Document:

Exhibit 10.16

 

FIRST MORTGAGE AND SECURITY AGREEMENT

 

George
R. Chapdelaine, in his capacity as Trustee of BRA Nominee Trust under a
declaration of trust dated January 23, 1991, recorded with the Suffolk
County Registry of Deed in Book 16684, Page 20, and filed with the Suffolk
Registry District of the Land Court as Document No. 472988 (“Mortgagor”), having
an address c/o Boston Restaurant Associates, Inc., 999 Broadway, Suite 400,
Saugus, Massachusetts 01906, for valuable consideration, grants with MORTGAGE
COVENANTS to Commerce Bank & Trust Company, a Massachusetts trust
company with offices at 390 Main Street, Worcester, Massachusetts 01608 (“Mortgagee”),
the properties in Boston, Massachusetts, known as (i) Unit A in the 76-78
North Margin Street Condominium, 76-78 North Margin Street, (ii) Unit C in
the 15 Thacher Street Condominium, 15 Thacher Street, and (iii) Unit 111⁄2
in the 13 Thacher Street Condominium, 13 Thacher Street, all as more fully
described in the documents attached to this mortgage as collective Exhibit A,
together with all of Mortgagor’s rights and interests as a condominium unit
owner in such properties (such units, rights, and interests being collectively
identified in this mortgage as “the premises”).  In this mortgage and in the attached legal
description each reference to the street name spelled in the preceding sentence
as “Thacher” shall include the alternative spelling “Thatcher.”

 

This
mortgage is given to secure the full and timely payment and performance of all
indebtedness and obligations of Mortgagor to Mortgagee now existing or
hereafter arising under the Loan Documents, as defined below, including without
implied limitation (i) the indebtedness evidenced by Mortgagor’s note of
even date in the face amount of $800,000 (“Note”) and (ii) Mortgagor’s
obligations to Mortgagee under a certain Multi-Party Guaranty Agreement of even
date among Mortgagor, Mortgagee, and other parties relating to obligations owed
Mortgagee by Boston Restaurant Associates, Inc., in the amount of $1,500,000
(“Guaranty Agreement”).

 

In this mortgage the term “Loan Documents” includes
not only the Note and the Guaranty Agreement but also (a) an assignment of
even date by Mortgagor to Mortgagee of all leases and rents of the premises, (b) a
Loan Agreement of even date among Mortgagor, Mortgagee, and Boston Restaurant
Associates, Inc. (“Loan Agreement”), (c) all other agreements,
assignments, grants, instruments, and other documents executed upon or after
the date of this mortgage by Mortgagor for the benefit of Mortgagee in
connection with the Guaranty Agreement, (d)  any future replacements or
substitutions for any of the foregoing documents, and (e) any future
renewals, restatements, amendments, modifications, supplementations, or
extensions of any of the foregoing documents.

 

RECORD
AND RETURN TO:

Dale
R. Harger, Esq.

Mountain,
Dearborn & Whiting LLP

370
Main Street

Worcester,
MA 01608

 

 

For
the same consideration and for the same purposes Mortgagor grants to Mortgagee
a security interest in all Mortgagor’s fixtures (as defined under the
Massachusetts Uniform Commercial Code) now or later situated on the premises,
including without implied limitation those described on the document attached
to this mortgage as Exhibit B (“personal property”).

 

For
the same consideration and for the same purposes, Mortgagor grants to Mortgagee
a security interest in all proceeds paid or payable for any loss or damage to
the premises and/or the personal property, including without implied limitation
any proceeds of casualty insurance, any awards for any taking by eminent
domain, and any payments made in consideration of any conveyance in lieu of
such a taking.

 

ARTICLE ONE

 

Covenants

 

In
addition to, and not in limitation of, Mortgagor’s obligations under the
statutory mortgage covenants given above, Mortgagor covenants and agrees with
Mortgagee as follows.

 

1.             Performance of Obligations.  Mortgagor will comply promptly and fully with
all provisions of the Loan Documents applicable to Mortgagor.

 

2.             Payment of Taxes, Liens, and Other Charges.

 

A.            Mortgagor
will pay promptly all real estate taxes, betterment assessments, water rates,
sewer charges, and other charges assessed or imposed by any governmental or
quasi- governmental entity (collectively “Governmental Charges”) which are or
might become a lien or charge upon all or any portion of the premises or the
personal property, whether or not assessed against Mortgagor, provided that
Mortgagor shall be entitled to contest in good faith any Governmental Charges
by appropriate proceedings diligently and continuously prosecuted, provided
that Mortgagor first pays the Governmental Charges or takes such other action
as is necessary to prevent the imposition during such proceedings of a lien or
charge for the Governmental Charges upon all or any portion of the premises or the
personal property.  Any abatement or
other reduction in the Governmental Charges as a result of such proceedings
shall be, subject to the provisions of the Loan Documents, the property of
Mortgagor.

 

B.            Mortgagor
will pay promptly all federal, state, and other taxes of whatever kind and
nature (except income taxes of Mortgagee) which could, if unpaid, result in a
lien on the premises or the personal property, provided that Mortgagor shall be
entitled to contest in good faith any such taxes by appropriate proceedings
diligently and continuously prosecuted, provided that Mortgagor first pays such
taxes or takes such other action as is necessary to prevent the imposition
during such proceedings of a lien or charge for such taxes upon all or any
portion of the premises or the personal property.  Any abatement or other reduction in such
taxes as a result of such proceedings shall be, subject to the provisions of
the Loan Documents, the property of Mortgagor.

 

C.            With
respect to any uninsured claim against Mortgagor which is or might become a
lien or charge upon all or any portion of the premises or the personal
property,

 

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including without implied limitation any claim which might give rise to
a lien for materials or labor, Mortgagor either (1) shall contest such
claim, provided that Mortgagor first takes such action as is necessary to
prevent the imposition or achieve the immediate dissolution of any lien upon
all or any part of the premises or the personal property, or (2) shall pay
such claim before any lien attaches.

 

D.            Mortgagor
shall notify Mortgagee in writing within ten (10) days after (i) Mortgagor
has knowledge of any lien that arises upon the premises or the personal
property or (ii) Mortgagor receives notice of any litigation,
investigation, proceeding, or other activity which reasonably could be expected
to give rise to such a lien.

 

3.             Escrow Account.

 

A.            If
Mortgagee so requires in writing after an Event of Default (defined below), but
not otherwise, Mortgagor will pay to Mortgagee monthly, on or before the first
day of each month, one-twelfth (1/12) of the annual amount which Mortgagee
estimates will be required to pay all Governmental Charges before they become past
due.  Whenever Mortgagee determines that
the sums accumulated under this paragraph are insufficient to meet the
obligation for which such sums were paid, Mortgagor will pay Mortgagee, on
demand, any amount required to satisfy the deficiency.  Such sums may be commingled with other assets
of Mortgagee and may be invested by Mortgagee for its own account, without any
obligation to pay income from such investment, or interest on such deposits, to
Mortgagor, or to account of Mortgagor for such income.

 

B.            The
obligation of Mortgagor to pay the Governmental Charges pursuant to Section 2A
shall not be considered discharged by its compliance with Section 3A
except to the extent that such obligations have been actually satisfied through
the operation of Section 3A.

 

C.            On
each occasion when real estate taxes become due with respect to the premises,
Mortgagor shall furnish Mortgagee with receipted real estate tax bills for the
premises within ten (10) days after the last date on which payment may be
made without the taxing authority’s imposition of interest or penalties for
non-payment.

