Exhibit 99.15
Date: January 24, 2002
XXXXXXXXXX/LANSING COMPANY
0 Xxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Re: Letter of Credit Agreement
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Ladies and Gentlemen:
From time to time, in order to assist you in establishing or opening
Letters of Credit with a bank or trust company (herein the "Bank") to cover the
purchase of goods and inventory, you may request us to join in the applications
for such Letters of Credit, and/or guarantee payment or performance of such
Letters and any drafts or acceptances thereunder, thereby lending our credit to
you. These arrangements shall be handled by us subject to the terms and
conditions set forth in the Accounts Receivable Financing Agreement (the
"Agreement") and as set forth below.
A. Our assistance in this matter shall at all times and in all respects be
in our sole discretion exercised by us in accordance with our
reasonable business judgment, all as more fully set forth in the
Agreement. The amount and extent of the Letters of Credit and the terms
and conditions thereof and of any drafts or acceptances thereunder,
shall in all respects be determined solely by us and shall be subject
to change, modification and revision by us, at any time and from time
to time.
B. Any indebtedness, liability or obligation of any sort whatsoever,
however arising, whether present or future, fixed or contingent,
secured or unsecured, due or to become due, paid or incurred, arising
or incurred in connection with any Letters of Credit, guarantees,
drafts or acceptances thereunder or otherwise (herein the
"Obligations") shall be incurred solely as an accommodation to you and
for your account. Obligations shall include, without being limited to,
all amounts due or which may become due under said Letters of Credit,
guarantees or any drafts or acceptances thereunder, all amounts charged
or chargeable to you or to us by the Bank, other financial institution
or correspondent bank which opens, issues or is involved with such
Letter of Credit, any other bank charges; fees and commissions; duties
and taxes; costs of insurance; all such other charges and expenses
which may pertain either directly or indirectly to such Letters of
Credit, drafts, acceptances, guarantees or to the goods or documents
relating thereto, and our charges as herein provided. We shall have the
right, at any time and without notice to you, to charge your account on
our books with the amount of any and all such Obligations. Any debit
balance which may exist at any time or from time to time in your
account shall be repayable to us on demand and shall incur interest at
the rate provided in the Agreement. All Obligations are to be repaid to
us solely in United States currency.
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C. As security for the prompt payment in full of all of your present and
future indebtedness or obligations whether under the factoring or
financing agreement between us, any other agreement between us or
otherwise, as well as to secure the payment in full of all Obligations
referred to herein, you hereby pledge and grant to us a continuing
general lien upon and security interest in the following "Collateral",
whether now owned or hereafter acquired by you, wherever located,
whether in transit or not: all presently owned and hereafter acquired:
(a) warehouse receipts, bills of lading, shipping documents, documents
of title, chattel paper and instruments, all whether negotiable or not;
(b) merchandise, inventory and goods which relate to any of the
foregoing or which are purchased from suppliers located outside of the
United States or its territories or which relate to letters of credit
opened through or with our assistance (whether for purchases from
domestic or foreign suppliers), and all additions thereto,
substitutions therefor and replacements thereof, in all stages of
manufacture, process or production--from raw materials through
work-in-process to finished goods, together with all goods and
materials used or usable in manufacturing, processing, packaging or
shipping same, all wherever located and whether in transit or not; and
(c) cash and non-cash proceeds of any and all of the foregoing, of
whatever sort and however arising.
D. You warrant and represent that we have and shall have at all times a
valid and effective first and paramount lien on and security interest
in all said Collateral and that your title to said Collateral is
unencumbered by any other liens. You also warrant and represent that
all sales of any goods or inventory covered hereby shall be made by you
in the ordinary course of business and the accounts arising from such
sales and proceeds thereof shall be transferred and assigned to us
pursuant to the Agreement; and you confirm that our lien and security
interest extends and attaches to those accounts and proceeds. Further,
you warrant and represent that all Letters of Credit are being opened
to cover actual purchases of goods and inventory solely for your
account, and said goods will not be sold or transferred, other than as
herein provided, without our specific prior written consent. You agree
to comply with the requirements of any and all laws in order to grant
to us and maintain in our favor, a valid first lien upon and security
interest in the Collateral and to do whatever we may request from time
to time in order to effect the purposes of this Agreement, including,
but without limitation, filing financing statements, keeping records
and making reports on the Collateral to us, advising us of the location
of all Collateral, marking, labeling and segregating such Collateral
and obtaining any necessary agreements or waivers with regard to the
Collateral.
