Exhibit 10.21
SECURITY AGREEMENT
THIS SECURITY AGREEMENT made as of the 20th day of January, 2000, by
and between Semele Group Inc., a Delaware corporation (the "Pledgor"), and Equis
Financial Group Limited Partnership, a Massachusetts limited partnership (the
"Secured Party"),
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement for Purchase and Sale of Special
Beneficiary Interests dated November 18, 1999 (the "Purchase Agreement"), the
Pledgor has purchased from the Secured Party a beneficial interest in each of
the four following trusts, each such interest being defined in the Second
Amended and Restated Declaration of Trust, as amended to date, of each of the
trusts as a "Special Beneficiary Interest":
AFG Investment Trust A
AFG Investment Trust B
AFG Investment Trust C
AFG Investment Trust D
(such Special Beneficiary Interests collectively, the "Special Beneficiary
Interests," and such Trusts collectively the "Trusts");
WHEREAS, the Pledgor has paid for the Special Beneficiary Interests by
delivery of the Pledgor's promissory note payable to the Secured Party in the
principal amount of $9,652,500 (the "Note"); and
WHEREAS, the Pledgor has agreed to secure its commitments under the
Note by a pledge of the Special Beneficiary Interests now owned by the Pledgor;
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. PLEDGE.
In consideration of the acceptance by the Secured Party of the
Note and the undertakings of the Pledgor in this Agreement, the Pledgor hereby
grants a security interest to the Secured Party in the Special Beneficiary
Interests together with all of the Pledgor's rights to receive distributions in
respect to such securities, whether in cash, securities or other property, and
whether during the continuance of or on account of the liquidation of any issuer
of such securities, and all of its other rights as a holder of securities of
each such issuer, and all of its rights, title and interest in and to any
certificate, instrument or other evidence of any of the foregoing, and together
with any and all substitutions and replacements thereof, including any
securities or other instruments into which any of the foregoing may at any time
and from time to time be converted or exchanged (the "Pledged Interests"). An
Assignment form duly endorsed in blank by the Pledgor is herewith delivered to
the Secured Party, to be held on the terms and conditions
contained herein. The Pledgor hereby appoints the Secured Party as its attorney
in fact to cause the transfer of the Pledged Interests on the books of the
Trusts to the Secured Party or its designee upon the occurrence of an "Event of
Default," as such term is defined in the Note. The Secured Party shall hold the
Pledged Interests as security for the purposes described herein and shall not
encumber or dispose of such property except in accordance with the provisions of
this Agreement.
2. LIQUIDATION, RECAPITALIZATION, ETC.
Any sums paid upon or with respect to any of the Pledged
Interests upon the consolidation, liquidation, recapitalization, dissolution or
reorganization of any of the Trusts or any other issuer thereof shall be paid
over to the Secured Party to be held by it as security for the Note; and in case
any distribution of capital shall be made upon or with respect to any of the
Pledged Interests or any property shall be distributed upon or with respect to
any of the Pledged Interests pursuant to the recapitalization or
reclassification of the capital of the issuer thereof or pursuant to the
reorganization or consolidation thereof, the property so distributed shall be
delivered to the Secured Party to be held by it as security for the Note. All
sums of money and other property paid or distributed in respect of the Pledged
Interests upon any such stock consolidation, liquidation, dissolution,
reorganization, recapitalization or reclassification which are received by the
Pledgor shall, until paid or delivered to the Secured Party, be held in trust
for the Secured Party as security for the Note.
3. WARRANTY OF TITLE.
The Pledgor warrants that it has good and marketable title to
the Pledged Interests pledged hereunder on the date hereof, subject to no
pledge, lien, security interest, charge, option, restriction or other
encumbrance, and that it has power, authority and legal right to pledge such
Pledged Interests pursuant to this Agreement. The Pledgor covenants that it will
defend the Secured Party's rights and security interest in such Pledged
Interests against the claims and demands of all persons whomsoever; and the
Pledgor covenants that it will have the like title to and right to pledge all
other property hereafter pledged with the Secured Party hereunder and will
likewise defend the Secured Party's rights and security interest therein.