 

4.             Insurance.

 

A.            Mortgagor
shall obtain and keep in force (i) one or more policies of insurance
insuring the premises and the personal property against loss or damage by fire
and all of the risks covered by insurance of the type now known as “all risk
coverage” in an amount not less than the actual full replacement cost of the
premises and the personal property, with a so-called “Agreed Amount Endorsement”,
and (ii) such other additional insurance coverage as from time to time may
be requested reasonably by Mortgagee, all in such amounts and for such periods
as Mortgagee reasonably requires from time to time.  All policies of insurance shall provide that
any proceeds shall be first payable to Mortgagee, as its interest may appear,
pursuant to an appropriate mortgagee endorsement.  All conditions of such insurance policies
shall be subject to prior approval by Mortgagee, and Mortgagor shall perform
all such conditions.  All such policies
shall provide that such policies shall not be canceled or materially amended
without at least thirty (30) days’ prior written notice to Mortgagee.  All insurers shall be 

 

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licensed and qualified to do business in the state in which the
premises are located, and all insurance policies (or certificates thereof)
shall be deposited with Mortgagee. 
Mortgagor shall deliver to Mortgagee new policies or certificates for
any insurance about to expire at least ten (10) days before such
expiration.

 

B.            In
the event of the foreclosure of this mortgage or any other transfer of title to
the premises or the personal property in extinction in whole or in part of the
indebtedness secured by this mortgage, all right, title, and interest of
Mortgagor in and to all such insurance policies shall pass to the transferee to
secure the payment and performance of Mortgagor’s obligations.

 

C.            In
case of any insured loss or claim, Mortgagor shall render promptly to the
insurance company a statement in writing, in compliance with the terms of the
policy, and shall give immediate notice to Mortgagee.  Mortgagee may, but shall not be obligated to,
make a claim or proof of loss.  At its
election Mortgagee may, after deducting from any insurance proceeds all of
Mortgagee’s expenses incurred in good faith in collection of such proceeds,
including reasonable attorneys’ fees, either (i) if an Event of Default
has occurred and is continuing, apply such net proceeds to any amounts due
Mortgagee under the Loan Documents (in which case Mortgagor shall waive any
provisions of the insurance contract which would require rebuilding, even if
such waiver reduces the insurance proceeds) or (ii) if no Event of Default
has occurred and is then continuing, and if Mortgagor demonstrates to Mortgagee’s
reasonable satisfaction that it is physically and economically practical to
restore the premises to a condition that provides reasonable security to
Mortgagee, and if the conditions set forth in the remainder of this Section 4C
are satisfied, make the net proceeds of insurance available to Mortgagor to
restore the premises and/or the personal property.  Such proceeds shall be paid out from time to
time as the work of restoration progresses, upon such certificates of
architects and/or other professionals as Mortgagee may require from time to
time.  Mortgagee shall not, however, be
required to release or pay any portion of such proceeds to Mortgagor unless (i) Mortgagor
first deposits with Mortgagee any additional funds which, together with such
proceeds, are necessary to cover the cost of restoration of the premises as an
economically functional unit that provides reasonable security to Mortgagee, as
established by the certificate of an architect or engineer employed by
Mortgagee at Mortgagor’s expense, and (ii) such restoration is begun
promptly and is diligently pursued to completion, all in accordance with plans
and specifications submitted to and approved by Mortgagee.  Upon the failure of Mortgagor to comply with
the requirements of the preceding sentence, Mortgagee may apply all proceeds
(or remaining proceeds) to any amounts due Mortgagee under the Loan
Documents.  Mortgagor shall reimburse
Mortgagee for all costs and expenses, including reasonable professional fees
and reasonable legal fees, incurred in good faith by Mortgagee in connection
with the foregoing matters, such reimbursement to be made within ten (10) days
after Mortgagee’s demand.  
Notwithstanding the foregoing, if the net amount of insurance proceeds
is less than $50,000 and if no Event of Default has occurred and is then
continuing, then Mortgagee promptly shall pay such proceeds over to Mortgagor.

 

D.            Nothing
in this Section 4 shall be deemed to relieve Mortgagor of its duty to
maintain and repair the premises and the personal property and to restore the
premises and to replace the personal property upon the occurrence of any
material loss, damage, or destruction, regardless of whether sufficient
insurance proceeds are available to Mortgagor.

 

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5.             Care of Property.

 

A.            Mortgagor
will make such repairs and replacements and take such other steps as may be
necessary to keep and maintain the premises and the personal property in good
repair, order, and condition.

 

B.            Except
as otherwise expressly provided in this mortgage, no material part of the
premises shall be removed, demolished, or altered substantially without the
prior express written consent of Mortgagee, which shall not be unreasonably
withheld or delayed.

 

C.            Mortgagor
will comply in all material respects with all federal, state, and local laws,
ordinances, and regulations relating to the premises and/or the personal
property, provided that Mortgagor may contest its duty of compliance by any
appropriate proceedings that effectively stay any enforcement action.

 

D.            Mortgagor
will give prompt notice to Mortgagee of any damage to the premises or the
personal property by fire or other casualty where the cost of repair exceeds
$10,000.

 

E.             Mortgagor
authorizes Mortgagee and its representatives to enter upon and inspect the
premises and the personal property at any time during normal business hours
after reasonable notice to Mortgagor.

 

F.             If
all or any material part of the premises or the personal property shall be
damaged by fire or other casualty, then Mortgagor promptly shall repair,
replace, and/or restore the premises and the personal property, regardless of
whether or not there are any insurance proceeds available.  If any material part of the premises or the
personal property shall be physically damaged, removed, or made unavailable for
use as a result of a taking or other condemnation, then subject to the
provisions of Section 6 of this mortgage Mortgagor shall promptly restore,
repair, and/or replace the remainder in a manner reasonably satisfactory to
Mortgagee.

 

6.             Takings.  Mortgagee shall be entitled to receive all
awards of damages for any taking, condemnation, or other action by any
governmental or quasi-governmental entity or authority resulting in any loss or
damage to any part of the premises or the personal property.  Provided no Event of Default has occurred and
is then continuing, and provided Mortgagor satisfies all conditions set forth
in this Section 6, then Mortgagee shall, after deducting from such awards
all of Mortgagee’s expenses incurred in good faith in collection of such
awards, including reasonable professional fees and reasonable attorneys’ fees,
either (i) if Mortgagor demonstrates to Mortgagee’s satisfaction (a) that
it is physically and economically practical to restore the premises, (b) that
Mortgagor has ample funds to accomplish the restoration, and (c) that such
restoration will leave the premises in a condition that provides reasonable
security to Mortgagee, make the net proceeds of such awards available to
Mortgagor for restoration, in which case such awards shall be paid out from
time to time as the work of restoration progresses, upon Mortgagee’s receipt of
such certificates of architects and/or other professionals as Mortgagee may
require from time to time require, or (ii) otherwise, apply such net award
to the indebtedness secured by this mortgage in such manner as Mortgagee may
determine.  Mortgagor shall 

 

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reimburse Mortgagee for all costs and expenses, including reasonable
professional fees and reasonable legal fees, incurred in good faith by
Mortgagee in connection with the foregoing matters, such reimbursement to be
made within ten (10) days after Mortgagee’s demand.

 

7.             Subordination to Leases.  Mortgagee shall have the right, by the
execution of suitable written agreements from time to time, to subordinate this
mortgage to any lease or leases from time to time in force, and on the
execution of any such instrument this mortgage shall be subordinate to the
lease for which subordination is applicable with the same force and effect as
if such lease had been executed and delivered, and a notice thereof recorded to
the extent required to give notice to third persons, prior to the execution,
delivery, and recording of this mortgage. 
Nothing in this mortgage shall be construed to obligate Mortgagee to
perform any of the duties of Mortgagor as lessor under any of the leases of the
premises or to pay any sum of money required by the terms of such leases to be
paid by Mortgagor, nor shall this Section 7 be interpreted to limit the
generality of Section 11 of this mortgage.

