Document:

exv10w3

 

Exhibit 10.3

UNLIMITED GUARANTY

     GUARANTY, dated as of August 2, 2007 made by LEASECOMM CORPORATION, a Massachusetts
corporation (the “Guarantor”), in favor of SOVEREIGN BANK, in its capacity as Agent (in
such capacity, the “Agent”) for the Lenders under the Credit Agreement dated as of the date
hereof among TimePayment Corp., a Delaware corporation (the “Borrower”), the Agent and the
Lenders named therein (the “Credit Agreement”). Unless otherwise defined herein, the terms
defined in the Credit Agreement are used herein as defined in the Credit Agreement

     WHEREAS, the Guarantor and the Borrower are wholly owned subsidiaries of the Parent, and all
of the Parent, the Borrower and the Guarantor will benefit, directly or indirectly, from the
extensions of credit to be made under the Credit Agreement.

     WHEREAS, the Parent has adopted a new business plan pursuant to which, through its
subsidiaries, it will finance different types of equipment with leases generated from different
sources than had previously been done by the Guarantor and, as a consequence thereof, the Parent
has decided that all new leases will be generated and financed by the Borrower and that the
Guarantor will only collect and wind down its existing portfolio of leases and will not generate
and finance any new leases.

     NOW, THEREFORE, in order to induce the Agent and the Lenders to enter into the Credit
Agreement and to make or extend one or more loans, advances or other extensions of credit upon the
terms and subject to the conditions set forth in the Credit Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Guarantor
agrees as follows:

     1. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby guarantees to the Agent
and the Lenders the full and punctual payment when due (whether at maturity, by acceleration or
otherwise), and the performance, of all Obligations. This Guaranty is an absolute, unconditional
and irrevocable guaranty of the full and punctual payment and performance of the Obligations and
not of their collectibility only and is in no way conditioned upon any requirement that the Agent
first attempt to collect any of the Obligations from the Borrower or resort to any security or
other means of obtaining their payment. Should the Borrower default in the payment or performance
of any of the Obligations, the obligations of the Guarantor hereunder shall become immediately due
and payable to the Agent and the Lenders, without demand or notice of any nature, all of which are
expressly waived by the Guarantor. Payments by the Guarantor hereunder may be required by the
Agent on any number of occasions.

 

 

     2. GUARANTOR’S AGREEMENT TO PAY. The Guarantor further agrees, as the principal
obligor and not as a guarantor only, to pay to the Agent, on demand, all costs and expenses
(including court costs and reasonable legal expenses) incurred or expended by the Agent in
connection with the Obligations, this Guaranty and the enforcement thereof, together with interest
on amounts recoverable under this Guaranty from the time such amounts become due until payment, at
the rate per annum equal to the rate of interest equal to the Base Rate, plus a margin of four
percent (4.00%); provided that if such interest exceeds the maximum amount permitted to be paid
under applicable law, then such interest shall be reduced to such maximum permitted amount.

     3. UNLIMITED GUARANTY. The liability of the Guarantor hereunder shall be unlimited.

     4. WAIVERS BY GUARANTOR; BANK’S FREEDOM TO ACT. The Guarantor agrees that the
Obligations will be paid and performed strictly in accordance with their respective terms
regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Agent with respect thereto. To the extent permitted by
applicable law, the Guarantor waives presentment, demand, protest, notice of acceptance, notice of
Obligations incurred and all other notices of any kind, all defenses which may be available by
virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any
right to require the marshalling of assets of the Borrower, and all suretyship defenses generally.
Without limiting the generality of the foregoing, the Guarantor, to the extent permitted by
applicable law, agrees to the provisions of any instrument evidencing, securing or otherwise
executed in connection with any Obligation and agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (i)
the failure of the Agent to assert any claim or demand or to enforce any right or remedy against
the Borrower; (ii) any extensions or renewals of any Obligation; (iii) any rescissions, waivers,
amendments or modifications of any of the terms or provisions of any agreement evidencing, securing
or otherwise executed in connection with any Obligation; (iv) the substitution or release of any
entity primarily or secondarily liable for any Obligation; (v) the adequacy of any rights the Agent
may have against any collateral or other means of obtaining repayment of the Obligations; (vi) the
impairment of any collateral securing the Obligations, including without limitation the failure to
perfect or preserve any rights the Agent might have in such collateral or the substitution,
exchange, surrender, release, loss or destruction of any such collateral; or (vii) any other act or
omission which might in any manner or to any extent vary the risk of the Guarantor or otherwise
operate as a release or discharge of the Guarantor, all of which may be done without notice to the
Guarantor.

     5. COMPLIANCE WITH CREDIT AGREEMENT AND OTHER COVENANTS.

          (a) The Guarantor agrees to observe, perform, comply with and be bound by all of the covenants
set forth in the Credit Agreement as if each such covenant were made by the Guarantor with each
reference therein to the “Borrower” changed to the “Guarantor”, other than the following: Section
5.7 (Use of Proceeds), Section 5.10 (Borrower’s Cash Accounts), Section 6.4 (Asset Quality) and
Section 7.6 (Restricted Payments).

-2-

 

          (b) The Guarantor agrees not to enter into any new lease agreement, installment sales contract
or other agreement as lessor or seller with respect to any equipment (a “Lease”) or conduct
any other business other than performing under, and collecting revenue from, its existing portfolio
of Leases.

     6. UNENFORCEABILITY OF OBLIGATIONS AGAINST BORROWER. If for any reason the Borrower
has no legal existence or is under no legal obligation to discharge any of the Obligations, or if
any of the Obligations have become irrecoverable from the Borrower by operation of law or for any
other reason, this Guaranty shall nevertheless be binding on the Guarantor to the same extent as if
the Guarantor at all times had been the principal obligor on all such Obligations. In the event
that acceleration of the time for payment of the Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, or for any other reason, all such amounts otherwise
subject to acceleration under the terms of any agreement evidencing, securing or otherwise executed
in connection with any Obligation shall be immediately due and payable by the Guarantor.

     7. WAIVER OF SUBROGATION. Until the payment and performance in full of all
Obligations and any and all obligations of the Borrower to the Lenders, the Guarantor shall not
exercise any rights against the Borrower arising as a result of payment by the Guarantor hereunder,
by way of subrogation or otherwise, and will not prove any claim in competition with the Agent or
the Lenders in respect of any payment hereunder in bankruptcy or insolvency proceedings of any
nature; the Guarantor will not claim any set-off or counterclaim against the Borrower in respect of
any liability of the Guarantor to the Borrower; the Guarantor waives any benefit of and any right
to participate in any collateral which may be held by the Agent or the Lenders; and notwithstanding
any other provision to the contrary contained herein, the Guarantor hereby irrevocably waives any
and all rights it may have at any time (whether arising directly or indirectly, by operation of law
or by contract) to assert any claim against the Borrower on account of payments made under this
Guaranty, including, without limitation, any and all rights of or claim for subrogation,
contribution, reimbursement, exoneration and indemnity.

     8. SUBORDINATION. The payment of any amounts due with respect to any indebtedness of
the Borrower now or hereafter held by the Guarantor is hereby subordinated to the prior payment in
full of the Obligations. The Guarantor agrees that the Guarantor will not demand, sue for or
otherwise attempt to collect any such indebtedness of the Borrower to the Guarantor until the
Obligations shall have been paid in full. If, notwithstanding the foregoing sentence, the
Guarantor shall collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by the Guarantor as trustee for the Agent and be
paid over to the Agent on account of the Obligations without affecting in any manner the liability
of the Guarantor under the other provisions of this Guaranty.

