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Exhibit 99.4
FORM OF EXCHANGE AGENCY AGREEMENT
This Agreement is entered into as of ___________, 1998 between IBJ Schroder Bank
& Trust Company, a banking corporation organized under the laws of the State of
New York, as Exchange Agent (the "Agent") and AAi.FosterGrant, Inc., a
corporation organized under the laws of the State of Rhode Island (the
"Company").
The Company proposes to exchange $1,000 principal amount of the Company's
10 3/4% Senior Notes due 2006, Series B (the "New Notes" or "Exchange Notes") in
exchange (the "Exchange Offer") for an equal aggregate principal amount of the
Company's outstanding 10 3/4% Senior Notes due 2006, Series A (the "Old Notes")
pursuant to the Registration Rights Agreement dated as of July 21, 1998 and the
accompanying Letter of Transmittal. The Exchange Offer will terminate at 5:00
p.m. New York City Time on ________, 1998, unless extended by the Company in its
sole discretion (the "Expiration Date"). The New Notes are to be issued by the
Company pursuant to the terms of an Indenture dated as of July 21, 1998 (the
"Indenture") between the Company, the Guarantors named therein, and IBJ Schroder
Bank & Trust Company, as trustee (the "Trustee").
Subject to the provisions hereof, the Company hereby appoints and the Agent
hereby accepts the appointment as Agent for the purposes of receiving, accepting
for delivery and otherwise acting upon tenders of the Old Notes (the
"Certificates") in accordance with the form of Letter of Transmittal attached
hereto (the "L/T") and with the terms and conditions set forth herein and under
the caption "The Exchange Offer" in the Prospectus.
The Agent has received the following documents in connection with its
appointment:
(i) L/T
(ii) a form of Notice of Guaranteed Delivery
(iii) the Prospectus
The Agent is authorized and hereby agrees to act as follows:
(a) to address, and deliver by hand or next day courier, a complete set of
the Exchange Offer Documents to each person who, prior to the
Expiration Date, becomes a registered holder of Old Notes promptly
after such person becomes a registered holder of Old Notes;
(b) to receive all tenders of Old Notes made pursuant to the Exchange
Offer and stamp the L/T with the day, month and approximate time of
receipt;
(c) to examine each L/T and Old Notes received to determine that all
requirements necessary to constitute a valid tender have been met. The
Agent shall be entitled
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to rely on the electronic messages sent by the Depository Trust
Company ("DTC") regarding ATOP delivery of the Notes to the Agent's
account at DTC from the DTC participants listed on the DTC position
listing provided to the Agent;
(d) with the approval of the President, any Vice President, the Secretary
or Assistant Secretary of the Company, to take such actions necessary
and appropriate to correct any irregularity or deficiency associated
with any tender not in proper order;
(e) to follow instructions given by Duane M. DeSisto, Chief Financial
Officer of the Company, with respect to the waiver of any
irregularities or deficiencies associated with any tender;
(f) to hold all valid tenders subject to further instructions from Duane
M. DeSisto, Chief Financial Officer of the Company;
(g) to render a written report, in the form of Exhibit A attached hereto,
on each business day during the Exchange Offer and promptly confirm,
by telephone, the information contained therein to Margaret D. Farrell
at Hinckley, Allen & Snyder.