 

8.             Expenses.  Within ten (10) days of Mortgagee’s
demand, Mortgagor shall reimburse Mortgagee for all costs and expenses incurred
by Mortgagee, including reasonable attorneys’ fees, in any action, proceeding,
or dispute of any kind in which Mortgagee is made a party or appears as an
intervenor or party plaintiff or defendant, affecting or relating to any of the
Loan Documents, to Mortgagor, or to the premises and/or the personal property,
including, without implied limitation, the foreclosure of this mortgage, any
taking or other condemnation involving the premises, or any action to protect
the security afforded Mortgagee by this mortgage.  Any such amounts paid by Mortgagee shall be
added to the indebtedness secured by this mortgage and shall bear interest at
the default rate provided in the Note. 
In the event of redemption after foreclosure proceedings have been
commenced, Mortgagee shall be entitled to recover all costs, charges, and
expenses, including reasonable professional fees and reasonable attorneys’
fees, incurred up to the time of redemption. 
In case of a foreclosure sale, Mortgagee shall be entitled to retain out
of the monies arising from such sale all sums then secured by this mortgage,
whether then or thereafter payable, including all costs, charges, or expenses,
including reasonable professional fees and reasonable attorneys’ fees, incurred
or sustained by Mortgagee by reason of any default in the performance or
observance of any condition of this mortgage.

 

9.             Management and Other Agreements.  Without Mortgagee’s prior express written
consent, which shall not be unreasonably withheld or delayed, Mortgagor shall
not enter into (i) any agreement for management or maintenance of the
premises for a term in excess of one year, or (ii) any agreement or
obligation the benefit or burden of which may run with the land.

 

10.           Estoppel Certificates.  From time to time, Mortgagor and Mortgagee
shall furnish, either on request of the other, signed written statements
setting forth (i) the amount of unpaid principal and interest secured by
this mortgage, (ii) whether or not any offsets or defenses exist against
Mortgagee’s claims for such principal and interest, and (iii) the then
state of facts relative to the condition of the premises and the personal
property.

 

11.           Prohibition of Transfer.

 

A.            Prohibited transfers.  Unless expressly permitted under this Section 11,
there shall occur no transfer, in any manner whatever, voluntarily or
involuntarily, by operation 

 

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of law or otherwise, of any part of the legal or equitable title to all
or any portion of the premises or the personal property.  The transfers prohibited by the preceding
sentence shall include, without implied limitation, (1) any sale of all or
any portion of the premises and/or the personal property, and (2) the
granting of any mortgage, security interest, lease (except in accordance with Section 11C),
devise, gift, or easement.  Any such
transfer made without Mortgagee’s prior express written consent shall
constitute an Event of Default under this mortgage.

 

B.            Successors in interest.  Without notice to Mortgagor, Mortgagee may
deal with Mortgagor’s successor or successors in interest with reference to the
mortgage and the debt secured by this mortgage in the same manner as with
Mortgagor, without in any way discharging Mortgagor’s liability or obligations
with respect to this mortgage or such debt.

 

C.            Permitted transfers.  The provisions of Section 11A shall not
prohibit (1) replacements of obsolete or worn-out portions of the personal
property, (2) the leasing of the premises on commercially reasonable terms
to affiliates of Mortgagor, provided that each such lease is junior to the lien
of this mortgage, or (3) any of the following (“Permitted Liens”):

 

(i)            Liens to
secure Governmental Charges in respect of obligations not overdue;

 

(ii)           Liens to
secure claims for labor, material, or supplies in respect of obligations not
overdue; and

 

(iii)          Liens
securing (in the aggregate) less than $50,000 in respect of judgments or awards
that have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder and in respect of which
the Mortgagor in good faith is prosecuting an appeal or proceedings for review
and in respect of which a stay of execution shall have been obtained pending
such appeal or review.

 

D.            Changes pertaining to Mortgagor.  Without limiting the generality of any other
provision in this mortgage, Mortgagor warrants (1) that there will occur
no amendment, restatement, or other change in the declaration of trust
identified on the first page of this mortgage, (2) that at all times
the entity which currently is the beneficiary of Mortgagor will remain the only
beneficiary, (3) that such beneficiary of Mortgagor will not transfer or
encumber voluntarily in any manner all or any part of its beneficial interest,
and (4) that such beneficiary will not suffer any involuntary transfer or
encumbrance of all or any part of its beneficial interest.

 

12.           Mortgagee’s Right to Cure.  Mortgagee shall be entitled, but not
obligated, to cure any default of Mortgagor not cured by Mortgagor within any
applicable grace period.  Mortgagee shall
be reimbursed by Mortgagor for all costs, charges, and expenses, including
without implied limitation reasonable professional fees and reasonable
attorneys’ fees, incurred in connection therewith.  All sums for which Mortgagee may be entitled
to reimbursement shall earn interest at the default rate set forth in the Note,
shall be secured by the Loan Documents, and shall be payable on demand of
Mortgagee.

 

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13.           Other Mortgages.  If at any time the premises are encumbered by
another mortgage, or by a security interest granted pursuant to a security
agreement to which Mortgagee is not a party, then Mortgagor shall not modify,
amend, or extend such prior mortgage or security agreement, or the debt or any
obligation secured thereby, without the prior written consent of
Mortgagee.  Mortgagor shall not accept or
request any further advances secured by any such other mortgage or security
agreement.  Mortgagor shall fulfill all
its obligations under such other mortgage or security agreement, and upon any
default thereunder Mortgagee shall be entitled but not obligated to cure said
default and be reimbursed therefor, in the manner provided in Section 12
of this mortgage.

 

14.           Financial and Other Information.  From time to time on Mortgagee’s request
Mortgagor promptly shall furnish Mortgagee with all financial and other
information requested by Mortgagee in connection with the condition,
profitability, and operation of the premises.

 

ARTICLE TWO

 

Rights of Mortgagee

 

In
addition to, and not in limitation of, any other rights and remedies available
to Mortgagee, Mortgagee shall have the following rights and remedies.

 

15.           Events of Default.  The term “Event of Default”, wherever used in
this mortgage, shall mean any one or more of the following events:

 

(a)           Material
breach by Mortgagor of any of Mortgagor’s covenants and agreements under
Sections 11, 13, or 19 of this mortgage;

 

(b)           Any
material breach or violation with respect to any representation, warranty,
covenant, agreement, or other obligation arising under this mortgage (other
than under Sections 11, 13, or 19 of this mortgage), where such breach or
violation continues beyond the period, if any, specifically allowed Mortgagor
under this mortgage for a cure, or if this mortgage allows no such specific
period, then for more than thirty (30) days after written notice; provided,
however, that (i) if such breach or violation cannot be cured within such
specific period or such thirty (30) day period and (ii) if Mortgagor (A) commences
a cure within the applicable period and (B) diligently and continuously
prosecutes the cure to completion within sixty (60) days after its occurrence,
then such breach or violation shall not constitute an Event of Default; but the
cure periods described above shall not be construed to give Mortgagor any right
to cure any default under any instrument other than this mortgage;

 

(c)           Any
occurrence or circumstance that constitutes an “Event of Default” as defined in
any of the Loan Documents;

 

(d)           The
voluntary or involuntary imposition upon the premises or the personal property
of any lien other than a Permitted Lien, provided that if such a lien is
involuntary Mortgagor shall have thirty (30) days after learning of the lien in
which to dissolve the lien; or

 

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(e)           Any
uninsured loss of or damage to a material portion of the premises and/or the
personal property, if Mortgagee determines to its reasonable satisfaction that
it is not feasible for Mortgagor promptly to restore the premises or the
personal property to a condition which provides reasonable security to
Mortgagee.

 

16.           Acceleration of Maturity.  If an Event of Default occurs, then at
Mortgagee’s election the entire indebtedness secured by this mortgage shall
become immediately due and payable without notice or demand.

 

17.           Mortgagee’s Power of Enforcement.  This mortgage is upon the STATUTORY CONDITION
and upon the further condition that no Event of Default shall occur.  Upon the failure of either such condition,
then Mortgagee (a) shall have, as to the premises and all of the personal
property to which the statutory power of sale applies, the STATUTORY POWER OF
SALE, (b) shall have, as to any portion of the personal property to which
the statutory power of sale does not apply, all of the rights and remedies of a
secured party under the Uniform Commercial Code of the state in which the
premises are located, and (c) may take such other actions or proceedings
as Mortgagee deems necessary or advisable to protect its interests under this
mortgage.  All such rights and remedies
may be exercised individually, sequentially, or in concert, all such rights and
remedies being cumulative, the exercise of one not being deemed a waiver of any
of the others or a cure of any default. 
In exercising its powers of sale under this mortgage, Mortgagee may sell
the premises and/or the personal property as a whole or in such separate parts
as Mortgagee may in its discretion elect, Mortgagor hereby waiving, on behalf
of itself and its successors and assigns, the application of any doctrine of
marshaling.  If Mortgagee elects to sell
the premises and/or the personal property in parts or parcels, the sales may be
held from time to time, and Mortgagee’s powers of sale shall not be exhausted
until all of the premises and the personal property shall have been sold.