     9. SECURITY; SET-OFF. Regardless of the adequacy of any Collateral or any other means
of obtaining repayment for any Obligations, any deposits, balances or other sums credited by or due
from the head office of the Agent, any Lender or any of their branch offices to Guarantor and any
property of Guarantor now or hereafter in the possession, custody, safekeeping or control of the
Agent or any Lender or in transit to the Agent or any Lender may, at any time and from time to
time, without notice to the Guarantor or compliance with any other condition precedent now or
hereafter imposed by statute, rule of law, or otherwise (all of which

-3-

 

are hereby expressly waived by the Guarantor) and to the fullest extent permitted by law, set
off, appropriated and applied by the Agent or any Lender against any and all Obligations of the
Guarantor in such manner as the head office of the Agent, any Lender or any of their branch offices
in their sole discretion may determine, and the Guarantor hereby grants the Agent and each Lender a
continuing security interest in such deposits, balances, other sums and property for the payment
and performance of all such Obligations and although such Obligations may be contingent or
unmatured. ANY AND ALL RIGHTS TO REQUIRE THE AGENT OR ANY LENDER TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING
ITS RIGHTS OF SETOFF WITH RESPECT TO SUCH DEPOSITS, BALANCES, OTHER SUMS AND PROPERTY OF THE
GUARANTOR ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Agent, Lender or the branch
office, as the case may be, will provide prompt notice to the Guarantor of any setoff hereunder.

     10. FURTHER ASSURANCES. The Guarantor authorizes the Agent to file any financing
statement deemed by the Agent to be necessary or desirable to perfect any security interest granted
by the Guarantor to the Agent, and as agent for the Guarantor, to sign the name of the Guarantor
thereto. The Guarantor also agrees to do all such things and execute all such documents, as the
Agent may consider necessary or desirable to give full effect to this Guaranty and to perfect and
preserve the rights and powers of the Agent hereunder, and the Guarantor hereby authorizes the
Agent to file such UCC financing statements and amendments as may be deemed necessary or desirable
by the Agent.

     11. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the Guarantor, its
successors and assigns, and shall inure to the benefit of and be enforceable by the Agent and its
successors, transferees and assigns under the Credit Agreement.

     12. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of this Guaranty
nor consent to any departure by the Guarantor therefrom shall be effective unless the same shall be
in writing and signed by the Agent. No failure on the part of the Agent to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise thereof or the
exercise of any other right.

     13. NOTICES. All notices hereunder shall be given in the same manner as set forth in
Section 11.1 of the Credit Agreement, provided that the Borrower’s address for notices shall
constitute the Guarantor’s address for notices, and any notice given to Borrower in accordance with
the terms of such Section shall be deemed to be given to the Guarantor.

     14. GOVERNING LAW; CONSENT TO JURISDICTION. THIS GUARANTY IS A CONTRACT UNDER THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE GUARANTOR CONSENTS TO THE JURISDICTION OF ANY OF THE FEDERAL OR STATE COURTS
LOCATED IN SUFFOLK COUNTY IN THE COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT TO
ENFORCE THE RIGHTS OF THE AGENT AND THE

-4-

 

LENDERS UNDER THIS GUARANTY AND CONSENTS TO SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE
UPON SUCH OBLIGOR IN THE MANNER PROVIDED IN SECTION 13 ABOVE. THE GUARANTOR IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH ACTION BROUGHT IN
THE COURTS REFERRED TO IN THIS SECTION AND IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY SUCH ACTION THAT SUCH ACTION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     15. Waiver of Jury Trial. EACH OF THE GUARANTOR AND THE AGENT HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER, THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE AGENT RELATING
TO THE ADMINISTRATION OR ENFORCEMENT OF THIS GUARANTY, AND AGREES THAT IT WILL NOT SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CAN NOT BE OR HAS NOT BEEN
WAIVED. EXCEPT AS PROHIBITED BY LAW, EACH OF THE GUARANTOR AND THE AGENT HEREBY WAIVES ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES. THE GUARANTOR (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT
OR LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (b) ACKNOWLEDGES THAT THE AGENT AND THE
LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS TO WHICH EACH IS
A PARTY BECAUSE OF, AMONG OTHER THINGS, THE GUARANTOR’S WAIVERS AND CERTIFICATIONS CONTAINED
HEREIN.

     15. MISCELLANEOUS. This Guaranty constitutes the entire agreement of the Guarantor
with respect to the matters set forth herein. The rights and remedies herein provided are
cumulative and not exclusive of any remedies provided by law or any other agreement, and this
Guaranty shall be in addition to any other guaranty of the Obligations. The invalidity or
unenforceability of any one or more sections of this Guaranty shall not affect the validity or
enforceability of its remaining provisions. Captions are for the ease of reference only and shall
not affect the meaning of the relevant provisions. The meanings of all defined terms used in this
Guaranty shall be equally applicable to the singular and plural forms of the terms defined.

-5-

 

     IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed under seal and
delivered by its duly authorized officer, as of the date first above written.

	 	 	 	 	 
	 	GUARANTOR:

LEASECOMM CORPORATION

 	 
	 	By:  	/s/ Richard F. Latour
 	 
	 	 	Name:  	Richard F. Latour 	 
	 	 	Title:  	President 	 
	 

[SIGNATURE PAGE TO LEASECOMM GUARANTY]

 

 

CERTIFICATE

The undersigned certifies to Sovereign Bank that:

     1. He is the President of the Guarantor which executed the foregoing Guaranty and in that
capacity has the authority to make this certificate on behalf of the Guarantor.

     2. The Guarantor is a corporation, validly organized or formed and existing in good standing
and in the full enjoyment of its powers and franchises under the laws of The Commonwealth of
Massachusetts.

     3. The foregoing Guaranty has been duly executed and delivered on behalf of the Guarantor,
such actions have been duly authorized by all necessary corporate or other action, and the
execution, delivery and performance of the Guaranty by the Guarantor will not contravene any
existing law, rule or regulation, or any provision of its certificate of incorporation or by-laws
or other document or documents evidencing its establishment or governing the conduct of its affairs
or any agreement to which it is a party or by which it is bound.

     IN WITNESS WHEREOF, the undersigned has made this certificate on behalf of the Guarantor this
2nd day of August, 2007.

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Richard F. Latour
	 	 

[Seal]

-7-exv10w4

 

Exhibit 10.4

SECURITY AGREEMENT

     This SECURITY AGREEMENT (this “Agreement”) is made as of the 2nd day of August,
2007, by TIMEPAYMENT CORP., a Delaware corporation (the “Borrower”), and its Subsidiaries
from time to time party hereto (together with the Borrower, each an “Obligor”, and
collectively, the “Obligors”), in favor of SOVEREIGN BANK, in its capacity as Agent (in
such capacity, the “Agent”) for the Secured Parties (as defined below).

WITNESSETH:

     WHEREAS, the Borrower, the Agent and the Lenders intend to enter into a Credit Agreement,
dated as of even date herewith (as amended, modified, supplemented or restated from time to time,
the “Credit Agreement”);

     WHEREAS, it is a condition precedent to the Agent and the Lenders entering into the Credit
Agreement and making extensions of credit thereunder that each Obligor execute and deliver this
Agreement and grant the security interests herein provided;

     NOW, THEREFORE, in order to induce the Agent and the Lenders to enter into the Credit
Agreement and the Lenders to make or extend to the Borrower one or more loans, advances or other
extensions of credit upon the terms and subject to the conditions set forth therein, and in
consideration thereof, and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, each Obligor agrees as follows:

     Section 1. Definitions. The following capitalized terms used herein or in any
certificate, report or other document delivered pursuant hereto shall have the meanings assigned to
them below. Unless otherwise defined herein, the terms defined in the Credit Agreement are used
herein, and in any certificate, report or other document delivered pursuant hereto, as defined in
the Credit Agreement. Except as otherwise defined herein or in the Credit Agreement, terms defined
in the Uniform Commercial Code and used herein shall have the meanings set forth therein;
provided, however, that the term “instrument” shall be such term as defined in
Article 9 of the Uniform Commercial Code rather than Article 3 of the Uniform Commercial Code.