E. You unconditionally indemnify us and hold us harmless from any and all
loss, claim or liability arising from any transactions or occurrences
relating to Letters of Credit established or opened for your account,
the Collateral relating thereto and any drafts or acceptances
thereunder, and all Obligations hereunder, including any such loss or
claim due to any action taken by any Bank; provided, however that you
shall not indemnify us for losses arising from our gross negligence or
willful misconduct as finally determined by an applicable court of law.
You further agree to hold us harmless for any errors or omission,
whether caused by us, by the Bank or otherwise. Your unconditional
obligation to us hereunder shall not be modified or diminished for any
reason or in any manner whatsoever. You agree that any charges made to
us for your account by the Bank shall be conclusive on us and may be
charged to your account.
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F. We shall not be responsible for: The existence, character, quality,
quantity, condition, packing, value or delivery of the goods purporting
to be represented by any documents; any difference or variation in the
character, quality, quantity, condition, packing value or delivery of
the goods from that expressed in the documents; the validity,
sufficiency or genuineness of any documents or of any endorsements
thereon, even if such documents should in fact prove to be in any or
all respects invalid, insufficient, fraudulent or forged; the time,
place, manner or order in which shipment is made; partial or incomplete
shipment, or failure or omission to ship any or all of the goods
referred to in the Letters of Credit or documents; any deviation from
instructions; delay, default, or fraud by the shipper and/or anyone
else in connection with the Collateral or the shipping thereof; or any
breach of contract between the shipper or vendors and yourselves.
Furthermore, without being limited by the foregoing, we shall not be
responsible for any act or omission with respect to or in connection
with any Collateral.
G. You agree that any action taken by us, if taken in good faith and
absent from gross negligence (as finally determined by an applicable
court of law), or any action taken by any Bank, under or in connection
with the Letters of Credit, the guarantees, the drafts or acceptances,
or the Collateral, shall be binding on you and shall not put us in any
resulting liability to you. In furtherance thereof, we shall have the
full right and authority to clear and resolve any questions of
non-compliance of documents; to give any instructions as to acceptance
or rejection of any documents or goods; to execute any and all
steamship or airway guarantees (and applications therefor), indemnities
or delivery orders; to grant any extensions of the maturity of, time of
payment for, or time of presentation of, any drafts, acceptances, or
documents; and to agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Letters of Credit, drafts or
acceptances; all in our sole name, and the Bank shall be entitled to
comply with and honor any and all such documents or instruments
executed by or received solely from us, all without any notice to or
any consent from you.
H. Without our express consent and endorsement in writing, you agree not
to clear and resolve any questions of non-compliance of documents; to
give any instructions as to acceptance or rejection of any documents or
goods; to execute any and all applications for steamship or airway
guarantees, indemnities or delivery orders; to grant any extensions of
the maturity of, time of payment for, or time of presentation of, any
drafts, acceptances or documents; or to agree to any amendments,
renewals, extensions, modifications, changes or cancellations of any of
the terms or conditions of any of the applications, Letters of Credit,
drafts or acceptances.
I. You agree that any necessary import, export or other licenses or
certificates for the import or handling of the Collateral will have
been promptly procured; all foreign and domestic governmental laws and
regulations in regard to the shipment and importation of the
Collateral, or the financing thereof will have been promptly and fully
complied with; and any certificates in that regard that we may at any
time request will be promptly furnished. In this connection, you
warrant and represent that all shipments made under any such Letters of
Credit are in accordance with the governmental laws and regulations of
the countries in which the shipments originate and terminate, and are
not prohibited by any such laws and regulations. You assume all risk,
liability and responsibility for, and agree to pay and discharge, all
present and future local, state, federal or foreign taxes, duties, or
levies. Any embargo, restrictions, laws, customs or regulations of any
country, state, city, or other political subdivision, where the
Collateral is or may be located, or wherein payments are to be made, or
wherein drafts may be drawn, negotiated, accepted, or paid, shall be
solely your risk, liability and responsibility.
