**Exhibit 10.17**

 

**MULTI-PARTY SECURITY AGREEMENT**

 

Thisis an agreement between Commerce Bank & Trust Company, a Massachusettstrust company with offices in Worcester, Massachusetts (“Secured Party”), andthe following organizations (collectively “Debtors”):

 

BostonRestaurant Associates, Inc., a Delaware corporation (“BRAI”);

Ocean, Inc.,a Massachusetts corporation (“Ocean”);

FantailRestaurant, Inc., a Massachusetts corporation (“Fantail”);

PizzeriaRegina of Florida, Inc., a Florida corporation (“Florida”);

PizzeriaRegina of Holyoke, Inc., a Massachusetts corporation (“PR Holyoke”);

PizzeriaRegina of Kingston, Inc., a Massachusetts corporation (“PR Kingston”);

PizzeriaRegina of New Jersey, Inc., a New Jersey corporation

(“PR New Jersey”);

PizzeriaRegina Providence, Inc., a Rhode Island corporation

(“PR Providence”);

BostonRestaurant Associates International, Inc., a Delaware corporation

(“International);

PolcariEnterprises, Inc., a Massachusetts corporation (“Polcari I”);

Polcari’s, Inc.,a Delaware corporation (“Polcari II”);

Polcari’sof Salem New Hampshire, Inc., a New Hampshire corporation

(“PolcariIII”); and

Polcari’sof Woburn, Inc., a Massachusetts corporation (“Polcari IV”).

 

On thedate of this agreement Secured Party has entered into a certain Loan Agreement(“Loan Agreement”) with BRAI and with the Trustee of BRA Nominee Trust (“Trustee”).  Also on this date, Secured Party and Debtors,together with the Trustee and Polcari’s of Cambridge, Inc., have enteredinto a certain Multi-Party Guaranty Agreement (“Guaranty Agreement”), whichprovides essentially that Debtors guaranty all obligations owed to SecuredParty by BRAI and/or the Trustee.

 

1.             **Grant**.

 

Forthe purposes stated in Section 2 below, each of the Debtors (a) grantsto Secured Party a security interest in the property defined in Section 3below as “Collateral” and (b) to the extent applicable, pledges andcollaterally assigns the Collateral to Secured Party.

 

2.             **Purpose.**

 

Theforegoing grant, pledge, and assignment shall secure the full and timelypayment, performance, and observance of all Debtors’ monetary and non-monetaryobligations to Secured Party now existing and hereafter arising, direct orindirect, absolute or contingent, liquidated or unliquidated, due or to becomedue, and whether joint, several, or joint and several (collectively “Obligations”),including without implied

 

----

 

limitation the Debtors’ obligations arising from or relating to theLoan Agreement and/or the Guaranty Agreement.

 

3.             **Collateral.**

 

“Collateral”means all of the Debtors’ rights and interests now owned or hereafter acquiredin the property described on Exhibit A1, attached, together with all cashand non-cash proceeds and products of such property.  Each category of collateral listed on Exhibit A1shall have the meaning attributed to it in the Massachusetts Uniform CommercialCode, as amended from time to time, the definitional sections of which areincorporated here by reference as if set forth fully in this agreement.  Without limiting the generality of theforegoing provisions, “Collateral” also means and includes all rights andinterests of Debtors in (a) the trademarks listed on Exhibit A2,attached, (b) any liquor license listed on Exhibit A3, attached, and (c) anycash and non-cash proceeds thereof.  Notwithstandingthe foregoing, “Collateral” does not include (i) any liquor licensealready pledged to a landlord of the Debtors, (ii) any liquor license apledge of which the issuing municipality declines to approve, and (iii) anyleasehold interest the collateral assignment of which is prohibited by thelease.

 

4.             **Covenants, Warranties, and Agreements**.  In the remainder of this agreement the term “Debtor”refers individually to each of the Debtors.

 

A.            **Ownership and location of Collateral. **Each Debtor warrants to Secured Party and covenants withSecured Party that (1) it owns the Collateral free and clear of allclaims, liens, and security interests, other than those listed on Exhibit B,attached (“Permitted Encumbrances”), (2) it has the power and authority tomake and perform this agreement, (3) the only locations of its Collateralare and will be at the places listed on Exhibit C, attached, and (4) ithas and will have no Collateral except at the foregoing locations or in transitthereto.  The term “PermittedEncumbrances” shall include not only the currently existing liens listed on Exhibit Bbut also any liens arising from any equipment financing that is expresslypermitted in the Loan Agreement.