     Accounts. All rights of each Obligor to payment of a monetary obligation (i) for
property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (ii)
for services rendered or to be rendered, (iii) for a secondary obligation incurred or to be
incurred, or (iv) arising out of the use of a credit or charge card or information contained on or
for use with the card; and all sums of money and other proceeds due or becoming due thereon, all
notes, bills, drafts, acceptances, instruments, documents and other debts, obligations and
liabilities, in whatever form, owing to such Obligor with respect thereto, all guarantees and
security therefor, and each Obligor’s rights pertaining to and interest in such property, including
the right of stoppage in transit, replevin or reclamation; all chattel paper; all amounts due from
Affiliates of each Obligor; all insurance proceeds; all other rights and claims to the payment of
money, under contracts or otherwise; and all other property constituting “accounts” as such term is
defined in the Uniform Commercial Code.

 

 

     Collateral. All property belonging to each Obligor or in which such Obligor has any
rights, of every kind and description, tangible and intangible, whether now owned or existing or
hereafter arising or acquired; including, without limitation, all Accounts, Equipment, General
Intangibles, Inventory and Investment Property, together with all goods, instruments (including
promissory notes), documents of title, policies and certificates of insurance, commercial tort
claims, chattel paper (whether tangible or electronic), deposit accounts, letter of credit rights
(whether or not the letter of credit is evidenced by a writing), and other property owned by each
Obligor or in which such Obligor has an interest; and including, without limitation, any cash that
is now or may hereafter be in the possession, custody or control of the Agent or the Secured
Parties or their participants or assigns for any purpose; any and all additions, substitutions,
replacements and accessions to the foregoing and all supporting obligations relating to the
foregoing; and all Proceeds and products of any of the foregoing.

     Collateral Account. See Section 3.9(a).

     Encumbrance. Any mortgage, pledge, security interest, lien or other charge or
encumbrance of any kind or nature (including, without limitation, the lien or retained security
title of a conditional vendor) upon or with respect to any property.

     Equipment. All machinery, equipment and fixtures, furniture, furnishings, trade
fixtures, specialty tools and parts, motor vehicles and materials handling equipment of each
Obligor, together with each Obligor’s interest in, and right to, any and all manuals, computer
programs, data bases and other materials relating to the use, operation or structure of any of the
foregoing; and all other property constituting “equipment” as such term is defined in the Uniform
Commercial Code.

     General Intangibles. All rights with respect to trademarks, service marks, trade
names, trade styles, patents, copyrights, mask works, trade-secrets information, all intellectual
property listed on Exhibit B hereto, other proprietary rights and rights to prevent others
from doing acts that constitute unfair competition with any Obligor or misappropriation of its
property, including without limitation any sums (net of expenses) that such Obligor may receive
arising out of any claim for infringement of its rights in any of the foregoing, and all rights of
each Obligor under contracts to enjoy performance by others or to be entitled to enjoy rights
granted by others, including without limitation any licenses; all payment intangibles; all
obligations and indebtedness of any kind (other than Accounts) owing to each Obligor from whatever
source arising; all contract rights; all rights of each Obligor as a bailor; all tax refunds; all
right, title and interest of each Obligor in and to all software, documents, books, records, files
and other information (on whatever medium recorded, and including without limitation computer
programs, tapes, discs, data processing software and related property and rights) maintained by
each Obligor that reflect the conduct of such Obligor’s business, such as financial records,
marketing and sales records, research and development records, and design, engineering and
manufacturing records; all rights under service bureau service contracts; all computer data and the
concepts and ideas on which said data is based; all developmental ideas and concepts, papers,
plans, schematics, drawings, blueprints, sketches and documents; all data bases; all customer
lists; and all other property constituting “general intangibles” as such term is defined in the
Uniform Commercial Code.

-2-

 

     Inventory. All goods, merchandise and other personal property (including warehouse
receipts and other negotiable and non-negotiable documents of title covering any such property) of
each Obligor that are held for sale, lease or other disposition or to be furnished under contracts
of service (or that are so furnished), or for display or demonstration, or leased or consigned, or
that are raw materials, piece goods, work-in-process, finished goods or supplies or other materials
used or consumed or to be used or consumed in such Obligor’s business, whether in transit or in the
possession of such Obligor or another, including without limitation all goods covered by purchase
orders and contracts with suppliers and all goods billed and held by suppliers and goods located on
the premises of any carriers, forwarding agents, truckers, warehousemen, vendors, selling agents or
other third parties; all proprietary rights, patents, plans, drawings, diagrams, schematics,
assembly and display materials relating to any of the foregoing; and all other property
constituting “inventory” as such term is defined in the Uniform Commercial Code.

     Investment Property. All of the securities (whether certificated or uncertificated)
of each Obligor, including without limitation all stocks, bonds, Treasury bills, certificates of
deposit, mutual or money market fund shares, security entitlements, securities accounts, commodity
contracts and commodity accounts; and all sums due or to become due on any of the foregoing, and
all securities, instruments or other property purchased or acquired as a result of the investment
and reinvestment thereof as hereinafter provided, and all other property constituting “investment
property” as such term is defined in the Uniform Commercial Code.

     Lease. Any lease agreement, installment sales contract or other agreement (including
any and all schedules, supplements and amendments thereon and modifications thereof) entered into
by an Obligor as lessor or seller with respect to Equipment.

     Perfection Certificate. A certificate signed by a Responsible Officer of each Obligor
in the form attached hereto as Exhibit A.

     Proceeds. All proceeds of and all other profits, rentals and receipts, in whatever
form, received or arising from any Collateral, including: whatever is received or acquired upon the
sale, lease, exchange, assignment, licensing or other disposition of any Collateral; whatever is
received, collected on or distributed on account of any Collateral; all rights arising out of any
Collateral; all claims arising out of the loss, nonconformity, interference with the use of,
defects or infringement of rights in, or damage to or destruction of, any Collateral; any insurance
payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage
to or destruction of, any Collateral; any unearned premiums with respect to policies of insurance
in respect of any Collateral; any condemnation or requisition payments with respect to any
Collateral; and all other property constituting “proceeds” as such term is defined in the Uniform
Commercial Code; in each case whether now existing or hereafter arising.

     Secured Parties. Collectively, the Agent, the Lenders and any other Persons the
Obligations owing to which are or are purported to be secured by the Collateral under the terms of
the Security Documents.

-3-

 

     Security Interests. The security interests and liens granted pursuant to Section 2
hereof, as well as all other security interests created or assigned as additional security for the
Obligations pursuant to this Agreement.

     Uniform Commercial Code. The Uniform Commercial Code as in effect in The Commonwealth
of Massachusetts from time to time, provided, that if by reason of mandatory provisions of
law, perfection, or the effect of perfection or nonperfection, of the Security Interests in any
Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than
Massachusetts, “Uniform Commercial Code” means the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection, as the case may be.

     Section 2. Grant.

     (a) To secure the full and punctual payment and performance of the Obligations, each
Obligor hereby assigns and pledges to the Agent for the benefit of the Secured Parties all of
its respective rights, title and interest in, and grants to the Agent for the benefit of the
Secured Parties a continuing security interest in, the Collateral of such Obligor. The
Security Interests are granted as security only and shall not subject the Agent or any
Secured Party to, or transfer to the Agent or any Secured Party or in any way affect or
modify, any obligation or liability of any Obligor with respect to any of the Collateral or
any transaction in connection therewith.

     (b) Contemporaneously with the execution of this Agreement, and from time to time
thereafter, each Obligor (i) shall deliver to the Agent such assignments, intellectual
property mortgages and assignments, instruments and notices and assignments under the
Assignment of Claims Act of 1940, as amended, as may reasonably be deemed necessary or
desirable by the Agent to perfect its Security Interest in the Collateral and (ii) authorizes
the Agent to file such Uniform Commercial Code financing statements and amendments as may be
deemed necessary or desirable by the Agent to perfect its Security Interest in the
Collateral, which financing statements may identify the collateral as being all assets of the
Obligor (or words of similar effect) or of equal or lesser scope or with lesser or greater
detail and may be filed by the Agent at any time in any jurisdiction and may be signed by the
Agent on behalf of the Borrower.