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J. Any rights, remedies, duties or obligations granted or undertaken by
you to any Bank in any application for Letters of Credit, or any
standing agreement relating to Letters of Credit or otherwise, shall be
deemed to have been granted to us and apply in all respects to us and
shall be in addition to any rights, remedies, duties or obligations
contained herein.
K. As further set forth in the Agreement, you hereby agree that prior to
your repayment of all indebtedness and Obligations to us, we may be
deemed to be the absolute owner of, with unqualified rights to
possession and disposition of, all Collateral, all of which may be held
by us as security as herein provided. Should possession of any such
Collateral be transferred to you, it shall continue to serve, as
security as herein provided, and any goods or inventory covered hereby
may be sold, transferred or disposed of only as herein above provided.
L. 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, but at your
expense. All policies covering the Collateral are to be made payable to
us in case of loss, under a standard non-contributory "mortgagee",
"lender's" or "secured party" clause and are to contain such other
provisions as we may require to fully protect our interests in the
Collateral and to any payments to be made under such policies, and all
proceeds of such policies are hereby assigned to us. All policies are
to be delivered to us, premium prepaid; and shall provide for not less
than ten days prior written notice to us of the exercise of any right
of cancellation. We shall have the sole right, in our own name or your
name, to file claims under any such insurance policies and to deal with
and handle such claims and any payments thereunder in all respects.
M. On 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 nonpayment when due of any
Obligations or other indebtedness owing to us by you, whether or not
the Agreement shall continue, or upon your general failure to pay your
debts when due, or upon your making a general assignment for the
benefit of creditors or upon there being 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 proceedings 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, we shall have the right, with or without notice to you, to
foreclose the lien and 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 to sell, lease, or
otherwise dispose of all or any part of the Collateral, whether the
goods have arrived or are to arrive, 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.
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 all of your premises
and facilities for the purpose of our 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
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the expenses of retaking, holding, storing, processing and preparing
for sale, selling, and the like, and then to the satisfaction of your
Obligations or other indebtedness to us, application as to particular
Obligations or as to principal or interest to be in our absolute and
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 any surplus
resulting therefrom. We shall have all rights of a secured party under
the Uniform Commercial Code. 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.
N. Any charges, fees, commissions, costs and expenses charged to us for
your account by any Bank in connection with or arising out of Letters
of Credit issued pursuant hereto or out of transactions relating
thereto will be charged to your account in full as received by us and
when made by any such Bank shall be conclusive on us. In addition to
the amounts charged to your account pursuant to the preceding sentence,
for our services hereunder we shall be entitled to our service fees
which shall be computed and charged to your account as follows:
[SEE LETTER OF CREDIT FEE SCHEDULE]
This agreement, which is subject to modification only in writing, is
supplementary to and is to be considered as a part of, the Agreement. If the
foregoing is in accordance with your understanding, please so indicate by
signing and returning the enclosed copy of this letter.
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
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SCHEDULE A
IMPORT LETTER OF CREDIT FEE SCHEDULE
Transaction Fee Minimum
----------- --- -------
Issuance 1/4% of face amount $70.00
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Plus: Processing Fee $70.00
Cable Fee $35.00
Amendments
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L/C Amount Increase 1/4% of the increased amount
Plus: Processing Fee
First four amendments $95.00
After fourth $125.00
Guarantees $50.00
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Plus: Processing Fee $50.00
Discrepancies $50.00
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Cancellations $50.00
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Unutilized L/C Fee $100.00
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Monthly Commissions 3% per annum
------------------- charged monthly $100.00
Payments
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Sight $20.00 plus 1/8% of draft amount $55.00
Time $30.00 plus 1 1/2% per annum $70.00
on draft amount for term
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