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EXHIBIT 10.22
CHATTEL LEASING
SECURITY AGREEMENT
This Chattel Leasing Agreement ("Agreement") is entered into as of November
29, 1996 by and between T. A. Leasing Corp. c/o Xxxxxx Xxxxxxx Incorporated, Xxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter called "Borrower") and
BANCBOSTON LEASING INC., 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
(hereinafter called "BancBoston"). Borrower hereby grants to BancBoston to
secure the payment of $25,818,941.00 plus interest and other charges as provided
in a certain Chattel Leasing Promissory Note of even date herewith from Borrower
to the order of BancBoston (the "Note") and also to secure the payment and
performance of all obligations of Borrower hereunder and the payment and
performance of all other obligations of Borrower to BancBoston whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, including in connection with any FUTURE ADVANCES (all of the
foregoing, being hereinafter called the "Obligations"), a continuing security
interest in the following personal property of Borrower wherever located,
whether now owned or hereafter acquired or arising, and any and all additions,
substitutions, accessions and proceeds thereto or thereof together with the
right to any and all manuals and other materials that contain technical data
relating to the use, operation or structure of the following (all of the same
being hereinafter called the "Collateral"):
All personal and fixture property of every kind and nature including
without limitation all furniture, fixtures, equipment, raw materials, inventory,
goods, accounts, contract rights (including rights under operating leases
wherein Borrower is lessor), rights to the payment of money, insurance refund
claims and all other insurance claims and proceeds, tort claims, chattel paper,
documents, instruments (including certified securities), deposit accounts and
all general intangibles including, without limitation, all uncertificated
securities, tax refund claims, license fees, patents, patent applications,
trademarks, trademark applications, trade names, copyrights, copyright
applications, rights to xxx and recover for past infringement of patents,
trademarks and copyrights, computer programs, computes software, engineering
drawings, service marks, customer lists, goodwill, and all licenses, permits,
agreements of any kind or nature pursuant to which Borrower possesses, uses or
has authority to possess or use property (whether tangible or intangible) of
others or others possess, use or have authority to possess or use property
(whether tangible or intangible) of Borrower, and all recorded data of any kind
or nature, regardless of the medium of recording including, without limitation,
all software, writings, plans, specifications and schematics.
Borrower hereby warrants and covenants that:
1. LOCATION. The Collateral will be kept at the locations listed on
SCHEDULE 1 hereto and Borrower will not remove the Collateral from such
locations without providing at least 30 days prior written notice to BancBoston.
2. LIENS. Except for the security interest granted hereby, Borrower is
the sole legal and equitable owner of the Collateral free from all encumbrances
and will defend the same against the claims and demand of all persons claiming
the same interests or any interests adverse to BancBoston. Borrower has good
right and legal authority to create a security interest in the Collateral in the
manner herein contemplated. Borrower will not pledge, mortgage or create, or
suffer to exist, a security interest in the Collateral in favor of any person
other than BancBoston, except for liens to secure taxes, assessments and other
government
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charges in respect of obligations not overdue or liens on properties to secure
claims for labor, materials or supplies in respect of obligations not overdue,
and will promptly notify BancBoston of any lien or security interest asserted or
any attachment, levy, execution or other legal process levied against or
involving the Collateral, and will not sell or transfer the Collateral or any
interest therein without the prior written consent of BancBoston.
3. PERSONAL PROPERTY. The Collateral shall remain personal property and
not be deemed to be a fixture irrespective of the manner of its attachment to
any real estate. If the Collateral is attached to real estate, Borrower will
promptly notify BancBoston, and will, on demand of BancBoston, use commercially
reasonable efforts to furnish to BancBoston a waiver or disclaimer signed by
each person having an interest in the real estate, of any interest in the
Collateral. Borrower will notify BancBoston in writing of any intended sale,
mortgage or of the terms and conditions of this Agreement to any prospective
purchaser, mortgagee, grantee or other transferee of the real estate or any
interest therein. Borrower will use commercially reasonable efforts to deliver
to BancBoston, no later than ninety (90) days after the date hereof, a waiver in
the form of SCHEDULE 3(a) hereto executed by each record owner and mortgagee of
real estate where the Collateral is located. The Collateral shall be used solely
by Borrower and its affiliates, and if the Collateral is used by an affiliate of
Borrower, Borrower shall lease the Collateral to such person pursuant to a
written lease in the form of SCHEDULE 3(b) hereto containing terms satisfactory
to BancBoston, shall deliver a manually signed original of such executed lease
to BancBoston, shall obtain and file signed financing statements in form and
substance satisfactory to BancBoston covering the Collateral so leased and shall
assign such financing statements to BancBoston.