     Section 3. Representations, Warranties and Covenants. The Obligors hereby, jointly
and severally, make the following representations and warranties, and agree to the following
covenants, each of which representations, warranties and covenants shall be continuing and in force
so long as this Agreement is in effect:

          3.1 Name; Location; Changes.

     (a) The name of each Obligor set forth in Section 1(a) of its Perfection Certificate is
the true and correct legal name of such Obligor, and except as otherwise disclosed to the
Agent in the Perfection Certificate, such Obligor has not done business as or used any other
name.

-4-

 

     (b) The type and state of organization of each Obligor set forth in Sections 1(c) and
1(d) of its Perfection Certificate is the true and correct type and state of organization of
such Obligor and the organizational identification number set forth in Section 1(e) of its
Perfection Certificate is the true and correct organizational identification number issued to
such Obligor by its state of organization (or if such state did not issue such Obligor an
organizational identification number such Obligor has so indicated in Section 1(e) of its
Perfection Certificate) and such Obligor is duly organized and in good standing in such state
on the date hereof.

     (c) The address of each Obligor set forth in Section 2(a) of its Perfection Certificate
is such Obligor’s chief executive office and the place where its business records are kept.
Except as disclosed on the Perfection Certificate, all business records of such Obligor are
located at such chief executive office.

     (d) No Obligor will change its name, identity or organizational structure, nature or
jurisdiction of organization, or chief executive office or place where its business records
are kept, or merge into or consolidate with any other entity, unless such Obligor shall have
given the Agent at least 30 days’ prior written notice thereof and such Obligor shall have
delivered to the Agent such new documents as may be necessary or reasonably required by the
Agent to ensure the continued perfection and priority of the Security Interests.

     (e) Each Obligor has delivered a Perfection Certificate to the Agent on the date hereof.
All information set forth in each Perfection Certificate is true and correct in all material
respects. Each Obligor agrees to supplement its Perfection Certificate promptly after
obtaining information which would require a correction or addition thereto.

          3.2 Ownership of Collateral; Absence of Liens and Restrictions. Each Obligor is, and
in the case of property acquired after the date hereof, will be, the sole legal and equitable owner
of the Collateral of such Obligor, holding good and marketable title to the same free and clear of
all Encumbrances except for the Security Interests and Permitted Encumbrances, and has good right
and legal authority to assign, deliver, and create a security interest in such Collateral in the
manner herein contemplated. The Collateral is genuine and is what it is purported to be. The
Collateral is not subject to any restriction that would prohibit or restrict the assignment,
delivery or creation of the security interests contemplated hereunder.

          3.3 First Priority Security Interest. This Agreement creates a valid and continuing
lien on and security interest in the Collateral, and upon the filing of Uniform Commercial Code
financing statements in the appropriate filing offices of each Obligor’s state of organization and
where Collateral consisting of fixtures is located, in each case as identified in such Obligor’s
Perfection Certificate, the Security Interests will be perfected (except to the extent a security
interest may not be perfected by filing under the Uniform Commercial Code) prior to all other
Encumbrances (other than the Permitted Encumbrances), and are enforceable as such against creditors
of each of the Obligors, any owner of the real property where any of the Collateral is located, any
purchaser of such real property and any present or future creditor obtaining a lien on such real
property. The Agent acknowledges that the attachment of its

-5-

 

security interest in any commercial tort claim of any Obligor as original collateral is
subject to such Obligor’s compliance with Section 5(e).

          3.4 No Conflicts. Neither any Obligor nor any of their respective predecessors has
performed any acts or is bound by any agreements which might prevent the Agent or the Secured
Parties from enforcing the Security Interests or any of the terms of this Agreement or which would
limit the Agent or the Secured Parties in any such enforcement. No financing statement under the
Uniform Commercial Code of any state or other instrument evidencing a lien that names any Obligor
as debtor is on file in any jurisdiction and no Obligor has signed any such document or any
agreement authorizing the filing of any such financing statement or instrument, except (i) as
specifically disclosed in a Perfection Certificate, (ii) with respect to Permitted Encumbrances and
(iii) with respect to which the secured party has authorized in writing, on or before the date
hereof, the filing of a termination statement.

          3.5 Sales and Further Encumbrances. No Obligor will sell, grant, assign or transfer
any interest in, or permit to exist any Encumbrance on, any of the Collateral of such Obligor,
except the Security Interests, Permitted Encumbrances and as permitted by the Credit Agreement.

          3.6 Fixture Conflicts; Required Waivers. Each Obligor intends, to the extent not
inconsistent with applicable law, that the Collateral of such Obligor shall remain personal
property of such Obligor and shall not be deemed to be a fixture irrespective of the manner of its
attachment to any real estate. Each Obligor will deliver to the Agent such disclaimers, waivers,
or other documents as the Agent may reasonably request to confirm the foregoing, executed by each
person having an interest in such real estate.

          3.7 Validity of Accounts. Each Account arises and will arise in the ordinary course
of an Obligor’s business out of or in connection with the sale or lease of goods or the rendering
of services and is and shall be a valid, legal and binding obligation of the party purported to be
obligated thereon, enforceable in accordance with its terms and free of material setoffs, defenses
or counterclaims. No Obligor has knowledge of any fact that would materially impair the validity
or collectibility of any of the Accounts.

          3.8 Maintenance of Books, Records and Leases; Legends; Verification of Accounts; Computer
Access.

     (a) Each Obligor shall keep complete and accurate books and records relating to the
Collateral, including without limitation all Leases, and upon request of the Agent shall
stamp, or otherwise mark or place legends on, such books and records, including without
limitation all Leases, in such manner as the Agent may reasonably request in order to reflect
the Security Interests.

     (b) Each Obligor will allow the Agent and its designees to examine, inspect and make
extracts from or copies of such Obligor’s books and records, inspect the Collateral and
arrange for verification of Accounts directly with any account debtors or by other methods,
under reasonable procedures established by the Agent after consulting with

-6-

 

the Obligor. Such access to such Obligor’s books and records shall include access to
all computer files, systems and servers maintained by such Obligor.

     (c) Each Obligor will maintain its original documents of all Leases forming part of the
Collateral in a separate, fireproof cabinet on the Obligor’s premises or at a third-party
storage site reasonably acceptable to the Agent. Upon request of the Agent, each Obligor
will deliver to the Agent or a third-party custodian designated by the Agent the original
documents of any or all Leases.

          3.9 Collection and Delivery of Proceeds.

     (a) Each Obligor will diligently collect all of its Accounts until the Agent exercises
its rights to collect the Accounts pursuant to this Agreement. Each Obligor shall deliver
daily to the account at the Agent designated by the Agent for receipt of collections (the
“Collateral Account”) all Proceeds of Accounts and Inventory received by such Obligor
and all other cash Proceeds of Collateral regardless of the source or nature of such
Proceeds, whether in the form of wire or ACH transfers, cash, checks, notes or other
instruments, in the identical form received (properly endorsed or assigned where required to
enable the Agent to collect same), and until such delivery such Obligor shall hold such
Proceeds in trust for and as the property of the Agent and shall not commingle such Proceeds
with any of such Obligor’s other funds or property. All deposits in the Collateral Account
shall constitute Proceeds of Collateral and shall not constitute payment of the Obligations.
If any Accounts are at any time evidenced by tangible chattel paper, promissory notes, trade
acceptances or other instruments, the applicable Obligor will, upon the request of the Agent,
promptly deliver the same to the Agent appropriately endorsed to the Agent’s order and,
regardless of the form of such endorsement, each Obligor hereby waives presentment, demand,
notice of dishonor, protest, notice of protest and all other notices with respect thereto.

