has been given written notice by
the Assignor and the Assignee to the contrary, the Insurer is hereby authorized
to recognize the Assignee's claims to rights hereunder without investigating the
reason for any action taken by the Assignee, or the validity or amount of the
liabilities, or the existence of any default therein, or the application to be
made by the Assignee of any amounts to be paid to the Assignee. The signature of
the Assignee shall be sufficient for the exercise of its rights under the
Policy, and the receipt of the Assignee for any sums received shall be a full
discharge and release therefor to the Insurer. Checks for all or any part of the
sums payable under the Policy shall be drawn to the exclusive order of the
Assignee, if so requested by the Assignee.
6. Exercise of Rights. The exercise of any right given herein to the Assignee
shall be at the option of the Assignee, but the Assignee may exercise any such
right without notice to, or assent by the Assignor, without affecting the
liability of, or releasing any interest hereby assigned by the Assignor.
7. Termination and Amendment of Assignment. This Assignment may not be altered
or changed without the consent of the Assignee and the Assignor. As long as this
Agreement is in force, the Assignee may not, without the prior written consent
of the Assignor, exercise any right under this Assignment that would reduce or
compromise the death benefit payable under the Agreement.
8. Insurer Protected. The Insurer shall be fully protected in recognizing any
request made by the Assignor with respect to the exercise of any incident of
ownership in and to the Policy, with or without the consent of the Assignee, and
upon surrender of the Policy, the Policy shall be terminated and be of no
further force or effect.
9. Construction. In the event of any conflict between the provisions of
this Assignment and the provisions of the Agreement, the provisions of the
Agreement shall control.
10. Payment of Assignee's Obligation. Upon the full payment to the Assignee of
the Assignor's obligation under the Agreement, the Assignee shall release this
Assignment, and the ownership of the Policy shall be free of all provisions and
restrictions of this Assignment.
IN WITNESS WHEREOF, the Assignor and Assignee have duly
executed this Assignment on the day and year first set forth above.
_ /s/ Xxxxxxx X. Goodfriend__________
XXXXXXX X. XXXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
__ /s/ Xxxxxx X. Xxxxxxxxxx
XXXXXX X. XXXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
__ /s/ Xxxxxx X. Xxxxxxxxx
XXXXXX XXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
GOODY'S FAMILY CLOTHING, INC.
By:_/s/ Xxxxx X. Call_______________
Xxxxx X. Call
Its:__President______________________
COLLATERAL ASSIGNMENT
THIS ASSIGNMENT is made to be effective as of the 1st day of
July, 1999 by XXXXXXX X. XXXXXXXXXX, XXXXXX X. XXXXXXXXXX and XXXXXX X.
XXXXXXXXX, as Trustees (collectively with all successors, the "Trustees" or the
"Assignor") of the XXXXXX AND XXXXX XXXXXXXXXX IRREVOCABLE TRUST (the "Trust"),
as owner and beneficiary of a certain policy of insurance on the lives of XXXXXX
X. XXXXXXXXXX and XXXXX X. XXXXXXXXXX (the "Insureds"), and GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation (the "Assignee").
WHEREAS, the Assignor and the Assignee are contemporaneously
entering into a Split Dollar Life Insurance Agreement (the "Agreement"); and
WHEREAS, the Assignor has agreed to furnish to Assignee
collateral security for payments to be made by Assignor to Assignee under the
Agreement;
NOW, THEREFORE, the Assignor hereby assigns to the Assignee,
its successors, and assigns certain rights to the extent described in Article 3
below under Insurance Policy No. 5700570, issued by Xxxx Xxxxxxx Life Insurance
Company (hereinafter called the "Insurer"), and any supplementary contracts
issued in connection therewith (such policy and contracts hereinafter
collectively called the "Policy), under which XXXXXX X.XXXXXXXXXX and XXXXX X.
XXXXXXXXXX are the insureds, such that the Assignee shall have the rights of a
revocable creditor beneficiary of the Policy, subject to all the terms of the
Policy.
The Assignor agrees, and the Assignee, by the acceptance hereof,
agrees to the following conditions:
1. Liabilities secured. This assignment is made and the Policy is to be held as
collateral security for certain liabilities of the Assignor to the Assignee,
either now existing with respect to the Policy or that may hereafter arise with
respect to the Policy, as and to the extent set forth in the Agreement.
