DEPOSITORY ACCOUNT AGREEMENT
This document, executed and effective as of June 4, 1996, will confirm our
arrangements regarding the special account, Account No 00000000 (the "FNBB
ACCOUNT"), which BANK OF AMERICA, N.W. N.A. d/b/a Seafirst Bank, 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000 ("BANK") has opened for THE FIRST
NATIONAL BANK OF BOSTON, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, as
Agent (as hereinafter defined), and LAMONTS APPAREL, INC., Debtor-In-Possession,
00000 Xxxxxxx Xxxx, X.X., Xxxxxxxx, Xxxxxxxxxx 00000, a Delaware corporation
(the "COMPANY"). These arrangements relate a Debtor in Possession and Exit
Financing Loan Agreement dated as of June 4, 1996 (as amended and in effect from
time to time, the "LOAN AGREEMENT"), among the Company, certain lenders from
time to time party thereto (the "LENDERS") and The First National Bank of Boston
as agent (the "AGENT") for the Lenders.
1. The FNBB Account is to be entitled "The First National Bank of Boston"
for deposits of Collateral (as defined in the Security Agreement referred to in
the Loan Agreement) made by or on behalf of Company and is subject to signing
authority in the Agent's record of authorized signatures. The FNBB Account will
receive transfers of funds from a concentration account at Bank which is in the
name of Company (the "CONCENTRATION ACCOUNT"). Company maintains six deposit
accounts (the "DEPOSIT ACCOUNTS") at Bank. Each day, funds in the Deposit
Accounts will zero balance into the Concentration Account. Each day Company
will transfer the available current collected balance in the Concentration
Account into the FNBB Account. It is understood by Company and Bank that
electronic transfers of funds may be sent to the FNBB Account with instructions
to credit Company and that Bank will use its best efforts to ensure that these
items be credited to the FNBB Account. Any collected cash, checks, credit card
receipts, and electronic transfers of funds that constitute collateral are the
sole and exclusive property of the Agent and will be credited to the FNBB
Account.
The FNBB Account will be set up on Account Analysis and maintenance charges
and fees relating to the arrangements under this agreement will be offset
against earnings. Should a net deficit occur as, as a result of returned items,
maintenance charges or fees, Bank will charge the Company's Account No. 00000000
(the "COMPANY ACCOUNT") directly for such deficit. In the event there are
insufficient funds in the Company Account to cover the net deficit, the Agent
agrees that Bank may charge the FNBB Account for the amount of the net deficit.
If there are insufficient funds in the FNBB Account, upon receipt of physical
evidence, via facsimile number (617) 434-
2309 or (000) 000-0000 sent to the attention of Xxxxx Xxxx at the Agent, Company
and the Agent agree to pay the amount of the net deficit to the FNBB Account, in
immediately available funds, within one business day after receipt of said
physical evidence. The Agent's indemnification to pay the net deficit is
limited to the current or immediately preceding month's net deficit.
2. So long as this Agreement is in full force and effect, all monies in
the FNBB Account that constitute collateral will become the property of the
Agent upon deposit therein and Company will have no interest in or any control
thereof. The FNBB Account will not be subject to deductions, setoff, banker's
lien, or any other right in favor of any person other than the Agent, except as
otherwise provided in paragraph 2 of this Agreement.
3. In the event that Bank is served with a court order which affects the
FNBB Account, Bank will act in accordance with such court order. Until a court
order is received by Bank, whether such order is issued by the United States
Bankruptcy Court for the Western District of Washington in which the Company's
Bankruptcy Case is pending (the "BANKRUPTCY COURT") or any other court of
competent jurisdiction, Bank shall not have the right nor will it place a hold
on funds in, or in the process of being deposited to, the FNBB Account and will
process funds in strict accordance with the terms and conditions of this
Agreement. The Agent represents, warrants, and agrees that the Agent shall at
all times comply in all material respects with applicable bankruptcy statutes,
rules, and other laws as they may relate to funds deposited to the FNBB Account.