     (b) Each Obligor will (i) enter into blocked account arrangements with and reasonably
satisfactory to the Agent with respect to the Collateral Account and (ii) maintain all of its
deposit accounts at the Agent or, to the extent that the Agent so consents in writing, at
another financial institution which has agreed to accept drafts drawn on it by the Agent
under a written depository transfer or control agreement or other arrangement with the Agent
and to block such accounts and waive such institution’s own rights as against such accounts.
The Borrower shall pay all fees, costs and expenses associated with the establishment and
maintenance of such accounts.

     (c) Each Obligor shall, at the request of the Agent at any time upon the occurrence and
during the continuance of an Event of Default, notify its account debtors, and the Agent may
itself, after the occurrence and during the continuance of an Event of Default notify such
Obligor’s account debtors directly, of the Security Interest of the Agent in any Account and
that payment thereof is to be made directly to the Agent.

     (d) The Agent shall credit amounts received by the Agent pursuant to this Section 3.9 as
of the second Business Day after receipt thereof by the Agent, except that to the extent that
the Agent determines, in its discretion, to apply such amounts to reduce

-7-

 

outstanding Loans, then for purposes of calculating Total Outstandings under Section
2.1(a) of the Credit Agreement, such credit shall be deemed to have been entered one Business
Day after being received by the Agent. Such credit shall be conditional upon final payment
in cash or solvent credits of the items giving rise thereto.

          3.10 [Intentionally Omitted].

          3.11 Insurance. Each Obligor will keep the Collateral of such Obligor insured at all
times by insurance in such form and amounts as may be reasonably satisfactory to the Agent, and in
any event (without specific request by the Agent) will insure such Collateral against physical
hazard on an “all risks” basis, including fire, theft, and, in the case of motor vehicles,
collision. Such insurance shall be with insurance companies reasonably satisfactory to the Agent
and shall be payable to the Agent as loss payee and such Obligor, as their respective interests may
appear. Such insurance shall provide for not less than 30 days’ prior notice of cancellation,
change in form or non-renewal to the Agent, and shall insure the interest of the Agent regardless
of any breach or violation by such Obligor or any other person of the warranties, declarations or
covenants contained in such policies. Each Obligor shall insure the Collateral in amounts
sufficient to prevent the application of any co-insurance provisions. Each Obligor shall evidence
its compliance with the foregoing by delivering a certificate with respect to each policy
concurrently with the execution hereof, annually thereafter, and from time to time upon the request
of the Agent.

          3.12 Maintenance and Use; Payment of Taxes. Each Obligor will preserve, protect and
keep the Collateral of such Obligor in good order and repair, will not use the same in violation of
law or any policy of insurance thereon, and will pay promptly when due all taxes and assessments on
such Collateral or on its use or operation, except as otherwise permitted by the Credit Agreement.

          3.13 General Intangibles. Each Obligor will apply for, and diligently pursue
applications for, registration of its ownership of the General Intangibles for which registration
is appropriate, and will use such other measures as are appropriate to preserve its rights in its
other General Intangibles. Each Obligor will, at the request of the Agent, retain off-site current
copies of all materials created by or furnished to such Obligor on which is recorded then-current
information about any computer programs or data bases that such Obligor has developed or otherwise
has the right to use from time to time. Such materials shall include, without limitation, magnetic
or other computer media on which object, source or other code is recorded and documentation of
those computer programs or data bases, in the nature of listing printouts, narrative descriptions,
flow diagrams and similar things. Each Obligor will, at the request of the Agent, deliver a set of
such copies to the Agent or a third-party custodian designated by the Agent. Exhibit B
hereto sets forth all United States and foreign trademarks, servicemarks, trade names, trade
styles, patents, copyrights, and all registrations and applications for registration thereof and
all licenses thereof, owned or held by each Obligor.

          3.14 Securities, Investment Property. Except upon the occurrence and during the
continuance of an Event of Default, each Obligor shall retain the right to vote any Collateral
consisting of the Investment Property in a manner not inconsistent with the terms of this Agreement
and the Credit Agreement. If such Obligor, as registered holder of such Investment

-8-

 

Property, receives (i) any dividend or other distribution in cash or other property in
connection with the liquidation or dissolution of the issuer of such Investment Property, or in
connection with the redemption or payment of such, or (ii) any stock certificate, option or right,
or other distribution, whether as an addition to, in substitution of, or in exchange for, such
Investment Property, or otherwise, such Obligor agrees to accept the same in trust for the Agent
and to deliver the same forthwith to the Agent or its designee, in the exact form received, with
such Obligor’s endorsement or reassignment when necessary, to be held by the Agent as Collateral.
Upon request of the Agent, each Obligor will (i) deliver all of its Investment Property represented
by certificates, including without limitation all stock of its Subsidiaries, to the Agent to hold
pursuant to the terms of this Agreement, (ii) register in the name of the Agent or its designee any
uncertificated Investment Property or the Agent’s security interest therein on the books maintained
by or on behalf of the issuer thereof or the depository therefor and (iii) do all things necessary
or desirable, as determined by the Agent, to transfer control over any Investment Property to the
Agent including, but not limited to, registering the Agent as the holder of the securities
entitlement or commodities contract, as appropriate, and entering into any control agreement, in
the form designated by the Agent, pursuant to which the securities intermediary shall agree that it
will comply with the entitlement orders originated by the Agent without further consent by such
Obligor, and entering into any control agreement, in the form designated by the Agent, pursuant to
which the commodity intermediary shall agree that it will apply any value distributed on account of
any commodity contract as directed by the Agent without further consent by such Obligor.

          3.15 Deposit Accounts. Each Obligor shall take all actions necessary or requested by
the Agent to maintain, preserve or protect the rights and interest of the Agent with respect to all
cash deposits of such Obligor and all other Proceeds of Collateral. No Obligor shall open or
maintain any deposit or other bank account except in compliance with the Credit Agreement and
unless such Obligor shall either (a) cause the depositary bank to agree in an authenticated record
to comply at any time with instructions from the Agent to such depositary bank directing the
disposition of funds from time to time credited to such deposit account, without further consent of
such Obligor, or (b) arrange for the Agent to become the customer of the depositary bank with
respect to the depositary account, with such Obligor being permitted, only with the consent of the
Agent, to exercise rights to withdraw funds from such deposit account. The provisions of this
paragraph shall not apply to (i) any deposit account for which the Borrower, the depositary bank
and the Agent have entered into a cash collateral agreement specifically negotiated among the
Borrower, the depositary bank and the Agent for the specific purpose set forth therein, (ii)
deposit accounts for which the Agent is the depositary and (iii) deposit accounts specially and
exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of the Borrower’s salaried employees.

          3.16 Letters of Credit Rights. For each letter of credit at any time issued to any
Obligor as beneficiary thereunder, such Obligor shall, at the request of the Agent, pursuant to an
agreement in form and substance satisfactory to the Agent, either (i) arrange for the issuer and
any confirmer of such letter of credit to consent to an assignment to the Agent of the proceeds of
any drawing under the letter of credit or (ii) arrange for the Agent to become the transferee
beneficiary of the letter of credit.

-9-

 

          3.17 Electronic Chattel Paper and Transferable Records. For any interest in an
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 Section 16 of the
Uniform Electronic Transactions Act as in effect in any jurisdiction applicable to any Obligor, any
Collateral or any transaction contemplated hereby, the applicable Obligor shall take such action as
the Agent may reasonably request to vest in the Agent control under Section 9-105 of the Uniform
Commercial Code 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, Section 16 of the
Uniform Electronic Transactions Act of such transferable record.