 

B.            **General. **Each Debtorcovenants and agrees with Secured Party as follows:

 

(1)           itwill timely pay Secured Party all amounts required by the Obligations, whetheron demand, at maturity, by acceleration, or otherwise, and will otherwiseperform and observe strictly in accordance with their terms all of the Obligations;

 

(2)           itwill defend the Collateral against the claims and demands of all persons andwill indemnify and hold harmless Secured Party against all such claims anddemands unless the same arise from Secured Party’s gross negligence or willfulmisconduct.

 

2

----

 

(3)           itwill not permit any of the Collateral, or any business records relating to theCollateral, to be removed from a permitted location without the prior writtenconsent of Secured Party, except (i) in the ordinary course of business or(ii) upon a sale of assets expressly approved by Secured Party in writingin advance;

 

(4)           itwill immediately advise Secured Party in writing of any change in its place ofbusiness, or the opening of any new place of business;

 

(5)           itwill not (a) permit any security interests (other than Secured Party’ssecurity interest and the Permitted Encumbrances) to attach to any of theCollateral; (b) permit any of the Collateral to be levied upon under anylegal process or to become the subject of any lien unless such lien isdissolved within thirty (30) days after the lien arises; (c) transfer inany manner whatsoever any interest in the Collateral, except (i) in theordinary course of business, or (ii) upon a sale of assets expressly approvedby Secured Party in writing in advance; (d) permit to be done or to occuranything that may materially impair the value of any of the Collateral or thesecurity intended to be afforded by this agreement; or (e) permit anytangible Collateral to become an accession to other goods, unless such othergoods are owned by Debtor; and

 

(6)           itwill (a) perform and observe in full and on time all its duties and otherundertakings with respect to the obligations secured by the Permitted Encumbrancesand (b) will not materially modify the obligations secured by thePermitted Encumbrances.

 

C.            **Promissory notes and tangible chattel paper**.  If at any time any Debtor holds or acquiresany promissory notes or tangible chattel paper, then within five (5) businessdays such Debtor shall endorse, assign, and deliver such items to SecuredParty, together with such instruments of transfer or assignment, duly executedin blank, as Secured Party from time to time may specify.

 

D.            **Deposit accounts**.  Foreach deposit account that any Debtor at any time opens or maintains, suchDebtor shall, within five business days after Secured Party’s request followingan Event of Default, pursuant to an agreement in form and substancesatisfactory to Secured Party, at Secured Party’s election, either (1) causethe depositary bank to agree to comply at any time with instructions given bySecured Party to such depositary bank directing the disposition of funds fromtime to time credited to such deposit account, without further consent of theDebtor, or (2) arrange for Secured Party to become the customer of thedepositary bank with respect to the deposit account, such that Debtor ispermitted to withdraw funds from the deposit account only with the consent ofSecured Party.  The provisions of this section shallnot apply to (i) any deposit account for which the Debtor, the depositarybank and Secured Party have entered into a control agreement or cash collateralagreement, (ii) any deposit accounts as to which Secured Party is thedepositary, and (iii) any deposit account specially and exclusively usedfor payroll, payroll taxes, employee expense reimbursement, and other employeewage and benefit payments for the Debtor’s employees.

 

3

----

 

E.             **Investment property**. If any Debtor at any time holds or acquires any certificated securities,then within five (5) business days after the signing of this agreement orthe acquisition of the certificates, whichever is earlier, such Debtor shallendorse, assign, and deliver such certificates to Secured Party, accompanied bysuch instruments of transfer or assignment, duly executed in blank, as SecuredParty from time to time may specify.  Ifany securities now or hereafter acquired by any Debtor are uncertificated andare issued to such Debtor or its nominee directly by the issuer, then suchDebtor shall immediately notify Secured Party thereof, and within five businessdays after Secured Party’s request, pursuant to an agreement in form andsubstance satisfactory to Secured Party, at Secured Party’s election eithershall (1) cause the issuer to agree to comply with instructions given bySecured Party as to such securities, without further consent of the Debtor orsuch nominee, or (2) arrange for Secured Party to become the registeredowner of the securities.  If anycertificated securities, uncertificated securities, or other investmentproperty now or hereafter acquired by any Debtor are held by such Debtor or itsnominee through a securities intermediary or commodity intermediary, then suchDebtor immediately shall notify Secured Party thereof, and within five businessdays after Secured Party’s request, pursuant to an agreement in form andsubstance satisfactory to Secured Party, at Secured Party’s election the Debtoreither shall (a) cause such securities intermediary or commodityintermediary to agree (i) to comply with entitlement orders or otherinstructions given by Secured Party as to such securities or other investmentproperty, or (ii) to apply any value distributed on account of anycommodity contract as directed by Secured Party, in each case without furtherconsent of the Debtor or such nominee, or (b) in the case of financialassets or other investment property held through a securities intermediary,arrange for Secured Party to become the entitlement holder with respect to suchinvestment property, with the Debtor being permitted to exercise rights towithdraw or otherwise deal with such investment property only with the consentof Secured Party.  Secured Party shallnot give any such entitlement orders, instructions, or directions to any suchissuer, securities intermediary, or commodity intermediary, and shall notwithhold its consent to the exercise of any withdrawal or dealing rights by theDebtor, unless an Event of Default (i) has occurred and is continuing or (ii) wouldresult from a requested withdrawal or dealing. The provisions of this section shallnot apply to any financial assets credited to a securities account for whichSecured Party is the securities intermediary.

