Exhibit 99.12
Date: January 24, 2002
XXXXXXXXXX/LANSING COMPANY
0 Xxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
EQUIPMENT SECURITY AGREEMENT
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Gentlemen:
1. As security for the prompt payment in full of all loans and
advances made and to be made to you from time to time by us, in conjunction with
the Accounts Receivable Financing Agreement of even date herewith between us, as
amended, from time to time (herein the "Agreement"), as well as to secure the
payment in full of the other Obligations (hereinafter defined), you hereby
pledge and grant to us a continuing general lien upon and security interest
(herein "Security Interest") in the following described "Collateral":
All present and hereafter acquired machinery, equipment, furnishings
and fixtures, and all additions, substitutions and replacements
thereof, wherever located, together with all attachments, components,
parts, equipment and accessories installed thereon or affixed thereto,
and all proceeds of whatever sort.
2. This agreement is being executed by you to induce us to make
loans or advances to you or otherwise to extend credit or financial
accommodations to you pursuant to the Agreement, or to induce us to enter into
the Agreement with you, and is executed in consideration of our doing, or having
done, any of the foregoing. You agree that any of the foregoing shall be done or
extended by us in our sole discretion, and shall be deemed to have been done or
extended by us in consideration of, and in reliance upon, the execution of this
agreement, but that nothing herein shall obligate us to do any of the foregoing.
3. The amount of the loans and advances made or to be made by us to
you, and the period of time during which they are to remain outstanding shall at
all times be governed by the Agreement. We are at liberty, from time to time,
without responsibility or liability to you, to exercise our discretionary rights
thereunder, including any revision any limits placed by us on loans and advances
or other Obligations.
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4. The Security Interest granted hereunder and any lien or security
interest that we now or hereafter have in any of your other assets, collateral
or property, secure the payment and performance of all of your now existing and
future Obligations as defined in Section 1.8 of the Agreement. Obligations shall
also include, without limitation, all interest, commissions, financing and
service charges, and expenses and fees chargeable to and due from you under this
agreement, the Agreement or any other agreement or arrangement which may be now
or hereafter entered into between us.
5. The Security Interest in the Collateral, unless expressly limited
by the provisions of paragraph 1 above, shall extend and attach to:
(a) The entire Collateral which is presently in existence and
which is owned by you or in which you have any interest, and all Collateral
which you may purchase or in which you may acquire any interest at any time and
from time to time in the future, whether such Collateral is in transit or in
your or our constructive, actual or exclusive occupancy or possession or
otherwise, or is held by you or others for your account, and whether your
interest in such Collateral is as owner or lessee or conditional vendee; and
(b) The entire Collateral wherever located, including without
limitation, all Collateral which may be located on your premises, or upon the
premises of any carriers, forwarding agents, truckers, warehousemen, vendors,
selling agents, finishers, converters, processors, or to other third persons who
may have possession of the Collateral; and
(c) The entire Collateral whether the same constitutes personal
property or fixtures, including, but without limiting the generality of the
foregoing, all dies, jigs, tools, benches, tables, accretions, component parts
thereof, and additions thereto, as well as all accessories, motors, engines and
auxiliary parts used in connection with or attached to the Collateral.
6. You agree, at your own cost and expense, to keep the Collateral
in as good and substantial repair and condition as the same is now or at the
time the lien and security interest granted herein shall attach thereto,
reasonable wear and tear excepted, making any and all repairs and replacements
when and where necessary. You also agree to safeguard, protect and hold all
Collateral for our account and make no disposition thereof unless you first
obtain our prior written approval. Any sale, exchange or other disposition of
any Collateral shall only be made by you with our prior written approval, and
all proceeds of any such sales shall not be commingled with your other property,
but shall be segregated, held by you in trust for us as our exclusive property,
and shall be delivered immediately by you to us in the identical form received
by you. Upon the sale, exchange, or other disposition of the Collateral, as
herein provided, the Security Interest provided for herein shall without break
in continuity and without further formality or act, continue in, and attach to,
all proceeds, including any instruments for the payment of money, accounts
receivable, contract rights, documents of title, shipping documents, chattel
paper and all other cash and non-cash proceeds of such sale, exchange or
disposition. As to any such sale, exchange or other disposition, we shall have
all of the rights of an unpaid seller, including stopping in transit, replevin,
rescission and reclamation.