 

18.           No Waiver or Release.  The failure or delay of Mortgagee to exercise
any option, right, remedy, or election shall not be deemed to be a waiver.  No sale of all or any part of the premises or
the personal property, no forbearance on the part of Mortgagee, no release or
partial release thereof, no extension of the time for payment of all or any
part of the indebtedness secured by this mortgage, and no other indulgence
given by Mortgagee to Mortgagor (or to any other person obligated to Mortgagee
under the Loan Documents) shall operate to release or otherwise affect either
the lien of this mortgage or the original liability of Mortgagor, notice of all
such forebearance, releases, extensions, and indulgences being hereby waived by
Mortgagor.

 

ARTICLE THREE

 

Hazardous Materials

 

19.           Hazardous Materials

 

A.            Compliance with Superfund and Hazardous Waste Laws.  Mortgagor warrants and represents that to the
best of Mortgagor’s knowledge, except to the extent disclosed in writing to
Mortgagee before the signing of this mortgage, there are no “oil”, “hazardous
materials”, “hazardous wastes”, or “hazardous substances” (collectively, “Materials”)
as such terms are defined under Comprehensive Environmental Response,
Compensation, and Liability 

 

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Act, 42 U.S.C. Section 9601, et seq., as amended, the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., as
amended, and the regulations promulgated thereunder, and all applicable state
and local laws, rules, and regulations, including, without limitation,
Massachusetts General Laws, Chapters 21C and 21E (collectively, “Superfund and
Hazardous Waste Laws”) in or on the premises, except those for which Mortgagee
has given prior express written approval, and then only to the extent that the
presence of the Materials is (i) properly licensed and approved by all
appropriate governmental officials, (ii) in accordance with all applicable
laws and regulations, and (iii) in compliance with any terms and
conditions stated in the prior written approval issued by Mortgagee.  Mortgagor covenants to comply strictly with
the requirements of the Superfund and Hazardous Waste Laws and to notify
Mortgagee promptly of the presence of any Materials in or on the premises.  Mortgagor covenants to protect, indemnify,
and hold Mortgagee harmless from and against all loss, cost, damage, and
liability, including reasonable attorneys’ fees and costs of litigation,
suffered or incurred by Mortgagee on account of the presence of Materials in or
on the premises, including, without limitation, any such loss, cost, damage, or
liability arising from a violation of any of the Superfund or Hazardous Waste
Laws.

 

B.            Additional Events of Default.  The term “Event of Default” in this mortgage
shall include the following events in addition to those identified elsewhere in
this mortgage:

 

(1)           If
Mortgagor fails to comply with any of the covenants and representations set
forth in this Section 19;

 

(2)           If
at any time any representation or warranty made by Mortgagor in this Section 19
shall be materially incorrect;

 

(3)           If
any Materials are or become present in or on the premises, except those for
which Mortgagee has given prior express written approval, and then only to the
extent that the presence of the Materials is (i) properly licensed and
approved by all appropriate governmental officials, (ii) in accordance
with all applicable laws and regulations, and (iii) in compliance with any
terms and conditions stated in the prior written approval issued by the
Mortgagee;

 

(4)           If
at any time there is a material release, discharge, deposit, injection,
dumping, spilling, leaking, incineration, or placing of any Materials into or
on the premises; or

 

(5)           If
at any time the use, generation, treatment, storage, disposal, or treatment of
any Materials on the premises is in violation of applicable laws and
regulations.

 

C.            Cure by Mortgagor.  Notwithstanding the provisions of Section 19B,
if Mortgagor (a) promptly gives Mortgagee notice of the presence of any
Materials in or on the premises; (b) complies with any notice requirements
imposed by any of the Superfund and Hazardous Waste Laws; (c) promptly
commences to arrange for the cleanup of such Materials and/or the containment
of Materials where there is a threat of release; (d) demonstrates to
Mortgagee’s satisfaction that Mortgagor has the financial resources to perform
the cleanup and/or 

 

10

 

containment; and (e) diligently and successfully pursues the
cleanup and/or containment, as the case may be, through to completion, then
Mortgagee agrees not to take any action to (i) cure Mortgagor’s default, (ii) prosecute
foreclosure proceedings, (iii) accelerate payment under the Note, or (iv) avail
itself of any other remedies, unless in Mortgagee’s good faith judgment the
exercise of any such remedies is necessary to protect its security.

 

D.            Cure by Mortgagee.  At its election, in its sole discretion, and
without notice, but subject to the foregoing Section 19C, Mortgagee may
(but shall not be obligated to) cure any failure on the part of Mortgagor or
any occupant of the premises to comply with the Superfund and Hazardous Waste
Laws, including without implied limitation the following actions:

 

(1)           Arrange
for the cleanup or containment of any Materials found in, on, or near the
premises, and pay cleanup costs, containment costs, and other costs associated
with the project, including without implied limitation any professional fees;

 

(2)           Pay
on behalf of Mortgagor any fines or penalties imposed upon Mortgagor by any
federal, state, or local governmental agency or authority; and

 

(3)           Make
any other payment or perform another act which in Mortgagee’s judgment might
prevent a lien from attaching to the premises or which might dissolve or reduce
any lien already attached.

 

Any
partial exercise by Mortgagee of the foregoing remedies or any partial
undertaking on the part of Mortgagee to cure Mortgagor’s failure (or the
failure of any occupant of the premises) to comply with the Superfund and
Hazardous Waste Laws shall not obligate Mortgagee to complete the actions taken
or to expend further sums to cure any such noncompliance; neither shall the
exercise of any such remedies operate to place upon Mortgagee any
responsibility for the operation, control, care, management, or repair of the
premises, or make the Mortgagee the “operator” of the premises within the
meaning of the Superfund and Hazardous Waste Laws.

 

Any
amounts paid or costs incurred by Mortgagee as a result of any actions taken
under this Section 19, together with interest at an annual rate equal to
the rate then accruing on the Note, including any default rate, (i) shall
be due and payable by Mortgagor to Mortgagee on demand and (ii) shall be
added to and become a part of the indebtedness secured by this mortgage.  By making any such payment or incurring any
such costs, Mortgagee shall be subrogated to any rights of Mortgagor, or those
claiming under Mortgagor, to seek reimbursement from any third parties,
including without implied limitation any predecessor in interest to Mortgagor’s
title.

 

E.             Tenants’ Use of Materials.  In every lease or other agreement for the
possession and use of all or any portion of the premises, Mortgagor shall
include provisions satisfactory to Mortgagee which require the tenant (a) to
covenant that the leased premises will not be used for the generation, storage,
treatment, use, or disposal of Materials, (b) to covenant to deliver
promptly to Mortgagor and to Mortgagee copies of any notices received by the
tenant in connection with the presence (or alleged presence) of Materials in or
upon the premises, (c) to 

 

11

 

allow both Mortgagee and Mortgagor periodically to inspect the leased
premises and (d) to indemnify and hold harmless both Mortgagor and
Mortgagee from and against all loss, liability, damage, and expense, including
reasonable consultants’ and attorney’s fees, arising from the presence (or
alleged presence) of Materials in or upon the premises.

 

F.             Studies and reports.  If an Event of Default is outstanding and if
Mortgagee has notified Mortgagor of its intention to commence foreclosure, then
Mortgagor shall permit Mortgagee’s agents and contractors to enter upon the
premises after reasonable notice from time to time to test the premises for the
presence of Materials.  The costs of such
tests and all related fees and expenses incurred in good faith by Mortgagee
shall be payable by Mortgagor on demand and to the extent permitted by law
shall be recoverable from the proceeds of any foreclosure sale.