4. DISTRIBUTIONS AND VOTING RIGHTS.
Unless and until an Event of Default shall have occurred and
be continuing, the Pledgor shall be entitled to receive all cash distributions
paid in respect of the Pledged Interests and to vote the Pledged Interests and
to give consents, waivers and ratifications in respect of the Pledged Interests;
provided, however, that no vote shall be cast, or consent, waiver or
ratification given or action taken which would be inconsistent with or violate
any provisions of this Agreement or the Note. All such rights of the Pledgor to
receive any cash distributions shall cease in case an Event of Default shall
have occurred and be continuing, and in that case cash distributions shall be
paid over by the Pledgor to the Secured Party to be applied by it to the
satisfaction of the Note, and all cash distributions received by the Pledgor
shall, until so paid to the Secured Party, be held in trust for the Secured
Party as security for the Note. All such rights of the Pledgor to vote and give
consents, waivers and ratifications with respect to the Pledged Interests shall,
at
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the Secured Party's option as evidenced by the Secured Party's notifying the
Pledgor of such election, cease in case an Event of Default shall have occurred
and be continuing, and in that case the Secured Party shall have all such
rights.
5. DISCHARGE OF OBLIGATIONS.
Upon payment and performance in full of all obligations to be
performed by the Pledgor under the Note, the Secured Party shall transfer to the
Pledgor all of the Pledged Interests and all rights received by the Secured
Party as a result of the pledge contained herein.
6. DEFAULT.
Upon the occurrence of an Event of Default, the Secured Party
shall have the rights and remedies provided in the Uniform Commercial Code of
Massachusetts, and in that connection the Secured Party may, upon 5 days' notice
to the Pledgor sent by registered mail and without liability for any diminution
in price which may have occurred, sell all of the Pledged Interests in such
manner and for such price as the Secured Party may determine. It is agreed by
the Pledgor that such notice is reasonable. At any public sale, the Secured
Party shall be free to purchase all or any part of the Pledged Interests. Out of
the proceeds of any sale, the Secured Party may retain an amount equal to the
principal and interest then due under the Note, plus the amount of the expenses
of sale, including legal costs and reasonable attorneys' fees, and shall pay any
balance of such proceeds to the Pledgor.
7. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit
of the Pledgor and the Secured Party and their successors and assigns; provided,
however, that neither party may assign this Agreement without the consent of the
other.
8. OTHER PROVISIONS.
(a) WAIVERS; RIGHTS AND REMEDIES. No delay or omission on the
part of the Secured Party in exercising any right or remedy shall operate as a
waiver thereof or of any other right or remedy. No waiver by the Secured Party
shall be effective unless made in writing, and 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. All the Secured Party's rights and remedies shall be cumulative
and may be exercised singularly or concurrently, and nothing herein shall be
deemed to limit in any way any rights the Secured Party might otherwise have
under any other instrument or by law, including, without limiting the generality
thereof, the right to negotiate any note or other instrument together with any
collateral specifically described herein.
(b) ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and may be amended only by an instrument in writing referring to this Agreement
executed by the Pledgor and the Secured Party.
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(c) GOVERNING LAW. This Agreement shall be governed by and
construed and interpreted according to the laws of the Commonwealth of
Massachusetts.
(d) NOTICES. All notices required or permitted hereunder shall
be in writing and shall be deemed to have been duly given if delivered in hand
or deposited in the United States mail, postage prepaid, or with Federal Express
or comparable overnight delivery service, addressed as follows:
(i) if to the Pledgor:
Semele Group Inc.
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: President
(ii) if to the Secured Party:
Equis Financial Group Limited Partnership
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Chief Executive Officer
or to such other address as a party shall designate by notice to the other.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
SEMELE GROUP INC.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Title: President
EQUIS FINANCIAL GROUP LIMITED
PARTNERSHIP
By: Equis Corporation, its general partner
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Title: President
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