4. CHANGE OF ADDRESS; FURTHER ASSURANCES. Borrower will promptly notify
BancBoston in writing of any change in address from that shown in this
Agreement, shall at all reasonable times and from time to time allow BancBoston,
by or through any of its officers, agents, attorneys or accountants, to examine,
inspect or make extracts from Borrower's books and records or inspect the
Collateral wherever located, and shall do, make, execute and deliver all such
additional and further acts, things, deeds, assurances and instruments as
BancBoston may reasonably require more completely to vest in and assure to
BancBoston its rights hereunder or in any of the Collateral.
5. INSURANCE. Borrower will keep the Collateral at all times insured by
such insurance satisfactory to BancBoston, and in any event and without specific
request by BancBoston, will insure the Collateral on an "all-risk" basis
including so-called extended coverage against fire, theft, and, in the case of
any motor vehicle, collision, and, without limiting the requirements of this
Section 5, in accordance with the insurance requirements set forth on SCHEDULE 5
hereto. All policies of insurance shall be with such insurance companies
satisfactory to BancBoston, and shall state that loss thereon is payable to
BancBoston (as loss payee and additional insured) and Borrower as their
respective interests may appear. All policies of insurance shall provide for not
less than thirty (30) days' notice of cancellation or change in form or
nonrenewal to BancBoston and shall insure the interest of BancBoston regardless
of any breach or violation by the Borrower or other person of the warranties,
declarations or covenants contained in such policies and, if requested by
BancBoston, shall be delivered to and held by it until all of the Obligations
have been fully performed. Borrower expressly authorizes BancBoston, after a
default under Section 8 of this Agreement, to adjust and settle claims under any
insurance policy relating to the Collateral. After a default under Section 8 of
this Agreement, BancBoston may act as attorney for Borrower in making and
settling claims under any insurance covering the Collateral.
6. MAINTENANCE; TAXES. Borrower will keep the Collateral in good order
and repair, reasonable wear and tear excepted, and will not use the same in
violation of law or any policy of
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insurance thereon. Borrower will pay promptly when due all taxes and assessments
upon the Collateral or for its use or operation or upon this Agreement, except
for taxes and assessments being contested by Borrower in good faith and with
respect to which adequate reserves have been established.
7. DISCHARGE OF ENCUMBRANCES. In the exercise of its reasonable
discretion, BancBoston may pay or discharge taxes and other encumbrances at any
time levied or placed on the Collateral, make repairs thereof and place and pay
for insurance thereon and pay any necessary filing fees. Borrower agrees to
reimburse BancBoston on demand for any and all expenditures so made, and until
paid the amount thereof shall be an Obligation secured by the Collateral and
bear interest until paid at the rate for overdue payments under the Note.
BancBoston shall have no obligation to Borrower to make any such expenditures
nor shall the making thereof relieve Borrower of any default.