          3.18 Bailments, Etc. If any Collateral of any Obligor is at any time in the
possession or control of any warehouseman, bailee or the Obligor’s agents or processors, such
Obligor shall, upon request of the Agent, (i) notify such warehouseman, bailee, agent or processor
of the Security Interests and instruct such warehouseman, bailee, agent or processor to hold all
such Collateral for the Agent’s account subject to the Agent’s instructions, (ii) arrange for such
warehouseman, bailee, agent or processor to authenticate a record acknowledging that it holds
possession of the Collateral for the Agent’s benefit, (iii) deliver any negotiable warehouse
receipt, bill of lading or other document of title issued with regard to the Collateral to the
Agent appropriately endorsed to the Agent’s order, and (iv) arrange for the issuance in the name of
the Agent, in form reasonably satisfactory to the Agent, any nonnegotiable document of title
covering such Collateral.

          3.19 Assignment of Claims Act. If at any time any Accounts of any Obligor arise from
contracts with the United States of America or any department, agency or instrumentality thereof,
such Obligor, upon request of the Agent, shall execute all assignments and take all steps
reasonably requested by the Agent in order that all monies due and to become due thereunder will be
assigned and paid to the Agent under the Assignment of Claims Act of 1940.

          3.20 Notes and Instruments. If at any time any amount payable under or in connection
with any of the Collateral is evidenced by any promissory note or other instrument, such note or
instrument, upon the request of the Agent, shall be promptly delivered to the Agent, duly endorsed
in a manner satisfactory to the Agent.

     Section 4. Further Assurances. Upon the reasonable request of the Agent, and at the
sole expense of such Obligor, each Obligor will promptly execute and deliver such further
instruments and documents and take such further actions as the Agent may deem desirable to obtain
the full benefits of this Agreement and of the rights and powers herein granted, including, without
limitation, filing of any financing statement, continuation statement, amendment or notice under
the Uniform Commercial Code or other applicable law, execution of assignments or mortgages of
General Intangibles, delivery of appropriate stock or bond powers, and transfer of Collateral
(other than Inventory, Accounts and Equipment) to the Agent’s possession. Each Obligor authorizes
the Agent to file financing statements, amendments and continuation statements naming the Obligor
as debtor in order to perfect its interest in the Collateral without the signature of such Obligor
to the extent permitted by applicable law, and to file a copy of this Agreement in lieu thereof,
and to take any and all actions required by any earlier versions of the Uniform Commercial Code or
by other law, as applicable in any relevant Uniform Commercial

-10-

 

Code jurisdiction, or by other laws applicable in any foreign jurisdiction in order to protect
or perfect its Security Interests. Each Obligor shall provide the Agent with any information the
Agent shall reasonably request in connection with the foregoing, including, without limitation, the
type and jurisdiction of organization of such Obligor, and any organizational identification number
issued to such Obligor. Each Obligor shall also take all actions reasonably requested by the Agent
in order to insure the continued perfection and priority of the Agent’s security interest in any of
the Collateral and of the preservation of its rights therein.

     Section 5. Notices and Reports Pertaining to Collateral. Each Obligor will, with
respect to the Collateral:

     (a) promptly furnish to the Agent, from time to time upon request, reports in form and
detail reasonably satisfactory to the Agent;

     (b) promptly notify the Agent of any Encumbrance (except Permitted Encumbrances)
asserted against the Collateral, including any attachment, levy, execution or other legal
process levied against any of the Collateral, and of any information received by such Obligor
relating to the Collateral, including the Accounts, the account debtors, or other persons
obligated in connection therewith, that may in any way materially adversely affect the value
of the Collateral or the rights and remedies of the Agent with respect thereto;

     (c) deliver to the Agent, as the Agent may from time to time request, delivery
receipts, customers’ purchase orders, shipping instructions, bills of lading and any other
evidence of shipping arrangements;

     (d) promptly after the application by such Obligor for registration of any General
Intangibles, as contemplated in Section 3.13, notify the Agent thereof;

     (e) promptly upon acquiring any commercial tort claim, notify the Agent in a writing
signed by such Obligor, of the details thereof and grant to the Agent in such writing a
security interest therein and in all the Proceeds thereof, such writing to be in form and
substance satisfactory to the Agent; and

     (f) promptly upon receipt of any letter of credit issued to such Obligor as beneficiary
thereunder or upon acquiring 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 Section 16 of the Uniform Electronic Transactions
Act, notify the Agent thereof.

     Each Obligor authorizes the Agent to destroy all invoices, delivery receipts, reports and
other types of documents and records submitted to the Agent in connection with the transactions
contemplated herein at any time subsequent to 12 months from the time such items are delivered to
the Agent.

     Section 6. Agent’s Rights and Remedies in General. So long as any Event of Default
shall have occurred and is continuing:

-11-

 

     (a)

     (i) the Agent may, at its option, without notice or demand, take immediate
possession of the Collateral, and for that purpose the Agent may, so far as any
Obligor can give authority therefor, enter upon any premises on which any of the
Collateral is situated and remove the same therefrom or remain on such premises and
in possession of such Collateral for purposes of conducting a sale or enforcing the
rights of the Agent;

     (ii) each Obligor will, upon demand, assemble the Collateral and make it
available to the Agent at a place and time designated by the Agent that is reasonably
convenient to both parties;

     (iii) the Agent may collect and receive all income and Proceeds in respect of
any Collateral and exercise all rights of each Obligor with respect thereto,
including without limitation the right to exercise all voting and corporate rights at
any meeting of the shareholders of the issuer of any Investment Property and to
exercise any and all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to any Investment Property as if the Agent
were the absolute owner thereof, including the right to exchange, at its discretion,
any and all of any securities upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof, all without liability
except to account for property actually received (but the Agent shall have no duty to
exercise any of the aforesaid rights, privileges or options and shall not be
responsible for any failure to do so or delay in so doing);

     (iv) the Agent may sell, lease or otherwise dispose of any Collateral at a
public or private sale, with or without having such Collateral at the place of sale,
and upon such terms and in such manner as the Agent may determine, and the Agent may
purchase any Collateral at any such sale. Unless such Collateral threatens to
decline rapidly in value or is of the type customarily sold on a recognized market,
the Agent shall send to the Obligor owning such Collateral prior written notice
(which, if given within ten (10) days of any sale, shall be deemed to be reasonable,
provided that the Agent shall use commercially reasonable efforts to provide at least
ten (10) days’ notice to the extent practicable under the circumstances) of the time
and place of any public sale of such Collateral or of the time after which any
private sale or other disposition thereof is to be made. Each Obligor agrees that
upon any such sale such Collateral shall be held by the purchaser free from all
claims or rights of every kind and nature, including any equity of redemption or
similar rights, and all such equity of redemption and similar rights are hereby
expressly waived and released by such Obligor. In the event any consent, approval or
authorization of any governmental agency is necessary to effectuate any such sale,
such Obligor shall execute all applications or other instruments as may be required;
and

     (v) in any jurisdiction where the enforcement of its rights hereunder is sought,
the Agent shall have, in addition to all other rights and remedies, the rights

-12-

 

and remedies of a secured party under the Uniform Commercial Code and other
applicable law.

     (b) The Agent may perform any covenant or agreement of any Obligor contained herein that
such Obligor has failed to perform and in so doing the Agent may expend such sums as it may
reasonably deem advisable in the performance thereof, including, without limitation, the
payment of any taxes or insurance premiums, payment to obtain a release of an Encumbrance or
potential Encumbrance, expenditures made in defending against any adverse claim and all other
expenditures which the Agent may make for the protection of any Collateral or which it may be
compelled to make by operation of law. All such sums and amounts so expended shall be repaid
by such Obligor upon demand, shall constitute additional Obligations and shall bear interest
from the date said amounts are expended at the rate per annum provided in the Credit
Agreement to be paid on Base Rate Loans after the occurrence of an Event of Default. No such
performance of any covenant or agreement by the Agent on behalf of such Obligor, and no such
advance or expenditure therefor, shall relieve such Obligor of any Event of Default under the
terms of this Agreement or the other Loan Documents.