 

ARTICLE FOUR

 

Miscellaneous Provisions

 

20.           Notices.  All notices shall be in writing and shall be
delivered to Mortgagor (a) at the address stated on the first page of
this mortgage and (b) to the same address but in care of Boston Restaurant
Associates, Inc., Attn: Controller, and to Mortgagee at 390 Main Street,
Worcester, Massachusetts, Attention: 
Commercial Loan Department, or to such other address as either party
specifies in writing.  A notice may be
given in any manner, but a notice shall take effect only upon (1) its
actual delivery to the specified address or (2) the third business day
after being sent by certified mail. 
Copies shall be sent to counsel as follows, but failure to send a copy
shall not invalidate the notice:

 

	
  Mortgagor’s counsel

  	
   

  	
  Mortgagee’s counsel

  
	
  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

  

 

21.           Amendments.  This mortgage may not be amended, waived, or
discharged orally, but only by an agreement in writing signed by both Mortgagor
and Mortgagee.  No such amendment shall
take effect until it is recorded in the appropriate registry of deeds or other
appropriate office.

 

22.           Severability.  The invalidity of any provision of this mortgage,
as determined by a court of competent jurisdiction, shall not affect the
validity of any other provision.

 

23.           Governing Law.  This mortgage shall be interpreted and
enforced in accordance with the laws of the Commonwealth of Massachusetts.

 

24.           Successors and Assigns.  This mortgage shall be binding upon and inure
to the benefit of Mortgagee and its successors and assigns and Mortgagor and
its successors and assigns.

 

12

 

25.           Entire agreement.  This mortgage states the parties’ entire
agreement concerning its subject matter, superseding all prior agreements,
representations, and understandings.

 

ARTICLE FIVE

 

Condominium Provisions

 

Mortgagor covenants and
agrees with Mortgagee as follows concerning the “Condominiums,” as defined
below.

 

26.           Definitions.

 

A.            “Condominiums”
means collectively the three condominiums identified in the attached Exhibit A.

 

B.            “Condominium
Documents” means collectively (i) the master deeds of the Condominiums, as
amended, including all rules and regulations, as amended, and (ii) the
declarations of trust recorded with such master deeds, including all amendments
to such declarations of trust.

 

27.           Undertakings.  Mortgagor shall pay on a timely basis all
fees and other charges assessed upon Mortgagor or the premises pursuant to the
Condominium Documents.  Mortgagor shall
perform and observe all of its other duties and obligations arising under the
Condominium Documents.  Mortgagor shall
notify Mortgagee promptly in writing after Mortgagor becomes aware of (a) any
material casualty loss to the common property of any of the Condominiums or (b) any
lapse of any casualty insurance on such common property.  Without Mortgagee’s prior express written
consent, which shall not be unreasonably withheld or delayed, Mortgagor shall
not approve or consent to (i) any material amendment of any of the
Condominium Documents or (ii) any dissolution or termination of the legal
status or legal existence of any of the Condominiums.

 

Signed
and sealed April 14, 2005.

 

	
   

  	
  BRA Nominee
  Trust

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  George R. Chapdelaine, Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

13

 

The Commonwealth of Massachusetts

 

	
  Worcester, ss.

  	
   

  	
  April 14, 2005

  

 

George
R. Chapdelaine personally appeared before me in his capacity as Trustee of BRA
Nominee Trust and acknowledged having signed the foregoing document in that
capacity voluntarily for its stated purpose. 
To identify the signatory I relied upon:

 

o                                    a
driver’s license or other state or federal government document bearing a
photographic image.

 

o                                    an
oath or affirmation of a credible witness known to me who knows the signatory.

 

o                                    my
personal knowledge of the identity of the signatory.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public:
  Dale R. Harger

  
	
   

  	
  My commission
  expires: 10/23/09

  
	
   

  	
   

  
	
   

  	
   

  

 

14

 

EXHIBIT A

To Mortgage and Security Agreement

Granted to Commerce Bank & Trust Company

By George R. Chapdelaine, Trustee

of BRA Nominee Trust

 

EXHIBIT A

 

Parcel 1

 

The condominium unit (the “Unit”) known as and
numbered Unit No. 11 1⁄2 Thacher Street, Boston, Massachusetts in the 13 Thacher
Street Condominium (the “Condominium”), a condominium situated at 11 1⁄2 - 13 Thacher
Street, Boston, Massachusetts.  The
Condominium has been created by Master Deed dated December 30, 1987, and
recorded with the Suffolk County Registry of Deeds in Book 14379, Page 146.

 

Together with an
undivided 20.00 percent interest appertaining to said Unit in the common areas
and facilities of said Condominium, and together with the rights and easements
appurtenant to said Unit as set forth in the Master Deed, as the same may be
amended from time to time.

 

Said Unit is subject to
and with the benefit of the restrictions on use set forth in said Master Deed.

 

The Unit is conveyed
subject to and with the benefit of a) the terms and provisions of said Master
Deed; b) the Declaration of Trust of the 13 Thacher Street Condominium Trust
dated December 30, 1987 and recorded with said Deeds in Book 14379, Page 173,
including the By-Laws therein set forth, and any rules and regulations
promulgated pursuant thereto; c) the provisions of Massachusetts General Laws
Chapter 183A, relating to condominiums as that statue is written as of the date
hereof, and as it may in the future be amended; and d) all rights,
restrictions, easements and covenants of record.

 

Being the same premises
conveyed by deed of Peter A. Modica individually and as Trustee of The Modica
Realty Trust dated January 23, 1991 and recorded with Suffolk Registry of
Deeds in Book 16715, Page 100.

 

Parcel 2

 

The condominium unit (the “Unit”) known as and
numbered Unit No. C in the 15 Thacher Street Condominium (the “Condominium”),
a condominium situated at 15 Thacher Street, Boston, Massachusetts.  The Condominium has been created by Master
Deed dated December 30, 1987, and recorded with the Suffolk County
Registry of Deeds in Book 14379, Page 82.

 

Together with an
undivided 20.00 percent interest appertaining to said Unit in the common areas
and facilities of said Condominium, and together with the rights and easements
appurtenant to said Unit as set forth in the Master Deed, as the same may be
amended from time to time.

 

15

 

Said Unit is subject to and
with the benefit of the restrictions on use set forth in said Master Deed.

 

The Unit is conveyed
subject to and with the benefit of a) the terms and provisions of said Master
Deed; b) the Declaration of Trust of the 15 Thacher Street Condominium Trust dated
December 30, 1987 and recorded with said Deeds in Book 14379, Page 109,
including the By-Laws therein set forth, and any rules and regulations
promulgated pursuant thereto; c) the provisions of Massachusetts General Laws
Chapter 183A, relating to condominiums as that statue is written as of the date
hereof, and as it may in the future be amended; and d) all rights,
restrictions, easements and covenants of record.

 

Being the same premises
conveyed by deed of Peter A. Modica individually and as Trustee of The Modica
Realty Trust dated January 23, 1991 and recorded with Suffolk Registry of
Deeds in Book 16715, Page 103.

 

Parcel 3

 

The condominium unit (the
“Unit”) known as and numbered Unit No. A in the 76-78 North Margin Street
Condominium (the “Condominium”), a condominium situated at 76-78 North Margin
Street, Boston, Massachusetts.  The
Condominium has been created by Master Deed dated April 2, 1987, and
registered with the Suffolk County Registry District of the Land Court as
Document No. 423339 on Certificate of Title No. 98197.

 

Together with an
undivided 15.00 percent interest appertaining to said Unit in the common areas
and facilities of said Condominium, and together with the rights and easements
appurtenant to said Unit as set forth in the Master Deed, as the same may be
amended from time to time, and indicated on Condominium Plan No. 1862-B
together with undivided fractional interest in common areas.

 

Said Unit is subject to
and with the benefit of the restrictions on use set forth in said Master Deed.

