Exhibit 99.14
Date: January 24, 2002
CARLYLE INDUSTRIES, INC.
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 factoring or accounts receivable financing agreement 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, or to induce us to enter into or continue a factoring or
financing arrangement 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 in our sole discretion. The ratio of Collateral to such loans and
advances and to the other Obligations referred to herein must be satisfactory to
us at all times, and the valuation of the Collateral is to be determined
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exclusively by us. We are to be at liberty, from time to time, without
responsibility or liability to you, to revise any limit placed by us on loans
and advances or other Obligations.
4. In addition to the loans and advances made or to be made by us to
you or to others for your account, "Obligations" shall include any and all
indebtedness which may at any time be owing by you to us howsoever arising.
Obligations shall include, without limitation, all indebtedness whether now in
existence or incurred by you from time to time hereafter; whether secured by
pledge, lien upon or security interest in any of your assets or property other
than the Collateral herein described, or by pledge, lien upon or security
interest in the assets or property of any other person, firm, entity or
corporation (herein "person"); whether such indebtedness is absolute or
contingent, joint or several, matured or unmatured, direct or indirect and
whether you are liable to us for such indebtedness as principal, surety,
endorser, guarantor or otherwise. Obligations shall also include, without
limitation, your liability to us for any balances owing in any account
maintained on our books under the Agreement or under any other agreement or
arrangement now or hereafter entered into between us; indebtedness for goods or
services purchased by you from any concern whose accounts receivable are
factored or financed by us; your liability to us as maker or endorser on any
promissory note or other instrument for the payment of money; your liability to
us under any instrument of guaranty or indemnity, or arising under any guaranty,
endorsement or undertaking which we may make or issue to others for your
account, including any accommodation extended with respect to applications for
letters of credit, our acceptance of drafts or our endorsement of notes or other
instruments for your account and benefit. 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.
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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; 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 require. 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 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.
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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 in the Collateral. To the extent permitted by applicable law, you
irrevocably authorize us to file financing statements and all amendments and
continuations with respect thereto, all in order to create, perfect or maintain
our Security Interest in the Collateral, and you hereby ratify and confirm any
and all financing statements, amendments and continuations with respect thereto
heretofore and hereafter filed by us pursuant to the foregoing authorization.
You agree to do whatever we may 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 satisfactory to us. 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.
All original policies are to be delivered to us, premium prepaid, with the 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.
12. You agree to pay, when due, all taxes, assessments, claims and
other charges (herein "taxes") lawfully levied or assessed upon the Collateral,
and if such taxes remain unpaid after the date fixed for the payment thereof, or
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.
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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, five (5) 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 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, 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.
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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.
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, 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_______________________________________
Name:
Title:
Read and Agreed to:
CARLYLE INDUSTRIES, INC.
By /s/ XXXXXX X.XXXXX
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Accepted at New York, New York
THE CIT GROUP/COMMERCIAL SERVICES, INC.
By_______________________________________
Name:
Title:
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