     (c) Prior to any disposition of Collateral pursuant to this Agreement the Agent may, at
its option, cause any of the Collateral to be repaired or reconditioned (but not upgraded
unless mutually agreed) in such manner and to such extent as to make it saleable.

     (d) The Agent is hereby granted a license or other right to use, without charge, each
Obligor’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks and advertising matter, or any property of a similar nature, relating to the
Collateral, in completing production of, advertising for sale and selling any Collateral; and
each Obligor’s rights under all licenses and all franchise agreements shall inure to the
Agent’s benefit.

     (e) Each Obligor recognizes that the Agent may be unable to effect a public sale of all
or a part of the Investment Property by reason of certain prohibitions contained in the
Securities Act of 1933 (as amended from time to time, the “Securities Act”) or the
securities laws of various states (the “Blue Sky Laws”), but may be compelled to
resort to one or more private sales to a restricted group of purchasers who will be obliged
to agree, among other things, to acquire the Investment Property for their own account, for
investment and not with a view to the distribution or resale thereof. Each Obligor
acknowledges that private sales so made may be at prices and upon other terms less favorable
to the seller than if the Investment Property were sold at public sales. Each Obligor agrees
that the Agent has no obligation to delay sale of any of the Investment Property for the
period of time necessary to permit the Investment Property to be registered for public sale
under the Securities Act or the Blue Sky Laws, and that private sales made under the
foregoing circumstances shall be deemed to have been made in a commercially reasonable
manner.

     (f) The Agent shall be entitled to retain and to apply the Proceeds of any collection or
disposition of the Collateral, first, to its reasonable expenses of collecting,

-13-

 

retaking, holding, protecting and maintaining, and preparing for disposition and
disposing of, the Collateral, including reasonable attorneys’ fees and other legal expenses
incurred by it in connection therewith; and second, to the payment of the Obligations in
accordance with the terms of the Credit Agreement. Any surplus remaining after such
application shall be paid to the Obligors or to whomever may be legally entitled thereto,
provided that in no event shall the Obligors be credited with any part of the Proceeds of the
disposition of the Collateral until such Proceeds shall have been received in cash by the
Agent. The Obligors shall remain liable for any deficiency.

     (g) Each Obligor hereby appoints the Agent and each of the Agent’s designees or agents
as attorney-in-fact of such Obligor, irrevocably and with power of substitution, with full
authority in the name of such Obligor, the Agent or otherwise, for sole use and benefit of
the Agent, but at such Obligor’s expense, so long as an Event of Default is continuing, to
take any and all of the actions specified above in this Section and elsewhere in this
Agreement. This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Obligations remain outstanding.

     Section 7. Agent’s Rights and Remedies with Respect to Collateral. The Agent may, at
its option, at any time and from time to time after the occurrence and during the continuance of an
Event of Default, without notice to or demand on any Obligor, take the following actions with
respect to the Collateral:

     (a) with respect to any Accounts (i) demand, collect, and receipt for any amounts
relating thereto, as the Agent may determine; (ii) commence and prosecute any actions in any
court for the purposes of collecting any such Accounts and enforcing any other rights in
respect thereof; (iii) defend, settle or compromise any action brought and, in connection
therewith, give such discharges or releases as the Agent may deem appropriate; (iv) receive,
open and dispose of mail addressed to any Obligor and endorse checks, notes, drafts,
acceptances, money orders, bills of lading, warehouse receipts or other instruments or
documents evidencing payment, shipment or storage of the goods giving rise to such Accounts
or securing or relating to such Accounts, on behalf of and in the name of such Obligor; and
(v) sell, assign, transfer, make any agreement in respect of, or otherwise deal with or
exercise rights in respect of, any such Accounts or the goods or services which have given
rise thereto, as fully and completely as though the Agent were the absolute owner thereof for
all purposes;

     (b) with respect to any Equipment and Inventory (i) make, adjust and settle claims under
any insurance policy related thereto and place and pay for appropriate insurance thereon;
(ii) discharge taxes and other Encumbrances at any time levied or placed thereon; (iii) make
repairs or provide maintenance with respect thereto; and (iv) pay any necessary filing fees
and any taxes arising as a consequence of any such filing. The Agent shall have no
obligation to make any such expenditures nor shall the making thereof relieve the Obligor of
its obligation to make such expenditures; and

     (c) with respect to any Investment Property (i) transfer them at any time to itself, or
to its nominee, and receive the income and all other distributions thereon and

-14-

 

hold the same as Collateral hereunder or apply it to any matured Obligations; and (ii)
demand, sue for, collect or make any compromise or settlement it deems desirable.

Except as otherwise provided herein, the Agent shall have no duty as to the collection or
protection of any Collateral nor as to the preservation of any rights pertaining thereto, beyond
the safe custody of any Collateral in its possession.

     Section 8. Set-off Rights. Regardless of the adequacy of any Collateral or any other
means of obtaining repayment for any Obligations, any deposits, balances or other sums credited by
or due from the head office of the Agent, any Secured Party or any of their branch offices to any
Obligor and any property of such Obligor now or hereafter in the possession, custody, safekeeping
or control of the Agent or any Secured Party or in transit to the Agent or any Secured Party may,
at any time and from time to time, without notice to such Obligor or compliance with any other
condition precedent now or hereafter imposed by statute, rule of law, or otherwise (all of which
are hereby expressly waived by each Obligor) and to the fullest extent permitted by law, set off,
appropriated and applied by the Agent or any Secured Party against any and all Obligations of such
Obligor in such manner as the head office of the Agent, any Secured Party or any of their branch
offices in their sole discretion may determine, and each Obligor hereby grants the Agent and each
Secured Party a continuing security interest in such deposits, balances, other sums and property
for the payment and performance of all such Obligations and although such Obligations may be
contingent or unmatured. ANY AND ALL RIGHTS TO REQUIRE THE AGENT OR ANY SECURED PARTY TO EXERCISE
ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
EXERCISING ITS RIGHTS OF SETOFF WITH RESPECT TO SUCH DEPOSITS, BALANCES, OTHER SUMS AND PROPERTY OF
ANY OBLIGOR ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Agent, Secured Party or the
branch office, as the case may be, will provide prompt notice to the Obligor of any setoff
hereunder.

     Section 9. Release of Certain Collateral. Immediately upon (i) a sale of Leases and
related Equipment and Receivables to a Special Purpose Subsidiary and the satisfaction of each
condition set forth in Section 7.4(c) of the Credit Agreement, (ii) the Agent’s receipt of a
certificate (in form reasonably acceptable to the Agent) of a Responsible Officer of the Borrower
as to the specific Leases and related Equipment and Receivables subject to such sale and the
satisfaction of each condition set forth in Sections 7.4(c) of the Credit Agreement and (iii) the
Agent’s acceptance in writing of such certificate without any objection to any of the items
therein, the Secured Parties’ Security Interest in such Leases and related Equipment and
Receivables shall automatically be released and the Borrower shall be entitled thereupon to file
amendments to any applicable Uniform Commercial Code financing statements releasing the same.

