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BANKBOSTON.
BancBoston Leasing Inc.
CHATTEL PROMISSORY NOTE
$9,000,000.00 Boston, Massachusetts
August 26, 1999
FOR VALUE RECEIVED, the undersigned promise(s) to pay to the order
of BancBoston Leasing Inc. (together with any successors or assigns,
"BancBoston"), a Massachusetts corporation with its principal place of
business at 100 Federal Street, Boston, Massachusetts 02110, the principal
amount of Nine Million Dollars and Zero Cents ($9,000,000.00) with interest
thereon at the fixed rate of Ten and 35/100 percent (10.35%) per annum,
payable as follows: (i) interest on the principal amount advanced hereunder,
from the date of such advance through the last day of the month in which such
advance is made, which is payable on October 1, 1999, and thereafter (ii) in
32 equal installments of principal and interest of $323,049.15 each beginning
on October 1, 1999 and on the same day of each month thereafter. Interest
shall be calculated on the basis of a 360-day year for the actual number of
days elapsed including holidays and days on which BancBoston is not open for
the conduct of business.
SECTION 1. PAYMENT TERMS.
1.1 PAYMENTS. All payments under this Chattel Promissory Note
("Note") shall be made by the undersigned to BancBoston in United States
currency at BancBoston's address specified above (or at such other address as
BancBoston may specify), in immediately available funds, on or before 2:00
p.m. Boston, Massachusetts time, on the due date thereof. Payments received
by BancBoston prior to the occurrence of an Event of Default (as defined in
Section 3) will be applied FIRST to fees, expenses and other amounts due
hereunder (excluding principal and interest); SECOND, to accrued interest;
and THIRD to outstanding principal. After the occurrence of an Event of
Default, payments will be applied to the Obligations under this Note as
BancBoston determines in its sole discretion. Whenever payment hereunder is
to be made on a day other than BancBoston's business day, such payment shall
be due and payable on the immediately following business day for BancBoston.
1.2 PREPAYMENT; PREPAYMENT CHARGE. The undersigned may, at its
option, prepay all, but not less than all, of the principal of this Note
before maturity, which payments shall be applied in the inverse order of the
maturity of installments of principal hereunder provided, however, that if
any portion of the principal amount of this Note is prepaid for any reason,
whether voluntarily or as a result of acceleration of the indebtedness
evidenced hereby or otherwise, the undersigned shall pay to BancBoston
simultaneously with such prepayment, the following additional amounts:
A. a prepayment fee (the "Prepayment Fee") in an amount
equal to five percent (5%) of the principal amount outstanding under this
Note at the time of such prepayment if such prepayment should occur in months
1 through 12 of this Note, an amount equal to three percent (3%) of the
principal amount outstanding under this Note at the time of such prepayment
if such prepayment should occur in months 13 through 24 of this Note, an
amount equal to one and one-half percent (1.5%) of the principal amount
outstanding under this Note at the time of such prepayment if such prepayment
should occur in months 25 through 32 of this Note; and
B. a make-whole fee (the "Make-Whole Fee") equal to (i) the
present value as of the date of prepayment (the "Prepayment Date") of the
remaining principal and interest payments due under the Note discounted at
the Reinvestment Rate (defined below) plus 350 basis points from the
respective dates on which such installments would have been payable, less
(ii) the amount of principal prepaid on the Prepayment Date. Notwithstanding
the foregoing, in no event shall such Make-Whole Fee equal an amount less
than zero. As used herein, "Reinvestment Rate" shall mean the yield to
maturity as of the close of business three (3) business days prior to the
Prepayment Date on United States Treasury securities with a term equal to (or
a date that is nearest to) the scheduled maturity date of this Note 4/30/02.
All funds advanced hereunder which have been repaid may not be reborrowed,
except with the consent of BancBoston.
1.3 DEFAULT RATE. To the extent permitted by applicable law, upon
and after the occurrence of an Event of Default (whether or not BancBoston
has accelerated payment of this Note), interest on principal and overdue
interest shall, at the option of BancBoston, be payable on demand at a rate
per annum equal to two percent (2%) above the rate of interest otherwise
payable hereunder. If such default rate violates applicable law, the default
rate shall be at the maximum rate of interest per annum allowed by such law.
1.4 LATE PAYMENT CHARGE. If a payment of principal or interest
hereunder is not made within ten (10) days of its due date, the undersigned
will pay, on demand, a late payment charge equal to two percent (2%) above
the rate of interest otherwise payable on the amount of such payment. If the
late payment charge violates applicable law, the late payment charge shall be
at the maximum rate of interest per annum allowed by such law. Nothing in the
preceding sentence shall affect BancBoston's right to accelerate the maturity
of this Note in the event of any default in the payment of this Note.