 

The Unit is conveyed
subject to and with the benefit of a) the terms and provisions of said Master
Deed; b) the Declaration of Trust of the 76-78 North Margin Street Condominium
Trust dated April 28, 1987 and registered with said Registry District as
Document No. 423342A, including By-Laws therein set forth, and any rules and
regulations promulgated pursuant thereto; c) the provisions of Massachusetts
General Laws Chapter 183A, relating to condominiums as that statute is written
as of the date hereof, and as it may in the future be amended; and d) all
rights, restrictions, easements and covenants of record.

 

Being the same premises conveyed by deed of Peter A.
Modica individually and as Trustee of The Modica Realty Trust dated January 23,
1991 and registered with Suffolk Registry of Deeds of the Land Court as
Document No. 472987.

 

16

 

EXHBIIT B

To Mortgage and Security Agreement

Granted to Commerce Bank & Trust Company

By George R. Chapdelaine, Trustee

of BRA Nominee Trust

 

Any
and all (i) portable or sectional buildings; (ii) screens, awnings,
screen doors, storm and other detachable windows and doors; (iii) window
shades and blinds; (iv) garbage and trash incinerators and receptacles; (v) installed
trees, shrubs, plants, fences, and gates; (vi) heating, lighting,
incinerating, refrigerating, freezing, ventilating, air conditioning, air
cooling, fire extinguishing, sprinkling, plumbing, cleaning, and power
equipment and apparatus, including and without limitation boilers, tanks,
furnaces, radiators, water heaters, air conditioners, and compressors; (vii) gas,
water, and electrical equipment and apparatus; (viii) elevators,
escalators, switchboards, engines, motors, tanks, pumps, partitions, conduits,
and ducts; (ix) furniture, shelving, counters, scales and cabinets; (x)
computers, cash registers and office equipment; (xi) construction equipment,
materials, supplies, and tools; (xii) household or commercial appliances,
cabinets, furnishings, carpeting, draperies and light fixtures; (xiii) cranes,
elevators, and other devices used or usable for lifting and moving; and (xiv)
wires, cables, switches, and other devices used or usable for communication
and/or information transfer; all together with (xv) all parts, fittings,
accessories, equipment, special tools, renewals, and replacements of all or any
part thereof, and all other property of the same class whether now owned or
hereafter acquired by Mortgagor.

 

17Exhibit 10.17

 

MULTI-PARTY SECURITY AGREEMENT

 

This
is an agreement between Commerce Bank & Trust Company, a Massachusetts
trust company with offices in Worcester, Massachusetts (“Secured Party”), and
the following organizations (collectively “Debtors”):

 

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

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

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

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

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

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

Pizzeria
Regina of New Jersey, Inc., a New Jersey corporation

(“PR New Jersey”);

Pizzeria
Regina Providence, Inc., a Rhode Island corporation

(“PR Providence”);

Boston
Restaurant Associates International, Inc., a Delaware corporation

(“International);

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

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

Polcari’s
of Salem New Hampshire, Inc., a New Hampshire corporation

(“Polcari
III”); and

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

 

On the
date 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 entered
into a certain Multi-Party Guaranty Agreement (“Guaranty Agreement”), which
provides essentially that Debtors guaranty all obligations owed to Secured
Party by BRAI and/or the Trustee.

 

1.             Grant.

 

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

 

2.             Purpose.

 

The
foregoing grant, pledge, and assignment shall secure the full and timely
payment, performance, and observance of all Debtors’ monetary and non-monetary
obligations to Secured Party now existing and hereafter arising, direct or
indirect, absolute or contingent, liquidated or unliquidated, due or to become
due, and whether joint, several, or joint and several (collectively “Obligations”),
including without implied

 

 

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

 

3.             Collateral.

 

“Collateral”
means all of the Debtors’ rights and interests now owned or hereafter acquired
in the property described on Exhibit A1, attached, together with all cash
and non-cash proceeds and products of such property.  Each category of collateral listed on Exhibit A1
shall have the meaning attributed to it in the Massachusetts Uniform Commercial
Code, as amended from time to time, the definitional sections of which are
incorporated here by reference as if set forth fully in this agreement.  Without limiting the generality of the
foregoing provisions, “Collateral” also means and includes all rights and
interests of Debtors in (a) the trademarks listed on Exhibit A2,
attached, (b) any liquor license listed on Exhibit A3, attached, and (c) any
cash and non-cash proceeds thereof.  Notwithstanding
the foregoing, “Collateral” does not include (i) any liquor license
already pledged to a landlord of the Debtors, (ii) any liquor license a
pledge of which the issuing municipality declines to approve, and (iii) any
leasehold interest the collateral assignment of which is prohibited by the
lease.

 

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 with
Secured Party that (1) it owns the Collateral free and clear of all
claims, liens, and security interests, other than those listed on Exhibit B,
attached (“Permitted Encumbrances”), (2) it has the power and authority to
make and perform this agreement, (3) the only locations of its Collateral
are and will be at the places listed on Exhibit C, attached, and (4) it
has and will have no Collateral except at the foregoing locations or in transit
thereto.  The term “Permitted
Encumbrances” shall include not only the currently existing liens listed on Exhibit B
but also any liens arising from any equipment financing that is expressly
permitted in the Loan Agreement.

 

B.            General.  Each Debtor
covenants and agrees with Secured Party as follows:

 

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

 

(2)           it
will defend the Collateral against the claims and demands of all persons and
will indemnify and hold harmless Secured Party against all such claims and
demands unless the same arise from Secured Party’s gross negligence or willful
misconduct.

 

2

 

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

 

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

 

(5)           it
will not (a) permit any security interests (other than Secured Party’s
security interest and the Permitted Encumbrances) to attach to any of the
Collateral; (b) permit any of the Collateral to be levied upon under any
legal process or to become the subject of any lien unless such lien is
dissolved within thirty (30) days after the lien arises; (c) transfer in
any manner whatsoever any interest in the Collateral, except (i) in the
ordinary course of business, or (ii) upon a sale of assets expressly approved
by Secured Party in writing in advance; (d) permit to be done or to occur
anything that may materially impair the value of any of the Collateral or the
security intended to be afforded by this agreement; or (e) permit any
tangible Collateral to become an accession to other goods, unless such other
goods are owned by Debtor; and

 

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

 

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

 

D.            Deposit accounts.  For
each deposit account that any Debtor at any time opens or maintains, such
Debtor shall, within five business days after Secured Party’s request following
an Event of Default, pursuant to an agreement in form and substance
satisfactory to Secured Party, at Secured Party’s election, either (1) cause
the depositary bank to agree to comply at any time with instructions given by
Secured Party to such depositary bank directing the disposition of funds from
time to time credited to such deposit account, without further consent of the
Debtor, or (2) arrange for Secured Party to become the customer of the
depositary bank with respect to the deposit account, such that Debtor is
permitted to withdraw funds from the deposit account only with the consent of
Secured Party.  The provisions of this section shall
not apply to (i) any deposit account for which the Debtor, the depositary
bank and Secured Party have entered into a control agreement or cash collateral
agreement, (ii) any deposit accounts as to which Secured Party is the
depositary, and (iii) any deposit account specially and exclusively used
for payroll, payroll taxes, employee expense reimbursement, and other employee
wage 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 or
the acquisition of the certificates, whichever is earlier, such Debtor shall
endorse, assign, and deliver such certificates to Secured Party, accompanied by
such instruments of transfer or assignment, duly executed in blank, as Secured
Party from time to time may specify.  If
any securities now or hereafter acquired by any Debtor are uncertificated and
are issued to such Debtor or its nominee directly by the issuer, then such
Debtor shall immediately notify Secured Party thereof, and within five business
days after Secured Party’s request, pursuant to an agreement in form and
substance satisfactory to Secured Party, at Secured Party’s election either
shall (1) cause the issuer to agree to comply with instructions given by
Secured Party as to such securities, without further consent of the Debtor or
such nominee, or (2) arrange for Secured Party to become the registered
owner of the securities.  If any
certificated securities, uncertificated securities, or other investment
property now or hereafter acquired by any Debtor are held by such Debtor or its
nominee through a securities intermediary or commodity intermediary, then such
Debtor immediately shall notify Secured Party thereof, and within five business
days after Secured Party’s request, pursuant to an agreement in form and
substance satisfactory to Secured Party, at Secured Party’s election the Debtor
either shall (a) cause such securities intermediary or commodity
intermediary to agree (i) to comply with entitlement orders or other
instructions given by Secured Party as to such securities or other investment
property, or (ii) to apply any value distributed on account of any
commodity contract as directed by Secured Party, in each case without further
consent of the Debtor or such nominee, or (b) in the case of financial
assets or other investment property held through a securities intermediary,
arrange for Secured Party to become the entitlement holder with respect to such
investment property, with the Debtor being permitted to exercise rights to
withdraw or otherwise deal with such investment property only with the consent
of Secured Party.  Secured Party shall
not give any such entitlement orders, instructions, or directions to any such
issuer, securities intermediary, or commodity intermediary, and shall not
withhold its consent to the exercise of any withdrawal or dealing rights by the
Debtor, unless an Event of Default (i) has occurred and is continuing or (ii) would
result from a requested withdrawal or dealing. The provisions of this section shall
not apply to any financial assets credited to a securities account for which
Secured Party is the securities intermediary.