 

F.             **Collateral in the possession of a bailee**.  If at any time any goods that constituteCollateral are in the possession of a bailee, then the Debtor which owns suchgoods promptly shall notify Secured Party. If requested by Secured Party, such Debtor promptly shall obtain anacknowledgement from the bailee, in form and substance satisfactory to SecuredParty, that the bailee holds such Collateral for the benefit of Secured Partyand will act upon Secured Party’s instructions without the further consent ofthe Debtor.  Secured Party shall not giveany such instructions unless an Event of Default has occurred and is continuingor would occur after taking into account any action by the Debtor with respectto the bailee.

 

4

----

 

G.            **Electronic chattel paper and transferable records**.  If any Debtor at any time holds or acquiresan interest in any electronic chattel paper or any “transferable record,” asthat term is defined in Section 201 of the federal Electronic Signaturesin Global and National Commerce Act, or in §16 of the Uniform ElectronicTransactions Act as in effect in any relevant jurisdiction, such Debtorpromptly shall notify Secured Party thereof and at the request of Secured Partyshall take such action as Secured Party requests to vest in Secured Partycontrol, under § 9-105 of the Uniform Commercial Code (“UCC”), of suchelectronic chattel paper, or control, under Section 201 of the federalElectronic Signatures in Global and National Commerce Act, or as the case maybe, §16 of the Uniform Electronic Transactions Act, as in effect in suchjurisdiction, of such transferable record. Secured Party agrees to arrange,pursuant to procedures satisfactory to Secured Party and as long as suchprocedures will not result in Secured Party’s loss of control, for the Debtorto make alterations to the electronic chattel paper or transferable recordpermitted under UCC § 9-105, or as the case may be, Section 201 ofthe federal Electronic Signatures in Global and National Commerce Act or §16 ofthe Uniform Electronic Transactions Act for a party in control to make withoutloss of control, unless an Event of Default has occurred and is continuing orwould occur after taking into account any action by the Debtor with respect tosuch electronic chattel paper or transferable record.

 

H.            **Letter-of-credit rights**.  If any Debtorat any time is a beneficiary under a letter of credit, then such Debtorpromptly shall notify Secured Party.  AtSecured Party’s request and option the Debtor shall, pursuant to an agreementin form and substance satisfactory to Secured Party, either (1) arrangefor the issuer and any confirmer of such letter of credit to consent to anassignment to Secured Party of the proceeds of any drawing under the letter ofcredit or (2) arrange for Secured Party to become the transfereebeneficiary of the letter of credit, provided that Secured Party agrees thatthe proceeds of any drawing under the letter of credit are to be applied to theObligations.

 

I.              **Commercial tort claims**. If any Debtor at any time holds or acquires a commercial tort claim,then such Debtor immediately shall notify Secured Party in a writing of thedetails of such claim and shall grant to Secured Party in writing a securityinterest in such claim and in its proceeds, all upon the terms of thisagreement, such writing to be in form and substance reasonably satisfactory toSecured Party.

 

J.             **Goods.**  With respectto Collateral consisting of goods, each Debtor covenants and agrees withSecured Party as follows:

 

(1)           Debtorwill insure the Collateral against all hazards requested in good faith bySecured Party, such insurance being issued by insurers reasonably satisfactoryto Secured Party and being in an amount reasonably satisfactory to SecuredParty; will cause Secured Party to be named as sole loss payee on suchinsurance; and will use the proceeds of such insurance, if Secured Partyreleases the proceeds to Debtor pursuant to the following subsection, to repairor replace the Collateral free of all liens and security interests other thanSecured Party’s and (to the extent applicable) the 

 

5

----

 

Permitted Encumbrances.  IfDebtor fails to obtain such insurance, Secured Party shall have the right (butnot the obligation) to obtain it at Debtor’s expense, whereupon Debtor shallreimburse Secured Party on demand;

 