2. Representation of solvency. The Assignor declares that no proceedings in
bankruptcy are pending against the Assignor and that the Trust property is not
subject to any assignment for the benefit of creditors.
3. Specific rights assigned. Without detracting from the generality of the
foregoing, Assignor hereby grants the following specific rights to the Assignee
in this assignment:
a. Until the occurrence of a Restricting Event (as defined in the
Agreement), Assignee is granted exclusively the following rights: (i) the right
to surrender the Policy; (ii) the right to change the beneficiary of the Policy;
(iii) the right to select dividend options; (iv) the right to select optional
methods of settlement with regard to the death benefits payable under the
Policy; (v) the right to assign its rights in the Policy; (vi) the right to
obtain a policy loan or loans on the Policy, provided that the amount of such
loans together with the interest therein shall at no time exceed the cash
surrender value of the Policy as of the date to which the premiums on the Policy
have been paid; and (vii) the right to withdraw or borrow against the cash value
of the Policy as described in and subject to the terms of the Agreement.
b. Upon the death of the latter to die of the Insureds, whether or not a
Restricting Event (as defined in the Agreement) has occurred, the Assignee shall
have the right to receive, and the Insurer shall pay to the Assignee, an amount
equal to the aggregate unreimbursed premiums paid by Assignee in respect of the
Policy less the amounts, if any, that have been received by Assignee as a
beneficiary of the Policy, and less any outstanding Policy loans taken by
Assignee.
c. In the event the Policy is surrendered or canceled by the Trustees,
Assignee shall have the right to be repaid all unreimbursed amounts paid by the
Assignee for the premiums on the Policy, taking into account any additional sums
remitted to Assignee pursuant to Section 3.3 of the Agreement less (i) any
amounts received in respect of the Policy by Assignee from the insurance company
and (ii) less any outstanding Policy loans taken by Assignee. Any balance of any
cash surrender value received shall be retained by the Trustees.
d. The Assignee shall have no other rights, options, privileges or powers in
and to the Policy as a result of this Assignment.
4. Covenants of Assignee. The Assignee covenants as follows:
a. Any balance of sums that may be received hereunder from the Insurer
remaining after payment to the Assignee as provided in the Agreement in the
event the Agreement is terminated will be paid by the Assignee to the persons
who would be entitled thereto under the terms of the Policy had this Assignment
not been executed.
b. Following the occurrence of a Restricting Event, the Assignee will, upon
request, forward the Policy without unreasonable delay to the Insurer for
endorsement of any designation or change of beneficiary, or any election of an
optional mode of settlement.
5. Authorization to Insurer. Unless the Insurer has been given written notice
by the Assignor and the Assignee to the contrary, the Insurer is hereby
authorized to recognize the Assignee's claims to rights hereunder without
investigating the reason for any action taken by the Assignee, or the validity
or amount of the liabilities, or the existence of any default therein, or the
application to be made by the Assignee of any amounts to be paid to the
Assignee. The signature of the Assignee shall be sufficient for the exercise of
its rights under the Policy, and the receipt of the Assignee for any sums
received shall be a full discharge and release therefore to the Insurer. Checks
for all or any part of the sums payable under the Policy shall be drawn to the
exclusive order of the Assignee, if so requested by the Assignee.
6. Exercise of Rights. The exercise of any right given herein to the Assignee
shall be at the option of the Assignee, but the Assignee may exercise any such
right without notice to, or assent by the Assignor, without affecting the
liability of, or releasing any interest hereby assigned by the Assignor.
7. Termination and Amendment of Assignment. This Assignment may not be altered
or changed without the consent of the Assignee and the Assignor. As long as this
Agreement is in force, the Assignee may not, without the prior written consent
of the Assignor, exercise any right under this Assignment that would reduce or
compromise the death benefit payable under the Agreement.
8. Insurer Protected. The Insurer shall be fully protected in recognizing any
request made by the Assignor with respect to the exercise of any incident of
ownership in and to the Policy, with or without the consent of the Assignee, and
upon surrender of the Policy, the Policy shall be terminated and be of no
further force or effect.
9. Construction. In the event of any conflict between the provisions of
this Assignment and the provisions of the Agreement, the provisions of the
Agreement shall control.