     Section 10. Waivers. To the extent permitted by applicable law, each Obligor waives
presentment, demand, notice, protest, notice of acceptance of this Agreement, notice of any loans
made, credit or other extensions granted, Collateral received or delivered and any other action
taken in reliance hereon and all other demands and notices of any description, except for such
demands and notices as are expressly required to be provided to such Obligor under this Agreement
or any other document evidencing the Obligations. Each Obligor waives, to the

-15-

 

fullest extent permitted by law, the benefit of all appraisement, valuation, stay, extension
and redemption laws now or hereafter in force and all rights of marshaling in the event of any sale
or disposition of any of the Collateral. To the extent permitted by applicable law, with respect
to both the Obligations and any Collateral, each Obligor assents to any extension or postponement
of the time of payment or any other forgiveness or indulgence, to any substitution, exchange or
release of Collateral, to the addition or release of any party or person primarily or secondarily
liable, to the acceptance of partial payment thereon and the settlement, compromise or adjustment
of any thereof, all in such manner and at such time or times as the Agent may deem advisable. The
Agent may exercise its rights with respect to the Collateral without resorting, or regard, to other
collateral or sources of reimbursement for Obligations. The Agent shall not be deemed to have
waived any of its rights with respect to the Obligations or the Collateral unless such waiver is in
writing and signed by the Agent. No delay or omission on the part of the Agent in exercising any
right and no course of dealing shall operate as a waiver of such right or any other right. A
waiver on any one occasion shall not bar or waive the exercise of any right on any future occasion.
All rights and remedies of the Agent in the Obligations or the Collateral, whether evidenced
hereby or by any other instrument or papers, are cumulative and not exclusive of any remedies
provided by law or any other agreement, and may be exercised separately or concurrently.

     Section 11. Expenses. Each Obligor shall, on demand, pay or reimburse the Agent for
all reasonable expenses (including attorneys’ fees and disbursements of outside counsel and
allocated costs of in-house counsel) incurred or paid by the Agent in connection with the
negotiation, preparation, filing or recording, interpretation and the administration and
enforcement of this Agreement, its on-site periodic examinations of the Collateral and any other
exercise, preservation or enforcement of any rights, remedies or options of the Agent or the
satisfaction of any Obligation, or in connection with any litigation, proceeding or dispute in any
way related to Obligations, or the Collateral. Such costs and expenses shall include, without
limitation, reasonable fees and disbursements of outside legal counsel and the allocated costs of
in-house legal counsel; accounting, consulting, appraisal, brokerage or other similar professional
fees or expenses; all reasonable fees, charges (including the Agent’s per diem charges) and
expenses as are incurred to preserve the validity, perfection, priority and value of any Security
Interest created hereby; and all reasonable costs, charges and expenses relating to any attempt to
inspect, verify, protect, preserve, restore, collect, sell, liquidate or otherwise dispose of any
of or realize upon any Collateral or the exercise by the Agent of any of the rights conferred upon
it hereunder. The obligation to pay any such amount of all such costs and expenses shall, except
as otherwise provided herein, until paid, bear interest at the rate applicable to Base Rate Loans
and shall be an additional Obligation secured by the Collateral.

     Section 12. Notices. All notices hereunder shall be given in the same manner as set
forth in Section 11.1 of the Credit Agreement and any notice given to any Obligor in accordance
with the terms of such Section shall be deemed to be given to each of the Obligors.

     Section 13. Joinder. Each Obligor agrees that from time to time in the event that it
shall acquire or form any Subsidiary, other than a Special Purpose Subsidiary, such Obligor shall
cause such Subsidiary to execute and deliver an Instrument of Joinder in the form attached hereto
as Exhibit C, a Perfection Certificate and all other documents deemed desirable by the
Agent, and that upon such execution and delivery, this Agreement shall become the binding
obligation

-16-

 

of such Subsidiary which shall become an Obligor hereunder and this Agreement shall create a
valid and continuing lien on and security interest in the Collateral of such Subsidiary.

     Section 14. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of each Obligor, its respective successors and assigns, and shall be binding upon and
inure to the benefit of and be enforceable by the Agent, the Secured Parties and their respective
successors and assigns; provided that no Obligor may assign or transfer its rights or
obligations hereunder.

Section 15. Governing Law; Consent to Jurisdiction, Etc.

          (a) THIS AGREEMENT IS A CONTRACT UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL
FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OBLIGOR CONSENTS TO THE
JURISDICTION OF ANY OF THE FEDERAL OR STATE COURTS LOCATED IN SUFFOLK COUNTY IN THE COMMONWEALTH OF
MASSACHUSETTS IN CONNECTION WITH ANY SUIT TO ENFORCE THE RIGHTS OF THE AGENT AND THE SECURED
PARTIES UNDER THIS AGREEMENT AND CONSENTS TO SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON
SUCH OBLIGOR IN THE MANNER PROVIDED IN SECTION 12 ABOVE. EACH OBLIGOR IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH ACTION BROUGHT IN
THE COURTS REFERRED TO IN THIS SECTION AND IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY SUCH ACTION THAT SUCH ACTION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     Section 16. Waiver of Jury Trial. EACH OBLIGOR AND THE AGENT HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER
OR THEREUNDER, THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE AGENT RELATING
TO THE ADMINISTRATION OR ENFORCEMENT OF THIS AGREEMENT, AND AGREES THAT IT WILL NOT SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CAN NOT BE OR HAS NOT BEEN
WAIVED. EXCEPT AS PROHIBITED BY LAW, EACH OBLIGOR AND THE AGENT HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. EACH OBLIGOR (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR
SECURED PARTIES HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS

-17-

 

AND (b) ACKNOWLEDGES THAT THE AGENT AND THE SECURED PARTIES HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH EACH IS A PARTY BECAUSE OF, AMONG OTHER
THINGS, THE OBLIGOR’S WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

     Section 17. General. This Agreement may not be amended or modified except by a
writing signed by each of the Obligors and the Agent. This Agreement and any amendment hereof may
be executed in several counterparts and by each party on a separate counterpart, each of which when
so executed and delivered shall be an original, but all of which together shall constitute one
instrument. Section headings are for convenience of reference only and are not a part of this
Agreement. In the event that any Collateral or any deposit or other sum due from or credited by
the Agent is held or stands in the name of any Obligor and another or others jointly, the Agent may
deal with the same for all purposes as if it belonged to or stood in the name of such Obligor
alone.

[Remainder of page intentionally left blank.

The next page is the signature page.]

-18-

 

     IN WITNESS WHEREOF, the undersigned have caused this Security Agreement to be duly executed as
an instrument under seal as of the date first written above.

	 	 	 	 	 
	 	TIMEPAYMENT CORP.

 	 
	 	By:  	/s/ Richard F. Latour
 	 
	 	 	Name:  	Richard F. Latour 	 
	 	 	Title:  	President 	 
	 

	 	 	 	 	 
	ACCEPTED AS OF THE

DATE FIRST ABOVE WRITTEN:

SOVEREIGN BANK, as Agent

 	 	 
	By:  	/s/ Jeffrey G. Millman
 	 	 
	 	Name:  	Jeffrey G. Millman 	 	 
	 	Title:  	Senior Vice President 	 	 
	 

[SIGNATURE PAGE TO TPC SECURITY AGREEMENT]

 

 

EXHIBIT A

PERFECTION CERTIFICATE

(attached hereto)

 

 

EXHIBIT B

LIST OF INTELLECTUAL PROPERTY

[TO BE COMPLETED BY BORROWER]

TRADEMARKS (including registered and material unregistered trademarks, trade names and service
marks, and all applications for any of the foregoing.)

CORPORATE NAMES

INTERNET DOMAIN NAMES

COPYRIGHTS

 

 

EXHIBIT C

INSTRUMENT OF JOINDER

     [SUBSIDIARY], a [STATE] [ENTITY] (the “Company”), hereby agrees that as of the date
hereof it is an Obligor under that certain Security Agreement (as the same may be amended,
modified, supplemented or restated from time to time, the “Security Agreement”), dated as
of the 2nd day of August, 2007, by TimePayment Corp. in favor of Sovereign Bank, acting
as Agent for the Secured Parties, as if it were an original signatory thereto. The Company hereby
agrees that it shall be subject to all of the obligations of an Obligor set forth in the Security
Agreement, and that all of the Collateral (as defined in the Security Agreement) now or hereafter
owned by the Company or in which the Company has an interest shall be subject to the Security
Interests described in the Security Agreement.

     EXECUTED
on this _____ day of _________, 200__.

	 	 	 	 	 
	 	[SUBSIDIARY]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}]]