8. DEFAULT; REMEDIES. Borrower may have possession and use of the
Collateral until default. Upon the happening of any of the following events or
conditions (each a "default"), namely: (a) default (i) in the payment of any
installment of principal or interest under the Note when the same becomes due
and payable, whether on the scheduled date or any accelerated date, (ii) in the
payment of any Obligation (other than those in the preceding clause (i)) within
three (3) days after the same becomes due and payable, whether when ordinarily
payable or upon acceleration, (iii) in the payment to BancBoston of any monetary
obligation within three (3) days after the same becomes due by any endorser,
guarantor or surety of or for any of the Obligations, (iv) in the performance by
Borrower of any covenant contained herein or in the Note (other than the
covenants in ss.ss.5, 10 and 12 hereof, as to which no grace period shall
apply), which default remains unremedied for twenty (20) days, (v) in the
performance by any guarantor of the Obligations of any covenant in such
guarantor's guaranty, after giving effect to all applicable grace periods, (vi)
in the performance of any obligation or covenant of Borrower to BancBoston under
any other note or security agreement, or any obligation to BancBoston of any
endorser, guarantor or surety for any of Borrower's obligations thereunder,
after giving effect to all applicable grace periods, (b) default in the payment
or performance of (i) any promissory note, credit agreement, loan agreement,
conditional sales contract, guaranty, lease, indenture, bond, debenture or other
material obligation whatsoever to which Borrower is a party or by which Borrower
is bound in excess of $3,000,000 as a result of which default a party thereto or
a holder thereof is entitled to accelerate the obligations of Borrower
thereunder, and such default has not been waived or cured in accordance with the
terms of the contract pursuant to which it is payable, or (ii) any trade, tax or
other current obligation of Borrower in excess of $3,000,000 as they mature,
unless such obligations are being contested diligently and in good faith; (c)
any representation or warranty of Borrower in this Agreement proves false,
erroneous or misleading in any material respect; (d) loss, theft, material
damage or destruction of or to any of the Collateral to the extent not covered
by insurance (provided that the occurrence of the events described in this
clause (d) shall not constitute a default for purposes of this clause (d) until
such time as the aggregate book value of Collateral subject to events described
in this clause (d) which is not covered by insurance equals or exceeds
$1,000,000, and in such event shall constitute a default only if after such
aggregate book value of Collateral not covered by insurance exceeds such amount
Borrower does not immediately prepay the Obligations under the Note in an amount
equal to the amount of the loss, theft, damage or destruction or replace such
Collateral with assets of equivalent value reasonably acceptable to BancBoston);
(e) involuntary liens on any Collateral which do not secure any obligation which
is otherwise prohibited by this Agreement and which are removed or discharged
within thirty (30) days so long as (i) Borrower immediately (and in any event
within ten days of imposition of the lien) gives BancBoston written notice of
the lien, (ii) Borrower in BancBoston's reasonable judgment is taking all
reasonable steps to remove the lien, (iii) in BancBoston's reasonable judgment
there is a reasonable likelihood the lien will be removed and (iv) no
foreclosure proceedings are
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instituted or execution levied; (f) dissolution, termination of existence,
insolvency, business failure, appointment of a receiver of any part of the
property of, assignment for the benefit of creditors by, or the commencement of
any proceeding under any bankruptcy or insolvency laws by or against Borrower,
any lessee of Collateral pursuant to a lease described in Section 3, or any
endorser, guarantor or surety of or for any Obligation (provided that nothing
herein shall be deemed to cause a default if any lessee of Collateral or
endorser, guarantor (other than JHFSC Acquisition Corp.) or surety of or for any
Obligation terminates its existence or dissolves and such action is, in the
judgment of Borrower, desirable and does not have a material adverse effect on
the business, operations or condition (financial or otherwise) of Borrower) and,
in the case of any bankruptcy or insolvency proceeding commenced against
Borrower, any lessee of Collateral pursuant to a lease described in Section 3,
or any endorser, guarantor or surety of or for any Obligation, Borrower or any
such other person shall indicate its approval thereof, consent thereto or
acquiescence therein or such proceeding shall not have been dismissed within
sixty (60) days following the filing thereof; (g) such a change in the ownership
of Borrower by JHFSC Acquisition Corp. as in the opinion of BancBoston increases
its risk; (h) any default under any lease entered into by Borrower pursuant to
Section 3 hereof (provided that so long as no default exists hereunder or would
exist after giving effect to any such waiver, Borrower may waive defaults (other
than insolvency defaults) under any such lease); or (i) any Event of Default
under and as defined in that certain Revolving Credit Agreement dated as of
November 29, 1996, by and among JHFSC Acquisition Corp., the other lenders named
therein and The First National Bank of Boston for itself and as agent shall have
occurred; thereupon, and as long as such event continues, BancBoston may
immediately without notice or demand declare all of the Obligations to be due
and payable, and BancBoston shall then have in any jurisdiction where
enforcement hereof is sought, in addition to all other rights and remedies, the
rights and remedies of a secured party under the Uniform Commercial Code of
Massachusetts, including without limitation, the right to take immediate
possession of the Collateral, and for such purpose BancBoston may, so far as
Borrower can give authority therefor, enter upon any premises on which the
Collateral, or any part thereof, may be situated and remove the same therefrom
without liability to Borrower for damages related thereto.