10. Payment of Assignee's Obligation. Upon the full payment to the Assignee of
the Assignor's obligation under the Agreement, the Assignee shall release this
Assignment, and the ownership of the Policy shall be free of all provisions and
restrictions of this Assignment.
IN WITNESS WHEREOF, the Assignor and Assignee have duly
executed this Assignment on the day and year first set forth above.
__ /s/ Xxxxxxx X. Goodfriend_________
XXXXXXX X. XXXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
__ /s/ Xxxxxx X. Xxxxxxxxxx
XXXXXX X. XXXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
__ /s/ Xxxxxx X. Xxxxxxxxx
XXXXXX XXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
GOODY'S FAMILY CLOTHING, INC.
By:___/s/ Xxxxx X. Call __________
Xxxxx X. Call
Its:__President ____________
COLLATERAL ASSIGNMENT
THIS ASSIGNMENT is made to be effective as of the 1st day of
July, 1999 by XXXXXXX X. XXXXXXXXXX, XXXXXX X. XXXXXXXXXX and XXXXXX X.
XXXXXXXXX, as Trustees (collectively with all successors, the "Trustees" or the
"Assignor") of the XXXXXX AND XXXXX XXXXXXXXXX IRREVOCABLE TRUST (the "Trust"),
as owner and beneficiary of a certain policy of insurance on the lives of XXXXXX
X. XXXXXXXXXX and XXXXX X. XXXXXXXXXX (the "Insureds"), and GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation (the "Assignee").
WHEREAS, the Assignor and the Assignee are contemporaneously
entering into a Split Dollar Life Insurance Agreement (the "Agreement"); and
WHEREAS, the Assignor has agreed to furnish to Assignee
collateral security for payments to be made by Assignor to Assignee under the
Agreement;
NOW, THEREFORE, the Assignor hereby assigns to the Assignee,
its successors, and assigns certain rights to the extent described in Article 3
below under Insurance Policy No. 5700588, issued by Xxxx Xxxxxxx Life Insurance
Company (hereinafter called the "Insurer"), and any supplementary contracts
issued in connection therewith (such policy and contracts hereinafter
collectively called the "Policy), under which XXXXXX X.XXXXXXXXXX and XXXXX X.
XXXXXXXXXX are the insureds, such that the Assignee shall have the rights of a
revocable creditor beneficiary of the Policy, subject to all the terms of the
Policy.
The Assignor agrees, and the Assignee, by the acceptance hereof, agrees
to the following conditions:
1. Liabilities secured. This assignment is made and the Policy is to be held as
collateral security for certain liabilities of the Assignor to the Assignee,
either now existing with respect to the Policy or that may hereafter arise with
respect to the Policy, as and to the extent set forth in the Agreement.
2. Representation of solvency. The Assignor declares that no proceedings in
bankruptcy are pending against the Assignor and that the Trust property is not
subject to any assignment for the benefit of creditors.
3. Specific rights assigned. Without detracting from the generality of the
foregoing, Assignor hereby grants the following specific rights to the Assignee
in this assignment:
a. Until the occurrence of a Restricting Event (as defined in the
Agreement), Assignee is granted exclusively the following rights: (i) the right
to surrender the Policy; (ii) the right to change the beneficiary of the Policy;
(iii) the right to select dividend options; (iv) the right to select optional
methods of settlement with regard to the death benefits payable under the
Policy; (v) the right to assign its rights in the Policy; (vi) the right to
obtain a policy loan or loans on the Policy, provided that the amount of such
loans together with the interest therein shall at no time exceed the cash
surrender value of the Policy as of the date to which the premiums on the Policy
have been paid; and (vii) the right to withdraw or borrow against the cash value
of the Policy as described in and subject to the terms of the Agreement.
b. Upon the death of the latter to die of the Insureds, whether or not a
Restricting Event (as defined in the Agreement) has occurred, the Assignee shall
have the right to receive, and the Insurer shall pay to the Assignee, an amount
equal to the aggregate unreimbursed premiums paid by Assignee in respect of the
Policy less the amounts, if any, that have been received by Assignee as a
beneficiary of the Policy, and less any outstanding Policy loans taken by
Assignee.
c. In the event the Policy is surrendered or canceled by the Trustees,
Assignee shall have the right to be repaid all unreimbursed amounts paid by the
Assignee for the premiums on the Policy, taking into account any additional sums
remitted to Assignee pursuant to Section 3.3 of the Agreement less (i) any
amounts received in respect of the Policy by Assignee from the insurance company
and (ii) less any outstanding Policy loans taken by Assignee. Any balance of any
cash surrender value received shall be retained by the Trustees.
d. The Assignee shall have no other rights, options, privileges or powers
in and to the Policy as a result of this Assignment.