(2)           Insuranceproceeds attributable to the Collateral shall be delivered to and initiallyheld by Secured Party as cash collateral for the Obligations.  If no Event of Default is outstanding, , then(a) if the amount of proceeds is less than $50,000, Secured Party shalldeliver such proceeds to Debtor and Debtor shall repair or replace the damagedor destroyed Collateral, or (b) if the amount of proceeds equals orexceeds $50,000, and if Secured Party reasonably determines that it is feasiblefor the damaged or destroyed Collateral to be repaired or replaced withoutmaterial prejudice to Secured Party, Secured Party shall disburse from time totime all or any part of such proceeds upon such terms and conditions as SecuredParty reasonably decides advisable, for direct application by Debtor to therepair or replacement of the Collateral. If any Event of Default is outstanding when Secured Party receives anyinsurance proceeds, or if any Event of Default occurs while Secured Party isholding any such proceeds, then instead of delivering such proceeds to Debtor,Secured Party may apply all or any part of such proceeds to payment of theObligations;

 

(3)           Debtorwill keep the Collateral in good condition and repair, reasonable wear and tearexcepted, and will permit Secured Party and its agents to inspect theCollateral from time to time upon oral notice of at least twenty-four hoursduring normal business hours upon Secured Party’s request; and

 

(4)           Debtorwill pay Secured Party on demand all amounts, including reasonable attorney’sfees, paid or incurred by Secured Party (a) for any costs which SecuredParty incurs to discharge Debtor’s duties with regard to taxes, levies,insurance, repairs, or maintenance of the Collateral, and (b) in takingpossession of, disposing of, or preserving the Collateral.

 

K.            **Other Collateral**. With respect to all Collateral other than inventory and equipment, eachDebtor covenants and agrees as follows:

 

(1)           immediatelyafter Secured Party’s request from time to time upon and during the continuanceof an Event of Default, Debtor will give notice of Secured Party’s securityinterest to any persons obligated to Debtor on any such Collateral;

 

(2)           withinfive (5) business days after Secured Party’s request upon and during thecontinuance of an Event of Default, Debtor will deliver to Secured Party anyCollateral requested by it, in connection with which Debtor on demand shallmake or furnish all endorsements, notations, records, information, and otherforms of assistance requested by Secured Party to enable it to perfect itssecurity interest in such Collateral, to hold, transfer, or collect theproceeds of such Collateral, and/or to enforce Debtor’s and Secured Party’srights with respect to such Collateral; and

 

6

----

 

(3)           itwill take any actions that are reasonably necessary or advisable to preserveits rights against account debtors and any other obligors on such Collateral.

 

L.             **Other actions**.  EachDebtor agrees to take any other action requested by Secured Party to ensure theattachment, perfection, first priority, and enforceability of Secured Party’ssecurity interest in any and all of the Collateral, including without impliedlimitation, (a) executing, delivering, and (where appropriate) filingfinancing statements and amendments under the UCC, to the extent, if any, thatDebtor’s signature is required, (b) causing Secured Party’s name to benoted as secured party on any certificate of title for titled goods if suchnotation is a condition to attachment, perfection, priority, or enforceabilityof Secured Party’s security interest in such Collateral, (c) complyingwith any provision of any statute, regulation, or treaty of the United Statesas to any Collateral if compliance with such provision is a condition toattachment, perfection, priority, or enforceability of Secured Party’s securityinterest in such Collateral, (d) using its best efforts to obtaingovernmental and other third party consents and approvals, including withoutlimitation any consent of any licensor, lessor, or other person obligated onCollateral, (e) using its best efforts to obtain waivers from mortgageesand landlords (but only for locations that are not in shopping malls) in formand substance reasonably satisfactory to Secured Party and (f) taking allactions required by any earlier or subsequent versions of the UCC or by otherlaw, as reasonably determined by Secured Party.

 

5.             **Representations and warranties concerning Debtors’ names and legalstatus**.

 

Debtorsrepresent and warrant to Secured Party (a) that Debtors’ exact legal namesand organizational status are correctly stated on the first page of thisagreement and (b) that any organizational identification number iscorrectly stated on the signature page of this agreement.

 

6.             **Covenants concerning Debtors’ legal status**.

 

Debtorscovenant with Secured Party that (a) without providing at least thirtydays prior written notice to Secured Party, no Debtor will change its name, itsplace of business, the location of its chief executive office, its mailingaddress, or its organizational identification number, (b) if any Debtorthat does not have an organizational identification number later obtains one,such Debtor immediately shall notify Secured Party, and (c) no Debtor willchange its type of organization, jurisdiction of organization, or other legalstructure.

 

7.             **Miscellaneous representations and warranties**.

 

Debtorsrepresent and warrant to Secured Party that (a) none of the Collateralconstitutes, or is the proceeds of, “farm products” as defined in § 9-102(a)(34)of the UCC, and (b) no Debtor holds any commercial tort claim.

 

7

----

 

8.             **Covenants concerning Collateral**.