 

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

 

4

 

G.            Electronic chattel paper and transferable records.  If any Debtor at any time holds or acquires
an interest in any electronic chattel paper or any “transferable record,” as
that term is defined in Section 201 of the federal Electronic Signatures
in Global and National Commerce Act, or in §16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction, such Debtor
promptly shall notify Secured Party thereof and at the request of Secured Party
shall take such action as Secured Party requests to vest in Secured Party
control, under § 9-105 of the Uniform Commercial Code (“UCC”), of such
electronic chattel paper, or control, under Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or as the case may
be, §16 of the Uniform Electronic Transactions Act, as in effect in such
jurisdiction, of such transferable record. Secured Party agrees to arrange,
pursuant to procedures satisfactory to Secured Party and as long as such
procedures will not result in Secured Party’s loss of control, for the Debtor
to make alterations to the electronic chattel paper or transferable record
permitted under UCC § 9-105, or as the case may be, Section 201 of
the federal Electronic Signatures in Global and National Commerce Act or §16 of
the Uniform Electronic Transactions Act for a party in control to make without
loss of control, unless an Event of Default has occurred and is continuing or
would occur after taking into account any action by the Debtor with respect to
such electronic chattel paper or transferable record.

 

H.            Letter-of-credit rights.  If any Debtor
at any time is a beneficiary under a letter of credit, then such Debtor
promptly shall notify Secured Party.  At
Secured Party’s request and option the Debtor shall, pursuant to an agreement
in form and substance satisfactory to Secured Party, either (1) arrange
for the issuer and any confirmer of such letter of credit to consent to an
assignment to Secured Party of the proceeds of any drawing under the letter of
credit or (2) arrange for Secured Party to become the transferee
beneficiary of the letter of credit, provided that Secured Party agrees that
the proceeds of any drawing under the letter of credit are to be applied to the
Obligations.

 

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 the
details of such claim and shall grant to Secured Party in writing a security
interest in such claim and in its proceeds, all upon the terms of this
agreement, such writing to be in form and substance reasonably satisfactory to
Secured Party.

 

J.             Goods.  With respect
to Collateral consisting of goods, each Debtor covenants and agrees with
Secured Party as follows:

 

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

 

5

 

Permitted Encumbrances.  If
Debtor fails to obtain such insurance, Secured Party shall have the right (but
not the obligation) to obtain it at Debtor’s expense, whereupon Debtor shall
reimburse Secured Party on demand;

 

(2)           Insurance
proceeds attributable to the Collateral shall be delivered to and initially
held 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 shall
deliver such proceeds to Debtor and Debtor shall repair or replace the damaged
or destroyed Collateral, or (b) if the amount of proceeds equals or
exceeds $50,000, and if Secured Party reasonably determines that it is feasible
for the damaged or destroyed Collateral to be repaired or replaced without
material prejudice to Secured Party, Secured Party shall disburse from time to
time all or any part of such proceeds upon such terms and conditions as Secured
Party reasonably decides advisable, for direct application by Debtor to the
repair or replacement of the Collateral. 
If any Event of Default is outstanding when Secured Party receives any
insurance proceeds, or if any Event of Default occurs while Secured Party is
holding 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 the
Obligations;

 

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

 

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

 

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

 

(1)           immediately
after Secured Party’s request from time to time upon and during the continuance
of an Event of Default, Debtor will give notice of Secured Party’s security
interest to any persons obligated to Debtor on any such Collateral;

 

(2)           within
five (5) business days after Secured Party’s request upon and during the
continuance of an Event of Default, Debtor will deliver to Secured Party any
Collateral requested by it, in connection with which Debtor on demand shall
make or furnish all endorsements, notations, records, information, and other
forms of assistance requested by Secured Party to enable it to perfect its
security interest in such Collateral, to hold, transfer, or collect the
proceeds of such Collateral, and/or to enforce Debtor’s and Secured Party’s
rights with respect to such Collateral; and

 

6

 

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

 

L.             Other actions.  Each
Debtor agrees to take any other action requested by Secured Party to ensure the
attachment, perfection, first priority, and enforceability of Secured Party’s
security interest in any and all of the Collateral, including without implied
limitation, (a) executing, delivering, and (where appropriate) filing
financing statements and amendments under the UCC, to the extent, if any, that
Debtor’s signature is required, (b) causing Secured Party’s name to be
noted as secured party on any certificate of title for titled goods if such
notation is a condition to attachment, perfection, priority, or enforceability
of Secured Party’s security interest in such Collateral, (c) complying
with any provision of any statute, regulation, or treaty of the United States
as to any Collateral if compliance with such provision is a condition to
attachment, perfection, priority, or enforceability of Secured Party’s security
interest in such Collateral, (d) using its best efforts to obtain
governmental and other third party consents and approvals, including without
limitation any consent of any licensor, lessor, or other person obligated on
Collateral, (e) using its best efforts to obtain waivers from mortgagees
and landlords (but only for locations that are not in shopping malls) in form
and substance reasonably satisfactory to Secured Party and (f) taking all
actions required by any earlier or subsequent versions of the UCC or by other
law, as reasonably determined by Secured Party.

 

5.             Representations and warranties concerning Debtors’ names and legal
status.

 

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

 

6.             Covenants concerning Debtors’ legal status.

 

Debtors
covenant with Secured Party that (a) without providing at least thirty
days prior written notice to Secured Party, no Debtor will change its name, its
place of business, the location of its chief executive office, its mailing
address, or its organizational identification number, (b) if any Debtor
that does not have an organizational identification number later obtains one,
such Debtor immediately shall notify Secured Party, and (c) no Debtor will
change its type of organization, jurisdiction of organization, or other legal
structure.

 

7.             Miscellaneous representations and warranties.

 

Debtors
represent and warrant to Secured Party that (a) none of the Collateral
constitutes, 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.

 

Each
Debtor covenants with Secured Party that it will (a) not use the
Collateral in violation of any law or any policy of insurance, (b) pay
when due all taxes, assessments, governmental charges, and levies made upon the
Collateral, incurred in connection with the use or operation of the Collateral,
or incurred in connection with this agreement, unless (x) the same are being
contested in good faith by proper legal proceedings and (y) adequate reserves
have been established and maintained therefor, and (c) operate its
business in compliance with (i) all applicable material provisions of the
federal Fair Labor Standards Act, as amended, and (ii) all applicable
material provisions of federal, state, and local statutes and ordinances
dealing with the control, shipment, storage, or disposal of hazardous materials
or substances.