4. Covenants of Assignee. The Assignee covenants as follows:
a. Any balance of sums that may be received hereunder from the Insurer
remaining after payment to the Assignee as provided in the Agreement in the
event the Agreement is terminated will be paid by the Assignee to the persons
who would be entitled thereto under the terms of the Policy had this Assignment
not been executed.
b. Following the occurrence of a Restricting Event, the Assignee will, upon
request, forward the Policy without unreasonable delay to the Insurer for
endorsement of any designation or change of beneficiary, or any election of an
optional mode of settlement.
5. Authorization to Insurer. Unless the Insurer has been given written notice
by the Assignor and the Assignee to the contrary, the Insurer is hereby
authorized to recognize the Assignee's claims to rights hereunder without
investigating the reason for any action taken by the Assignee, or the validity
or amount of the liabilities, or the existence of any default therein, or the
application to be made by the Assignee of any amounts to be paid to the
Assignee. The signature of the Assignee shall be sufficient for the exercise of
its rights under the Policy, and the receipt of the Assignee for any sums
received shall be a full discharge and release therefor to the Insurer. Checks
for all or any part of the sums payable under the Policy shall be drawn to the
exclusive order of the Assignee, if so requested by the Assignee.
6. Exercise of Rights. The exercise of any right given herein to the Assignee
shall be at the option of the Assignee, but the Assignee may exercise any such
right without notice to, or assent by the Assignor, without affecting the
liability of, or releasing any interest hereby assigned by the Assignor.
7. Termination and Amendment of Assignment. This Assignment may not be altered
or changed without the consent of the Assignee and the Assignor. As long as this
Agreement is in force, the Assignee may not, without the prior written consent
of the Assignor, exercise any right under this Assignment that would reduce or
compromise the death benefit payable under the Agreement.
8. Insurer Protected. The Insurer shall be fully protected in recognizing any
request made by the Assignor with respect to the exercise of any incident of
ownership in and to the Policy, with or without the consent of the Assignee, and
upon surrender of the Policy, the Policy shall be terminated and be of no
further force or effect.
9. Construction. In the event of any conflict between the provisions of
this Assignment and the provisions of the Agreement, the provisions of the
Agreement shall control.
10. Payment of Assignee's Obligation. Upon the full payment to the Assignee of
the Assignor's obligation under the Agreement, the Assignee shall release this
Assignment, and the ownership of the Policy shall be free of all provisions and
restrictions of this Assignment.
IN WITNESS WHEREOF, the Assignor and Assignee have duly
executed this Assignment on the day and year first set forth above.
______/s/ Xxxxxxx X. Goodfriend________________
XXXXXXX X. XXXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
_____ /s/ Xxxxxx X. Xxxxxxxxxx _____
XXXXXX X. XXXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
____ /s/ Xxxxxx X. Xxxxxxxxx
XXXXXX XXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
GOODY'S FAMILY CLOTHING, INC.
By:____/s/ Xxxxx X. Call _______
Xxxxx X. Call
Its:___President___________
COLLATERAL ASSIGNMENT
THIS ASSIGNMENT is made to be effective as of the 1st day of
July, 1999 by XXXXXXX X. XXXXXXXXXX, XXXXXX X. XXXXXXXXXX and XXXXXX X.
XXXXXXXXX, as Trustees (collectively with all successors, the "Trustees" or the
"Assignor") of the XXXXXX AND XXXXX XXXXXXXXXX IRREVOCABLE TRUST (the "Trust"),
as owner and beneficiary of a certain policy of insurance on the lives of XXXXXX
X. XXXXXXXXXX and XXXXX X. XXXXXXXXXX (the "Insureds"), and GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation (the "Assignee").
