Exhibit 10.9
[Execution]
(Account – With Activation)
DEPOSIT ACCOUNT CONTROL
AGREEMENT
This Agreement is entered into as of
November 15, 2005 among Vitamin Shoppe Industries Inc.
(“Company”) Wachovia Bank, National Association, in its
capacity as agent pursuant to the Loan Agreement (as hereinafter
defined) acting for and on behalf of the Lenders described below
(in such capacity together with its successors and assigns
“Agent”), and Bank of America, N.A.
(“Bank”) with respect to the following:
A. Bank has agreed to establish and
maintain for Company deposit account number 9429291251 (the
“Account”).
B. The Company has entered into
financing arrangements with Agent and the parties to the Loan
Agreement as lenders (collectively, with their respective
successors and assigns “Lenders”) pursuant to which the
Company may from time to time have certain indebtedness or other
obligations to Agent and Lenders. As used herein the term
“Loan Agreement” shall mean the Loan and Security
Agreement, dated November __, 2005, among Agent, Lenders, the
Company and certain of its affiliates, as the same now exists or
may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
C. Company has granted to Agent, for
the benefit of the Lenders and the other Secured Parties (as
defined in the Loan Agreement), a security interest in, among other
things, the Account and in the checks and other payment
instructions (“Checks”) deposited in the
Account.
D. Company, Agent and Bank are
entering into this Agreement to evidence Agent’s security
interest in the Account and such Checks and to provide for the
disposition of net proceeds of Checks deposited in the
Account.
Accordingly, Company, Agent and
Bank agree as follows :
1. (a) This Agreement evidences
Agent’s control over the Account. Notwithstanding anything to
the contrary in the agreement between Bank and Company governing
the Account, Bank will comply with instructions originated by Agent
as set forth herein directing the disposition of funds in the
Account without further consent of the Company.
(b) Company represents and warrants
to Agent and Bank that it has not assigned or granted a security
interest in the Account or any Check deposited in the Account,
except for the security interest granted to Agent and each of the
other Secured Parties (as defined in the Loan Agreement) and the
rights and interests of Bank set forth herein.
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(c) Company will not permit the
Account to become subject to any other pledge, assignment, lien,
charge or encumbrance of any kind, other than the security
interests of Agent and each of the other Secured Parties and the
rights and interests of Bank set forth herein.
2. During the Activation Period (as defined
below), Company and its officers, agents and other representatives
shall not have any authority to withdraw any amounts from, to draw
upon or otherwise exercise any authority or power with respect to
the Account or amounts held therein or payable therefrom and Bank
shall not permit Company to do any of the foregoing. Prior to the
Activation Period, Company may operate and transact business
through the Account in the ordinary course of business, including
making withdrawals from the Account, but covenants to Agent that it
will not close the Account without Agent’s prior written
consent. Bank shall have no liability in the event Company breaches
this covenant to Agent.
Company and Agent acknowledge and agree that
Bank may debit the Account for any ACH credit entries (the
“Entries”) that may have been originated by Company but
that have not settled at the time of Bank’s receipt of the
Notice (as hereinafter defined) or for any Entries that are
subsequently returned thereafter.
A reasonable period of time following the
commencement of the Activation Period (not to exceed five
(5) Business Days after Bank’s receipt of the Notice),
and continuing on each Business Day thereafter, Bank shall transfer
all collected and available balances in the Account automatically
and without further direction each Business Day, at Company’s
sole cost and expense, by federal funds wire transfer, solely to
Agent at its account specified in the Notice. The “Activation
Period” means the period which commences within a reasonable
period of time not to exceed two (2) Business Days after
Bank’s receipt of a written notice from Agent in the form of
Exhibit A hereto (the “Notice”). A “Business
Day” is each day except Saturdays, Sundays and Bank holidays.
Funds are not available if, in the reasonable determination of
Bank, they are subject to a hold, dispute or legal process
preventing their withdrawal.
3. Bank agrees that it shall not offset, charge,
deduct or otherwise withdraw funds from the Account, except as
permitted by Section 4 hereof, until it has been advised in
writing by Agent that all of Company’s obligations that are
secured by the Checks and the Account (other than contingent
obligations not yet accrued at such time) are paid in full and the
financing arrangements of Agent and Company and its subsidiaries
shall have been terminated. Agent shall notify Bank promptly in
writing upon payment in full of Company’s obligations (other
than contingent obligations not yet accrued at such
time).
4. Bank is permitted to charge the
Account:
(a) for its fees and charges
relating to the Account or associated with this Agreement;
and
(b) in the event any Check deposited
into the Account is returned unpaid for any reason or for any
breach of warranty claim.
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5. (a) If the balances in the Account or
any other account of Company or its subsidiaries maintained at Bank
are not sufficient to compensate Bank for any fees or charges due
to Bank in connection with the Account or this Agreement, Company
agrees to pay Bank upon written demand the amount due to Bank.
Company will have breached this Agreement if it has not paid Bank,
within five (5) Business Days after such demand, the amount
due to Bank.
(b) If the balances in the Account
or any other account of Company or its subsidiaries maintained at
Bank are not sufficient to compensate Bank for any returned Check,
Company agrees to pay Bank upon written demand the amount due to
Bank. If Company fails to so pay Bank promptly upon written demand
and if the balances in the Account or any other deposit account of
Company or its subsidiaries at Bank are not sufficient to
compensate Bank for any such returned Check, Agent (for the account
of Company) agrees to pay Bank, within five (5) Business Days
after Bank’s written demand to Agent, any amount received by
Agent with respect to such returned Check. The failure to so pay
Bank shall constitute a breach of this Agreement.
(c) Company hereby authorizes Bank,
without prior notice, from time to time after the expiration of the
five (5) Business Day periods described in subsections 5(a)
and 5(b) hereof, to debit any other account Company may have with
Bank for the amount or amounts due to Bank under subsections 5(a)
or 5(b) hereof.
6. (a) Each Business Day, Bank will send
any Checks as well as any other materials, such as invoices, which
it may receive related to the Account, plus information regarding
the deposits to the Account, to the address specified below for
Company or as otherwise specified in writing by Company to Bank,
and will send a copy of each such documents and the deposit advice
to the address specified below for Agent.
(b) In addition to the original Bank
statement provided to Company, Bank will provide Agent with a
duplicate of such statement.
7. (a) Bank will not be liable to Company
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