7. You hereby warrant and represent that you are solvent; and that
except as herein otherwise specifically provided, this Security Interest
constitutes, and shall at all times constitute, a first and only lien on the
Collateral except for purchase money security interests in equipment acquired
after the date hereof, provided that (i) a description thereof is given to us
and (ii) the aggregate amount of all of such purchase money security interests
for you and your affiliate Westwater Industries, Inc. does not exceed $250,000
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in a fiscal year; that you are, or will be at the time additional Collateral is
acquired by you, the absolute owner of the Collateral with full right to pledge,
sell, consign, transfer and create a Security Interest therein, free and clear
of any and all claims or liens in favor of others; that you will at your expense
forever warrant and, at or request, defend the same from any and all claims and
demands of any other person; that you will not grant, create or permit to exist,
any lien upon or security interest in the Collateral, or any proceeds, in favor
of any other person; and that the Collateral does not comprise a part of your
inventory and that it is and will only be used by you in your business and will
not be held for sale or lease, or removed from your premises, or otherwise
disposed of by you without our prior written approval.
8. You agree to maintain books and records pertaining to the
Collateral in such detail, form and scope as we shall reasonably require. As
further set forth in the Agreement, you agree that we or our agents may enter
upon your premises at any time, and from time to time, for the purpose of
inspecting the Collateral and any and all records pertaining thereto. You agree
to notify us promptly of any change in your name, mailing address, principal
place of business or the location of the Collateral. You are also to advise us
promptly, in sufficient detail, of any substantial change relating to the type,
quantity or quality of the Collateral, or any event which would have a material
effect on the value of the Collateral, or on the Security Interest granted to us
herein.
9. You agree to: execute and deliver to us, from time to time,
solely for our convenience in maintaining a record of the Collateral, such
written statements and schedules as we may reasonably require, designating,
identifying or describing the Collateral pledged to us hereunder. Your failure,
however, to promptly give us such statements or schedules shall not affect,
diminish, modify or otherwise limit our Security Interest in the Collateral.
10. You agree to comply with the requirements of all state and
federal laws in order to grant to us a valid and perfected first Security
Interest (other than as provided in Section 7 (ii) hereof) in the Collateral. We
are hereby authorized by you to file any financing statements covering the
Collateral whether or not your signature appears thereon. You agree to do
whatever we may reasonably request, from time to time, by way of: leasing
warehouses; filing notices of lien, financing statements, amendments, renewals
and continuations thereof; cooperating with our custodians; keeping stock
records; transferring Collateral to our possession; obtaining waivers from
landlords and mortgagees; and performing such further acts as we may require in
order to effect the purposes of this agreement.
11. You agree to maintain insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts and
covering such risks as are at all times in the exercise of our reasonable
business judgment. All policies covering the Collateral are to be made payable
to us, in case of loss, under a standard non-contributory "mortgagee", "lender"
or "secured party" clause and are to contain such other provisions as we may
require to fully protect our interest in the Collateral and to any payments to
be made under such policies. Copies of all policies are to be delivered to us
(and to the extent we may reasonably require, originals thereof) premium
prepaid, and original loss payable endorsement in our favor, and shall provide
for not less than ten (10) days prior written notice to us of the exercise of
any right of cancellation. At your request, or if you fail to maintain such
insurance, we may arrange for such insurance, but at your expense and without
any responsibility on our part for: obtaining the insurance, the solvency of the
insurance companies, the adequacy of the coverage, or the collection of claims.
Unless we shall otherwise agree with you in writing, we shall have the sole
right, in our name or yours, to file claims under any insurance policies, to
receive, receipt and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.
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12. Subject to and as further set forth in the Agreement, you agree
to pay, when due, all taxes, assessments, claims and other charges (herein
"taxes") lawfully levied or assessed upon the Collateral, and if any lien shall
be claimed thereunder which in our opinion might create a valid obligation
having priority over the rights granted to us herein, we may, without notice to
you, but on your behalf, pay such taxes, and the amount thereof shall be an
Obligation secured hereby and due to us on demand. Any and all fees, costs and
expenses, of whatever kind and nature (including any taxes, attorneys' fees or
costs for insurance of any kind), which we may incur: in filing public notices;
in preparing or filing documents, making title examinations or rendering
opinions; in protecting, maintaining or preserving the Collateral; in enforcing
or foreclosing the Security Interest hereunder, whether through judicial
procedures or otherwise; or in defending or prosecuting any actions or
proceedings arising out of or related to our transactions with you under this
arrangement, shall be borne and paid by you. If same are not promptly paid by
you, we may pay same on your behalf, and the amount thereof shall be an
Obligation secured hereby and due to us on demand.
13. You agree to comply with all acts, rules, regulations, and orders
of any legislative, administrative or judicial body or official, applicable to
the Collateral or any part thereof, or to the operation of your business;
provided that you may contest any acts, rules, regulations, orders and
directions of such bodies or officials in any reasonable manner which will not,
in our opinion, adversely affect our rights or priority in the Collateral
hereunder.