Notwithstanding anything in this Agreement to the contrary, Bank may interplead
the funds in, and the funds in the process of being deposited into, the FNBB
Account in an action commenced in the Bankruptcy Court, naming the Agent and
Company as defendants, provided that Bank reasonably believes compliance with
this paragraph will result in liability to Bank. Following such interpleader,
Bank shall be released from all further liability with respect to the funds
interpleaded.
4. So long as this Agreement is in effect, Company will each day effect a
wire transfer of the available current collected balance in the FNBB Account to
The Agent's operating account as follows:
The First National Bank of Boston
Boston, Massachusetts
ABA# 000-000-000
Attention: Xxxxxxxx X. Xxxxx
Credit: CFL Loan Operations
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Re: Lamonts Apparel, Inc., Debtor-In-Possession
or any other account as the Agent may instruct the Bank and Company from time to
time, in writing, in advance of the wire being sent. This wire transfer will be
a restricted, repetitive transfer and the Company will not be authorized to make
any other transfers from the FNBB Account.
6. Company hereby authorizes Bank to orally request information from the
Agent from time to time regarding its borrowing availability and/or wire
transfer of funds to the Company or to Company's accounts at Bank, and Company
authorizes the Agent to orally provide such information as Bank may reasonably
request.
7. At the end of each month, Bank's regular statement covering the
deposits to and withdrawals from the FNBB Account is to be sent to The First
National Bank of Boston, 000 Xxxxxxx Xxxxxx, Mail Stop 01-09-06, Xxxxxx,
Xxxxxxxxxxxxx 00000. Attention: Xxxxx Xxxx and a copy of said statement to
Company, 00000 Xxxxxxx Xxxx, X.X., Xxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxx
Xxxxxxx.
8. Any contact with Bank regarding operational matters should be directed
to Xxxxx Xxxxxxxx, telephone number (000) 000-0000 or in her absence, Xxxxx
Xxxxxx, telephone number (000)000-0000.
9. Any contact with Company regarding operational matters should be
directed to Xxx Xxxxxxx, telephone number (000) 000-0000.
10. Any contact with the Agent regarding operational matters should be
directed to Xxxxx Xxxx, telephone number (000) 000-0000, or in her absence,
Xxxxxx Xxxxxx-Xxxxxx, telephone number (000) 000-0000.
11. The Agent or Bank may terminate this agreement at any time upon ten
(10) days prior written notice delivered to the Agent, Bank and Company, as
applicable. Such notice shall be effective when transmitted and received by
Certified Mail, Return Receipt Requested or by personal delivery to the
addresses herein designated. No such termination shall impair the rights of any
party to this Agreement with respect to items processed prior to the effective
date and time of termination. Company may not terminate this Agreement without
prior written consent of the Agent. At such time as Company has repaid all of
its obligations to the Agent and the lenders in respect of the Loan Agreement,
and all credit commitments under the Loan Agreement have terminated, the Agent
will terminate this Agreement.
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12. The Agent and Company, jointly and severally, agree to hold Bank
harmless from and against any and all losses, costs, expenses and liabilities
that Bank my incur with respect to this Agreement, including but without
limitation any net deficit and all costs and reasonable attorneys' fees
(including the allocated cost of in-house counsel) incurred by Bank to enforce
any provision of this Agreement. This indemnification shall not apply to
losses, costs, expenses or liabilities resulting from Bank's gross negligence or
willful misconduct. This indemnification shall survive the termination of this
Agreement.
13. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and same Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers, all as of the day and year first above
written.
THE FIRST NATIONAL BANK BANK OF AMERICA, N.W.
OF BOSTON, as Agent N.A. d/b/a Seafirst Bank
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxx Xxxxxx
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Its: Vice President Its: Vice President
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LAMONTS APPAREL, INC.
Debtor-In-Possession
By: /s/ Xxxxxx Xxxxxxxxxx
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Its: Chief Financial Officer
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