 

9.             Power of Attorney.

 

For
purposes of Section 4L of this agreement, each Debtor irrevocably appoints
Secured Party as its attorney-in-fact to do all acts and things which Secured
Party in good faith decides advisable to perfect and continue perfected its
rights and to protect the Collateral, all as fully and completely as each
Debtor could do if such Debtor were acting on its own behalf.  The powers conferred on Secured Party in this
section are solely to protect its interests in the Collateral and shall
not impose any duty upon it to exercise any such powers.  Secured Party shall be accountable only for
the amounts that it actually receives as a result of the exercise of the
foregoing powers.  Neither Secured Party
nor any of its officers, directors, employees, or agents shall be liable to
Debtors for any act or failure to act, except for Secured Party’s own gross
negligence or willful misconduct.

 

10.           Authorization.

 

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

 

11.           Events of Default.

 

Each
of the following circumstances and occurrences shall constitute an Event of
Default under this agreement:

 

8

 

(1)           Material
breach, with respect to any Debtor, of any warranty, covenant, or other
provision of this agreement unless (a) such breach is cured within an
expressly applicable cure period or (b) if this agreement provides no
expressly applicable cure period, then (i) the breach is readily curable
and (ii)  the breach is fully cured within the shortest reasonable period,
which shall not exceed thirty (30) days;

 

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

 

(3)           The
imposition upon any Collateral of any lien or encumbrance other than the
Permitted Encumbrances and/or a security interest in favor of Secured Party;

 

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

 

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

 

(6)           The
filing by any Debtor in any forum of any petition, answer, or similar document
seeking (a) relief under any bankruptcy, insolvency, or similar law, or (b) the
appointment of a receiver, trustee, or other fiduciary to take charge of any of
any Debtor’s property;

 

(7)           The
filing against any Debtor in any forum of any petition or similar document
under any bankruptcy, insolvency, or similar law, if such is not dismissed
within forty-five (45) days;

 

(8)           The
filing against any Debtor in any forum of any petition or similar document
seeking the appointment of a receiver, trustee, or other fiduciary to take
charge of any of such Debtor’s property, if such is not dismissed within
forty-five (45) days;

 

(9)           Any
Debtor’s written statement or acknowledgment of its inability to pay its debts
as they become due;

 

(10)         Any
assignment by any Debtor for the benefit of any of its creditors, or any
composition by any Debtor with any of its creditors;

 

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

 

9

 

(12)         The
commencement of any proceeding seeking the dissolution of any Debtor, unless
such proceeding is dismissed within forty-five (45) days; or

 

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

 

12.           Power to Sell or Collect Collateral.

 

A.            After
any Event of Default, Secured Party shall have, in addition to all other rights
and remedies, the rights and remedies of a secured party under the applicable
provisions of the UCC, including without implied limitation the right to take
possession of the Collateral.  For that
purpose Secured Party may enter upon any premises on which the Collateral may
be 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 a
recognized 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 or
of the time after which any private sale or any other intended disposition is
to be made.

 

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

 

13.           Standards for exercising remedies.

 

To the extent that applicable law imposes duties on Secured
Party to exercise remedies in a commercially reasonable manner, Debtors
acknowledge and agree that it is not commercially unreasonable for Secured
Party (a) to decline to incur expenses that are reasonably necessary (i) to
prepare the Collateral for disposition or (ii) to complete work in
process, (b) to fail to obtain third-party consents for access to any
Collateral 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 the
Collateral, (c) to fail to (i) exercise collection remedies against
account debtors or other persons obligated on the Collateral or (ii) remove
liens, encumbrances, or any adverse claims against the Collateral, (d) to
exercise collection remedies against account debtors and other persons
obligated on the Collateral, directly or through the use of collection agencies
and other collection

 

10

 

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

 

14.           Marshalling.

 

Secured
Party shall not be required to marshal any present or future collateral
security for the Obligations or to resort to such collateral security or other
assurances of payment in any particular order. 
All of Secured Party’s rights under this agreement and in respect of
such collateral security and other assurances of payment shall be cumulative
and 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 collateral
which might delay or impede the enforcement of Secured Party’s rights under
this agreement, or under any other instrument creating or evidencing any of the
Obligations, under which any of the Obligations is outstanding or by which any
of 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.

 

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

 

11

 

16.           Waivers and Assents.

 

To the
full extent permitted by law, but except as expressly provided otherwise in
this 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 by
Secured Party in reliance on this agreement; and all other demands and notices
of any description.  With respect both to
the Obligations and the Collateral, Debtors assent to any extension,
postponement, or other indulgence; to any substitution, exchange, or release of
any Collateral; to the addition or release of any person primarily or
secondarily liable; to the acceptance of partial payments; and to any
settlement, compromise, or adjustment, all in such manner and at such time or
times as Secured Party decides advisable. 
To the full extent permitted by law, Secured Party shall have no duty as
to the collection or protection of the Collateral or any income therefrom; as
to the preservation of rights against prior parties; or as to the preservation
of any rights pertaining thereto.  Secured
Party may exercise its rights with respect to the Collateral without resort or
regard to other sources of reimbursement for the Obligations.  Secured Party shall not be deemed to have
waived any of its rights unless such waiver is given in writing and is signed
by Secured Party.  No delay or omission
on the part of Secured Party in exercising any right shall operate as a
waiver.  No waiver shall arise from any
course of conduct by Secured Party.  A
waiver on one occasion shall not be construed as a bar to, or waiver of, any
right on any future occasion.  All rights
and remedies of Secured Party, whether available by law or stated in this
agreement or in any other instrument or document, shall be cumulative, and all
such rights and remedies may be exercised singly, concurrently, or sequentially.

 

17.           Expenses; Proceeds of Collateral.

 

Debtors
shall reimburse Secured Party on demand for any and all expenses, including
reasonable professional fees and reasonable legal fees, incurred or paid by
Secured Party in good faith in protecting or enforcing its rights under this
agreement (i) after notice to Debtors, if no Event of Default is then
outstanding, or (ii) after any Event of Default.  After deducting all such expenses, the
balance of any proceeds of collection or sale of the Collateral shall be applied
to the payment of principal, interest, and other sums due on the Obligations in
such order as Secured Party may determine, proper allowance for interest on
Obligations not then due being made, and any surplus shall be paid as required
by law.

 

18.           General.

 

A.            Any
notices to a Debtor shall be effective (1) upon actual delivery to
Borrower’s principal office or (2) when sent by certified mail (return
receipt 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 to
any of them at Borrower’s principal office shall constitute notice to all
Debtors for all purposes.

 

12

 

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

 

C.            Copies
of notices shall be sent to counsel as follows, but failure to send such a copy
shall 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.            Because
this agreement has been negotiated and signed in Massachusetts in reliance upon
the applicability of Massachusetts substantive law, the construction, validity,
and performance of this agreement shall be governed by the laws of
Massachusetts, disregarding any law or doctrine that might dictate the
application of the law of another state except for Sections 9-301 through 9-307
of the Massachusetts UCC.  This agreement
shall benefit the parties’ successors and assigns and shall bind their
successors and assigns.  This agreement
may not be amended, supplemented, or otherwise changed except by a written
instrument signed by both parties.  This
agreement contains the entire understanding of the parties, superseding all
negotiations, representations, and prior understandings with respect to the
subject matter hereof.

 

E.             The
defined terms “Loan Agreement” and “Guaranty Agreement” shall include all
future amendments, restatements, renewals, and replacements.

 

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

 

19.           Jury waiver.

 

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

 

20.           Organizational number.

 

Each
Debtor represents that its “organizational number” for UCC purposes, if any, is
set forth on the attached Exhibit E.

 

13

 

21.           Possible closures.

 

Secured
Party agrees that Debtors may sell or close their existing restaurants in New
Jersey and Florida and may dissolve the entities that own and operate such
restaurants; such closures and dissolutions shall not be treated as a violation
of any provision of this agreement, and the net proceeds of the disposition of
the assets of such restaurants (a) shall be retained by Debtors if no
Event of Default is then outstanding or (b) shall be paid to Secured Party
to be applied to the Obligations in such manner as Secured Party decides
advisable if any Event of Default is then outstanding.  This agreement shall continue in full force
and effect nothwithstanding such dissolutions.

 

Signed
as 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

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