WHEREAS, the Assignor and the Assignee are contemporaneously
entering into a Split Dollar Life Insurance Agreement (the "Agreement"); and
WHEREAS, the Assignor has agreed to furnish to Assignee
collateral security for payments to be made by Assignor to Assignee under the
Agreement;
NOW, THEREFORE, the Assignor hereby assigns to the Assignee,
its successors, and assigns certain rights to the extent described in Article 3
below under Insurance Policy No. VP60849130, issued by Pacific Life Insurance
Company (hereinafter called the "Insurer"), and any supplementary contracts
issued in connection therewith (such policy and contracts hereinafter
collectively called the "Policy), under which XXXXXX X.XXXXXXXXXX and XXXXX X.
XXXXXXXXXX are the insureds, such that the Assignee shall have the rights of a
revocable creditor beneficiary of the Policy, subject to all the terms of the
Policy.
The Assignor agrees, and the Assignee, by the acceptance hereof, agrees
to the following conditions:
1. Liabilities secured. This assignment is made and the Policy is to be held as
collateral security for certain liabilities of the Assignor to the Assignee,
either now existing with respect to the Policy or that may hereafter arise with
respect to the Policy, as and to the extent set forth in the Agreement.
2. Representation of solvency. The Assignor declares that no proceedings in
bankruptcy are pending against the Assignor and that the Trust property is not
subject to any assignment for the benefit of creditors.
3. Specific rights assigned. Without detracting from the generality of the
foregoing, Assignor hereby grants the following specific rights to the Assignee
in this assignment:
a. Until the occurrence of a Restricting Event (as defined in the
Agreement), Assignee is granted exclusively the following rights: (i) the right
to surrender the Policy; (ii) the right to change the beneficiary of the Policy;
(iii) the right to select dividend options; (iv) the right to select optional
methods of settlement with regard to the death benefits payable under the
Policy; (v) the right to assign its rights in the Policy; (vi) the right to
obtain a policy loan or loans on the Policy, provided that the amount of such
loans together with the interest therein shall at no time exceed the cash
surrender value of the Policy as of the date to which the premiums on the Policy
have been paid; and (vii) the right to withdraw or borrow against the cash value
of the Policy as described in and subject to the terms of the Agreement.
b. Upon the death of the latter to die of the Insureds, whether or not a
Restricting Event (as defined in the Agreement) has occurred, the Assignee shall
have the right to receive, and the Insurer shall pay to the Assignee, an amount
equal to the aggregate unreimbursed premiums paid by Assignee in respect of the
Policy less the amounts, if any, that have been received by Assignee as a
beneficiary of the Policy, and less any outstanding Policy loans taken by
Assignee.
c. In the event the Policy is surrendered or canceled by the Trustees,
Assignee shall have the right to be repaid all unreimbursed amounts paid by the
Assignee for the premiums on the Policy, taking into account any additional sums
remitted to Assignee pursuant to Section 3.3 of the Agreement less (i) any
amounts received in respect of the Policy by Assignee from the insurance company
and (ii) less any outstanding Policy loans taken by Assignee. Any balance of any
cash surrender value received shall be retained by the Trustees.
d. The Assignee shall have no other rights, options, privileges or powers
in and to the Policy as a result of this Assignment.
4. Covenants of Assignee. The Assignee covenants as follows:
a. Any balance of sums that may be received hereunder from the Insurer
remaining after payment to the Assignee as provided in the Agreement in the
event the Agreement is terminated will be paid by the Assignee to the persons
who would be entitled thereto under the terms of the Policy had this Assignment
not been executed.
b. The Assignee will, upon request, forward the Policy without unreasonable
delay to the Insurer for endorsement of any designation or change of
beneficiary, or any election of an optional mode of settlement.
5. Authorization to Insurer. Unless the Insurer has been given written notice
by the Assignor and the Assignee to the contrary, the Insurer is hereby
authorized to recognize the Assignee's claims to rights hereunder without
investigating the reason for any action taken by the Assignee, or the validity
or amount of the liabilities, or the existence of any default therein, or the
application to be made by the Assignee of any amounts to be paid to the
Assignee. The signature of the Assignee shall be sufficient for the exercise of
its rights under the Policy, and the receipt of the Assignee for any sums
received shall be a full discharge and release therefor to the Insurer. Checks
for all or any part of the sums payable under the Policy shall be drawn to the
exclusive order of the Assignee, if so requested by the Assignee.
6. Exercise of Rights. The exercise of any right given herein to the Assignee
shall be at the option of the Assignee, but the Assignee may exercise any such
right without notice to, or assent by the Assignor, without affecting the
liability of, or releasing any interest hereby assigned by the Assignor.