 

EachDebtor covenants with Secured Party that it will (a) not use theCollateral in violation of any law or any policy of insurance, (b) paywhen due all taxes, assessments, governmental charges, and levies made upon theCollateral, incurred in connection with the use or operation of the Collateral,or incurred in connection with this agreement, unless (x) the same are beingcontested in good faith by proper legal proceedings and (y) adequate reserveshave been established and maintained therefor, and (c) operate itsbusiness in compliance with (i) all applicable material provisions of thefederal Fair Labor Standards Act, as amended, and (ii) all applicablematerial provisions of federal, state, and local statutes and ordinancesdealing with the control, shipment, storage, or disposal of hazardous materialsor substances.

 

9.             **Power of Attorney**.

 

Forpurposes of Section 4L of this agreement, each Debtor irrevocably appointsSecured Party as its attorney-in-fact to do all acts and things which SecuredParty in good faith decides advisable to perfect and continue perfected itsrights and to protect the Collateral, all as fully and completely as eachDebtor could do if such Debtor were acting on its own behalf.  The powers conferred on Secured Party in thissection are solely to protect its interests in the Collateral and shallnot impose any duty upon it to exercise any such powers.  Secured Party shall be accountable only forthe amounts that it actually receives as a result of the exercise of theforegoing powers.  Neither Secured Partynor any of its officers, directors, employees, or agents shall be liable toDebtors for any act or failure to act, except for Secured Party’s own grossnegligence or willful misconduct.

 

10.           **Authorization.**

 

EachDebtor irrevocably authorizes Secured Party at any time to file any initial UCCfinancing statements and amendments that (a) describe the Collateral (i) as“all assets” of such Debtor (or terms of similar import), regardless of whetherany particular asset falls within the scope of Article 9 of the UCC, or (ii) asbeing of an equal or lesser scope or with greater detail, and (b) includeany other information required by part 5 of Article 9 of the UCC,including (i) whether such Debtor is an organization, the type oforganization, and any organization identification number issued to such Debtorand, (ii) in the case of a financing statement filed as a fixture filingor indicating Collateral as as-extracted collateral or timber to be cut, asufficient description of the real property to which the Collateralrelates.  Each Debtor agrees to furnishall such information to Secured Party promptly upon Secured Party’s request.

 

11.           **Events of Default**.

 

Eachof the following circumstances and occurrences shall constitute an Event ofDefault under this agreement:

 

8

----

 

(1)           Materialbreach, with respect to any Debtor, of any warranty, covenant, or otherprovision of this agreement unless (a) such breach is cured within anexpressly applicable cure period or (b) if this agreement provides noexpressly applicable cure period, then (i) the breach is readily curableand (ii)  the breach is fully cured within the shortest reasonable period,which shall not exceed thirty (30) days;

 

(2)           Materialmisrepresentation, with respect to any Debtor, in this agreement or in anydocument furnished to Secured Party by or on behalf of any Debtor;

 

(3)           Theimposition upon any Collateral of any lien or encumbrance other than thePermitted Encumbrances and/or a security interest in favor of Secured Party;

 

(4)           Themaking of any levy, seizure, sequestration, or attachment of or upon anyproperty of Debtors in an aggregate amount exceeding $50,000, unless releasedor dissolved within ten (10) days;

 

(5)           Theissuance of any injunction or other order which, in Secured Party’s judgment,materially impairs any Debtor’s business or financial condition, unless suchinjunction is dissolved or stayed within ten (10) days after its issuance;

 

(6)           Thefiling by any Debtor in any forum of any petition, answer, or similar documentseeking (a) relief under any bankruptcy, insolvency, or similar law, or (b) theappointment of a receiver, trustee, or other fiduciary to take charge of any ofany Debtor’s property;

 

(7)           Thefiling against any Debtor in any forum of any petition or similar documentunder any bankruptcy, insolvency, or similar law, if such is not dismissedwithin forty-five (45) days;

 

(8)           Thefiling against any Debtor in any forum of any petition or similar documentseeking the appointment of a receiver, trustee, or other fiduciary to takecharge of any of such Debtor’s property, if such is not dismissed withinforty-five (45) days;

 

(9)           AnyDebtor’s written statement or acknowledgment of its inability to pay its debtsas they become due;

 

(10)         Anyassignment by any Debtor for the benefit of any of its creditors, or anycomposition by any Debtor with any of its creditors;

 

(11)         Exceptas otherwise provided in Section 21 of this agreement, the dissolution ofany Debtor as a corporation;

 

9

----

 

(12)         Thecommencement of any proceeding seeking the dissolution of any Debtor, unlesssuch proceeding is dismissed within forty-five (45) days; or

 

(13)         Anycircumstance or occurrence that constitutes an Event of Default as defined inthe Loan Agreement, the Guaranty Agreement, or in any other legal document thatsecures, evidences, or states any of the Obligations.