SECTION 2. SECURITY AGREEMENT; COLLATERAL.
2.1 SECURITY AGREEMENT. This Note is issued pursuant to, and
entitled to the benefits of, and is subject to, the provisions of a certain
Master Security Agreement dated as of August 26, 1999 executed by the
undersigned (together with any amendments and riders thereto, the "Security
Agreement"), the terms and conditions of which are incorporated herein by
reference. The undersigned hereby ratifies and confirms the representations,
warranties, covenants and agreements set forth in the Security Agreement as
if made on the date of this Note. Neither this reference to the Security
Agreement, nor any provision thereof, shall affect or impair the absolute and
unconditional obligation of the undersigned to pay the principal of, and
interest on, this Note as provided herein.
2.2 COLLATERAL. The undersigned grants to BancBoston, as security
for the full and punctual payment and performance of the Obligations
including, without limitations, the Obligations under this Note, a continuing
lien, claim and encumbrance on, and security interest in, all equipment
("Equipment") set forth on Schedule 1 attached hereto and in all Collateral
as defined in the Security Agreement in accordance with the terms and
conditions as set forth therein. The Equipment shall constitute a portion of
the Collateral as defined in the Security Agreement for all purposes
thereunder.
SECTION 3. DEFAULTS AND REMEDIES. The occurrence of (i) a default in
the payment when five (5) consecutive days have elapsed since the date on
which the principal of, or interest on, this Note is due or (ii) any other
default in the payment or performance of this Note or of any other
Obligation, with any applicable grace or notice period which may be granted
in the Security Agreement having elapsed, or (iii) any Event of Default under
the Security Agreement shall constitute an "Event of Default" hereunder
thereby entitling BancBoston to exercise any and all remedies available at
law or under the Security Agreement, in any case, after the giving of any
required notice and the elapse of any cure period. All rights and remedies of
BancBoston are cumulative and are exclusive of any rights or remedies
provided by law or in equity or by agreement, and may be exercised separately
or concurrently. As used herein, "Obligation" means any obligation of the
undersigned hereunder or under the Security Agreement to BancBoston or to any
of its affiliates, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising; and any obligation of any
guarantor with respect to this Note or the Security Agreement, including any
person or entity who has pledged or granted to BancBoston a security interest
in, or other lien on, property on behalf of the undersigned as collateral for
the Obligations.
SECTION 4. MISCELLANEOUS.
4.1 WAIVER; AMENDMENT. No delay or omission on the part of
BancBoston in exercising any right hereunder shall operate as a waiver of
such right or of any other right under this Note. No waiver of any right or
any amendment hereto shall be effective unless in writing and signed by
BancBoston nor shall a waiver on one occasion bar or waive the exercise of
any such right on any future occasion. Without limiting the generality of the
foregoing, the acceptance by BancBoston of any late payment shall not be
deemed to be a waiver of the Event of Default arising as a consequence
thereof. Each Obligor waives presentment, demand, notice, protest, and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note or of any collateral for the
Obligations, and assents to any extensions or postponements of the time of
payment and to any other indulgences under this Note or with respect to any
such collateral, to any substitutions, exchanges or releases of any such
collateral, and to
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any additions or releases of any other parties or persons primarily or
secondarily liable hereunder, that, from time to time, may be granted by
BancBoston in connection herewith.
4.2 TAXES. The undersigned agrees to indemnify BancBoston and hold
it harmless from and against any transfer taxes, documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution, delivery, and performance of this Note or the pledge or grant of
any Collateral for the Obligations.
4.3 TERMS AND DEFINITIONS. The terms and conditions of this Note
shall prevail where there may be conflicts or inconsistencies with the terms
and conditions of the Security Agreement. All capitalized terms used in this
Note, unless otherwise defined, have the meanings set forth in the Security
Agreement.
4.4 LENDER RECORDS. The entries on the records of BancBoston
(including any appearing on this Note) shall be PRIMA FACIE evidence of the
aggregate principal amount outstanding under this Note and interest accrued
thereon.
4.5 GOVERNING LAW; CONSENT TO JURISDICTION. This Note is intended to
take effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts, without
giving effect to the conflict-of-laws provisions thereof. The undersigned
agrees that any suit for the enforcement of this Note may be brought in the
courts of such state or any Federal court sitting in such state and consents
to the non-exclusive jurisdiction of each such court and to service of
process in any such suit being made upon the undersigned by mail at the
address specified below. The undersigned hereby waives any objection that it
may now or hereafter have to the venue of any such suit or any such court or
that such suit was brought in an inconvenient forum.