14. On a breach by you of any of the terms or provisions of this
agreement, the Agreement or any other agreement or arrangement now or hereafter
entered into between us; or on the effective date of a termination of the
Agreement; or on the non-payment when due of any Obligation owing to us, whether
or not the Agreement shall continue; or upon your committing an act of
bankruptcy, making a general assignment for the benefit of creditors; or there
is filed by or against you a petition in bankruptcy or for the appointment of a
receiver; or there is commenced under any bankruptcy or insolvency law, any
proceeding for your relief or for the composition, extension, arrangement or
adjustment of any of your obligations; or your business is discontinued as a
going concern; then we shall have the right, with or without notice to you, to
foreclose the Security Interest created herein by any available judicial
procedure, or to take possession of the Collateral without judicial process, and
to enter any premises where the Collateral may be located for the purpose of
taking possession of or removing the Collateral. We shall have the right without
notice or advertisement, to sell, lease, or otherwise dispose of all or any part
of the Collateral, whether in its then condition or after further preparation or
processing, in your name or in ours, or in the name of such party as we may
designate, either at public or private sale or at any broker's board, in lots or
in bulk, for cash or for credit, with or without warranties or representations,
and upon such other terms and conditions as we in our sole discretion may deem
advisable, and we shall have the right to purchase at any such sale. If notice
of intended disposition of any said Collateral is required by law, fifteen (15)
days notice shall constitute reasonable notification. If any Collateral shall
require rebuilding, repairing, maintenance or preparation, we shall have the
right, at our option, to do such of the aforesaid as is necessary, for the
purpose of putting the Collateral in such saleable form as we shall deem
appropriate. You agree, at our reasonable request, to assemble the Collateral
and to make it available to us at places which we shall select, whether at your
premises or elsewhere, and to make available to us your premises and facilities
for the purpose of taking possession of, removing or putting the Collateral in
saleable form. The proceeds of any such sale, lease or other disposition of the
Collateral shall be applied first, to the expenses of retaking, holding,
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storing, processing, preparing for sale, selling, and the like, and then to the
satisfaction of your Obligations to us, application as to particular Obligations
or as to principal or interest to be in our sole discretion. You shall be liable
to us for, and shall pay to us on demand, any deficiency which may remain after
such sale, lease or other disposition, and we in turn agree to remit to you, or
your successors or assigns, any surplus resulting therefrom. The enumeration of
the foregoing rights is not intended to be exhaustive and the exercise of any
right shall not preclude the exercise of any other rights, all of which shall be
cumulative.
15. The rights and Security Interest granted to us hereunder are to
continue in full force and effect, notwithstanding the termination of the
Agreement or the fact that the principal account maintained in your name on our
books may from time to time be temporarily in a credit position, until the final
payment to us in full of all Obligations due to us by you. Our delay, or
omission to exercise any right hereunder, shall not be deemed a waiver thereof,
or be deemed a waiver of any other right, unless such waiver be in writing and
signed by us. A waiver on any one occasion shall not be construed as a bar to or
waiver of any right or remedy on any future occasion.
16. To the extent that your Obligations are now or hereafter secured
by any assets or property other than the Collateral, or by the guarantee,
endorsement, assets or property of any other person, then we shall have the
right, in our sole discretion, to determine which rights, security, liens,
security interests or remedies we shall at any time pursue, foreclose upon,
relinquish, subordinate, modify or take any other action with respect to,
without in any way modifying or affecting any of them, or of any of our rights
hereunder.
17. This agreement, which is subject to modification only in writing
signed by us, is supplementary to, and is to be considered as part of, the
Agreement. No course of dealing between us shall change or modify this
agreement. The validity, interpretation and enforcement of this agreement shall
be governed by the laws of the State of New York without reference to principles
of conflicts of law other than Sections 5-1401 and 5-1402 of the New York
General Obligations Law.
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18. If the foregoing is in accordance with your understanding, please
so indicate by signing and returning to us the original and one copy of this
agreement. This agreement shall take effect as of the date set forth above,
after being accepted below by one of our officers in New York, New York, after
which, we shall forward a copy to you with signatures completed for your files.
Very truly yours,
THE CIT GROUP/COMMERCIAL SERVICES, INC.
By /s/ XXXXXXX XXXXXXXXXXX
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Name: Xxxxxxx Xxxxxxxxxxx
Title: Assistant Vice President
Read and Agreed to:
XXXXXXXXXX/LANSING COMPANY
By /s/ XXXXXX X. XXXXXXXX
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Name: Xxxxxx X. Xxxxxxxx
Title: President
Accepted at New York, New York
THE CIT GROUP/COMMERCIAL SERVICES, INC.
By /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Title: Vice President
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