(h) to follow and act upon any written amendments, modifications or
supplements to these instructions, any of which may be given to the
Agent by the President, any Vice President, the Secretary or Assistant
Secretary of the Company or such other person or persons as they shall
designate in writing;
(i) to return to the presentors, in accordance with the provisions of the
L/T, any Old Notes that were not received in proper order and as to
which the irregularities or deficiencies were not cured or waived;
(j) in the event the Exchange Offer is consummated, to deliver
authenticated Exchange Notes to tendering Noteholders, in accordance
with the instructions of such Noteholder's specified in the respective
L/T's, as soon as practicable after receipt thereof;
(k) to determine that all endorsements, guarantees, signatures,
authorities, stock transfer taxes (if any) and such other requirements
are fulfilled in connection with any request for issuance of the
Exchange Notes in a name other than that of the registered owner of
the Old Notes;
(l) to deliver to, or upon the order of, the Company all Old Notes
received under the Exchange Offer, together with any related
assignment forms and other documents;
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(m) subject to the other terms and conditions set forth in this Agreement
to take all other actions reasonable and necessary in the good faith
judgment of the Agent, to effect the foregoing matters;
(n) arrange to comply with all requirements under the tax laws of the
United States, including those relating to missing Tax Identification
Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company understands that the Agent is required to
deduct 31% on payments to holders who have not supplied their correct
Taxpayer Identification Number or required certification. Such funds
will be turned over to the Internal Revenue Service in accordance with
applicable regulations; and
(o) deliver or cause to be delivered, in a timely manner, to each
governmental authority to which any transfer taxes are payable in
respect of the exchange of Old Notes, the Agent's check in the amount
of all transfer taxes so payable, and the Company shall reimburse the
Agent for the amount of any and all transfer taxes payable in respect
of the exchange of Old Notes; provided, however, that the Agent shall
reimburse the Company for amounts refunded to the Agent in respect of
the Agent's payment of any such transfer taxes, at such time as such
refund is received by the Agent.
The Agent shall:
(1) have no duties or obligations other than those specifically set forth
herein, provided, however, that in no way will the Agent's general
duty to act in good faith be discharged by the foregoing;
(2) not be required to refer to any documents for the performance of its
obligations hereunder other than this Agreement, the L/T and the
documents required to be submitted with the L/T; other than such
documents, the Agent will not be responsible or liable for any terms,
directions or information in the Prospectus or any other document or
agreement unless the Agent specifically agrees thereto in writing;
(3) not be required to act on the directions of any person, including the
persons named above, unless the Company provides a corporate
resolution to the Agent or other evidence satisfactory to the Agent of
the authority of such person;
(4) not be required to and shall make no representations and have no
responsibilities as to the validity, accuracy, value or genuineness of
(i) the Exchange Offer, (ii) any Certificates, L/T's or documents
prepared by the Company in connection with the Exchange Offer or (iii)
any signatures or endorsements, other than its own;
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(5) not be obligated to take any legal action hereunder that might, in its
judgment, involve any expense or liability, unless it has been
furnished with reasonable indemnity by the Company;
(6) be able to reasonably rely on and shall be protected in acting on the
written or oral instructions with respect to any matter relating to
its actions as Agent specifically covered by this Agreement, of any
officer of the Company authorized to give instructions under paragraph
(g) or (h) above;
(7) be able to reasonably rely on and shall be protected in acting upon
any certificate, instrument, opinion, notice, letter, telegram or any
other document or security delivered to it and believed by it
reasonably and in good faith to be genuine and to have been signed by
the proper party or parties;
(8) not be responsible for or liable in any respect on account of the
identity, authority or rights of any person executing or delivering or
purporting to execute or deliver any document or property under this
Agreement and shall have no responsibility with respect to the use or
application of any property delivered by it pursuant to the provisions
hereof;
(9) be able to consult with counsel satisfactory to it (including counsel
for the Company or staff counsel of the Agent) and the advice or
opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with advice or opinion of
such counsel;
(10) not be called on at any time to advise, and shall not advise, any
person delivering an L/T pursuant to the Exchange Offer as to the
value of the consideration to be received;
(11) not be bound by any notice or demand, or any waiver or modification of
this Agreement or any of the terms hereof, unless evidenced by a
writing delivered to the Agent signed by the proper authority or
authorities and, if the Agent's duties or rights are affected, unless
the Agent shall give its prior written consent thereto; and
(12) have no duty to enforce any obligation of any person to make delivery,
or to direct or cause any delivery to be made, or to enforce any
obligation of any person to perform any other act.
The Agent shall be entitled to compensation as set forth in Exhibit B attached
hereto.