 

12.           **Power to Sell or Collect Collateral.**

 

A.            Afterany Event of Default, Secured Party shall have, in addition to all other rightsand remedies, the rights and remedies of a secured party under the applicableprovisions of the UCC, including without implied limitation the right to takepossession of the Collateral.  For thatpurpose Secured Party may enter upon any premises on which the Collateral maybe situated and may remove the Collateral therefrom.  Unless the Collateral is perishable,threatens to decline speedily in value, or is of a type customarily sold on arecognized market, Secured Party shall give Debtors at least ten (10) days’prior written notice of the time and place of any public sale of Collateral orof the time after which any private sale or any other intended disposition isto be made.

 

B.            Atany time in its discretion after any Event of Default, Secured Party may forthe purpose of obtaining security for payment of the Obligations (1) transferany securities or other property constituting Collateral into its own name orthat of its nominee, (2) receive the income thereon, (3) hold thesame as security, or (4) apply it against principal, interest, or othersums due on the Obligations, and Secured Party may demand, collect, receiptfor, settle, compromise, adjust, sue for, foreclose, or realize upon anyCollateral as it may determine, whether or not the same are then due.  After any Event of Default, Secured Party (1) mayreceive, open, and dispose of mail addressed to Debtors, (2) may endorsenotes, checks, drafts, money orders, documents of title, or other evidence ofpayment, shipment, or storage or any other form of Collateral, on behalf of andin the name of Debtors, and (3) may sign and deliver to any post office aletter substantially in the form attached as Exhibit D.

 

13.           **Standards for exercising remedies**.

 

To the extent that applicable law imposes duties on SecuredParty to exercise remedies in a commercially reasonable manner, Debtorsacknowledge and agree that it is not commercially unreasonable for SecuredParty (a) to decline to incur expenses that are reasonably necessary (i) toprepare the Collateral for disposition or (ii) to complete work inprocess, (b) to fail to obtain third-party consents for access to anyCollateral or to obtain (or if not required by other law, to fail to obtain)governmental or third party consents for the collection or disposition of theCollateral, (c) to fail to (i) exercise collection remedies againstaccount debtors or other persons obligated on the Collateral or (ii) removeliens, encumbrances, or any adverse claims against the Collateral, (d) toexercise collection remedies against account debtors and other personsobligated on the Collateral, directly or through the use of collection agenciesand other collection

 

10

----

 

specialists, (e) to advertise dispositions of theCollateral through publications or media of general circulation, whether or notthe Collateral is of a specialized nature, (f) to contact other persons,whether or not in the same business as Debtors, for expressions of interest inacquiring all or any portion of the Collateral, (g) to hire one or moreprofessional auctioneers to assist in the disposition of the Collateral,whether or not the Collateral is of a specialized nature, (h) to disposeof the Collateral by utilizing Internet sites that provide for the auction ofassets of the types included in the Collateral or that have the reasonablecapability of doing so, or that match buyers and sellers of assets, (i) todispose of assets in wholesale rather than retail markets, (j) to disclaimdisposition warranties, (k) to purchase insurance or credit enhancements toinsure Secured Party against risks of loss, collection, or disposition of theCollateral or to provide to Secured Party a guaranteed return from thecollection or disposition of the Collateral, and (l) to obtain the services ofbrokers, investment bankers, consultants, and other professionals to assistSecured Party in the collection or disposition of any of the Collateral.Debtors acknowledge (a) that the purpose of this section is toprovide a nonexhaustive list of examples of actions or omissions that would notbe commercially unreasonable in Secured Party’s exercise of its remedies and (b) thatother actions or omissions by Secured Party shall not be deemed commerciallyunreasonable because of their omission from this section.  Nothing in this section shall beconstrued to grant any rights to Debtors or to impose any duties upon SecuredParty that would not have been granted or imposed by this agreement or byapplicable law in the absence of this section.

 

14.           **Marshalling.**

 

SecuredParty shall not be required to marshal any present or future collateralsecurity for the Obligations or to resort to such collateral security or otherassurances of payment in any particular order. All of Secured Party’s rights under this agreement and in respect ofsuch collateral security and other assurances of payment shall be cumulativeand in addition to all other rights, however existing or arising.  To the extent that it lawfully may do so,Debtors agree not to invoke any law relating to the marshalling of collateralwhich might delay or impede the enforcement of Secured Party’s rights underthis agreement, or under any other instrument creating or evidencing any of theObligations, under which any of the Obligations is outstanding or by which anyof the Obligations is secured or payment thereof is otherwise assured.  To the extent that it lawfully may do so,Debtors hereby irrevocably waive the benefits of all such laws.