7. Termination and Amendment of Assignment. This Assignment may not be altered
or changed without the consent of the Assignee and the Assignor. As long as this
Agreement is in force, the Assignee may not, without the prior written consent
of the Assignor, exercise any right under this Assignment that would reduce or
compromise the death benefit payable under the Agreement.
8. Insurer Protected. The Insurer shall be fully protected in recognizing any
request made by the Assignor with respect to the exercise of any incident of
ownership in and to the Policy, with or without the consent of the Assignee, and
upon surrender of the Policy, the Policy shall be terminated and be of no
further force or effect.
9. Construction. In the event of any conflict between the provisions of
this Assignment and the provisions of the Agreement, the provisions of the
Agreement shall control.
10. Payment of Assignee's Obligation. Upon the full payment to the Assignee of
the Assignor's obligation under the Agreement, the Assignee shall release this
Assignment, and the ownership of the Policy shall be free of all provisions and
restrictions of this Assignment.
IN WITNESS WHEREOF, the Assignor and Assignee have duly
executed this Assignment on the day and year first set forth above.
___ /s/ Xxxxxxx X. Xxxxxxxxxx
XXXXXXX X. XXXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
___ /s/ Xxxxxx X. Xxxxxxxxxx
XXXXXX X. XXXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
___ /s/ Xxxxxx X. Xxxxxxxxx
XXXXXX XXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
GOODY'S FAMILY CLOTHING, INC.
By:___/s/ Xxxxx X. Call______________
Xxxxx X. Call
Its:_President________________________
COLLATERAL ASSIGNMENT
THIS ASSIGNMENT is made to be effective as of the 1st day of
July, 1999 by XXXXXXX X. XXXXXXXXXX, XXXXXX X. XXXXXXXXXX and XXXXXX X.
XXXXXXXXX, as Trustees (collectively with all successors, the "Trustees" or the
"Assignor") of the XXXXXX AND XXXXX XXXXXXXXXX IRREVOCABLE TRUST (the "Trust"),
as owner and beneficiary of a certain policy of insurance on the lives of XXXXXX
X. XXXXXXXXXX and XXXXX X. XXXXXXXXXX (the "Insureds"), and GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation (the "Assignee").
WHEREAS, the Assignor and the Assignee are contemporaneously
entering into a Split Dollar Life Insurance Agreement (the "Agreement"); and
WHEREAS, the Assignor has agreed to furnish to Assignee
collateral security for payments to be made by Assignor to Assignee under the
Agreement;
NOW, THEREFORE, the Assignor hereby assigns to the Assignee,
its successors, and assigns certain rights to the extent described in Article 3
below under Insurance Policy No. 15067219, issued by Northwest Mutual Life
Insurance Company (hereinafter called the "Insurer"), and any supplementary
contracts issued in connection therewith (such policy and contracts hereinafter
collectively called the "Policy), under which XXXXXX X.XXXXXXXXXX and XXXXX X.
XXXXXXXXXX are the insureds, such that the Assignee shall have the rights of a
revocable creditor beneficiary of the Policy, subject to all the terms of the
Policy.
The Assignor agrees, and the Assignee, by the acceptance hereof, agrees
to the following conditions:
1. Liabilities secured. This assignment is made and the Policy is to be held as
collateral security for certain liabilities of the Assignor to the Assignee,
either now existing with respect to the Policy or that may hereafter arise with
respect to the Policy, as and to the extent set forth in the Agreement.
2. Representation of solvency. The Assignor declares that no proceedings in
bankruptcy are pending against the Assignor and that the Trust property is not
subject to any assignment for the benefit of creditors.
3. Specific rights assigned. Without detracting from the generality of the
foregoing, Assignor hereby grants the following specific rights to the Assignee
in this assignment:
a. Until the occurrence of a Restricting Event (as defined in the
Agreement), Assignee is granted exclusively the following rights: (i) the right
to surrender the Policy; (ii) the right to change the beneficiary of the Policy;
(iii) the right to select dividend options; (iv) the right to select optional
methods of settlement with regard to the death benefits payable under the
Policy; (v) the right to assign its rights in the Policy; (vi) the right to
obtain a policy loan or loans on the Policy, provided that the amount of such
loans together with the interest therein shall at no time exceed the cash
surrender value of the Policy as of the date to which the premiums on the Policy
have been paid; and (vii) the right to withdraw or borrow against the cash value
of the Policy as described in and subject to the terms of the Agreement.