In addition, after the occurrence of a default, the following provisions
shall apply: Borrower will upon demand make the Collateral available to
BancBoston at a place and time designated by BancBoston which is reasonably
convenient to both parties. BancBoston may sell, lease or otherwise dispose of
the Collateral at public or private sale with or without having the Collateral
at the place of sale and upon terms and in such manner as BancBoston may
determine and, unless prohibited by applicable law, BancBoston may purchase any
Collateral at such sale. Upon such sale the Collateral shall be held by the
purchaser absolutely free of any claims or rights whatsoever, all such rights or
claims hereof being waived and released by the Borrower. Prior to disposition of
Collateral pursuant to this Agreement, BancBoston may, at its option, cause any
of the Collateral to be repaired or reconditioned, but not upgraded unless
mutually agreed, in such manner and to such extent as to make such Collateral
saleable, and all reasonable sums expended therefor by BancBoston shall be
repaid by Borrower and be part of the Obligations secured hereby. Unless the
Collateral threatens to decline rapidly in value, BancBoston will give Borrower
at least five days' prior written notice of the time and place of any public
sale of the Collateral or of the time after which any private sale thereof is to
be made. From the proceeds of the sale, BancBoston shall be entitled to retain
(i) all sums secured hereby, (ii) its reasonable expenses of retaking, holding,
preparing for sale and selling, and (iii) reasonable legal expenses incurred by
it in connection herewith and with such sale.
9. WAIVERS. Borrower waives demand, notice, protest, notice of acceptance
of this Agreement, notice of loans made, credit extended, Collateral received or
delivered or other action taken in reliance hereon and all other demands and
notices of any description. With respect both to the Obligations and the
Collateral, Borrower assents to any extension or
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postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of Collateral, to the addition or release of
any party or person primarily or secondarily liable, to the acceptance of
partial payment thereon and the settlement, compromising or adjusting of any
thereof, all in such manner and at such time or times as BancBoston may deem
advisable. BancBoston shall have no duty (other than the duty of reasonable
care) as to the collection or protection of the Collateral or any income
thereon, nor as to the preservation of rights against prior parties or relating
to the Collateral. BancBoston may exercise its rights with respect to the
Collateral without resorting or regard to other collateral or sources of
reimbursement for liability. BancBoston shall not be deemed to have waived any
of its rights relating to the Obligations or the Collateral unless such waiver
is in writing and signed by BancBoston. No delay or omission on the part of
BancBoston in exercising any right shall operate as a waiver of such right or
any other right. A waiver on any one occasion shall not be construed as a bar to
or waiver of any right on any future occasion. All rights and remedies of
BancBoston relating to the Obligations or the Collateral, whether evidenced
hereby or by any other instrument or papers, shall be cumulative and may be
exercised separately or concurrently. At any time upon written request of
BancBoston, at the sole expense of the Borrower, the Borrower will promptly and
duly execute and deliver any and such further instruments and documents and take
such further action as BancBoston may reasonably deem desirable in obtaining the
full benefit of this Agreement and of the rights and powers herein granted. The
Borrower also authorizes BancBoston to act as Borrower's agent in order to file
any financing statement or continuation statement under the Uniform Commercial
Code without the signature of Borrower in order to effectuate the purposes of
this Agreement.