 

15.           **Deposits.**

 

Regardlessof the adequacy of the Collateral, any deposits or other sums at any timecredited by or due from Secured Party to any Debtor may, at any time after anyEvent of Default, be applied to the Obligations or may be set off againstliabilities on which such Debtor is liable as a primary obligor and may, at orafter the maturity thereof, be applied to or set off against liabilities onwhich such Debtor is liable as a secondary obligor.

 

11

----

 

16.           **Waivers and Assents**.

 

To thefull extent permitted by law, but except as expressly provided otherwise inthis agreement, Debtors waive demand, notice, and protest of all instruments;notice of acceptance of this agreement; notice of loans made, credit extended,and collateral received or delivered; notice of all other actions taken bySecured Party in reliance on this agreement; and all other demands and noticesof any description.  With respect both tothe Obligations and the Collateral, Debtors assent to any extension,postponement, or other indulgence; to any substitution, exchange, or release ofany Collateral; to the addition or release of any person primarily orsecondarily liable; to the acceptance of partial payments; and to anysettlement, compromise, or adjustment, all in such manner and at such time ortimes as Secured Party decides advisable. To the full extent permitted by law, Secured Party shall have no duty asto the collection or protection of the Collateral or any income therefrom; asto the preservation of rights against prior parties; or as to the preservationof any rights pertaining thereto.  SecuredParty may exercise its rights with respect to the Collateral without resort orregard to other sources of reimbursement for the Obligations.  Secured Party shall not be deemed to havewaived any of its rights unless such waiver is given in writing and is signedby Secured Party.  No delay or omissionon the part of Secured Party in exercising any right shall operate as awaiver.  No waiver shall arise from anycourse of conduct by Secured Party.  Awaiver on one occasion shall not be construed as a bar to, or waiver of, anyright on any future occasion.  All rightsand remedies of Secured Party, whether available by law or stated in thisagreement or in any other instrument or document, shall be cumulative, and allsuch rights and remedies may be exercised singly, concurrently, or sequentially.

 

17.           **Expenses; Proceeds of Collateral**.

 

Debtorsshall reimburse Secured Party on demand for any and all expenses, includingreasonable professional fees and reasonable legal fees, incurred or paid bySecured Party in good faith in protecting or enforcing its rights under thisagreement (i) after notice to Debtors, if no Event of Default is thenoutstanding, or (ii) after any Event of Default.  After deducting all such expenses, thebalance of any proceeds of collection or sale of the Collateral shall be appliedto the payment of principal, interest, and other sums due on the Obligations insuch order as Secured Party may determine, proper allowance for interest onObligations not then due being made, and any surplus shall be paid as requiredby law.

 

18.           **General.**

 

A.            Anynotices to a Debtor shall be effective (1) upon actual delivery toBorrower’s principal office or (2) when sent by certified mail (returnreceipt requested) to Borrower’s principal office.  In the case of notice by certified mail,notice shall be deemed given on the third business day after mailing.  Debtors agree that a single notice given toany of them at Borrower’s principal office shall constitute notice to allDebtors for all purposes.

 

12

----

 

B.            Noticesto Secured Party shall be effective (1) upon actual delivery to SecuredParty, to the attention of its Senior Loan Officer, 390 Main Street, Worcester,Massachusetts 01608, or (2) on the third business day after mailing bycertified mail to such address.

 

C.            Copiesof notices shall be sent to counsel as follows, but failure to send such a copyshall not affect the validity of the notice:

 
| Debtor:                            |   | Secured Party:                             |
|------------------------------------|--------|--------------------------------------------|
| Andrew P.  Strehle, Esq.      |   | Dale R.  Harger, Esq.                 |
| Brown Rudnick Berlack  Israels LLP |   | Mountain,  Dearborn & Whiting LLP |
| 1 Financial  Center                |   | 370 Main Street                            |
| Boston, MA 02111                   |   | Worcester, MA  01608                       |

 

D.            Becausethis agreement has been negotiated and signed in Massachusetts in reliance uponthe applicability of Massachusetts substantive law, the construction, validity,and performance of this agreement shall be governed by the laws ofMassachusetts, disregarding any law or doctrine that might dictate theapplication of the law of another state except for Sections 9-301 through 9-307of the Massachusetts UCC.  This agreementshall benefit the parties’ successors and assigns and shall bind theirsuccessors and assigns.  This agreementmay not be amended, supplemented, or otherwise changed except by a writteninstrument signed by both parties.  Thisagreement contains the entire understanding of the parties, superseding allnegotiations, representations, and prior understandings with respect to thesubject matter hereof.

 

E.             Thedefined terms “Loan Agreement” and “Guaranty Agreement” shall include allfuture amendments, restatements, renewals, and replacements.

 

F.             Allobligations of Debtors under this agreement shall be joint and several.

 

19.           **Jury waiver**.