4.6 SEVERABILITY; AUTHORIZATION TO COMPLETE; PARAGRAPH HEADINGS. If
any provision of this Note shall be invalid, illegal or unenforceable, such
provision shall be severable from the remainder of this Note and the
validity, legality and enforceability of the remaining provisions of this
Note shall not in any way be affected or impaired thereby. BancBoston is
hereby authorized, without further notice, to fill in blank spaces on this
Note pertaining to dates only, and to date this Note as of the date funds are
first advanced hereunder. Paragraph headings are for the convenience of
reference only and are not a part of this Note and shall not affect its
interpretation.
4.7 JURY WAIVER. BANCBOSTON (BY ITS ACCEPTANCE OF THIS NOTE) AND THE
UNDERSIGNED AGREE THAT NEITHER OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL
(A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER
ACTION BASED UPON, OR ARISING OUT OF, THIS NOTE, ANY RELATED INSTRUMENTS, ANY
COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM,
OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH
SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER BANCBOSTON NOR THE UNDERSIGNED HAS
AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH
WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
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BANKBOSTON.
BancBoston Leasing Inc.
IN WITNESS WHEREOF, the undersigned, by its duly authorized officer or
agent, has duly executed this Note, which is intended to take effect as a sealed
instrument, on the day and year first written above.
MORSE SHOE, INC.
(DEBTOR)
By: /s/ Philip G. Rosenberg
-----------------------------------
Title: Executive Vice President
Address: 555 Turnpike Street
Canton, MA 02021
JBI, INC.
(DEBTOR)
By: /s/ Philip G. Rosenberg
-----------------------------------
Title: Executive Vice President
Address: 555 Turnpike Street
Canton, MA 02021
THE CASUAL MALE, INC.
(DEBTOR)
By: /s/ Philip G. Rosenberg
-----------------------------------
Title: Executive Vice President
Address: 555 Turnpike Street
Canton, MA 02021
WGS CORP.
(DEBTOR)
By: /s/ Philip G. Rosenberg
-----------------------------------
Title: Executive Vice President
Address: 555 Turnpike Street
Canton, MA 02021
TCMB&T, INC.
(DEBTOR)
By: /s/ Philip G. Rosenberg
-----------------------------------
Title: Executive Vice President
Address: 555 Turnpike Street
Canton, MA 02021
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BANKBOSTON.
BancBoston Leasing Inc.
SCHEDULE 1
TO
CHATTEL PROMISSORY NOTE
dated August 26, 1999
of
Morse Shoe, Inc., JBI, Inc., The Casual Male, Inc., WGS Corp., TCMB&T, Inc.
All equipment, includes, without limitation, "equipment" as defined
in the UCC, and including all of the Debtor's equipment, machinery, and store
fixtures now owned or hereafter acquired, including but not limited to all
store fixtures, racking, shelving, displays, and computer equipment, office
machines, together with all parts, accessories, attachments, substitutions,
all accounts, contract rights, general intangibles, instruments, rents,
monies, payments and all other rights arising out of the use, sale or lease
or other disposition of the Equipment, all records or data relating to the
Equipment, and repairs and any and all proceeds thereof, including without
limitation insurance proceeds.
See EXHIBIT A to Schedule 1 of this Chattel Promissory Note for Equipment
Locations.
Check if the Equipment is classified fixtures:
[ ] fixtures _____________
[ ] non-fixtures ___________
MORSE SHOE, INC.
(DEBTOR)
By: /s/ Philip G. Rosenberg
---------------------------------
Title: Executive Vice President
Address: 555 Turnpike Street
Canton, MA 02021
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JBI, INC.
(DEBTOR)
By: /s/ Philip G. Rosenberg
---------------------------------
Title: Executive Vice President
Address: 555 Turnpike Street
Canton, MA 02021
THE CASUAL MALE, INC.
(DEBTOR)
By: /s/ Philip G. Rosenberg
---------------------------------
Title: Executive Vice President
Address: 555 Turnpike Street
Canton, MA 02021
WGS CORP.
(DEBTOR)
By: /s/ Philip G. Rosenberg
---------------------------------
Title: Executive Vice President
Address: 555 Turnpike Street
Canton, MA 02021
TCMB&T, INC.
(DEBTOR)
By: /s/ Philip G. Rosenberg
---------------------------------
Title: Executive Vice President
Address: 555 Turnpike Street
Canton, MA 02021
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