b. Upon the death of the latter to die of the Insureds, whether or not a
Restricting Event (as defined in the Agreement) has occurred, the Assignee shall
have the right to receive, and the Insurer shall pay to the Assignee, an amount
equal to the aggregate unreimbursed premiums paid by Assignee in respect of the
Policy less the amounts, if any, that have been received by Assignee as a
beneficiary of the Policy, and less any outstanding Policy loans taken by
Assignee.
c. In the event the Policy is surrendered or canceled by the Trustees,
Assignee shall have the right to be repaid all unreimbursed amounts paid by the
Assignee for the premiums on the Policy, taking into account any additional sums
remitted to Assignee pursuant to Section 3.3 of the Agreement less (i) any
amounts received in respect of the Policy by Assignee from the insurance company
and (ii) less any outstanding Policy loans taken by Assignee. Any balance of any
cash surrender value received shall be retained by the Trustees.
d. The Assignee shall have no other rights, options, privileges or powers
in and to the Policy as a result of this Assignment.
4. Covenants of Assignee. The Assignee covenants as follows:
a. Any balance of sums that may be received hereunder from the Insurer
remaining after payment to the Assignee as provided in the Agreement in the
event the Agreement is terminated will be paid by the Assignee to the persons
who would be entitled thereto under the terms of the Policy had this Assignment
not been executed.
b. Following the occurrence of a Restricting Event, the Assignee will, upon
request, forward the Policy without unreasonable delay to the Insurer for
endorsement of any designation or change of beneficiary, or any election of an
optional mode of settlement.
5. Authorization to Insurer. Unless the Insurer has been given written notice
by the Assignor and the Assignee to the contrary, the Insurer is hereby
authorized to recognize the Assignee's claims to rights hereunder without
investigating the reason for any action taken by the Assignee, or the validity
or amount of the liabilities, or the existence of any default therein, or the
application to be made by the Assignee of any amounts to be paid to the
Assignee. The signature of the Assignee shall be sufficient for the exercise of
its rights under the Policy, and the receipt of the Assignee for any sums
received shall be a full discharge and release therefor to the Insurer. Checks
for all or any part of the sums payable under the Policy shall be drawn to the
exclusive order of the Assignee, if so requested by the Assignee.
6. Exercise of Rights. The exercise of any right given herein to the Assignee
shall be at the option of the Assignee, but the Assignee may exercise any such
right without notice to, or assent by the Assignor, without affecting the
liability of, or releasing any interest hereby assigned by the Assignor.
7. Termination and Amendment of Assignment. This Assignment may not be altered
or changed without the consent of the Assignee and the Assignor. As long as this
Agreement is in force, the Assignee may not, without the prior written consent
of the Assignor, exercise any right under this Assignment that would reduce or
compromise the death benefit payable under the Agreement.
8. Insurer Protected. The Insurer shall be fully protected in recognizing any
request made by the Assignor with respect to the exercise of any incident of
ownership in and to the Policy, with or without the consent of the Assignee, and
upon surrender of the Policy, the Policy shall be terminated and be of no
further force or effect.
9. Construction. In the event of any conflict between the provisions of
this Assignment and the provisions of the Agreement, the provisions of the
Agreement shall control.
10. Payment of Assignee's Obligation. Upon the full payment to the Assignee of
the Assignor's obligation under the Agreement, the Assignee shall release this
Assignment, and the ownership of the Policy shall be free of all provisions and
restrictions of this Assignment.
IN WITNESS WHEREOF, the Assignor and Assignee have duly
executed this Assignment on the day and year first set forth above.
___ /s/ Xxxxxxx X. Xxxxxxxxxx
XXXXXXX X. XXXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
____ /s/ Xxxxxx X. Xxxxxxxxxx
XXXXXX X. XXXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
____ /s/ Xxxxxx X. Xxxxxxxxx
XXXXXX XXXXXXXXX, as Trustee of
THE XXXXXX AND XXXXX XXXXXXXXXX
IRREVOCABLE TRUST
GOODY'S FAMILY CLOTHING, INC.
By:___/s/ Xxxxx X. Call_____________
Xxxxx X. Call
Its:__President_____________________