 

SECUREDPARTY AND EACH DEBTOR WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY ACTION IN WHICHSECURED PARTY AND ANY OF THE DEBTORS IS A PARTY.

 

20.           **Organizational number.**

 

EachDebtor represents that its “organizational number” for UCC purposes, if any, isset forth on the attached Exhibit E.

 

13

----

 

21.           **Possible closures**.

 

SecuredParty agrees that Debtors may sell or close their existing restaurants in NewJersey and Florida and may dissolve the entities that own and operate suchrestaurants; such closures and dissolutions shall not be treated as a violationof any provision of this agreement, and the net proceeds of the disposition ofthe assets of such restaurants (a) shall be retained by Debtors if noEvent of Default is then outstanding or (b) shall be paid to Secured Partyto be applied to the Obligations in such manner as Secured Party decidesadvisable if any Event of Default is then outstanding.  This agreement shall continue in full forceand effect nothwithstanding such dissolutions.

 

Signedas a sealed instrument April 14, 2005.

 

Witness:

 
|   | Commerce Bank &  Trust Company  |
|--------|------------------------------------------|
|   |                                     |
|   |                                     | By |   |   |
|   | Michael D.  Thibeault                    |
|   | Senior Vice  President                   |
|   |                                     |
|   |                                     |
|   | Boston  Restaurant Associates, Inc. |
|   |                                     |
|   |                                     | By |   |   |
|   | George R.  Chapdelaine, President        |
|   | and Chief  Executive Officer             |
|   |                                     |
|   |                                     |
|   | Ocean, Inc.                         |
|   |                                     |
|   |                                     | By |   |   |
|   | George R. Chapdelaine,                   |
|   | President and                            |
|   | Chief Executive Officer                  |
|   |                                     |
|   |                                     |
|   | Fantail  Restaurant, Inc.           |
|   |                                     |
|   |                                     | By |   |   |
|   | George R. Chapdelaine,                   |
|   | President and                            |
|   | Chief Executive Officer                  |

 

14

----

 
|   | Pizzeria Regina  of Florida, Inc.    |
|--------|-------------------------------------------|
|   |                                      |
|   |                                      | By |   |   |
|   | George R. Chapdelaine,                    |
|   | President and                             |
|   | Chief Executive Officer                   |
|   |                                      |
|   |                                      |
|   | Pizzeria Regina  of Holyoke, Inc.    |
|   |                                      |
|   |                                      | By |   |   |
|   | George R. Chapdelaine,                    |
|   | President and                             |
|   | Chief Executive Officer                   |
|   |                                      |
|   |                                      |
|   | Pizzeria Regina  of Kingston, Inc.   |
|   |                                      |
|   |                                      | By |   |   |
|   |                                      |
|   | George R. Chapdelaine,                    |
|   | President and                             |
|   | Chief Executive Officer                   |
|   |                                      |
|   |                                      |
|   | Pizzeria Regina  of New Jersey, Inc. |
|   |                                      |
|   |                                      | By |   |   |
|   | George R. Chapdelaine,                    |
|   | President and                             |
|   | Chief Executive Officer                   |
|   |                                      |
|   |                                      |
|   | Pizzeria Regina  Providence, Inc.    |
|   |                                      |
|   |                                      | By |   |   |
|   | George R. Chapdelaine,                    |
|   | President and                             |
|   | Chief Executive Officer                   |

 

15

----

 
|   | Boston  Restaurant Associates        |
|--------|--------------------------------------|
|   | International, Inc.             |
|   |                                 |
|   |                                 | By |   |   |
|   | George R. Chapdelaine,               |
|   | President and                        |
|   | Chief Executive Officer              |
|   |                                 |
|   |                                 |
|   | Polcari  Enterprises, Inc.      |
|   |                                 |
|   |                                 | By |   |   |
|   | George R. Chapdelaine,               |
|   | President and                        |
|   | Chief Executive Officer              |
|   |                                 |
|   |                                 |
|   | Polcari’s, Inc.            |
|   |                                 |
|   |                                 | By |   |   |
|   | George R. Chapdelaine,               |
|   | President and                        |
|   | Chief Executive Officer              |
|   |                                 |
|   |                                 |
|   | Polcari’s of  Salem New         |
|   | Hampshire, Inc.                 |
|   |                                 |
|   |                                 | By |   |   |
|   | George R. Chapdelaine,               |
|   | President and                        |
|   | Chief Executive Officer              |
|   |                                 |
|   |                                 |
|   | Polcari’s of  Woburn, Inc. |
|   |                                 |
|   |                                 | By |   |   |
|   | George R. Chapdelaine,               |
|   | President and                        |
|   | Chief Executive Officer              |

 

16

----