The Company covenants and agrees to indemnify and hold the Agent harmless in its
capacity as Exchange Agent hereunder against any loss, liability, cost or
expense, including attorneys' fees and expenses, arising out of or in connection
with any act, omission, delay or refusal made by the Agent in reliance upon any
signature, endorsement, assignment, certificate, order, request, notice,
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instruction or other instrument or document reasonably believed by the Agent in
good faith to be authorized, and in delaying or refusing in good faith to accept
any tenders or effect any transfer of Old Notes; provided, however, that the
Company shall not be liable for indemnification or otherwise for any loss,
liability, cost or expense to the extent arising out of the Agent's gross
negligence or willful misconduct. In no case shall the Company be liable under
this indemnity with respect to any claim against the Agent unless the Company
shall be notified by the Agent, by letter or cable or by facsimile confirmed by
letter, of the written assertion of a claim against the Agent or of any other
action commenced against the Agent, promptly after the Agent shall have received
any such written assertion or notice of commencement of action. The Company
shall be entitled to participate at its own expense in the defense of any such
claim or other action, and, if the Company so elects, the Company shall assume
the defense of any suit brought to enforce any such claim. In the event that the
Company shall assume the defense of any such suit, the Company shall not be
liable for the fees and expenses of any additional counsel thereafter retained
by the Agent so long as the Company shall retain counsel satisfactory to the
Agent to defend such suit.
This Agreement shall be construed and enforced in accordance with the laws of
the State of New York and shall inure to the benefit of, and the obligations
created hereby shall be binding upon, the successors and assigns of the parties
hereto. The parties agree to submit and to the exclusive jurisdiction of the
federal or state courts located in the State of New York, New York County.
Unless otherwise expressly provided herein, all notices, requests, demands and
other communications hereunder shall be in writing, shall be delivered by hand,
facsimile or by First Class Mail, postage prepaid, shall be deemed given when
received and shall be addressed to the Agent and the Company at the respective
addresses listed below or to such other addresses as they shall designate from
time to time in writing, forwarded in like manner.
If to the Agent, to: IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Reorganization Operations Dept.
Telephone: (212) 858-2103
Facsimile: (212) 858-2611
with copies to: IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attn: Corporate Finance Trust Services
Telephone: (212) 858-2529
Facsimile: (212) 858-2952
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If to the Company, to: AAi.FosterGrant, Inc.
500 George Washington Highway
Smithfield, RI 02917
Attention: Duane M. DeSisto, Chief Financial Officer
Telephone: (401) 231-3800
Facsimile: (401) 231-3212
with copies to: Hinckley, Allen & Snyder
1500 Fleet Center
Providence, RI 02903
Attention: Margaret D. Farrell, Esq.
Telephone: (401) 274-2000
Facsimile: (401) 277-9600
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on their behalf by their officers thereunto duly authorized, all as of the day
and year first above written.
IBJ Schroder Bank & Trust Company
By: ______________________________
Name: ______________________________
Title: ______________________________
AAi.FosterGrant, Inc.
By: ______________________________
Name: ______________________________
Title: ______________________________
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EXHIBIT A
SAMPLE REPORT
Date:____________________
Report Number:___________
As of Date:______________
Ladies & Gentlemen:
As Exchange Agent for the Exchange Offer dated __________________, 1998, we
hereby render the following report:
Principal Amount previously received: _________________
Principal Amount received today: _________________
Principal Amount received against Guaranteed Deliveries: _________________
Principal Amount withdrawn today: _________________
TOTAL PRINCIPAL AMOUNT RECEIVED TO DATE: =================
RECAP OF PRINCIPAL AMOUNT REPRESENTED BY GUARANTEES
Guarantees previously outstanding: _________________
Guarantees received today: _________________
Guarantees settled today: _________________
Guarantees withdrawn today: _________________
Guarantees outstanding: _________________
TOTAL PRINCIPAL AMOUNT AND GUARANTEES OUTSTANDING: =================
Very truly yours,
Reorganization Operations Dept.
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EXHIBIT B
COMPENSATION
THE AGENT'S OUT-OF-POCKET EXPENSES INCURRED IN CONNECTION WITH
COMPLETING ITS DUTIES PURSUANT TO THIS AGREEMENT.