10. CHANGE IN NAME OR CORPORATE STRUCTURE. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, has all requisite corporate power to own its
property and conduct its business as now conducted and as presently
contemplated, and is in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction where such qualification is
necessary. Borrower will not change its name, identity or corporate structure in
any manner which might make any financing or continuation statement filed
hereunder seriously misleading within the meaning of Section 9-402(7) of the
Uniform Commercial Code (or any other then applicable provision of the Code)
unless Borrower shall have given BancBoston at least thirty (30) days' prior
written notice thereof or shall have delivered to BancBoston acknowledgment
copies of UCC-3 Financing Statements reflecting such change duly executed and
duly filed in each jurisdiction in which UCC-1 filings were required in order to
perfect the security interest granted by this Agreement in the Collateral and
shall have taken all action (or made arrangements to take such action
concurrently with such change if it is impossible to take such action in
advance) necessary or reasonably requested by BancBoston to amend such financing
statement or continuation statement so that it is not seriously misleading.
11. SECURITY INTEREST. The Borrower represents that this Agreement
constitutes a valid and continuing first lien on and first perfected security
interest in favor of BancBoston in the Collateral, prior to all other liens,
encumbrances, security interests and rights of others and is enforceable as such
against creditors of the Borrower, any owner of the real property where any of
the Collateral is located, any purchaser of such real property and any present
or future creditor obtaining a lien on such real property. Other than Uniform
Commercial Code financing statements executed in favor of BancBoston in
connection with this Agreement, no financing statements under the Uniform
Commercial Code of any state or other instrument evidencing a lien which names
Borrower as debtor is on file and Borrower has not signed any such document or
any security agreement authorizing any secured party thereunder to file any such
financing statement or instrument. Borrower agrees that if Borrower wishes to
enter into additional financing arrangements for capital assets BancBoston shall
have the opportunity to provide such financing arrangements before Borrower
shall seek financing from another lender. If
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BancBoston declines to provide such financing on terms reasonably satisfactory
to Borrower, BancBoston will release, pursuant to documents satisfactory to
BancBoston, from the lien of this Agreement the capital assets to be so financed
by the other lender; PROVIDED that the terms of any such other financing shall
be no more unfavorable to Borrower than the terms offered by BancBoston.
12. FINANCIAL STATEMENTS. Borrower shall annually, within ninety (90)
days after the close of the fiscal year for Borrower, furnish to BancBoston
financial statements of Borrower and JHFSC Acquisition Corp., including a
balance sheet as of the close of such year and statements of income and retained
earnings for such year, prepared in accordance with generally accepted
accounting principles, consistently applied from year to year, and certified by
Borrower's chief financial officer, in the case of Borrower's statements, and by
independent public accountants for JHFSC Acquisition Corp., in the case of its
financial statements. If requested by BancBoston, Borrower shall also provide
quarterly financial statements of Borrower, similarly prepared for each of the
first three quarters of each fiscal year, certified (subject to normal year-end
audit adjustments and the absence of footnotes) by the chief financial officer
of Borrower and furnished to BancBoston within sixty (60) days following the end
of the quarter, and such other financial information as may be reasonably
requested by BancBoston.
13. MISCELLANEOUS. This Agreement and all rights and obligations
hereunder, including matters of construction, validity and performance, shall be
governed by the laws of The Commonwealth of Massachusetts. This Agreement is
intended to take effect as a sealed instrument. Captions are intended for
convenience only and are not to be considered as part of the text of this
Agreement. If any provision of this Agreement shall be held by any court of
competent jurisdiction to be unenforceable, such holding shall not affect or
impair any other provision hereof.
IN WITNESS WHEREOF, Borrower has duly executed four original counterparts
of this Agreement as of the date first written above.
T. A. Leasing Corp.
By:
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Title:
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Hereunto Duly Authorized
Accepted:
BancBoston Leasing Inc.
By:
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Title:
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SCHEDULE 1
Collateral Locations
